CURRENT WEEKLY INTELLIGENCE SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A003300030001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 39
• Document Creation Date: December 20, 2016
• Sequence Number: 1
• Content Type: SUMMARY

Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
State Dept. review completed '""r lltw
CONFIDENTIAL
5f~?T
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO.
OCI NO. 0291/61
3 August 1961
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT
NO CHANCE IN CLASS.
^ DEOLASSIFIED
CLASS. CHANGED TO- TS S
NWIam Fl-mdvVV DATE:
ALT H. 70.2
INTELLIGENCE
DOCUMENT NO.
DATE: uxe to
Ito
25X1
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent the
immediate appraisal of the Office of Current Intelligence.
Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
3 August 1961
T H E W E E K I N B R I E F
EAST-WEST RELATIONS
0 o 0 0 o 0 0 0 0 0 0 0 0 0 0 0 0
The tone and content of Khrushchev's conversations
with Ambassador McCloy suggest that the Soviet leader
still prefers to avoid a showdown over Berlin but feels
obliged to adopt an increasingly strong line against the
West. Khrushchev's principal purpose in these talks
apparently was to intensify pressure th
o
Page 1
take an early initiative in proposing formal negotiations.
W
Referrin
to th
'
g
e President
s address of 25 July as a
"declaration of preliminary war," the premier warned
that he might be obliged to inform the Soviet people
that the US had, in effect, presented the USSR with
an ultimatum which was "tantamount to war." In an
effort to strengthen his hand, Khrushchev hinted at
further Soviet military measures. He was careful, how-
ever, to indicate a continuing preference for negotiations
and to su
t
gges
that proposals might be exchanged.
EAST GERMAN REGIME SEEKS TO STEM REFUGEE FLOW . Page 3
The East German regime has steadily tightened exist-
ing police controls in an effort to cut the refugee flow
to West Berlin. To date--probably on Moscow's orders--
the regime has hesitated to take the drastic step of
sealing off West Berlin and is using a high degree of
caution in dealing with a hostile
population. West
Berli
n registered 30,444 refugees during July, the
highest
THE NEW SOVIET PARTY PROGRAM . . . . . . . . . . . . . . . Page 4
The Soviet Union's new party program--an outline for
the building of communism over the next 20 years--reaffirms
the main lines of Khrushchev's pronouncements since the
20th party congress in 1956 and indicates that future
policies will be patterned largely on present practices.
Free medical care, housing, utilities, and public trans-
port are promised--unless precluded by the international
situation and the struggle against the "imperialists,"
particularly the United States. Heavy industry is to
retain an overwhelming priority. The program contains
no important new ideological formulations; the USSR's
stand on issues in dis ute with Communist China appears
unchanged.
CONFIDENTIAL
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
1
CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
3 August 1961
BIZERTE . . . . . . . . . . . . . . . . . . . . . . . . . Page 8
Bourguiba has indicated his willingness to enter into
bilateral negotiations with France. Some Tunisians con-
sider that an emergency General Assembly session would
strengthen Tunisia's position. Bourguiba apparently still
hopes for a gesture of Western support and has sent his
defense minister to Washington. The parallel visit of
the foreign minister to Moscow may result in an invita-
tion to Bourguiba for a trip to the USSR. The first in-
stallment of Arab League military support is en route to
FRANCE-ALGERIA . . . . . . . . . . . . . . . . . . . . . . Page 9
The decision by the provisional Algerian government
(PAG) to suspend the second round of talks with the French
underscores its determination not to compromise its demand
for control over the Sahara. PAG leaders deny the move
is connected with the Bizerte problem, but they probably
hope to profit by the additional pressure on France. PAG
failure to obtain its objectives in the talks to date, how-
ever, may strengthen the "hard-line" advocates of all-out
war at the upcoming meeting of the 62-member National
Council of the Algerian Revolution. 25X1
CONGO . . . . . . . . . . . . . . . . . . . . . . . . . . Page 11
After a delay occasioned in part by squabbling among
representatives from Leopoldville, Cyrille Adoula, a
moderate, was confirmed as premier by the Congolese par-
liament on 2 August. Gizenga received one of three vice-
premierships, and Christophe Gbenye, a xenophobic Gizenga
lieutenant who has been showing considerable ambition of
his own, was named interior minister. The new govern-
ment reflects a wide political spectrum and is likely
to prove unwieldy; it appears less oriented toward the
West than was that of Joseph Ileo. Gizenga apparently
is continuing his efforts to build up his Stanleyville
base. Instability in Katanga seems to be increasing
as officials there become aware of their isolation, and
unrest is growing in the Katanga army. 25X1
SITUATION IN LAOS . . . . . . . . . . . . . . . . . . . . Page 13
Boun Oum and Phoumi are in Phnom Penh for talks with
Souvanna Phouma in what may be merely the first in a
series of meetings seeking a basis for agreement on a
coalition government. Prince Souphannouvong is boycotting
the Phnom Penh meeting, insisting that talks on the compo-
sition of a new government be conducted in Laos by depu-
ties of the three princes. The Lao National Congress
passed a constitutional amendment on 30 July enabling the
King to choose the premier of the projected coalition
government or even to assume the position himself. The
Pathet Lao has refused to recognize the legality of the
amendment. The military situation remains generally
CONFIDENTIAL
SNOW-T
BRIEFS
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
Noe CONFIDENTIAL Nkse
CURRENT INTELLIGENCE WEEKLY SUMMARY
3 August 1961
CUBA .
Havana's close scrutiny
of the Security Council's proceedings on the French-Tuni-
sian dispute over Bizerte may presage a Cuban move in the
UN seeking the withdrawal of the US from the Guantanamo
naval base. Relations with Venezuela have deteriorated
further as the result of a recent diplomatic incident.
The Cuban-Venezuelan dispute stems indirectly from the
increasing number of Cubans who have been taking asylum
BRAZILIAN FOREIGN POLICY . .
Page 14
1 25X1
Page 15
President Quadros' foreign policy moves continue to
emphasize strengthened relations with the bloc and a modi-
fication of Brazil's traditional posture of support for
the United States. His recent order to renew diplomatic
relations with the USSR rounds out Brazil's recognition
of all European bloc countries except East Germany, and
efforts to expand trade relations with Communist China
are now in progress.
PANAMANIANS SEEKING REVISION OF TREATY WITH US . . . . . . Page 17
A campaign to increase the annuity paid by the US for
the use of the Panama Canal and the surrounding Zone is
being pressed by Panama and will probably be raised at
the Inter-American Economic and Social Council meeting
which begins on 5 August in Uruguay. The Panamanians
will probably also request other changes in the treaty,
last revised in 1955. Chronic irritants in US-Panamanian
relations are being emphasized by information media, busi-
nessmen, students, and officials. Some have indicated
that the threat of violence may be used as a pressure
UNITED NATIONS SECURITY COUNCIL ELECTIONS . . . . . . . . Page 18
Two of the three seats to be filled on the UN Security
Council will probably be hotly contested, and there may
be a further splitting of the two-year term by the contest-
ants. Rumania and the Philippines are seeking election
to what was originally the Eastern European seat. Further-
more, Cuba's determination to oppose Venezuela--the major-
ity candidate of the Latin American caucus--for the seat
being vacated by Ecuador may lead to the election of an
African member as a compromise candidate. Elections will
take place during the 16th General Assembly session, which
CONFIDENTIAL
~ i A&! Of
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
NVW CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
3 August 1961
AUSTRIA AND THE SOUTH TIROL ISSUE .. . Page 19
New instances of sabotage in the South Tirol have led
to a bitter exchange of notes between the Italian and Aus-
trian governments and exposed tensions within the Austrian
coalition cabinet; Further discussions on autonomy for
the area appear most unlikely at this time, since Vienna
is handicapped in finding new approaches to the problem
by pressures from extremist Tirolean elements. Representa-
tives of both the Socialist and the People's parties are
in next year's national elections. v+y 25X1
THE SITUATION IN SPAIN . . . . . . . . . . . . . . . Page
Spain's recent economic advances under the US-backed
stabilization program have strengthened Franco's domestic
political control. The government is concerned, however,
over the possible impact of Angolan developments on the
stability of neighboring Portugal and the likelihood of
increased Moroccan pressure on Spanish North Africa.
SPECIAL ARTICLES
THE QUESTION OF PARTITIONING ALGERIA Page
. . . . . . . . . .
While De Gaulle's main aim in threatening to "regroup"
the Algerian population is to induce the provisional Al-
gerian government (PAG) to meet French terms on a solution
of the Algerian war, there is no doubt he is determined
to carry out his threat as a last resort. His commitment
to protect the European minority in Algeria and his de-
sire to strengthen French military forces in Europe this
fall may outweigh the grave economic and political problems
involved. Although French officials stress the temporary
nature of "regroupment" and hint that they envisage even-
t
ual mass emigration or an accommodation with the PAG,
they seem to expect to retain areas large enough to per-
it
m
a relatively long transition period.
THE FEDERATIO& OF RHODESIA AND NYASALAND . . . . . . . . . Page 5
The adoption of a moderately liberal constituti -on
for Southern Rhodesia, following a referendum on 26 July
by a.preddminante1 . white electorate, is at best a small
step toward solution of the problems facing the Federa-
tion of Rhodesia and Nyasaland. The new constitution is
opposed as inadequate by most Africans and as going too
far by a substantial minority of the whites. Northern
Rhodesia is still simmering, following the publication of
new constitutional proposals, which Britain probably will
impose in the face of widespread 'African opposition. In
Nyasaland, where the situation has been quiet as a result
of the firm discipline exerted by Hastings Banda's Malawi
Congress party, Banda may try to take Nysaland out of the
CONI I'DENTIAL
BRIEFS
Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
CONFIDENTIAL .r
CURRENT INTELLIGENCE WEEKLY SUMMARY
3 August 1961
Federation after the protectorate's first African-domi-
nated legislature convenes late this summer.
. "wow
CONFIDENTIAL
Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
tu1vrILL.L U IHL. NNW I
CURRENT INTELLIGENCE WEEKLY SUMMARY
NEEKLY REVIEW
EAST-WEST RELATIONS
The tone and content of
Khrushchev' s conversations .pith
Ambassador McCloy on 26 and 27
July suggest that the Soviet
leader still prefers to avoid
a showdown over Berlin but feels
obliged to adopt an increasingly
strong line in response to West-
ern moves. His principal mo-
tive in these talks was to in-
ject a further note of alarm
over Berlin and intensify pres-
sure for the West to take the
initiative in renewing negotia-
tions.
Bile-equipped Badger jet medium
bombers.
Berlin
In his first meeting with
McCloy, Khrushchev raised the
Berlin question and repeated
his position in essentially the
same terms he has used since
the Vienna meeting, with par-
ticular emphasis on Soviet
determination to conclude a
peace treaty "under any condi-
tions."
Khrushchev sought to pro-
vide an incentive for a Western
move by suggesting an exchange
of proposals. He was careful
to indicate that his offer to
negotiate on a peace treaty
remained "valid and open."
He also went to some lengths
to point out that the USSR was
prepared to accept any US pro-
posals on guarantees for the
"freedom and independence" of
West Berlin after the conclusion
of a peace treaty.
Khrushchev's remarks sug-
gest that he will make a vigorous
public response to the Presi-
dent's address but will be care-
ful not to foreclose the possi-
bility of negotiata.on'. Khru.--
shchev also made an effort to
improve his bargaining position
by implying that some new Soviet
defense measures were under
consideration.
In further moves to rein-
force the impression of mili-
tary readiness to deal with a
crisis over Berlin, speeches
and official pronouncements in
connection with Soviet Naval Day
activities emphasized the abil-
ity of the Navy to attack sur-
face ships at great distances.
In a 29 July Pravda article
Admiral Gorshakov stated that
the West "would do well" to
realize that their "traditional
invulnerability has been liqui-
dated forever." A display of
Soviet naval strength off Len-
ingrad included about 60 sur-
face ships and submarines and
a naval air fly-by of 36 mis-
Khrushchev referred to
Soviet proposals for agreement
on a peace treaty, stating
that the USSR was not seeking
a clash with the US and that
"lancing the Berlin boil" would
clear the atmosphere. He said
he fully realized the danger
of the approaching situation,
but he added that no efforts
at intimidation would keep the
Soviet Union from signing a
peace treaty. Khrushchev in-
vited the West to advance pro-
posals and suggested that the
Soviet Union might have some
counterproposals to make.
In their second conversa-
tion, Khrushchev turned to the
President's speech of 25 July
and claimed that the President had
presented an ultimatum which if not
accepted would mean war. Khru-
shchev declared that the USSR
accepted this "challenge" and
would not change its policy
on Germany and Berlin. He stated
that he planned to meet with
his military advisers, review
the situation, and decide on
measures to strengthen Soviet
defenses.
Khrushchev doubted that
the USSR would follow the US
in mobilization of armed forces
and industrial power, since he
believed a war would be thermo-
nuclear. He emphasized alleged
Soviet missile superiority and
reiterated his intention to con-
sult with the Soviet general
staff. Deliberately miscon-
struing the President's posi-
tion in his address, Khrushchev
C09MIAL
3 Aug 61 WEEKLY REVIEW Page 1 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
VVtll 1 VL1l t lnL VMW
CURRENT. INTELLIGENCE WEEKLY SUMMARY
contended.that the Soviet people
had to be informed that the US
would start a war if a separate
treaty were signed. He,claimed,
nevertheless, that a separate
treaty would indeed be signed.
The Soviet premier ended
this discussion, however, on a
more conciliatory note. He stated
that he still believed in the
President's "reason" and pointed
out that Western consultations
would be necessary and it was
uncertain whether the US' allies
would want war. In any event,
he continued, Soviet proposals
for negotiations on a peace
treaty. remained and the USSR
wished to resolve the problem
of Berlin "peacefully."
Prior to these discussions
and the President's address, the
Soviet ambassador in Washington
told a US official that?Mosoow
would definitely sign a peace
treaty with East Germany in the
second half of November and that
invitations to a peace confer-
ence would be issued some time
before.. The ambassador adopted
the same line as Khrushchev,
stating that "time was running
out" and that there should be
serious negotiations. between the
US and USSR before war became
"inevitable." After a peace
treaty the East Germans would
gain control over access, he
stated, but would be prepared
to grant access to Berlin if
certain "offensive" activities
in West Berlin were stopped. He
implied that full recognition
of East Germany would not be
necessary.
The ambassador's categor-
ical statement on the timing of
a peace treaty was probably in-
tended to influence the US.deci-
sions over Berlin, since the con=
versation occurred on 17 July,
when the ambassador probably be-
lieved high-level decisions were
being made by the US:
-Disarmament
In his conversations with
McCloy, Khrushchev implied that
the future of disarmament talks
might be influenced by develop-
ments over Berlin. He alleged
would grow in the USSR because
of the Berlin situation, and
that if the US intensified its
"threats" over a German peace
treaty, he might not be able to
resist pressure for resumption.
He boasted that the USSR had a
100-megaton thermonuclear weapon
which needed to be tested.
On the general disarmament
talks, Khrushchev adopted a pose
of flexibility and reasonableness
and stated that the Soviets were
prepared to agree to any US meas-
ures in the first stage of a
complete and general disarmament
program. Echoing his speech of
8 July,,he listed a number of
first-stage measures such as a
partial troop withdrawal, a nu-
clear-free zone, inspection
zones against surprise attack,
and nonaggression pacts.
At the end of the conversa-
tion, Khrushchev referred to an
aide-memoire which was subsequent-
ly submitted to the US in the bi-
lateral talks in Moscow. This
memorandum represented a tactical
shift in the Soviet position by
putting forward a set of prin-
ciples to serve as a guide to
future multilateral negotiations.
In a further tactical switch,
the Soviets agreed to a recess
and indicated they would be pre-
pared to resume negotiations in
September in New York. Previous-
ly the Soviet delegation had
argued that a discussion of de-
tailed disarmament plans was
necessary in order to reach
agreement on principles.
While the new set of prin-
ciples does not signal any shift
in the substantive Soviet posi-
tion, the move to salvage some
agreement out of the US-Soviet
bilateral talks may have been
influenced by the Soviet leaders'
concern over the Berlin situa-
tion. They may regard further
bilateral talks with the US as
a form of insurance against a
mounting crisis over Berlin. Mos-
cow's shift may have also been
due in part to the publication
of the Soviet party program,
which stresses "universal and
total disarmament" as one of the
main tasks for Soviet foreign
policy. F_ I 25X1
that pressure for resuming tests I
3 Aug 61 WEEKLY REVIEW Page 2 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
1111111W 11 v.i
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
i+;4$;T-GERMAN,REGIME SEEKS.TO ,STEMH rREFUGEE FLOW
In July, escapes of East
German refugees to West Berlin
reached the highest figure for
any month since 1953o Regis-
trations at the West Berlin re-
ception center at Marienfelde
reached 30,444. The actual to-
tal may have been even higher,
since some.f?efugees go directly
to West Germany and others re-
main in West Berlin without com-
plying with processing formali-
ties. Escapes-; to West Berlin
and West Germany so far this
year total almost 140,000, in
comparison with just under 200,-
000 for all of last year. The
flow is continuing, with a total
of 2,349 registering the first
two days of August.
West Ger#-an Social Demo-
cratic (SPD) leaders are fear-
ful that increasing public dis-
content in East Germany may
erupt into disorders, although 25X1
they doubt that these would de-
velop into another a rising like
the one in 1953.
To date, the East Germans
appear to have relied on tight-
ening existing internal controls
and on scare propaganda--in-
eluding show trials--in an at-
tempt to discourage escapes to
West Berlin and West Germany.
American officials in Berlin
had no information as of 31 July
on specific new measures taken
TOTAL ANNUAL REFUGEE FLOW INTO WEST BERLIN AND WEST GERMANY
Refugees entering West Berlin (most Refugees entering West Germany directly
of whom later go on to West Germany) across East-West German mnal border
by the regime to prevent escapes,
The increasing stridency of re-
gime admonitions to East Germans
to remain away from West Berlin
suggests that the regime may
place restrictions on visits to
the city; some refugees have
referred to rumors that a special
permit will be required.
The regime has also been
pressing its campaign to coerce
East Berliners and East Germans
working in West Berlin--"border
crossers"--to take employment
in East Germany. West Berlin
officials report that absenteeism
among "border crosses" has been
unusually high in recent days;
a total of 463 border crossers,
plus their dependents, defected
between 8 and 31 July,
The. East Ger mans have appar-
ently concluded that a separate
peace treaty is inevitable and
will bring-about at least the
permanent division of Germany if
not the next world war. However,
there has been no evidence of
organized resistance activities
against the East German regime.
WEST BERLIN REFUGEE TOTALS
COMPARISON OF 1960 AND 1961 BY WEEKS
3 10 17 24 31 7 14 21 28 7 14 21 28 4 11 18 25 2 9 16 23 30 6 13 20 27 4 11 18 25 18 15 22 29
JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST
1361 1753
I 1046
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
JULY AUGUST
SECRET
3 Aug 61 WEEKLY REVIEW Page 3 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
~r rrr
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
THE NEW SOVIET PARTY PROGRAM
The Soviet Union's new par-
ty program--an outline for the
building of communism over the
next 20 years--reaffirms the
main lines of Khrushchev's pro-
nouncements since the 20th par-
ty congress in 1956 and indi-
cates that future policies will
be modeled largely, along the
lines of present practices.
The program--third in the
history of the Communist party
--is, like its predecessors, es-
sentially a statement of aims
and purposes rather than a blue-
print to be followed in detail.
Many of the provisions of the
earlier programs were never ful-
filled, although the programs
as a whole were declared achieved.
The new program embodies the
most precise timetable yet put
forth'for the achievement of
communism. (The Soviet Union
officially is still a socialist
society, now in the process of
"building communism.") However,
it makes fulfillment of the
timetable contingent on peace,
disarmament, and an uncompli-
cated international situation,
thus affording the regime con-
siderable leeway in carrying
out its provisions.
The document promises that
a Communist society will be sub-
stantially achieved in the USSR
within the next two decades and
will be fully completed sometime
later. The specific achieve-
ments forecast for each of the
next two decades, however, fall
far short of meeting the criteria
which Marx and Lenin set forth
for the Communist society and
which are reaffirmed by the new
program. These criteria are a
sufficiency of material wealth
so that every individual can
receive in accordance with his
needs without regard to the work
he performs, and the creation
of a "new man" who will work to
the best of his abilities with-
out regard to any material in-
centive. The present generation
in the Soviet Union, it is clear,
will see the achievement of com-
munism only by fiat.
The economic features of
the program, though sparing of
specific data, provide an image
of rapidly expanding industry
and agriculture making possible
a consumer welfare program on
an unprecedented scale for the
USSR. Stripped of its heavy
layer of propaganda, however,
the program appears to be little
more than a continuation of pres-
ent economic policies.
Industrial production by
1980 is to reach six times the
1960 level. This implies an an-
nual, average rate of growth
slightly higher than called for
in the Seven-Year Plan (1959-65).
To support this, the pro-
gram calls for industrial labor
productivity to increase through
1980 at a rate about equal to
that achieved in the last decade
--roughly 7 percent. The program
recognizes that such a rate would
require "enormous investments,"
but there is little question that,
as in the past, Moscow will also
place great reliance on in-
creased efficiency and technical
innovation to achieve these
goals.
Should the Soviet Union
succeed in increasing industrial
output as planned, by 1970 it
would just about reach the 1960
level of industrial output in
the US. Assuming that the US
growth rate will be 4.5 percent
per year and that Soviet indus-
trial production at the end of
1960 was about 42 percent of that
of the US, Soviet output by 1970
SECRET
3 Aug 61 WEEKLY REVIEW Page 4 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
would be about 67 percent of that
of the US and by 1980 would be
about equal to it.
With the dictum that "elec-
trification plays the leading
role in the development of all
branches of the national economy
in ensuring technological prog-
ress," the program proposes a
tripling of electric power out-
put by 1970 and a production of
from 2,700 to 3,000 billion kilo-
watts in 1980. Such growth would
require the addition of 54,000,000
kilowatts of new capacity in
1980 alone, compared with 60,-
000,000 kilowatts called for
during the entire period of the
Seven-Year Plan.
Production of crude steel,
the only other commodity target
specified, is planned at approx-
imately 250,?000,000 tons by 1980
--about 2.4 times the US peak
production reached in 1955 and
roughly equivalent to 75 percent
of world production in 1960.
Annual investment in the closing
years would have to amount to
from one third to one half the
entire steel investment of the
Seven-Year Plan.
The party continues to be
"ceaselessly solicitous of the
growth of heavy industry," thus
supporting the implication in
the steel and electric power
goals that despite recent re-
marks by Khrushchev on the fu-
ture equality of light and heavy
industries, the latter will con-
tinue to enjoy its priority.
At the same time, promises of
the wide introduction of house-
hold gadgets suggest that a
significant rise in the produc-
tion of consumer durable goods
is in store.
In its agricultural goals,
Moscow appears again to be
vastly overoptimistic, and un-
realistic ambitions are not made
any more believable by vague
promises of increased investment
in agricultural machinery, fer-
tilizer, and construction. Agri-
cultural production is planned
to increase 6-7 percent annually
during the next 20 years, while
grain production is to be doubled
in order to support a 200-percent
increase in the output of meat
in the first ten years and a
300-percent increase by 1980.
In the unlikely event that grain
output could be expanded in the
manner planned, the 1970 goal
for meat would only approximate
US per capita production in 1956,
atarget which Khrushchev had
hoped to surpass by 1960.
Perhaps the most impressive
feature of the program is the
"pie in the sky" offered the
consumer. Consumer demands are
to be "satisfied," the housing
problem "solved"--at a low level
--and a wide array of "free" serv-
ices, offered to the consumer
including medical care, housing,
utilities, and public transport.
The promise to provide each
family--presumably both urban
and rural--with a suitable "hy-
gienic" apartment during the
1970s is apparently an extension
of the program announced in 1957
to eliminate the housing shortage
by 1970 by providing 100 square
feet per person of housing (the
present figure for the US is 300
square feet). Such a program is
feasible but will mean the So-
viet Government must continue to
devote a heavy share of construc-
tion outlays to housing during
the entire period and possibly
adopt a more tolerant attitude
toward private. housing.
The net effect of the wel-
fare program on the economy will
SECRET
3 Aug 61 WEEKLY REVIEW Page 5 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
w Noe
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
be slight. The prospective
"free" items now cost the con-
sumer relatively little in di-
rect outlays--about 15 to 20
percent of total consumer ex-
penditures in 1060. The balance
of the cost of these goods and
services is paid primarily
through indirect taxes. Whether
the consumer pays directly or
indirectly for such services
would be mainly a bookkeeping
problem and would have no real
effect on his standard of liv-
ing. Moscow's concern that its
welfare program should not dis-
rupt the value of incentives in
promoting economic progress is
indicated by the statement that
throughout the period, personal
income would be tied to the
"quantity and quality of produc-
tion."
In the political sphere,
the principal aspect of the pro-
gram is the provision for "sys-
tematic renewal" of the member-
ship of the leading governmental
and party organizations. On the
government side, it is proposed
that "leading workers of all-
union, republican, and local or-
gans be elected to their duties
for no longer than three consecu-
tive terms." For the top eche-
lons of the party, replacement
of not less than one quarter of
the membership of the central
committee and presidium every
four years is called for.
A larger turnover is speci-
fied for republic, regional, and
local party organizations. A
loophole provides that "some
party leaders, in recognition
of their acknowledged authority,
notable political, organiza-
tional, and other qualities, can
be elected to the leading organs
for a longer period." A similar
clause assures the continued
re-election of "exceptional"
workers in the government.
Achieving a healthy turn-
over in the membership of the
Various Party and governmental
organs has not been a particu-
larly serious problem, however.
Normal attrition in the central
committee over a four-year
period, for instance, is con-
sistently greater than the 25
percent figure stipulated in
the program. The same can be
said for membership in the party
presidium. A systematic re-
shuffle, however, could facili-
tate the breaking up of cliques
and discourage empire building
at the lower levels; it might
even help to create the impres-
sion that the party has adopted
a now safeguard against the re-
currence of one-man rule. In
fact, these and other organi-
zational changes outlined in
the program do not touch the
essentials of the Soviet govern-
mental system or reduce the
hegemony of the party leadership.
The international section
of the program does not signal
any major shift from the main
lines of Soviet policy laid down
by Khrushchev at the 20th and
21st party congresses. The pro-
gram makes it clear that Khru-
shchev considers the achievement
of his domestic program bound
to the successful implementation
of his peaceful coexistence
strategy--the "main aim" and
"central principle" of Soviet
foreign policy. Peaceful co-
existence is justified as the
only valid policy under present
world conditions. The program
cautions that international de-
velopments could force an in-
crease in defense expenditures
which would hold up the "reali-
zation of the plans for increasing
the prosperity of the people."
SECRET
3 Aug 61 FVEEKLY REVIEW Page 6 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
The program strongly reaf- Communist parties in December
firms, however, that a world war in 1960. The obligation to re-
is not inevitable, and it pledges spect joint decisions and to re-
the Soviet Union to "utilize all spect joint actions is endorsed,
means" for preventing a new war, along with a warning that con-
At the same time, it distinguish- struction of socialism in isola-
es between various types of tion from the remainder of the
wars--along the lines of Khru- camp not only is a "reactionary"
shchev's 6 January statement-- policy but could lead to the loss
and reiterates the duty of the of socialist gains. This formu-
Soviet Union to support strug- lation, together with the em-
gles for national liberation. phasis on "nationalism" in so-
cialist countries as a danger to
The program is also a strong bloc solidarity, while probably
restatement of other main points aimed at Yugoslavia, is equally
which have distinguished Khru-
shchev's foreign policy approach.
The "zone of peace" and the
heightened appreciation of neu- figure strongly in the Sino-So-
tralism which Khrushchev intro- viet polemic, closely adhere to
duced at the 20th party congress the Moscow declaration.
are re-endorsed
Similarl
. .
y,
peaceful accession is coAA.L'irmed The Chinese have so far re-
as the preferred method for Com- stricted their comments on the,
munists to come to power. The party program to the publication
program stresses complete and of a TASS report concerning it.
general disarmament as one of While there are passages in the
the essential tasks of Soviet program with which the Chinese
policy with equal emphasis on are certain not to agree, it is
the liquidation of military unlikely that it will lead to
bases. Although it bitterly de- open criticism unless the Soviet
nounces the US as the stronghold Union attempts to make it appear
of international reaction, the that the program is applicable
program commits the USSR to "con to all Communist countries. The
duct an active and consistent Chinese instead will probably
policy" of improving relations emphasize those sections of the
with the US and other capitalist program with which they agree
states. Thus the program per- and circumspectly disregard those
mits the USSR to adopt a more parts of the document which rep-
conciliatory foreign policy line resent wholly Soviet views.
or to continue its current more
militant posture.
In dealing with intrabloc
relations, the program repeats
much of the language of the dec-
laration signed by the world
3 Aug 61
applicable to Communist China
and Albania. The sections on
revisionism and dogmatism, which
If subsequent Soviet comments
interpret the program as a state-
ment of principles and guidelines
that should determine the actions
of all members of the bloc, both
the Chinese and the Albanians
can be expected to enter a strong
dissent'.
SECRET
WEEKLY REVIEW Page 7 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
NNW
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
Tunis is asking for an emer-
gency special General Assembly
in the belief that such a meet-
ing would strengthen its posi-
tion vis-a-vis France by showing
that a majority of UN members
support Tunisia's demand for the
evacuation of Bizerte.1
President Bourguiba, how-
ever, believes it more important
to keep on good terms with the
Afro-Asians than "take chances
on De Gaulle's making some con-
The UAR, Iraq,
Guinea, and Ghana were reported
to be exerting the strongest
pressure for immediate UN ac-
tion.
In Tunisia, the possibil-
ity persists that the cease-
fire will be disrupted by some
incident. Tunisian forces,
strengthened by the return of
the troops assigned to the Con-
go, former fellagha, and Al-
gerian volunteers are regroup-
ing but have little military
capability.
French forces maintain the
positions they seized outside
the Bizerte base complex two
weeks ago and have extended
their control somewhat in sev-
eral areas.
The Tunisian
Governmen announced on 2 August
that "antiaircraft" guns had
fired on French planes violating
Tunisia's air space near the
Algerian frontier, listing the
incident among 60 such viola-
tions occuring within two days.
France has moved to reduce
tension in the Bizerte area by
replacing paratroops stationed
at some posts outside the base
with gendarmes trained to handle
civilians and by repatriating
military dependents and some
French civilians. The French
Foreign Ministry has sent a rep-
resentative to act as a political
adviser to the Bizerte base com-
mander, Admiral Amman. Tunisia,
for its part, has relaxed some
of the restrictions imposed on
French nationals but continues
to hold 167 persons who it
claims were connected with in-
telligence agencies of the French
forces at Bizerte. Another 51
French citizens have been ex-
pelled for "illegal activities."
In response to third-party
overtures, Tunisian officials
have indicated that Tunis: would
both guarantee immediate intra-
base communications and permit
France a reasonable period in
which to evacuate the base. They
consider, however, that a meet-
ing between Admiral Amman and
local Tunisian officials--on
which the French made a prereq-
uisite for withdrawing their
forces into the base and viewed
as a means of obtaining the de-
sired "guarantees"--would be
"pointless" and consider it
a French excuse to "drag feet
over withdrawal."
President De Gaulle told
Ambassador Stevenson on 28 July
that a solution can be reached
only through bilateral negotia-
tions, asserting that France
would not be influenced by any
UN resolution distasteful to it.
Foreign Minister Couve de Mur-
ville told Stevenson the next
day that it is not France's in-
tention to remain permanently
in Bizerte. He stated that he
did not think France could leave
SECRET
3 Aug 61 TKLY REVIEW Page 8 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
right away and that it would
not leave under pressure, "even
if the base were useless." He
added that evacuation might be
possible in a year "if the
world situation were better."
Although Tunisia apparent-
ly has discouraged the dispatch
of foreign troops, it has ac-
tively solicited arms aid, and
the first installment of Arab
League military support passed
through Bengasi, Libya, during
the night of 30-31 July.[-
Bourguiba apparently still
hopes for a gesturzo of /Yestern
support to balance the backing
of the Arab and African govern-
r1,-.alts and the Soviet bloc. He
..ay hope some commitment will
emerge from Defense Minister
Ladgham's visit to ,Yashington.
Ladgham reportedly was selected
to go to Washington in a last
effort to get American support
before Bourguiba takes "more
drastic steps" because Ladgham
has argued strongly against a
hasty break with the West. In
effect, he was told to "go to
your friends and see what help
you can get."
Foreign Minister Mokaddem's
concurrent visit to Moscow is,
according to Ambassador Walmsley,
a courtesy trip to balance that
by Ladgham. Mokaddem is likely,
however, to return with an invi-
tation for Bourguiba to visit
Moscow. Even though the Tunisian
Government claims to have no
confidence in the USSR, Bourguiba
would probably accept in the be-
lief that he could not rebuff
Soviet psychological support.
The decision of the pro-
visional Algerian government
(PAG) to suspend the second
round of talks with the French
was taken,
because of France's
refusal to consider Algerian
control over the Sahara as part
of an Algerian settlement. The
FAG leaders said they refused
a French request to take "48
hours for reflection" before
requesting suspension because
the PAG position would still
have been the same. They denied
that their decision to suspend
the talks was connected with the
Bizerte question, but the timing
suggests they may have wanted
to take advantage of the pressure
France is under on that issue.
The top PAG negotiator,
Belkacem Krim, observed after
the suspension that "negotia-
tions cannot be based on a coun-
try from which four fifths of
its territory has been amputated.
SECRET
3 Aug 61 WEEKLY REVIEW Page 9 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
%no Nap
SECRET..,...
CURRENT INTELLIGENCE WEEKLY SUMMARY
Krim said they were pre-
pared to resume talks and had
made provisions for maintain-
ing contact with the French,
but whether the PAG will try ne-
gotiations again will probably
be determined at the meeting of
the 62-member National Council
of the Algerian Revolution
(CNRA) scheduled for the first
part of August. The failure of
two rounds'of negotiations will
almost certainly again bring to
the fore the struggle between
those who favor negotiations
and the military "hard-liners"
who advocate all-.out war.and no
compromise.
The CNRA may decide to
await French reaction to the
break and the results of discus-
sion of the Algerian problem in
the United Nations this Septem-
ber, while preparing for stepped-
up military activity. A move by
De Gaulle toward partition of
northern Algeria rather than to-
ward compromise on the Sahara
would probably end the chances
for a peaceful settlement.
I On the same
day the suspension was an-
n9unced, De Craulle told Ambas-
sador Stevenson that France
would remain in the Sahara for
purposes of economic develop-
moot, which he said was "impos-
sible" without French help.
The specific issue of sover-
eignty, he said, was "not im-
portant."
on the PAG to make concessions
The French President's com-
ments to Stevenson and others
about the utgency of an Algerian
settlement this year and his
repeated references to regroup-
ment of the Europeans could im-
ply that De Gaulle considers
negotiations under present cir-
cumstances virtually hopeless
and that he will soon proceed
with steps toward regroupment
as a further means of pressure
SECRET
3 Aug 61 WEEKLY REVIEW Pare 10 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
After a delay occasioned
in part by squabbling among rep-
resentatives from Leopoldville,
Cyrille Adoula, a moderate who
had been Premier Ileo?s interior
minister, w,as confirmed as pre-
mier by the Congolese parliament
on 2 August. Gizenga received
on of three vice premierships;
the other two went to oppor-
tunistic tribal leaders who have
been identified at various times
with both Leopoldville and Stan-
leyville. Christophe Gbenye,
a xenophobic Gizenga lieutenant
who has been showing considerable
ambition of his own, was named
interior minister. The new
government seems to include most
of the major Congolese factions
except Katanga; it is likely
to be unwieldy and may prove
unstable.
miership "the darkest moment
of our history," thereby en-
dorsing the stop-Gizenga move-
ment publicly for the first
time. Moreover, the continued
absence of Gizenga himself, to-
gether with the self-serving
activities of Gbenye, weakened
the Stanleyville group's unity.
A further factor which aided
the early confirmation of Aboula
was the desire of the legislators
to end their two weeks' monastic
seclusion at Lovanium University
outside of Leopoldville. The
near-unanimous vote by which the
Adoula government was approved
thus is not an accurate reflec-
tion of the government's strength
in parliament.
In voting late last week,
supporters of Gizenga were
elected by small margins to
most of the offices in the
chamber of deputies, and it
appeared that a Gizenga band
wagon might be getting under
way. The trend toward Stanley-
ville was halted, however, by
a variety of factors. The
senate, which is more con-
servative than the lower house,
offset the Gizenga victory by
electing moderate officers by
comfortable majorities. Kasa-
vubu,-in his speech officially
opening the legislature, termed
the period of Lumumba's pre-
Although Gizenga and his
supporters received a substan-
tial portion of the cabinet po-
sitions, it remains uncertain
whether the Stanleyville leader
will abandon his stronghold in
Orientate Province, He appar-
ently continues his efforts to
build up his strength there. An
arrangement has been made between
the Stanleyville government and
Air Jordan for 80 charter flights
from Cairo to Orientale Province
over the next 12 months, The
cargo shipments reportedly would
be prepared by the UAR Army,
The first charter aircraft ar-
rived in Stanleyville on 20 July,
but there has been no indication
that arms were aboard,
SECRET
3 Aug 61 WEEKLY REVIEW Page 11 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
The Sudan has not official-
ly modified its position refus-
ing landing rights to cargo
flights to Stanleyville. Al-
though Sudanese officials per-
mitted the 20 July flight to
land in Khartoum, they would
probably refuse overflight per-
mission in any case where they
had evidence that illicit cargo
was being carried.
A Chinese Communist am-
bassor arrived in Stanley-
ville on 31 July, according to
a Peiping announcement. The
USSR, Yugoslavia,-the UAR, and
Mali already have diplomatic
representatives in Gizenga's
capital.
In Katanga, there are signs
of growing instability. Offi-
cials,in Elisabethville appear
to be increasingly aware of
their isolation, but they are
unwilling to make the conces-
sions necessary for a rapproche-
ment with Leopoldville or with
foreign countries. Interior
Minister Munongo reportedly
has been given a free hand to
implement his plan to pressure
the West by seeking a rapproche-
ment with the Soviet bloc.
However, Munongo's statements
have evoked little response in
Western capitals, and his over-
tures have been rejected by
both Yugoslavia and the USSR.
Moscow has refuted Katangan
Interior Minister Munongo's
claims that the Soviet Union
is prepared "to help Katanga
by peaceful means." Izvestia
stated on 1 August thaie
USSR "does not intend to have
any dealings with the clique
of puppets" and "bankrupt
lackeys" in Elisabethville.
The article added, however,
that the USSR takes to heart
the suffering and struggle
for freedom of the people
of Katanga, but that it in no
way identifies the population
with "degenerates like Munon-
go. It
The Katanga regime is
under pressure from the UN
and from a few of its own sup-
porters to come to terms with
Leopoldville. Apparently as
a result of this pressure--
and probably also because he
thought Leopoldville officials
would bid high for the support
of his legislators in the power
struggle with Gizenga--Tshombd
made a quick trip to Brazza-
ville, where he offered to
negotiate with Kasavubu. His
terms were too high even to
permit a meeting, however, and
the trip proved abortive.
Katanga's isolation is com-
plicated by growing unrest in
the Katangan army. The Congolese
troops reportedly are dissatis-
fied over their pay--which is
lower than that of Leopoldville's
forces--and over the fact that
Belgians still occupy most of 25X1
the important military posts.
Several near mutinies have re-
cently occurred.
SECRET
3 Aug 61 WEEKLY REVIEW Page 12 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
SECRET
Premier Boun Oum, General
Phoumi,
and
36
other.
Vientiane
leaders
are
in
Phnom
Penh for
talks with Souvanna Phouma_ on
the possible formation of a
coalition government. Prince
?3ouphannouvong is boycotting
the Phnom Penh talks, in line
with his group's insistence that
follow-up talks to the Zurich
accord between the three princes
be undertaken by their deputies
at Namone; however, a ranking
Pathet Lao leader, in an appar-
ent effort to limit Souvanna's
concessions to the rightists,
has unexpectedly turned up in
Phnom Penh.
Despite the optimism pro-
fessed by both Souvanna and
Boun Oum, the prospects for any
meaningful agrcetnent at Phnom
Penh seem none too bright; Sou-
vanna's statement to the press
that his group must control the
foreign affairs, defense, and
interior ministries in particu-
lar does not augur well for the
success of the talks.
The Laotian ,Nation-.l Cor4-
gress passed a constitutional
amendment on 30 July which will,
permit the ding to assume full
powers and to choose a person
to form a new government with-
out reference to the National
Assembly. General Phoumi engi-
neered this amendment, in the
hope that the King himself could
be persuaded to assume the pre-
miership, thus denying the job
to Souvanna. This maneuver by
Phoumi to avoid serving under
Souvanna in a new government
seems destined to fail, since
the King continues to show lit-
tle inclination to be drawn in-
to the political arena. The
Pathet Lao has served notice
that it will not recognize the
legality of the constitutional
amendment, describing it as
merely another effort by the
"Bonn Oum - Phoumi clique" to
frustrate formation of a govern-
ment of national unity under
Souvanna.
At Geneva, the 14 powers
in restricted sessions continue
to work on the long list of
points bearing on Laotian neu-
trality and the establishment
of safeguards against foreign
intervention which the British
and Soviet cochairmen agreed
to in mid-July. Several points,
including the proposed stipula-
tion that Laos must eschew mili-
tary alliances, have already
been put aside for the future
because of failure to reach agree-
ment. The bloc participants
took advantage of the discussions
on military alliances to launch
a new broadside against SEATO.
The conference is now bogged
down over the question of with-
drawal of foreign, troops.
The military situation re-
mains generally quiet, with the
rr.on oon rains at their height.
The opposing forces are using
the lull for training, resupply,
and redeployment so as to be in
the best possible position should
general hostilities be resumed.
25X1
SECRET
3 Aug 61 WEEKLY REVIEW Paan 13 of 23
Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
SECRET -l"OV,
CURRENT INTELLIGENCE WEEKLY SUMMARY
Castro has long promised
Cuba's "recovery" of the US
naval base at Guantanamo by
legal means, and it has been
conjectured that Cuba may seek
UN action ordering the evacua-
tion of the base. The Argentine
ambassador to the UN has com-
mented to a US delegate there
on the careful'attention being
given by the Cuban delegate to
the Security Council proceed-
ings on the French-Tunisian
crisis. He also said he has
learned "on good authority" that
the Cubans are not spending the
$3,386. annual rental recently
paid by the US under the terms
of the 1903 US-Cuban agreement.
He inferred that some Cuban
maneuver to regain Guantanamo
is imminent.
Cuba will attend the con-
ference of the Inter-American
Economic and Social Council
opening in Punta del Este, Uru-
guay, on 5 August, even though
the Castro regime has frequent-
ly attacked the scope and nature
of the Alliance for Progress
program, the main issue to be
discussed there. Havana an-
nounced on 2 August that its
13-man delegation to the meet-
ings would be headed by Che
Guevara, who may be expected
to work for the frustration of
US objectives and to seek great-
er Latin American support for
the Castro cause.
The second Latin American
Construction Workers' Congress
met in Havana from 1 to 3 Au-
gust to draw up a united stand
on wage and benefit demands and
to express "solidarity" with
the Cuban revolution. Another
conclave of Latin American and
bloc labor representatives was
reportedly to meet in Havana
at about the same time in order
to lay the groundwork for es-
tablishing a new Communist labor
organization to replace the
largely ineffective Latin Amer-
ican Workers Confederation (CTAL),
the regional affiliate of the
'FTU.
In Panama, the action
of the Cuban charge in firing
shots from an embassy window
during an anti-Castro demon-
stration on 26 July has led to
demands for his expulsion. In
what may be a more significant
move, the Venezuelan Government
reportedly said on 25 July that
its relations with Cuba--which
have been cool for some time--
had become "precarious" due to
an altercation regarding Cuban
refugees who had taken asylum
in the Venezuelan Embassy in
Havana.
The Castro regime had de-
manded the recall of the Vene-
zuelan charge there for per-
mitting Cuban asylees to enter
and leave the embassy at will.
Venezuela, in turn, accused
Cuba of following a policy of
"deliberate delay in issuing
safe-conduct enabling refugees
to leave the country."
SECRET
3 Aug 61 WEEKLY REVIEW Pace 14 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
Iftw .,r,U11M1'
CURRENT INTELLIGENCE WEEKLY SUMMARY
Travelers from Cuba have
informed American press repre-
sentatives that there are at
least 600 Political refugees in
the Latin American embassies in
Havana. The number reportedly
is growing, largely due to Cuban
reluctance to issue exit permits,
to increased government repres-
sion of "counter-revolutionary"
elements since mid-April, and
to increasing difficulties in
arranging transport.
A ten-man Swedish trade
delegation has been invited to
Havana to discuss a deal involv-
ing such industrial products as
motor vehicles, construction
equipment'). and steel, but a
Swedish Foreign Ministry spokes-
man informed the US Embassy on
28 July that his government
had not been aware of the mat-
ter. 25X1
BRAZILIAN FOREIGN POLICY
Brazilian President Quadros'
foreign policy moves continue
to emphasize strengthened rela-
tions with the Sino-Soviet bloc
and modification of Brazil's
traditional posture of support
for the United States. These
moves have been interspersed
with less frequent expressions
of support for the West without
specific reference to the US,
such as Brazil's explanation
that its inter-American commit-
ments preclude sending more than
an observer to the Belgrade con-
ference of nonaligned states on
1 September. Quadros has re-
served his favorable remarks on
the US mainly for private con-
versations but taken pains to
publicize his complaints--as,
for example, his public criti-
cism of the US ambassador on the
eve of the arrival of a Soviet
good-will mission.
The mission, headed by
Mikhail Georgadze, secretary
of the Presidium of the Supreme
Soviet, conveyed a personal let-
ter from Khrushchev to Quadros
inviting him to visit the USSR.
Quadros accepted and reportedly
invited Khrushchev to Brazil,
although in neither case was a
date indicated. Quadros deco-
rated the mission and requested
the Gagarin visit, which started
on 29 July.
Khrushchev's letter held
out strong hope of Soviet eco-
nomic aid. A Soviet plan for
extensive development of irriga-
tion and hydroelectric power
facilities in Brazil's impover-
ished northeast reportedly was
submitted to the Brazilian dele-
gation that toured Eastern
Europe last May. According to
a Brazilian press agency, the
SECRET
3 Aug 61 WEEKLY RRVTVW
">,: Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3 ) of 20
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
Foreign Ministry announced on
31 July that the USSR had of-
fered Brazil $200,000,000 on
the same credit terms given
Egypt for the Aswan Dam. This
could mean long-term Soviet
economic involvement in Brazil,
since the payments on principal
and interest at 2.5 percent
would not commence until after
delivery and would be spread
out over 12 years after each
item reached Brazil.
After the Soviet mission
departed on 24 July, Quadros
ordered the Foreign Ministry
to take steps to renew diplo-
matic relations with the USSR,
thus rounding out Brazil's rec-
ognition of all European bloc
countries except East Germany.
Quadros on 7 July ordered meas-
ures to expand trade with East
Germany, and a ministerial level
delegation from East Germany is
expected to visit Brazil soon.
Foreign Minister )Lrinos reaf-
firmed Brazil's sdpport for
West Germany in a speech on 23
July, but East Germ .ny will play
up the visit as an important
step toward de facto recognition.
Brazil has some trade but
no diplomatic relations with
Communist China. Foreign Min-
ister Arinos stated on 20 July
that in the future, Brazil would
have to decide which of the two
governmenrt8 represents China.
Brazil has expressed support
for discussion of the Chinese
representation issue at the
forthcoming UN General Assembly.
Vice President Goulart is
now en route to Communist China
at Peiping's'invitation, charged
by Quadros with negotiations re-
garding expanded trade and the
establishment of commercial of-
fices in each country. Quadros
told Arinos on 28 July that he
would receive "with greatest
satisfaction" the North Korean
"good-will" mission seeking to
visit Brazil, and instructed him
to examine trade possibilities.
Quadros has tentative plans
to visit all of the South Amer=ican Countries in late October
or November and, according to
the press, later to visit the
US. Arinos stated publicly on
20 July that the Cuban problem
was "not bilateral but conti-
nental" and must be studied
through consultation with other
governments, although a hemisphere
meeting to debate the problem
is "not advisable" now. At the
same time, Quadros has ordered
a study of ways to increase trade
with Cuba.
Quadros' supporters ex-
plain his foreign policy moves--
which in propaganda impact have
been more pro-Soviet than neu-
tral--as political expediency to
conciliate leftist criticism of
his domestic economic policies.
These moves also conform to
Quadros' desire to play a more
important role in world affairs
--as seen in his efforts to ex-
pand Brazil's relations with
Africa and the Middle East--and
to his admiration of Tito and
Nasir. His actions, follow-
ing hard on extensive fi-
nancial credits from-the US
and Europe, could encourage
other Latin American countries
to consider expanding diplo-
matic and economic relations
with the bloc, especially as a
means of supporting their ef-
forts to obtain economic as-
sistance from the US.
SECRET
3 Aug 61 WEEKLY REVIEW Page 16 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3 ' F
'y , as ter. (enrd I ' *?
PANAMANIANS SEEKING REVISION OF TREATY WITH US
A campaign to increase
the annuity paid by the United
States for use of the Panama
Canal and surrounding Zone is
being pressed by Panama, and
the subject will probably be
raised at the Inter-American
Economic and Social Council
meeting beginning on 5 August
in Uruguay.
A change in the annuity
would involve revising the
Panamanian-US treaty--last re-
vised in 1955--and raising many
other issues in the process.
Panama is almost certain to
point out that a larger annuity
could be,financed by raising
the tolls--which have not been
changed since the canal opened
in 1914--or by giving Panama
a share of the increased income
that results from the rise in
traffic through the canal.
There may also be demands
to display the Panamanian flag
on transiting ships and at more
than one point-in the Zone.
More job opportunities and bet-
ter pay for Panamanians in the
Zone would be sought, although
wages there are already sub-
stantially higher than in Pan-
ama. Student groups and others
can be expected to propagandize
their claims that the US con-
trols several areas outside the
Zone. Panamanian businessmen
and information media are also
raising chronic irritants in
US-Panamanian relations.
Spokesmen for several
political parties reportedly be-
lieve they have persuaded Presi-
dent Chiari to seek Latin Amer-
ican support at the conference
for an annuity increase from
$1,930,000 to $10,000,000.
Foreign Minister Galileo Solis
was quoted as saying at the
meeting of Central American for-
eign ministers in late July
that Panama could not yet join
Central American economic in-
tegration efforts, since it
"lives in a constant struggle
to retain the lands taken from
the economy of the nation by
treaties with the United States."
Castro's propaganda agency
Prensa Latina was quick to use
this statement in its dispatches
to Latin America.
Like other Latin American
countries, Panama, while anxious
to participate in the Alliance
for Progress, has been slow to
present planned and documented
requests for assistance. In
addition, its preoccupation
with the US presence in the
Canal Zone has distracted it
from making any serious effort
to develop the rest of the coun-
try.
Ambassador Farland believes
that "Panamanian aspirations
relative to the US and the Zone
are deeply held" and that the
chief deterrent to a major ef-
fort to wring concessions from
the US has been the fear of pro-
viding the small but active Com-
munist-Castro forces in Panama
with new opportunities. He sus-
pects the regime may become im-
patient and disregard this fear.
Some Panamanians--including Vice
Foreign Minister Chiari, the
President's nephew--have indi-
cated that they favor using the
threat of violence as a pressure
tactic against the US. 25X1
SECRET
3 Aug 61 WT+'.FTCT.v RFVTF.W Doom 17 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
SOVIET
UNION
CURRENT INTELLIGENCE WEEKLY SUMMARY
UNITED NATIONS SECURITY COUNCIL ELECTIONS
Two of the three seats to
be filled on the UN Security
Council will probably be hotly
contested, and this may result
in a further splitting of the
two-year term by the contestants.
Furthermore, rivalry between
Cuba and Venezuela for the La-
tin American seat may lead to
a successful bid by an African
state for this vacancy. The
elections will take place during
the 16th General Assembly, which
opens on 19 September.
Rumania and the Philippines
are running for what was origi-
nally the Eastern European
seat on the council. A "gentle-
men's agreement" in 194-' assigned
one seat each to Eastern
Europe, the Commonwealth, the
Near East, and Western Europe,
and two seats to Latin America.
Distribution at that time was
based on the comparative vot-
ing strength of the regional
areas in the General Assembly.
Since 1952 the Eastern Euro-
pean seat has frequently been
filled by a Near Eastern or
Asian representative;or, when
a voting deadlock developed,
has been divided into one-year
terms for each contestant.
Venezuela, but there remains
some support for Guatemala, which
announced its candidacy primarily
as a counter to Cuba. Cuba is
arguing that the only way it can
properly defend itself against
"further incursion" is through
membership on the council. An
Argentine delegate believes that
this line of argument may be
dangerously effective.
Elections require a two
thirds majority in the assembly,
and a continued deadlock in the
balloting could lead to the emer-
gence of an African candidate.
An impasse last year over Por-
tugal's candidacy for the West-
ern European seat led to a split
term shared by Liberia and Ire-
land.
Ghana, which withdrew in fa-
vor of Ceylon in 1958, will prob-
ably replace that country in the
Commonwealth seat; it is the only
Commonwealth candidate at this time.
Ghana is also a leading spokesman for
tropical"Africa.
U N SECURITY COUNCIL "EASTERN EUROPEAN" SEAT OCCUPANTS
While Rumania is not con-
sidered the strongest Soviet
bloc candidate, the Philip-
pines is not a strong contend-
er either. Many uncommitted
countries consider that the
Manila government is too pro-
Western, and some will say it
had its turn in 1957 when it
split a term with Yugoslavia.
Much depends on the caliber of
the Philippine delegation to
the UN this year; in the past,
Manila's representatives have
not especially distinguished
themselves.
Cuba, which withdrew its
candidacy last year in favor
of Chile, now is running for
the seat being vacated by Ecua-
dor. A majority of the Latin
American caucus seems to favor
COMMON-
WEALTH (I)
NEAR
EAST (I)
UNITED
STATES
LATIN
AMERICA
UNITED
KINGDOM
EASTERN
EUROPE (I)
WESTERN
EUROPE (I)
1946-1948 Poland
1948-1950 Ukrainian SSR
1950-1952 Yugoslavia
1952-1954 Greece
1954-1956 Turkey
1956-1958* Yugoslavia- Philippines
1958-1960 Japan
1960-1962* Poland-Turkey
"Two-year term divided by agreement between
the candidates when neither received the
necessary two-thirds majority vote.
25X1
3 Aug 61 QWfDAIF IA 1L Page 18 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 ( MICI()GNTIAI
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
CURRENT INTELLIGENCE WEEKLY SU
AUSTRIA AND THE SOUTH
New instances of sabotage
in the South Tirol have inspired
a bitter exchange of notes
between the Italian and Austrian
governments and exposed tensions
within the Austrian coalition
cabinet. On 11 July, Tirolean
terrorists severed all rail
lines leading into northern
Italy. Bilateral negotiations
on autonomy for the area broke
down in June, and a resumption
of talks appears most unlikely,
inasmuch as Vienna is handicapped
by pressures from extremist
Tirolean elements and by the
reluctance of both parties in
the coalition cabinet to do any-
thing that might cost them sup-
port in next year's national
elections.
Reports of dissension
within the Austrian Government
have been highlighted by the
publication of charges in a
reputable Swiss newspaper on
22 July that terrorist activi-
ties in the South Tirol were
being countenanced by Foreign
Minister Kreisky and Interior
Minister Afritsch, both Social-
ists, and by radical national-
ists in the People's party.
In denying this accusation,
Kreisky referred to a "slander-
ous" campaign to force him out
of office and hinted that it
emanated from a government offi-
cial whois a member of the People's
party,
TIROL ISSUE
Embarrassed by these criti-
cisms, the Austrian Government
is seeking outside assistance
in solving the South Tirol
problem, possibly on terms less
far-reaching than its public
stand for de ,lure provincial
autonomy. Adamantly opposed to
taking the dispute to the Inter-
national Court of Justice, as
desired by Italy, Austria on 18
July acted to return the issue
to the UN General Assembly, even
though it has no real expectation
of favorable action. Its principal
hope appears to be third-party me-
diation. Thus far, however, the
US, India, and France have declined
the task, and the UK has merely
agreed to study the question. Re-
course to the Council of Europe is
also being discussed by Austrian
officials.
Tirolean terrorist activities
have caused Italy to institute a
system of visa requirements for
Austrian visitors and to threaten
to withdraw the citizenship rights
of German-speaking South Tirolese.
In Austria both government and press
have unreservedly condemned these 25X1
Italian countermeasures.
Approximate area of German
speaking population in
northern Italy (South Tirol)
-Region boundary
*-- Province boundary
ISECIREF
3 Aug 61 WPI EEKLY- 'I AI Page 19 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
VV11I sv.a^ ---- *4 W# W
CURRENT INTELLIGENCE WEEKLY SUMMARY
Spain's recent economic
advances under the US-backed
stabilization program have
strengthened Franco's political
control and made it unlikely
that there will be any efforts
to modify the regime in the
near future. The government
is concerned, however, over
the possible impact of Angolan
developments in Portugal and
the likelihood of increased
Moroccan pressure on Spanish
North Africa.
change of regime is summed up in
a quotation reported by the
American Embassy in Madrid, "I
am anti-Franco, but may he live
forever." Despite a recent pact
emphasizing the common objectives
of Christian Democratic, Social-
ist, and some small left-wing 25X6
parties, opposition to the regime
is still too fragmented to pose
a real threat.
After an initial period
of uncertainty and business
stagnation following inaugura- In recent months the govern-
tion of the stabilization pro- ! ment has become increasingly wor-
gram in July 1959 and the con- vied over African developments.
tainment of inflation, the
level of economic activity has
gradually risen, particularly
in the past year. Most Span-
iards have shared in the result-
ing prosperity to some degree
and anticipate more. Little,
however, has been done to as-
sure sustained economic growth,
and while interest is growing
in European integration, there
is no real pressure to put
through the liberalization of
the economic structure that
would be necessary before Spain
It fears in particular a move
by Morocco against the Spanish
Sahara, which King Hassan II re-
asserted last March was Moroccan
territory. Since that time there
have been border incursions by
both sides. Madrid has substan-
tially reinforced its garrison
in that area, but, in accordance
with an earlier agreement, is
withdrawing all troops from
Morocco t'self except for those
in the enclaves of Ceuta and
Melilla. On 27 July the under-
secretary of the Spanish Foreign
could participate. Greater pro- Ministry sought an expression
ductive capacity is still ham- of US intentions in the event
pered by various controls such Morocco threatened Spain's North
as the restriction on the dis- African possessions.
charge of superfluous workers,
which deters management from
hiring additional labor when
business picks up.
The present political
stability is reflected in
Franco's reported intimation to
his cabinet ministers last month
that he did not plan any port-
folio changes in the near fu-
ture. Popular aversion to a
Spain is also disturbed
over.-, Portugal's position in
Africa, fearing that a
marked deterioration there
might topple Salazar--whom
Franco has firmly supported
on the Angolan issue--and
pave the way for a left-
ist takeover in Lisbon.
CONFIDENTIAL
3 Aug 61 ?VEEKLY REVIEW Page 20 of 20
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 rr trirtr MTIAM
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
SPECIAL ARTICLES
THE QUESTION OF PARTITIONING ALGERIA
While De Gaulle's main aim
in threatening to "regroup" the
Algerian population is to in-
duce the provisional Algerian
government (PAG) to come to
terms on a solution of the Al-
gerian war, there is no doubt
he is determined to carry out
his threat as a last resort.
His commitment to protect the
European minority in Algeria
and his desire to strengthen
French military forces in Europe
this fall may outweigh consid-
erations of the extremely grave
economic and political prob-
lems involved,
The "Regroupment" Concept
The possibility of regroup-
ing the population and parti-
tioning Algeria has been under
discussion in France for some
years. Several early studies,
including one brought before
the National Assembly in 1957,
envisaged running a line from
north to south, starting on the
Mediterranean coast between
Algiers and Tizi-Ouzou. This
would have left the eastern
third of Algeria to the Mos-
lems, while the western two
thirds and the Sahara would
have remained under French
sovereignty.
After the overthrow of
the Fourth Republic in May 1958,
emphasis was put on integrat-
ing Algeria with France, but
De Gaulle has consistently cited
partition as a means of protect-
ing the European and pro-French
Moslem minority if an eventual
self-determination vote should
favor an end to all ties with
France. After the French broke
off the Evian talks on 13 June,
"regroupment" was pushed with
new urgency, primarily to get
the PAG to adopt a more concil-
iatory position on key issues.
The second break in nego-
tiations on 28 July may cause
De Gaulle to begin regroupment
in order to impress the PAG
with his willingness to try this
alternative, despite strong op-
position in France and PAG
threats to fight it indefinitely.
Precisely what he means regroup-
ment to include has not been
made clear, however, except that
he does not think of the Sahara
as being part of Algeria, and
that his reference to the tem-
porary nature of the resettle-
ment seems to rule out any in-
tention to make Algerian parti-
tion permanent. It also seems
clear that, at least in theory,
individual Algerians would be
allowed to move to the area of
their choice, with those choos-
ing French protection having the
additional option of moving
eventually to metropolitan
France or elsewhere, probably
with financial assistance from
the French Government.
The Regroupment Area
French officials in dis-
cussing regroupment have care-25X1
fully avoided defining the
territory that would remain
under French control,
~ On 28
July, De -Gaulle told Ambassador
CONFIDENTIAL
3 Aug 61 SPECIAL ARTICLES Page 1 of 14
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 roklfill=NTIA1
Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
Stevenson that if no negotiat-
ed agreement could be reached
with the PAG he would push for
regroupment of the French popu-
lation in Oran and Algiers this
year.
Premier Debr6)speaking
before the National Assembly,
discussed partition in terms
of Moslem and European popula-
tion densities. Other govern-
ment officials, notably-Minis-
ter of Algerian Affairs Louis
Joxe, have spoken of regroup-
ing the European population in
French-protected enclaves in
Algiers and Oran.
Unofficial speculation,
much of it in the press, as to
the area France will retain en-
visages a coastal strip running
from Algiers to Oran and on to
the Moroccan border and, usually,
projecting from 75 to 80 miles
inland. Some unofficial maps
show French-controlled corri-
dors along gas and oil lines
and the railroad running from
Oran to the missile test cen-
ter at Colomb Bechar. The
former information director in
Algiers, Jacques Coup de Fre-
jac, has suggested that an
early public delineation of
the boundaries would allow
population readjustment to
take place "naturally." Paris
may wish to conduct a refer-
endum prior to the public an-
nouncement of the exact area
to be retained. Partition is
more likely to be based on
military, economic, and geo-
graphic factors than on
the results of a referendum,
however, and such considera-
tions would argue for reten-
tion of the areas shown on the
accompanying map if these areas
are intended to be anything
more than a way station for
emigration of those unwilling
to accept Moslem rule.
The Problems Involved
There are enormous eco-
nomic, military, and human
problems involved in making
3 Aug 61
such a political division and
maintaining a separate state
against continued attack by the
PAG. An estimated 200,000
Europeans would be forced to
choose between moving if their
homes lay in that territory
France would relinquish--for
the most part, the cities of
Constantine, Bone, Phillippe-
ville, and Bougie--or living
under PAG rule. Also involved
would be the removal from the
French area of a considerable
number of Moslems who would
choose to align themselves with
the PAG. Even a temporary re-
location would create stagger-
ing problems of employment for
those displaced.
If partition were to last
for a number of years, the dif-
ficulties in both parts of the
country would be increased.
Algeria as a whole is already
heavily dependent on outside
aid, and even under normal con-
ditions it is questionable
whether the relatively costly
industrialization program France
has been pushing would substan-
tially raise living standards
in the face of the high Moslem
birth rate. Economic problems
would be especially acute in
the parts left to PAG control,
because most of the agricultural
and industrial wealth is concen-
trated in the Algiers-Oran re-
gion.
Even with massive inter-
national aid, establishing and
developing a viable economy in
Moslem Algeria would be a very
long range problem. The French-
held lands would be little bet-
ter off, and the production and
shipment of oil and natural gas,
which are the basis for French
hopes in the area, would be sub-
ject to the constant threat of
interruption with consequent
loss of revenue. France would
probably maintain control of
the key dams and rivers which
supply water to the coastal areas,
but some of the headwaters would
be lost, and aqueducts, dams,
and reservoirs would be subject
to PAG harassment.
CONFIDENTIAL
Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3 e 2 of 14
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
CONSTANTINE BONE
ALGIERS 1,000,000 Moslem 550,000 Moslem
800,000 Moslem 85,000 Non-Moslem 70,000 Non-Moslem
400,000 Non-Moslem
7_'-~Bone
if -,x
Estimated Population Figures
ALGERIA (excluding the Sahara)
Moslem-9,200,000
Non-Moslem-1,100,000
Selected road Oil pipeline
a t Electrified barrier ""'" `?" Department boundary
Dam Unofficial estimate of area
to be retained by France
ORAN
550,000 Moslem
300,000 Non-Moslem
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
14r0' - _' VViri ii#1-i's I its ?r? V Owo~
CURRENT INTELLIGENCE WEEKLY SUMMARY
Paris could expect to hold
the reduced area with fewer
troops and more cheaply than
at present. Concentrated within
perhaps 20 percent of the pres-
ent limits of Algeria, the
army would have shorter internal
lines of communication, and the
coastal terrain would simplify
the problem of maintaining a
pacified zones Terrorism in
the coastal strip and the secu-
rity of oil and gas pipelines
could probably be handled by
less than half the present
500,000-man force in Algeria.
The Aures and Kabylie
mountains, where the PAG re-
tains some military strength,
would be outside the French
area, and repulsing PAG at-
tacks would probably not be
appreciably more difficult
than the present job of main-
taining the electrified bar-
riers on the Moroccan and
Tunisian borders, Moreoever,
if the PAG were to move the
military forces it now has in
Tunisia and Morocco into the
area the French would evacuate,
retaliatory measures against
PAG attacks would no longer
need to be limited by fear of
offending a third country. The
major pipelines and pumping
stations would be vulnerable
to PAG harassment, but French
supremacy in the air and the
maintenance of military strong
points along the lines would
probably assure reasonably con-
stant operation.
PAG Attitudes
The PAG would prefer to
avoid a situation leading to
partition or regroupmente Rebel
leaders have made it clear that
the indivisibility and terri-
torial integrity of Algeria,
including the Sahara, is not
subject to compromise. They
maintain that if France does
attempt regroupment, the war
will go ono PAG Deputy Pre-
mier Balkacem Krim, for ex-
ample, stated publicly on 24
May, "Partition precludes a
return to peace "
The PAG
probably believes the wide-
spread response to its call for
demonstrations in Algeria on
5 July has effectively demon-
strated Moslem hostility to
partition and given warning of
PAG capabilities to arouse the
Moslems to even more militant
action if necessary,
The PAG would probably
establish itself on Algerian
territory once French forces
were withdrawn. It would press
immediately for diplomatic,
financial, and military support
from any source to maintain
control, while planning moves
against the French enclaves,
The large reservoir of Moslem
manpower then under its control
would permit substantial aug-
mentation of rebel forces. In
addition to its ability to dis-
rupt oil, gas, and water lines,
the PAG would be able to deny
Moslem labor to the French-
held territory, use heavier land
armaments than heretofore, and
possibly develop an air-strike
capability,
What De Gaulle May Hope to Gain
Regardless of the problems
involved in even a temporary
partition, De Gaulle apparently
feels that if negotiations should
fail, regroupment would be the
only way to force the Algerian
problem into a new stage. Al-
though most French officials ad-
mit that partition alone offers
no final solution, a regroup-
ment of population would,in
French thinking, have some ad-
vantages in the short run and
might lead to an acceptable
solution. With a smaller and
more easily defensible area to
hold, De Gaulle could go ahead
with his plans to return to
Europe military units now in
Algeria.
Many of the economic costs
would continue after partition,
CONFIDENTIAL
3 Aug 61 SPECIAL ARTICLES Page 3 of 14
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 ....as r-.r,.l tl IAI
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
gaigswar
CURRENT INTELLIGENCE WEEKLY SUMMARY
but it is assumed that the part
OIL the costly Constantine plan
that is designed to spread in-
dustry to the largely agricul-
tural eastern section of Algeria
would be abandoned. Some ad-
justments to accommodate new
borders might involve unexpected
initial expenditures, however--
as, for example, the cost of
shifting the terminus of the
Hassi. Messaoud pipeline from
Bougie to Algiers.
The stress French officials
have placel on the temporary na-
ture of the regroupment proposal
indicates that Paris looks on
it as a first step toward a
more permanent arrangement. De
Gaulle's public statements in-
dicate a willingness to with-
draw from Algeria those Euro-
peans and pro-French Moslems
and Jews who hesitate to risk
PAG rule. Such a step would be
bitterly opposed by many Euro-
peans in Algeria, but there is
evidence that others are adapt-
ing themselves to the possibil-
ity that they may have to leave,
and European emigration to
France has recently increased.
De Gaulle's threat to exchange
populations between Algeria
and France and "leave Algeria
in chaos" would pose great
problems in France, and there
is no way of gauging the
strength of rightist military
and civilian reaction to such
an "abandonment."
Most of the Europeans who
have migrated from North Africa
to France in the past half-dozen
years have had the economic
means to establish themselves
in some proprietary capacity.
In many instances, however,
they antagonized the local
inhabitants by their attitudes.
They were dismayed, for example,
to find labor costs far higher
than those they were accustomed
to, and reports of their dis-
illusionment is fairly common
knowledge in Algeria. It is ar-
gued that expulsion of the
400,000 Moslem Algerians now
in metropolitan France would
not necessarily open a corre-
sponding number of jobs for
European emigrants from Algeria,
because most of the Moslems oc-
cupy menial posts, and over half
of them are engaged in seasonal
3 Aug 6]
agricultural jobs or even in
more casual employment such as
peddling.
This line of reasoning may
set too high a price on the
skills of the European working
class in Algeria, however, be-
cause most of them are in direct
competition with their Moslem
neighbors and would in the long
run have little to lose in seek-
ing employment elsewhere. More-
over, the ability of West Germany
to absorb more than 11,000,000
refugees from Eastern Europe in
the postwar period is frequently
cited by proponents of "abandon-
ing" Algeria as evidence that
France could assimilate the im-
migrants.
De Gaulle is probably still
hopeful that after a period of
partition, the PAG would be
amenable to an accommodation
with the French-held area. He
may anticipate that the PAG
would eventually agree to give
the regroupment areas a measure
of autonomy within an Algerian
state, or that it might even
permit the return of Europeans
to the area they had vacated.
The chief French negotiators at
Evian and Lugrin have felt that
the PAG has no understanding of
the problems involved in govern-
ing a large and underdeveloped
area like Algeria. De Gaulle
may hope that the problems of
trying to hold together the
rump state without the western
coastal area, the key adminis-
trative centers and ports, and
the skilled European population
would convince the PAG of the
need to cooperate with France,
If such is indeed the
French hope, it is likely that
Paris overestimates the effect
partition would have on the PAG
and underestimates the ability
of the Algerians to win inter-
national assistance to obtain
independence and control of the
Sahara. The failure of negotia-
tions would almost certainly lead
to the ascendancy of the military-
minded "hard liners" over the
"negotiators" now in control of
the PAG, and there is little like-
lihood that the PAG would accept,
as a result of partition, the French
terms it was unwilling to accept
soStQNfl~4U~+L
Page 4 of 14
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
f`-? jt ^r- - - - NNIF 4W
The adoption of a moderate-
ly liberal constitution for
Southern Rhodesia, following a
referendum on 26 July by a pre-
dominantly white electorate,
is at best a small step toward
solution of the problems fac-
ing the Federation of Rhodesia
and Nyasaland.
The new constitution is
opposed by most Africans and
by a large minority of the
whites. Northern Rhodesia is
still simmering following the
publication of new constitu-
tional proposals, which Britain
probably will impose in the
face of widespread African op-
position. In Nyasaland, where
the situation has been quiet
as a result of the firm dis-
cipline exerted by Hastings
Banda's Malawi Congress party,
there is the possibility that
Banda may try to take Nyasaland
out of the Federation after
the protectorate's first Af-
rican-dominated legislature
convenes late this summer. Un-
til all these problems have
been worked out, further con-
stitutional development for the
Federation as a whole will be
kept in abeyance.
Background
The Federation, compris-
ing the self-governing colony
of Southern Rhodesia and the
two British-administered pro-
tectorates of Northern Rhodesia
and Nyasaland, was set up in
1953 despite vigorous African
opposition. There was some
political motivation in its
formation; Britain hoped that
by creating a multiracial state
in central Africa, it could
head off the growing trend to-
ward racialism in its colonial
possessions.
The principal reasons
for the creation of the Federa-
tion, however, were economic.
It was argued that the econo-
mies of the three territories
were complementary, with North-
ern Rhodesia furnishing foreign
exchange through its copper ex-
ports, the burgeoning Southern
Rhodesian economy providing a
wide range of manufactured and
agricultural products, and Nyasa-
land exporting labor to the oth-
er two territories. In addi-
tion, it was expected that South-
ern Rhodesian industry would
benefit from preferential treat-
ment in the markets of the north-
ern territories, and that South-
ern Rhodesia and, particularly,
pove*tystricken Nyasaland would
profit from association with
copper-rich Northern Rhodesia.
The planners also hoped
that the diversified Southern
Rhodesian economy would cushion
the effect throughout the Fed-
eration of any drop in copper
prices. Further, it was be-
lieved that an economically
viable federation would leave
Southern Rhodesia less subject
to the economic attraction of
the Union of South Africa.
From its formation until
1957, the Federation enjoyed a
period of phenomenal economic
growth, based principally on
rising copper prices. A declin-
ing world copper market in 1957
and 1958, however, sharply re-
duced the Federation's foreign
exchange position and forced a
slowdown in developmental ex-
penditures. At the same time,
racial conservatives came more
and more to dominate white pol-
itics in the Federation.
These developments led to
stepped-up African nationalist
activity and ultimately to dis-
turbances in early 1959, where-
upon most of the African parties
were outlawed and their leaders
jailed. In the wake of these
disturbances, and particularly
after the appointment of Iain
Macleod as colonial secretary
in October 1959, the British
CON TIAL
3 Aug 61 SPECIAL ARTICLES Page 5 of 14
Approved For Release 2007/10/23: CIA-RDP79-00927A003300030001-3
 PnnrrInrikiTIat
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
and Federation gov-
ernments decided that
African demands for
greater political
representation should
be met at a faster
pace, although fric-
tion continued be-
tween British and
federal authorities
over the speed of Af-
rican advance. For
the last year and a
half, Britain has
been engaged in com-
plex negotiations
with whites and Af-
ricans in an effort
to produce a revised
set of constitutions
for the Federation
as a whole and for
its three parts.
The Constitutional
Proposals
The proposals
for Northern and
Federation of Rhodesia and
"A" voters' roll--which has
high educational and financial
qualifying requirements and
thus will be dominated by whites
--while the "district" tallies
will favor the "B" roll, which
will be predominantly African.
Southern Rhodesia are the points
most vigorously contended. Nyasa-
land is assured of an African
majority in the legislature--
although Africans probably will
still be in the minority in the
cabinet--after elections on 15
August. Constitutional talks
on the Federation have been ad-
journed since last December,
pending the outcome of the oth-
er negotiations.
The new Southern Rhodesian
constitution, approved by an
electorate composed of some 78,-
000 whites and 4,400 Africans,
allows for the election of Af-
ricans to the legislature for
the first time--albeit in a
minority position. Fifty of
the 65 members are to be elected
from "constituencies" and the
remainder from "districts."
Each voter will cast a ballot
for a candidate on each list,
but the "constituency" votes
will be weighted to favor the
3 Aug 61
Under the new constitution,
Britain will abandon its veto
power over Southern Rhodesian
racial legislation. The Rho-
desians will get a bill of
rights and a constitutional
council whose duty it will be
to advise on racial matters.
The constitution liberalizes
somewhat the colony's land-
tenure legislation--a sore
point among rural Africans.
The Northern Rhodesian
constitutional proposals are
even more complex--the British
Labor party has termed them a
"dog's breakfast." The proposals
envisage the creation of a leg-
islative council with 45 elected
,gyp
Eriffifflyleffs
Nyasaland
Page 6 of 14
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 r'nntc1nEh1T1 M1
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
members. Of these, 15 would be
elected by an upper roll simi-
lar to the Southern Rhodesian
"A" roll and therefore dominated
by whites, and 15 would be
chosen by a predominantly Af-
rican lower roll. Of the re-
maining 15, one would be elected
by the Asian and colored (mixed-
blood) communities combined.
The others would be chosen from
seven double-member constituen-
cies according to an extremely
involved formula designed to
ensure that these members have
at least a minimum of support
from both major races. The gov-
ernor apparently would retain
the authority to nominate a few
additional members, and there
presumably would also be a few
ex officio members.
The constitutional propos-
als for both territories are ac-
ceptable to the white-dominated
United Federal party (UFP),
which controls the federal gov-
ernment and that in Southern
Rhodesia and has considerable
support among whites in North-
ern Rhodesia. They have been
rejected by African nationalists,
by white liberals, and by die-
hard European conservatives.
Nevertheless, the Southern
Rhodesian constitution probably
will go into effect following
elections this fall, and Britain
probably will impose its new
proposals on Northern Rhodesia,
at least for a short period.
Politics in all three
territories are dominated by
moderates of both races, but
there are extremist elements
among both Africans and Euro-
peans who are putting pressure
on the present leaders. More-
over, the gaps even between
moderate groups are wide and
often appear unbridgeable.
Nyasaland: In Nyasaland,
Hastings Banda's Malawi Congress
party seems certain to capture
all 20 lower-roll seats and to
have a good chance in three of
the eight upper-roll constit-
uencies in the elections on 15
August. Under the Nyasaland
constitution, this means that
Banda Is party is sure of three
portfolios in the ten-member
cabinet--and that at least one
of the two ministries allocated
to upper-roll legislators may
also fall to the Malawi. Banda,
who is running unopposed, has
indicated he will take the Agri-
culture Ministry.
Although Banda has been
trying to project a more moder-
ate image of himself and his
party, there is no indication
that his animosity toward the
"stupid Federation" and toward
federal Prime Minister Welensky
has abated. Malawi officials
insist that Nyasaland has re-
ceived little economic benefit
from federation, and they com-
plain in particular that funds
for economic development have
largely bypassed the protecto-
rate. They concede that Nyasa-
land's perennial deficits, which
run about $8,400,000 a year, have
been made up from federal funds,
but they believe this amount
could be obtained elsewhere.
Moreover, they are unwilling to
continue in a federation they
believe is dominated by Southern
Rhodesian whites. Thus, if the
Malawi emerges in a strong posi-
tion after the August elections,
Britain may be faced with an early
demand from Banda to break up
the Federation.
Northern Rhodesia: In
Northern Rhodesia, there is a
widespread realization among
the whites that an African-con-
trolled government in the near
future is virtually inevitable.
The majority report of the advi-
sory Monckton Commission--which
examined the Federation in de-
tail last year in preparation
for the December constitutional
CONFIDENTIAL
3 Aug 61 SPECIAL ARTICLES Page 7 of 14
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
CURRENT INTELLIGENCE WEEKLY SUMMARY
talks--recommended such a devel-
opment last October. The re-
cent British proposals, however,
leave the question of racial
predominance up in the air and
may actually be shaded slightly
in favor of the UFP.
The proposals for Northern
Rhodesia have been rejected by
both the United National Inde-
pendence party (UNIP) and the
African National Congress (ANC),
the two major African parties.
Kenneth Kaunda, the moderate
president of UNIP and the lead-
ing African in the protectorate,
has received blanket authoriza-
tion from his followers to con-
duct a campaign against the
proposals. Kaunda's program
involves consultations with con-
stitutional lawyers and sympathet-
ic states abroad, and he may
plan to demand that Britain name
a definite date for Northern
Rhodesia's independence.
Kaunda is strongly opposed
to violence, but UNIP extremists,
although presently under firm
party control, might be able to
foment demonstrations if the
rank and file becomes dissatis-
fied with Kaunda's slow pace.
UNIP has strong influence in the
key African mine workers' union,
and it could disrupt the Feder-
ation's economy if it managed
to line up the mine workers be-
hind its political aims.
Although both UNIP and the
ANC oppose the new constitutional
formula, neither has said it will
refuse to take part in elections
based on the proposals. The com-
plex electoral system is unlikely
to'produce a stable parliamentary
majority for any of the factions,
however, and it is questionable
whether the African leaders will
participate in a government.
Britain thus may be forced to
reopen talks on revision of the
Northern Rhodesian constitution
within a few months. No matter
what the constitutional develop-
ments, Northern Rhodesians of
all races can be expected to
press for a major reduction in
their financial contributions
to the other territories.
Southern Rhodesia: The
last-minute British changes in
the Northern Rhodesian consti-
tutional proposals apparently
were made in order to help
Welensky and Southern Rhodesian
Premier Whitehead in the referen-
dum over the new constitution
for Southern Rhodesia. Southern
Rhodesia, where 225,000 of the
Federation's 312,000 whites live,
has been a virtually autonomous
territory since 1923 and has Al-
ways been the most resistant of
the three territories to politi-
cal change.
The last year and a half
has seen a sustantial liberali-
zation in the racial attitudes
of the Europeans in Southern
Rhodesia, although they still
lag behind the northern areas.
Europeans regard the admission
of 15 Africans to the legisla-
ture as a major concession, and
Whitehead and Welensky seem
to have felt that even this ad-
vance would be jeopardized if
Africans received a parliamentary
majority in Northern Rhodesia.
Britain apparently yielded to
their pressure, even at the risk
of alienating Kaunda, the strong-
est force for moderation in the
protectorate.
Last February, the liberal
trend among Southern Rhodesian
whites apparently caught up
momentarily with the demands of
the rather inept leaders of the
main African group, the National
Democratic party (NDP). The re-
sult was an appearance of agree-
ment among all factions at the
colony's constitutional confer-
ence. Immediately thereafter,
however, NDP President Joshua
Nkomo began to back away from
the agreement and ultimately re-
pudiated it altogether. Under
CONFIDENTIAL
sasaff
3 Aug 61 SPECIAL ARTICLES Page 8 of 14
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
.~ C{NFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
pressure from extremists within
the party and from radical Afri-
can states, Nkomo apparently has
come to feel that the constitu-
tion will perpetuate the Afri-
cans' minority position.
In protest against the pro-
posals, the NDP on 23 July
mounted a highly successful
"referendum" of its own among
the African populace. Although
the announced totals--373,000
"p.0" votes to 471 in favor--
doubtless reflect an African
willingness to go along with
the crowd as well as consider-
able pressure from the NDP, the
"referendum" was the party's
most successful operation to
date. An attempt to foment
strikes prior to the official
referendum was largely ineffec-
tive, however--partly because
of a prompt police and army
mobilization and partly be-
cause Nkomo failed to give
wholehearted support to the
radical youth groups behind the
strike call.
Whitehead thus may be faced
with much more effective African
opposition in the future. In
addition, many Europeans in
Southern Rhodesia favor break-
ing up the Federation before
the other two territories at-
tain African parliamentary
majorities. Most advocates of
this course favor the establish-
ment of an independent state,
although this might set the econ-
omy back as much as 20 years;
some believe Southern Rhodesia's
salvation lies in amalgamation
with South Africa.
The political uncertainty
has virtually halted the expan-
sion of Southern Rhodesia's
economy, and both African and
European unemployment is at a
record high. With population
pressure in the native reserves
driving increasing numbers of
Africans into the money economy,
and with African nationalists
exerting greater influence in
the labor movement, Southern
Rhodesia may face unrest un-
less economic expansion is re-
sumed.
Optimists hope that Afri-
cans in Northern Rhodesia can
be persuaded to go along with
their new constitution, at least
for a short while; that the lib-
eralizing trend among Southern
Rhodesian whites, which may have
been interrupted during the
African disturbances last week,
can be resumed and even acceler-
ated; that Welensky and White-
head can control white separa-
tist sentiment in. Southern Rho-
desia; and that the leaders of
the NDP can exercise firmer
control over party extremists
and can guide Southern Rho-
desian Africans into relatively
moderate channels. Further,
they hope that Banda and his
lieutenants, who have become
increasingly realistic on eco-
nomic questions, can be persuaded
that continued association with
the other territories will pro-
vide the surest source of finan-
cial aid to Nyasaland; that
Northern Rhodesians will con-
tinue to permit a large part of
their copper proceeds to be used
elsewhere in the Federation;
and that the expansion of the
money economy can be resumed at
a rate which will absorb the
large numbers of Africans who
are trying to enter it.
Unless these conditions are
substantially met, the Federation
has little chance of survival as
a meaningful entity. Yet it is un-
likely that it can continue with
anything resembling its present
degree of centralization or that
the Africans will permit Welensky
to continue as premier in the re-
vised setup. The closest form of
association that seems possible is
an economic and common-services un-
ion, with most political functions
returned to the constituent terri-
tories. In any event, it is unlikely
that all the new constitutional structures
will be worked out and political tur. -
moilreduced until well into 1962.
25X1
CONFIDENTIAL
smilemmw
3 Aug 61 SPECIAL ARTICLES Page 9 of 14
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
Next Page (s) Next 5 = Page,(s) In Doc
u
ment Denied
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
 Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3
vvIVI IUI- I ins %we Name
Approved For Release 2007/10/23: CIA-RDP79-00927AO03300030001-3