WEEKLY SUMMARY

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December 6, 1963
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a1I// /A IIIII .... I, K111 IN =11a OCI No. 0309/63 Copy No. 77 (b)(1) (b)(3) WEEKLY SUMMARY OFFICE OF CURRENT INTELLIGENCE CENTRAL INTELLIGENCE AGENCY RETURN TO RECORDS CENT 1 E IMMEDIATELY AZi`FER, US JOB f Z" BOX APPROVED FOR RELEASE^ DATE: 02-Jun-201 0 GROUP I Excluded from automatic downgrading and declassification (Information as of 1200 EST, 5 December 1963) STATUS OF COMMUNIST WHEAT DEALS During the period of stalemated Soviet negotiations for 2.5 million tons of US wheat, other Communist countries have moved ahead with new purchases. THE' (SOVIET PARTY PRESIDIUM 4 CZECHOSLOVAK LEADER NOVOTNY STILL IN TROUBLE Circumstances surrounding his recent trip to Moscow and the low-key propaganda treatment it received suggest that he is no longer in good standing with the Soviet leadership. PEIPING LAUNCHES NEW CAMPAIGN IN AFRICA Premier Chou En-lai and Foreign Minister Chen Yi will begin an unprecedented tour of Africa in mid December to drum up support for Peiping's hard-line programs and promote a second Bandung conference. ASIA-AFRICA HANOI REVIVES NEUTRALITY SCHEME FOR SOUTH VIETNAM 8 The North Vietnamese are again pushing the idea of a "neutralized" South Vietnam, apparently in the hope of generating free world pressure for tiated settlement of the Vietnamese war. a nego- AREA NOTES 9 On Laos and Turkey &9 RET 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page i ASIA-AFRICA (continued) Page CYPRUS FACES CONSTITUTIONAL CRISIS President Makarios has formally proposed constitu- tional changes which would diminish the rights of the Turkish minority. POWER STRUGGLE CONTINUES IN IRAQ AND SYRIA Baathist influence is being reduced in the Iraqi regime, and the Baathist premier of Syria seems on the verge of breaking with party extremists. YEMENI DISENGAGEMENT PLAN IN TROUBLE Egypt has made no net reduction in its troop strength in Yemen, and Saudi Arabia is unlikely to agree to continuing the UN observation mission when its current mandate expires on 4 January. EGYPTIAN ECONOMIC POLICY MAY BE CHANGING Cairo appears to be adopting austerity measures in order to obtain continued Western aid for its development projects. BRAZZAVILLE GOVERNMENT TO HOLD ELECTIONS Prominent leftists are on the unopposed slate for Congo's 8December legislative elections, ant they probably will strongly influence the government that is formed. ZANZIBAR FACES INCREASING COMMUNIST ACTIVITY The Arab-dominated government of this British pro- tectorate which becomes independent on 10 December has done little to oppose the growth of contacts with the Communist bloc, but its leaders now'show signs of a decreasing compladency in this regard. INDEPENDENT KENYA'S PROSPECTS UNDER JOMO KENYATTA Stability in Kenya, which will receive independence on 12 December, will hinge largely on Prime Minister Kenyatta's ability to cope with animosities among the tribes,,to control factional rivalry within the ruling party, and to restore economic confidence in order to attract foreign capital. (Published sepa- rately as Special Report OCI No. 0309/63B) GOVERNMENT FORMED IN ITALY A center-left cabinet--bringing the Socialists into the government--has been formed by Christian Dem- ocrat Aldo Moro and is expected to seek a vote of confidence within the next few days. 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page ii EUROPE (continued) FRENCH-ALGERIAN DISPUTE OVER SAHARAN OIL CONCESSIONS Algeria wants a larger share of profits and control but hesitates to push its interference to the point of provoking withdrawal of French economic aid. RENEWED DISCUSSION OF EUROPEAN POLITICAL UNION A revival of interest--sparked by a new initiative from Belgium's Spaak--has been evident among EEC members, but the obstacles to agreement on the form of political.unity remain formidable. AREA NOTES On the Coal-Steel Community POSTELECTION PROSPECTS IN VENEZUELA President-elect Leoni's major problems are to contain Communist terrorism--or risk military in- tervention--and, since no party has a majority in Congress, to pull together an effective coalition. NEW POLITICAL TENSIONS IN THE DOMINICAN REPUBLIC Tensions have been heightened by recent moves by the military-installed provisional regime against pro-Castroites and by reaction to the regime's plans for a return to constitutional government. CROSSCURRENTS IN BRITISH GUIANA By ordering new elections under a proportional system before giving the colony independence, London hopes to curb the power of Cheddi Jagan's Communist-dominated ruling party. It is far from certain, however, that this action will provide the means of ousting Jagan or of creating an ef- fective alternative government. (Published sep- arately as Special Report OCI No. 0309/63A) AREA NOTES On Surinam, Guatemala, and Bolivia Page 17 21,22 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 1 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 2 During the period of stale- mated Soviet negotiations for 2.5 million tons of US wheat, other Communist countries have moved ahead with new purchases. .The East European countries are concluding three- to five-year purchase agreements with Canada, and Communist China has made its first purchases for 1964 de- livery from Western countries. In addition to the 8 mil- lion tons of wheat the USSR has under contract from Canada and Australia, Moscow has bought about 400,000 tons of wheat flour in Western Europe, is importing 400,000 tons of wheat on loan from Rumania, and is purchasing smaller quantities of grain other than wheat. The European satellites have contracted for the delivery during~1964 of approximately 1.8 million tons of free world wheat and smaller quantities of other grain. These relatively large purchases are necessary to off- set shortfalls in imports of Soviet grain during 1963-64. The USSR had supplied 2.7 mil- lion tons of wheat annually in 1961 and 1962. Hungary has asked for additional amounts of US wheat, and the Czechs seek financing of over 200,000 tons of American wheat. Bulgaria has approached US officials con- cerning prospective grain im- ports, and Poland has requested 900,000 tons of American wheat under PL-480. The satellites also are negotiating with West European brokers for smaller quantities of grain. Agreements with Canada for a total of over 2 million tons of wheat covering deliveries be- yond 1964 have been signed by Poland, Czechoslovakia, and Bulgaria. Ottawa also expects to conclude similar agreements with Hungary and East Germany. Satellite long-term interest in Western grain reflects acknowl- edgment of Soviet agricultural problems and the inability of the satellites to meet their growing needs for grain from domestic production. Communist China's first big wheat purchase for 1964 delivery was for 1.1 million tons from Aus- tralia. Peiping also is buying at least 300,000 tons from Ar- gentina and apparently as much from Mexico. It also will soon conclude a contract for Canadian wheat under its agreement cover- ing the import of up to 5 mil- lion tons from mid-1963 to mid- 1966. Smaller'purchases may be made elsewhere, as Peiping ap- parently will need more than the 5.5 million tons of grain it im- ported this year to maintain per capita consumption at the same level. Most of the Soviet grain imports are being paid for in cash. The large Canadian deal contains credit terms, but Mos- cow has boggled at current in- terest rates. The satellites, with fewer cash resources, are seeking to defer payment as long as possible. Peiping has bought on credit where available, but is prepaying its grain debts. CURRENT INTELLIGENCE WEEKLY SUMMARY SECRET 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 4 PRESIDIUM OF THE COMMUNIST PARTY OF THE SOVIET UNION Probable Areas of Responsibility Full Members Age Positions (Not Necessarily Complete) Khrushchev 69 Party first Secretary Party and government head 'Chairman, RSFSR Party Brezhnev Voronov Kiri lenko Kozl ov Titular head of state 52 RSFSR Premier 57 First Deputy. Chairman, Kosyg i n Kuusinen Mikoyan Podgorny Polyansky Shvernik Party Secretary Party Secretary Government affairs of the Russian Republic RSFSR party-industrial affairs Senior adviser to Khrushchev, particularly infields of foreign affairs and foreign. trade .Communist parties !(?) Government agricultural affairs' CPSU~relations with` foreign Communist parties Coordination of world Communist movement Heads trial-board concerned with infractions of party discipline CLASSIFIED MATERIAL ON REVERSE OF PAGE 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 5 Circumstances surrounding Czechoslovak party boss Novotny's recent trip to Moscow and the low-key propaganda treatment it received suggest that he is no longer in good standing with the Soviet leadership. Whatever the reason for his trip, Novotny did not receive the public en- dorsement from Khrushchev usually accorded a favored leader of Novotny's rank. Novotny partic- ularly needs open Soviet back- ing at this time as he struggles to maintain control over dis- sident elements in the Czecho- slovak party. The official party-state delegation--the first from Prague to Moscow since 1958-- consisted of the new premier, Jozef Lenart, and several ,hi h- level economic officials The official business of the delegation apparently was primarily economic, as several economic agreements were signed-- none of which was important enough to warrant Novotny's presence. However, the delega- tion also signed a 20-year exten- sion of the Soviet-Czechoslovak Friendship and Mutual Assistance Pact, and this event probably was arranged to provide an ex- cuse for Novotny's presence. The pact would technically have expired on 12 December, but its self-renewing clause would have extended it another five years automatically and precluded any real need to sign new documents. Soviet reportn oNo votny's quick trip- was considerably less than that given the Czech leader's 1958 visit and still less than that given the visit by Hungary's Kadar in July. A joint com- muniqud issued on 28 November contained none of the standard praise for Czechoslovakia's "progress" or the party's leader- ship abilities. Czechoslovak leader. It seems likely that No- votny was summoned to Moscow because of his inept handling of the challenge to his power which has developed within his party during past months. KhrushcheV'sfailure to give him public backing is likely to be interpreted by the opposi- tion in Prague as tacit support -IR 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 6 A, MEY NIGERIA CENTRAL AF&ICA "REPUBLIC Possible Stops on Forthcoming Tour of Communist China's Chou En-lai and Chen Yi Recognizes Communist China Recognizes Nationalist China ISH ARA NEOA4 y,~~/ 8 DECEMBER 1963 34374 R- EPUBLIC EV%, ,6v T H.E orthern i ANGOLA Rhodesia EOERATION OF RHO0ESIA ANAL NYASALAND Souehem SOUTH- Rhodesia WEST ECHUANALANDJ-^I AFRICA I~~ REPUBLIC OF saland MAL REPJ PEIPING LAUNCHES NEW CAMPAIGN IN AFRICA Communist China's Premier Chou En-lai and Foreign Minister Chen Yi will begin an unprecedented tour of Africa in mid-December designed to drum up support for Peiping's hard-line programs.and to promote a second Bandung Conference. No other major world power has ever sent two such high-ranking offi- cials on a grand tour-of the con- tinent. For the Chinese, too far away for effective military meddling and unable to afford a large-scale eco- nomic assistance program for Africa, a barnstorming expedition by Peiping's suavest and most ad- roit leaders would seem the only way of rallying Afro-Asian support. Chou and Chen can be expected to argue persuasively for a second Bandung Conference and to attempt to gain support for a militant race-oriented struggle against "co- lonialism" and "US imperialism." The two-month trip will re- portedly include visits to Guinea, Ghana, Mali, Algeria, Tanganyika, the Somali Republic, and the UAR. They; may also visit the other Afri- can countries with which Peiping has diplomatic relations--Morocco, Uganda, and the Sudan. A stay in Albania.is apparently scheduled, and an official visit to Pakistan on the way home is probable. Pei- ping has made no formal announce- ment of the trip and full details of the itinerar are not yet avail- able. Chen is apparently scheduled to reach Africa first. He will attend the independence celebra- tions in Kenya on 12 December and possibly those in Zanzibar two days earlier. Like other former British colonies in East Africa, both these countries are expected to recognize Peiping, and the Chi- nese foreign minister's presence would probably expedite such ac- tion. Chou En-lai will ostensibly be returning state visits by nu- merous African leaders to Peiping in recent years, and a general aura of high-powered public rela- tions will surround much of his activity in this area where Pei- ping has been competing with the Soviet Union for influence. He will arrive in Cairo on 14 December at the head of a 50-man delegation. Chen Yi will probably meet Chou here to take part in serious sub- stantive discussions which are likely to center on the continuing Sino-Indian border impasse. The UAR was one of India's stanchest supporters during the Colombo con- ference mediation efforts late last year. Chinese efforts to get backing for a second Afro- Asian meeting on the Bandung pat- tern are likely to be parried by Nasir who, with Tito, has teen a leading proponent of a nonaligned summit conference even broader than the 1961 Belgrade meeting. Another stop of major impor- tance will probably be Algeria. In recent months the Chinese have made a big play for oloser')contacts with the Ben Bella regime. Five separate Chinese delegations at- tended Algerian National Day cele- brations this fall, and the Chi- nese recently granted the Algerians a $50-million interest-free loan. 6 Dec.. 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page HANOI, REVIVES NEUTRALITY SCHEME FOR SOUTH VIETNAM The North Vietnamese are again pushing the idea of a "neutralized" South Vietnam, apparently in the hope of gen- erating free world pressure for a negotiated settlement of the Vietnamese war. Hanoi probably estimates that such pressure would eventually force the US to reconsider its policy of full military support for the anti- Communist forces in South Viet- nam. The last such North Viet- namese campaign occurred early in 1962 when Hanoi sought to broaden international sentiment for a settlement of the Vietnam- ese war along lines then being proposed for Laos. There is no indication that Hanoi is as yet willing to make any meaningful conces- sion in its oft-proposed terms for a settlement. It continues to maintain, for example, that all US forces must be withdrawn from South Vietnam before even a cease-fire. It has also declared that a "coalition" gov- ernment--in its view, one open to Communist domination--must be formed prior to any neutrali- zation arrangement. The latest North Vietnamese neutrality proposals have been directed primarily at Laos, Cam- bodia, and France. Hanoi also voiced swift ap Proval of Prince Sihanouk's re- cent proposal for new discussions aimed at guaranteeing Cambodia's neutrality by the signatories of the Geneva Accords. The Com- munists probably hope to use such a conclave as a sounding board for discussing South Viet- namese neutralization--a propos- al Sihanouk has frequently en- dorsed. For the first time in over. a year, moreover, the Hanoi- controlled National Front for the Liberation of South Vietnam has publicly. reiterated its support of a three-country neutral- ity plan similar to that pro- posed by Sihanouk. The Front's proposal promptly received official North Vietnamese en- dorsement. Hanoi has allegedly stressed the importance of a change in US policy toward South Vietnam in connection with its willing- ness to "negotiate" a settlement of the war. 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 8 LAOS CLASSIFIED MATERIAL ON REVERSE OF PAGE Asia-Africa Laos: Right-wing and neu- tralist forces are continuing to exert pressure on Pathet Lao units in central and northern Laos. Neutralist forces which recently captured Vang Vieng have advanced 16 miles farther north and now control strategic Route 13 from the capital to this point. In central Laos rightist troops have captured Kam Keut, a Pathet Lao strong point at the western end of Route 8. These forces, reinforced by an airborne bat- talion from Savannakhet, have ad- vanced toward Lak Sao, a depot on the Communists' supply route to the Nhommarath region. Right- wing regular and guerrilla forces on the Plaine des Jarres are con- tinuing to subject nearby Xieng Khouang town to heavy artillery bombardment, but the Pathet Lao and dissident neutralist troops apparently are holding their positions. Pathet Lao propaganda has strongly protested these mili- tary moves. On 30 November, General Singkapo, the Communist military commander, charged that the US and the rightists were attempting to sabotage current neutralist.- Pathet Lao negotia- tions and warned that the right- ists would be held "fully re- sponsible for the consequences." The latest talks, on 3 December, between neutralist commander Kong Le and Singkapo ended in an angry exchange of recrimina- tions. Nevertheless the Pathet Lao thus far have not attempted major military counteraction, and still seem interested in arranging talks between Premier Souvanna and their leader Sou- phannouvong. In view of contin- uing reports of supply convoys moving into Laos from North Vietnam, however, the Communists clearly are at least retaining their capability for major mil- Turkey: A substantial vic- tory by the opposition Justice Party (JP) in last month's lo- cal elections dealt the final blow to Turkish Prime Minister Inonu's coalition government. Both the minor coalition parties decided to withdraw, in the be- lief that their association with Inonu had cut deeply into their popular support, and Inonu re- signed on 2 December. The JP, heir to the ousted Menderes regime and distrusted by Turkish military leaders, now appears likely to re-enter the government. This will involve their choosing. itary initiatives at a time of some compromise between JP lead- ers, many of whom prefer to con- tinue to build their strength on the outside, and the military, who, despite their anti-JP feel- ings, are reluctant to take over the government. There remains the possibil- ity, however, that the JP will press its political advantage beyond acceptable limits and precipitate an army take-over. In any event, a period of in- tense political maneuvering lies ahead, which may bring in some less controversial figure than Inonu as head of the government. CET 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 9 SE (YT /YnT l~l'. The three-year-old dispute between Greek and Turkish Cypriots over interpretation and implemen- tation of their republic's con- stitution has entered a new phase which has sharply increased ten- sion between the two communities. On 30 November Greek Cypriot President Makarios presented Turk- ish Cypriot Vice President Kuchuk with a 22-page memorandum con- taining 13 suggested changes in the constitution, which would have the over-all effect of dimin- ishing the rights of the Turkish minority. Among the proposals were elimination of the presiden- tial and vice presidential veto powers, abolition of the provi- sions requiring separate majori- ties by Greek and Turkish Cypriots for enactment of certain laws, establishment of unified munici- palities, unification of the ad- ministration of justice, and mod- ification of the provisions now calling for a 70:30 ratio between Greek and Turkish Cypriots in the civil service to reflect the ac- tual (approximately 80:20) ratio between the two ethnic groups. The reaction in Ankara, how- ever, will largely determine the final attitude of the Turkish Cypriot leadership. Turkish Gov- ernment leaders have been ada- mantly opposed to any fundamental change in the Cypriot constitu- tion. The current political crisis in Ankara makes major con- cessions on Cyprus at this time highly unlikely. J Should the Turkish Cypriots eventually reject his memorandum, or present unaccept- able counterproposals, he has warned that he will act unilat- erally, ; if. necessary, to void those provisions he regards as harmful.. fence. Well-trained paramilitary organizations reportedly exist in both communities. While lead- ers of these organizations have indicated their reluctance to initiate hostilities, these well- armed irregular forces might be brought into action, if discipline among the integrated police and gendarmerie forces breaks down in the face of isolated acts of vio- 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 10 POWER STRUGGLE CONTINUES IN IRAQ AND SYRIA Political alignments in both Syria and Iraq continue to shift rapidly as contending factions compete for power, and sudden upheavals are possible in both countries. Reactions in either country to events across the border are likely to complicate the picture fur- ther. In Iraq, anti-Baathist of- ficers and members of the govern- ment have begun to eliminate Baathist influence in the re- gime. The minister of communi- cations, a leader of the moder- ate faction of the Baath Party, has been eased out of office and exiled to Beirut with sev- eral associates. Baathist Vice President Bakr is also said to be leaving the country. Hardan Tikriti, a strong Baathist who heads the Defense Ministry, has requested a British visa. Pressures for a move against Baathists still holding posi- tions of power have been grow- ing among "Arab nationalist army officers and government officials desiring closer rela- tions with Cairo. President Arif has apparently acquiesced in the action against the Baath, but his role in the move is not yet clear. The anti-Baathist faction. now appears to have the upper hand, but the fate of 4th Divi- sion Commander Nasrat, a dedi- cated Baathist, is not certain. He reportedly has surrounded Baghdad with troops in the ex- pectation of a showdown. If he still retains his command, he may attempt to redress the present situation. A decay of the Baathist position in Iraq is almost cer- tain to undermine further the position of the party in Syria, where Premier Hafiz, a military member of the Baath international command, appears on the verge of breaking with party extrem- ists. He reportedly has halted the activities of the national guard--the Baath's paramilitary wing--and is casting about for support from traditional Syrian political elements, as well as from the military." Several con- servative politicians have been freed from custody in the past few days. ing. While Hafiz' actions are reported to have infuriated doctrinaire Baathist Major Gen- eral Umran, who is deputy pre- mier, Interior Minister Atasi, a long-time party member, is said to have resigned and to have denounced Umran as well as Hafiz as opportunists. Umran has not been seen for several days, and there are rumors that Hafiz is attempting to remove him from his position. Baath' Party founders Aflaq and Bitar have asked for visas to go abroad, and the US Embassy believes that a coup is develop- GRFrT- CURRENT INTELLIGENCE WEEKLY SUMMARY YEMENI DISENGAGEMENT PLAN IN TROUBLE The disengagement plan for Yemen is threatening to break down on 4 January, the date the latest extension of the UN ob- servation mission there expires. In the five months the plan has been in effect, Nasir has failed to make any net re- duction in Egyptian troop strength in Yemen. In late Oc- that he would attempt to withdraw 5,000 troops by 31 De- cember. However, over-all strength remains between 30,- 000 and 32,000. Nasir would presumably like to reduce his commitment in Yemen--which has cost him an estimated $50 mil- lion--but is afraid the repub- lican regime would collapse without heavy Egyptian support. It is increasingly unlikely that Saudi Arabia will agree to another extension of the UN Mission, and Crown Prince Faysal probably will resume supplying arms and ammunition to the Yemeni royalists after 4 January. Several thousand rifles and several million rounds of ammu- nition have already been stock- piled in the border area ready to be handed to the tribes on short notice. Efforts to broaden the base of the Yemeni republican regime have not moved forward, primarily because Nasir is ap- parently not yet ready to make the compromises necessary for a resolution of the stalemate. Egyptian. a ro is apparently fearful that a broadened Yemeni government would mean a reduc- tion or even elimination of Egyptian influence, since many of those republican leaders who command any significant following tend to be anti- rrnrn , rr+ I I .1' 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 12 1960 1961 1962 FISCAL YEARS (ENDING 30 JUNE) * The Egyption pound is currently valued at $2.30 EGYPTIAN OUTPUT, CONSUMPTION, AND PRICE INDICATORS CLASSIFIED MATERIAL ON REVERSE OF PAGE Economic realities may be forcing Egypt to modify its long- standing policy of improving living standards while keeping prices and taxes at minimum levels. Although actual changes have been slight, Egyptian budget data suggest that more extensive innovations'are planned in what is probably a reluctant response to the severe strains affecting the Egyptian economy. The pat- tern of change appears also to conform at least in part to rec- ommendations made by Western lending institutions and, al- though the shifts may. be intended as stopgap measures, the long- range requirements for foreign money could make them longer lasting. In recent years Egypt has greatly increased personal in- comes and kept personal taxes low while using subsidies to maintain price,;,stability. This policy has resutted in a con- tinuing foreign trade deficit and a ballooning domestic debt. The budget for the current fiscal year suggests that Egypt is shifting its approach. Allo- cations for consumer subsidies have dropped by more than 10 percent, instead of increasing as in recent years. Budgeted tax yields, almost unchanged in the recent past, are programed to increase almost 12 percent; the income and property tax category shows a jump of almost 20 percent. . A series of articles in a semiofficial Egyptian newspaper has underscored the'economic drain caused by heavy consump- tion. The reader was exhorted to understand that imports must be cut and consumption of domes- tic products reduced so that more could be exported. In mid- November, a government-sponsored conference adopted resolutions urging that development projects be financed through such media as social insurance payments and price adjustments. These press reports appear to presage even stricter import controls, higher prices, and enactment of some form of social-security tax to supplement government revenues. Inasmuch as Egyptian foreign currency reserves are negligible, the government has been anxiously seeking Western loans to cover the trade gap. All Western leaders support recent advice from the International Monetary Fund which included recommenda- tions that Egypt raise taxes, reduce subsidies, and allow prices to rise. If development plans are to be implemented, sizable injections of outside funds will be required for many years to come. Self- interest, therefore, appears to dictate continued adher- ence. to the main lines of the IMF's strictures, but any sharply adverse political re- percussions might still turn 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 13 Asia-Africa BRAZZAVILLE GOVERNMENT TO HOLD ELECTIONS The political situation in Congo (Brazzaville) remains confused and highly unstable as moderate Premier Massamba- Debat's ineffectual provisional government prepares for the 8 December vote on its new draft constitution and unopposed national legislative slate. There is no clear indication of who will emerge in charge of the postelection government, but it seems likely to be strongly influenced by the left- ist youth and labor elements which spearheaded the overthrow of conservative President You- lou last August. An electoral college is to convene on 19 December to fill the presidency--evidently planned to be the most power- ful executive position. Al- though Massamba has not taken a strong hold on the provisional government, his superior pres- tige may secure his election. At least some of the left- ist labor and youth leaders who chose to exert their influence on the provisional government from behind the scenes now have evidently decided to claim of- ficial positions. The slate of candidates for the new 55-mem- ber National Assembly includes the names of several of the more prominent leftists. Much depends at this stage on the attitude and behavior of the military leaders, who since August have been the ultimate political arbiters in Braza- ville. While most of them ap- parently continue personally to favor Massamba-Debat, their willingness to buck the left- ists has become more doubtful. While the military would prob- abily act to thwart any coup attempt, they are unlikely to play a strong positive politi- cal role, and recent instances of indiscipline among enlisted men cast considerable doubt on the army's real effectiveness. After the elections the leftists may induce the new government to adopt a more re- ceptive attitude toward the Soviet bloc. This may lead to the early extablishment of bloc diplomatic missions in Brazza- ville. It is unlikely, how- ever, that the Congolese will turn abruptly away from the French, on whom they are over- whelmingly dependent economi- ically. Present influence of the lo- cal leftists on Massamba-Debat is reflected in the rather free- wheeling activities of the siz- able group of extremist exiles from Leopoldville who have since October been using Brazzaville as a base of operations against Pre- mier Adoula. The exiles are being provided sanctuary, protection, and some direct support by ele- ments associated with the provi_ sional government. The exiles claim they have been promised even freer rein after the election --a development which would acer- bate frictions between the Braz- zaville and Leopoldville govern- &E 6RE-T- 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 14 The British protectorate of Zanzibar--consisting of the islands of Pemba and Zanzibar --will attain independence on 10 December. At the outset, the new nation faces increasing Communist activity, along with racial rivalries, a shaky econ- omy, and chronic political in- stability. Zanzibar traditionally has been governed by a Sultan--who remains the country's constitu- tional ruler--and is dominated by its 50,000 Arabs, who con- stitute only one sixth of the total population. They run the agricultural economy, which is based on production of 80 per- cent of the world's cloves and is headed for serious decline in view of dwindling foreign demand. Arabs also lead the Zanzibar Nationalist Party (ZNP), which controls the government in a coalition with a smaller party, even though the African opposition Afro-Shirazi Party polled 54 percent of the vote in last July's elections. The leadership of both major parties is predominantly anti-Communist, but it has appeared unable or unwilling to oppose the extensive growth of Communist contacts and commit- ments undertaken by the parties' youth. wings and labor unions. Many leaders have visited East- ern Europe and China for tours or short training courses. There are about 120 Zanzibaris studying in the bloc, including 17 guerrilla trainees in Cuba. Zanzibar's bookshops are well stocked with Communist publica- tions, the sale of which pro- vides part of ZNP's income. International communism has shown far greater interest in the islands than their rela- tive unimportance in Africa would seem to warrant. Both the Soviet bloc and Communist China have tried to establish a wide range of contacts and a fund of goodwill, but the total impact has peen scattered and superficial. The most active and influ- ential Communist is Abdulrahman Mohammed, generally known as "Babu." He represents the New China News Agency and was gen- eral secretary of ZNP until last June, when he quit to form his own party. He had provided ZNP's labor union and youth wing with many links to inter- national Communist organizations. So far he has had only limited success in attracting the extrem- ists of other parties and unit- ing the firebrands, political malcontents, and Communist sympathizers in the labor unions. There also are hopeful signs of a decreasing complacency on the part of Zanzibari govern- ment leaders, especially the dominant figure, Ali Muhsin Barwani, who is minister of ex- ternal affairs and trade. Barwani has pushed bills through the National Assembly allowing the government to prohibit any publication and outlaw any organ- ization deemed prejudicial to the maintenance of public order. SE RET 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 15 The four coalition partners. are the Christian Democratic Party (CD), the Socialist Party (PSI), the Social Democratic Party (PSDI), and the Premier Vice Premier Minister of Defense Minister of the Budget Minister of Finance Minister of the Treasury Minister of Interior Minister of Justice Minister of Education Minister of Public Works Minister of Agriculture Minister of Transport Minister of Post and Telecommunications Minister of Industry Minister of Labor Minister of Foreign Trade Minister of Merchant Marine Minister of State Participation Minister of Health Minister of Tourism Ministers without Portfolio Aldo Moro (CD Center) Pietro Nenni (PSI) GiuseppeSaragat (PSDI) Giulio Andreotti (CD Extreme Right Wing) Antonio Giolitti (PSI) Roberto Tremelloni (PSDI) Emilio Colombo (CD Center) Paolo Taviarii (CD Center) _; C>ronzo Reale (PRI); Luigi Gui (CD Center)- G' ovanni Pieraccini (PSI) Mario Ferrari-Aggradi, (CD Left Wing Angelo Jervolino;(CD Center) Carlo Russo (CD Center) Giuseppe Medici (CD Center) Giacinto Bosco (CD Left Wing) Bernardo Mattarel la (CD Center) Giovanni SpagnolIi (CD Center) Giorgio Bo (CD Left Wing) Giacomo Mancini (PSI) Achille Corona (PSI) AttilioPiccloni (CD Right Wing) Giulio Pastore (CD?Left'Wing) Luigi Preti '(PSDI) Umberto Deile=Fave (CD Center) Carlo Arnaudi .(PSI) 631205%4 CLASSIFIED MATERIAL ON REVERSE OF PAGE A center-left cabinet--bring- ing the Socialist Party into the government--has been formed in Italy by Christian Democrat Aldo Moro after nearly a month of dif- ficult negotiations. It is ex- pected to seek a vote of confi- dence within the next few days. The major part of the govern- ment program is concerned with economic reforms. Nevertheless, the short-range program appears to have been aimed partly at re- assuring conservative business interests, which have been fearful that a center-left government would concede too much to the "Marxist" viewpoints of the Socialists. The four parties making up the coali- tion, it is stipulated, "do not foresee nationalization measures." Much emphasis is placed on the need to develop economic plan- ning. In the foreseeable future, however, this planning is appar- ently not to go beyond the methods followed in a capitalist society such as France. That is, it seems not to envisage subjecting individ- ual business firms to compulsion, but rather implementing the na- tional plan by means of government initiatives in such areas as pub- lic investments, loans, subsidies, and tax exemptions. To curb inflation, the coali- tion agreement envisages such measures as a temporary freeze on new public expenditures and an ef- fort to hold wage increases roughly in line with productivity gains. The agreement carefully avoids, however, any appearance of opposi- tion to "fair" wage demands, and it suggests that credit restric- tions will not be applied so strongly as to curb "productive" investments. It implies that upper-income groups will be ex- pected to take on a greater share of the nation's tax burden, but there are no overtones of a soak- the-rich program. The agreement thus shows the hand both of those regarding inflationary pressures as the primary economic concern and those seeing them as second- ary to reforms of Italy's eco- nomic structure. Hence the out- look is for considerable friction within the coalition when it tries to translate general principles into specific implementation. Moro's announcement of a cabinet list had been postponed several times, largely as a re- sult of differences over who would fill the economic ministries. The Socialists had been threatened with a revolt by the important Lombardi faction unless the party was given one of the three major economic posts. This problem was resolved by alloting the Budget Ministry to a Lombardi associate. A Social Democrat was given the Finance post,; and Treasury went to a Christian Democrat. Continuation of Giulio Andreotti in the Defense Ministry gives a certain vested in- terest in the government to the right wing of the Christian Demo- cratic Party, which has generally opposed the party's center-left policy. Social Democrat Giuseppe Saragat, who became foreign minis- ter, is generally considered one of Italy's most pro-US political rr E 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 16 c 0 .F T~ a a - v w h h0 M g 0 w 0- 0 O z G.. ' _1 m m 0. Uzz a a a c a CLASSIFIED MATERIAL ON REVERSE OF PAGE Europe FRENCH-ALGERIAN DISPUTE OVER SAHARAN OIL CONCESSIONS Recent negotiations be- tween France and Algeria cast doubt on the future of France's Saharan oil and gas concessions. At issue are the questions of Algeria's share of oil conces- sion profits, the transfer of oil profits out of Algeria, and the financing of transport fa- cilities for petroleum. Presi- dent Ben Bella has indicated that, while he does not plan to nationalize France's Saharan concessions, he does want a re- negotiation of the 1962 Evian accords which ended the war in Algeria and which. govern French oil activities there. Paris' most recent concern arises from the Algerian reac- tion to a request by Trapal, an international consortium includ- ing companies in which the French Government has an interest, for permission to build a $72-million oil pipeline from the Hassi- Messaoud oil fields to Arzew on the Mediterranean (which would follow the route of an existing gas and gas-liquids pipeline). Algeria rejected the consortium's offer of a 20-percent share in the project and demanded 51 per- cent. Fearing that granting Al- geria controlling interest in this pipeline would jeopardize French control of other oil trans- portation facilities, Paris vigorously opposed the Algerian counterproposal and took steps to nullify possible Algerian overtures to other EEC countries for financing. Algeria is ap- parently determined nevertheless to gain a controlling interest and has already obtained agree- ment from Kuwait to lend $26.8 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY million. If Algeria elects to use these credits to start con- struction of the pipeline, there is little the consortium could do to stop it. In this event, France's chief concern would be to see that the concession- aires' right to transport oil through the new pipeline is protected. If an?agreement on rates cannot be reached, they would have recourse to arbitra. tion under the provisions of the Evian accords. Algerian oil revenues are expected to total $50 million in 1963, and Ben Bella has indi- cated that he wants a greater share. In addition, Algeria has instituted exchange controls which may prevent the oil com- panies from exporting their earnings outside of Algeria. France might grant Algeria a larger share of oil revenues, but is unlikely to accept the exchange controls on earnings. Paris has indicated that its aid program hinges on nonin- terference with the French-dom- inated companies' exploitation of Saharan oil and gas. Since official French aid-is expected to total $260 million in 1964, the threat of a cutback is likely to forestall nationali- zation, but might not prevent less drastic measures. Algeria may also be disinclined to under- cut the concessions because of;its hope to persuade France and other Western European nations to finance a trans-Mediterranean gas pipeline. French officials have suggested that a prerequi site to any such undertaking would be confirmation of pre- vious Saharan oil accords. Page 17 A revival of interest in European political union has been evident among the Common Market (EEC) countries in re- cent weeks, but:.the obstacles to agreement on any particular form of organization continue to be formidable. In the face of appeals from various. quarters for new initiatives toward political integration, Belgian Foreign Minister Spaak came up with a concrete proposal on 19 November for a European political com- mission. From Spank's view- point, such a commission--com- parable to the executive com- mission of the Common Market- would provide a'forum for a . "dialogue" among the national governments on political, mil- itary, and cultural problems. It would represent, he feels, a compromise between the con- cept of a supranational European federation--which he still favors as an ultimate goal-- and a union of sovereign states. Spaak,flxst made this sug- gestion in August'1962, and was probably encouraged to reoffer it now in the belief that the French may have become more accommodating in their views. He is also convinced that eco- nomic integration cannot proceed much further without a parallel political advance. In omitting this time the reference usually made by Benelux leaders to Britain's participation in any new negotiations, Spank probably felt that London's inability to do so should not prevent an at- tempt to move ahead now and to take advantage of any new French flexibility. The responses to Spaak's proposal have not been favorable. The Dutch were displeased by his failure to mention British participation, and the Italians reportedly are jealous because they continue to see themselves in the role of conciliator among the Six. Spaak's plan reportedly was not mentioned at the recent De Gaulle - Erhard talks, and the French Foreign Ministry is re- ported to be unimpressed. Despite the coolness toward Spank's specific proposal, the subject of Europe's political unity is likely to remain alive. Erhard, for example, has talked increasingly of the need for action although he has so far advocated no definite program. A meeting of Christian democrat- ic parties of the EEC countries on 10 December is to discuss possible initiatives on their part toward political integration. De Gaulle probably feels that any new moves on his part-- given the previous failure of his plan for a loose political grouping--would not be favorably received by the rest of the com- munity. The impression persists, however, that France is not averse to other EEC members taking the lead, and may, indeed be encour- aging them to do so. Moreover, should the current EEC negoti- ations on agriculture and the "Kennedy tariff round" be suc- cessful, the resulting atmos- phere would be much more con- ducive to consideration of polit- ical union proposals than has been the case for more than a year. &S GRE T_ 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 18 GREEK CHAMBER OF DEPUTIES 6312033 (Following 3 November 1963 Election) CLASSIFIED MATERIAL ON REVERSE OF PAGE CSC: The Council of Min- isters the Coal-Steel Com- munity postponed a formal deci- sion to raise steel tariffs at its 2 December meeting, but left the way open for such an increase a month hence. A ma- jority of the six members--in- cluding France and West Germany --favored a Community-wide in- crease to the Italian level, which is the highest in the CSC; but the required unanimity was lacking because of strong Dutch opposition and the inability of the Italian delegate to take a stand. The CSC president was authorized to consult bilater- ally with the US, the UK, Japan, and other countries which would be affected by a later decision to raise tariffs. Some CSC and French officials interpret Dutch willingness to go along with these consultations as a "deci- sion in principle" ultimately to approve a rise in tariffs. In another move suggesting a generally restrictionist outlook, the ministers approved, subject to consultation, a $10 per ton duty on pig iron imports, replacing the present ad valorem rates which are lower. By approving supplement- ary quotas on steel and pig iron, they also agreed to continue to restrict imports of these items 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 19 RESULTS OF VENEZUELAN ELECTIONS,1 DECEMBER1.1963 Republican Democratic Union (URD) Jovito Villalba 16 Wolfgang Larrazabal 35 Social Christian Party (COPEI) Rafael Caldera 24 Rafael Caidera National Unity Front (FUN) Arturo Uslor Petri 17 Others *Based on unofficial press service returns of about 90 percent of the estimated total vote. Final tabulations probably will show lower figures for Leoni and Coldera, but little significant change in the relative standing of the four major candidates. CLASSIFIED MATERIAL ON REVERSE OF PAGE Western Hemisphere POSTELECTION PROSPECTS IN VENEZUELA Venezuela's new President- elect Raul Leoni, standard bearer of the Democratic Action (AD) party, received only about one third of the more than three million votes cast in the 1 De- cember election. Rafael Caldera, of the-'progovernment Social Christian Party (COPEI), ended up in second place with almost 24 percent. Thus, the COPEI-AD coalition put together by Pres- ident Betancourt has lost ground since 1958, when the two parties accounted for about 65 percent of the vote. In Venezuela, voting is com- pulsory. The penalties for not voting are severe, including a fine of 5 percent of the income tax of the preceding year and a number of civic restrictions.. The voters in this election were not intimidated by threats of violence from the Communist-di- rected Armed Forces of National Liberation (FALN) or by anti- Betancourt propaganda emanating from Havana and Moscow. Theturn- out of voters was about the same as in 1958, when 93 percent of the registrants cast ballots. Leoni's difficulties before his inauguration on 2 March are likely to be substantial. Even before the votes were counted, the FALN threatened to react to a Leoni victory by instigating a "blood bath." A new flurry of terrorist incidents occurred on 2 and 3 December, but on 5 December the FALN released Colonel Chenault, deputy chief of the US Military Mission, who had been kidnaped the week before. Even the continuation of terrorism, however, will focus attention on another of Leoni's problems--how to get along with the military. Leoni has been overshadowed by Betancourt dur- ing their 35-year comradeship in various revolutionary move- ments, imprisonments, and ban- ishments. One result of Leoni's earlier self-effacement is that he has failed to develop a reputa- tion for decisive action, and some military leaders fear that he will not be sufficiently forceful in repressing the FALN. His election, therefore, may renew threats of military inter- vention. Leoni's other major problems have to do with congressional relations and with formation of his government. In congress, no party will have a majority. Moreover, the diverse elements which make up the congressional slate of each of the parties may not respond to ordinary party discipline. Leoni is also in for some hard bargaining if he is to have an effective coalition re- gime ready by the time he takes office. His efforts promise to be especially complicated by the fact that COPEI increased its voting strength by one third and will probably demand greater representation in the government. In addition, with an apparent need to spread patron- age more thinly than his predeces- sor had to, Leoni will be running a risk of stirring resentment own party faithful. 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 20 NEW POLITICAL TENSIONS IN THE DOMINICAN REPUBLIC Political tensions in the Dominican Republic have been heightened by recent moves on the part of the military-installed pro- visional regime against pro-Castro- ites and by reaction to the regime's plans for a return to constitutional government. On 2 December, the government outlawed the pro-Castro 24th of June Political Group (APCJ), until that time the only legal extreme leftist party in the country. This action was taken after police, searching for arms caches in the mountains near the northern coast, reportedly encountered two bands of guerrillas. According to a I December communique, the regime claims to have captured several of the rebels together with arms, ammunition, and Communist litera- ture. The two bands, totaling about 70 men, are said to be led by the president of the APCJ and one of his lieutenants. Meanwhile, the regime's elec- toral plans, which entail four elections for lesser offices-- beginning in September 1964-- prior to presidential balloting in July 1965, have aroused little enthusiasm outside government cir- cles. The two moderate leftist parties which won two thirds of the vote in December 1962 have rejected the formula, and almost all leading ..astern Hemisphere newspapers have expressed doubts about the plan. Most prominent Dominicans believe that popular elections are the only way to end their own political impasse and to regain US recognition. How- ever, some feel that the six minority parties backing the government will use their current influence in an effort to per- petuate themselves in power, while others doubt that the opposition parties will be allowed to com- pete without official harass- ment. Many observers, serious reservations about the wisdom of holding five elections within ten months in a country with practically no experience in democracy. The current disarray among pro- and antigovernment forces and growing right wing influence in the government and armed forces are stimulating fears that extreme rightists may eventually gain control of the country. One would-be strong man;, Luis Amiama Tio, recently resigned his. army commission to form a new party and is said to be receiving financial support for a pres- idential bid from a wealthy former supporter of ex-Dictator Surinam's two-week-long cabi- net crisis was resolved in the last week of November when Minister- President Johan Pengel formed a new coalition of three right-of-center parties. This coalition, like its predecessor, includes representatives of the three principal ethnic groups in this Dutch dependency's racially diverse society--the Negro Creoles, the East Indians, and the Javanese. Although the dispute (over a baux- ite mining contract with a US com- pany) which touched off the crisis has also been settled, Surinam is probably in for a period of in- creasing instability. Racial tensions between the predominant Creoles and the Asians may have been exacerbated by the maneuver- ing that preceded the formation of the cabinet. Economic difficul' ties are also in prospect because proposed outlays for the govern- ment's ambitious development pro- grams exceed availab1 resources. S E nn E'" 6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 21 Western Hemisphere Guatemala: Small guerrilla bands which have survived in the mountains of Guatemala for three years are again active and may be planning attacks on US properties. The Communist party (PGT) has renewed its efforts to control the rebel movement and, as ac eve consi er- able success. Luis Trejo, a guerrilla leader amenable to PGT direction, is showing new con- fidence in rebel strength and morale and to have claimed that a new guerrilla front would soon be opened. In the past, PGT control has reportedly been resisted by Yon Sosa, perhaps the most successful guerrilla leader, Bolivia: The activities of a pro-Castro group in Bolivia called the Committee of Anti- Imperialist Struggle (CLA), which apparently models itself on the Venezuelan terrorist or- ganization* seem to be passing from the organizational phase to the operational. who prefers to maintain direct contact with the Castro regime for financial support and in- structions. These 0 are consistent with the frequent linking of support for Guatemalan and Venezuelan guerrillas in Che Guevara's speeches. At the current. World Peace Council meeting in Warsaw, Chinese Communist spokesmen also specified revolutionary movements in those two countries as particularly deserving of active support. The CLA is believed to have been established in late 1962, sma zs compose o youths who formerly were asso- ciated with the youth organiza- tion of the governing National Revolutionary Movement. These activists presumably have be- come disillusioned with what they consider a shift to the right in the policies of Presi- ~GPCET_ CURRENT INTELLIGENCE WEEKLY SUMMARY Page 22 &BGRET