CURRENT INTELLIGENCE BULLETIN - 1954/02/10

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 02993975
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: February 10, 1954

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3.3(h)(2)
10 February 1954 3.5(c)
Copy No. c51
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO
NO CHANGE IN CLASS.
11 DECLASSIFIED
CLASS, CHANGED TO: TS 8 C
NEXT REVIEW DATE' 2 QD 9 -
AUTH: HR 70-2.6agi
DATE:VIEWER
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
GENERAL
1. Soviet Council of Ministers to consider Egypt's request for economic
aid (page 3). "
2. Mao-Malenkov meeting allegedly scheduled for Mukden (page 3).
FAR EAST
3. South Korea threatened by new uncontrolled inflation (page 4).
SOUTHEAST ASIA
4. Magsaysay prepared to recognize Associated States (page 4).
5. French believe Viet Minh moving 312th Division into northern Laos
(page 5).
6. Situation in Tonkin delta described as "rotten" (page 6).
7. India agrees to buy 600,000 tons of Burmese rice (page 6).
SOUTH ASIA
8. Alleged dissatisfaction in Indian parliament with Nehru's neutralism
(page 7).
LATIN AMERICA
9. Guatemala may attempt to purchase F-51's from European seller
(page 7).
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GENERAL
1. Soviet Council of Ministers to consider Egypt's request for economic aid:
Comment: The USSR recently granted
aid and technical assistance to Afghanistan and offered the latter to
India. It is possible that an agreement may be worked out with Egypt.
It is unlikely, however, that Soviet aid would approach the magnitude
required for the Egyptian projects, since the estimated cost of the
dam alone is more than $500,0002000.
The Nagib regime is under considerable
political pressure to start these much-publicized projects and probably
cannot finance them despite claims that it would attempt to do so if
foreign aid is unavailable.
The United States has refused financial
assistance pending further study of the projects. Egypt is also nego-
tiating with the West German government, which will participate only
on a limited scale.
2. Mao-Malenkov meeting allegedly scheduled for Mukden:
Soviet ambassador Yudin has "persuaded"
Mao Tse-tung to meet Malenkov in Mukden,
Manchuria, during early February,
The
meeting is allegedly to "find a line of compromise" between tne "pan-
Russian tendency" of the Soviet regime and the "pan-Asiatic tendency" of
Peiping.
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Comment: Mao's whereabouts since
December has been unknown; however, Malenkov has been identified
by the Soviet press as being in Moscow from 25 to 28 January and
from 3 to 5 February.
Although Peiping's strong influence with
other Far Eastern Communist movements poses a possible long-range
problem for Moscow, there is no evidence of a current Sino-Soviet
conflict on this question.
FAR EAST
3. South Korea threatened by new uncontrolled inflation:
South Korea faces another period of uncon-
trolled inflation, according to American
economic coordinator Wood. He notes that
the present monthly budget deficits are ex-
pected to triple during the first half of 1954, and that aid goods will not
arrive fast enough to withdraw substantial amounts a currency from the
economy.
Wood warns that even with considerably in-
creased arrivals of salable aid goods over present expectations, a fur--
ther substantial rise in prices is unavoidable.
Comment: Large budgetary deficits, caused
principally by military expenditures, increased the price level some
2,000 percent during the war. While a favorable food situation helped
slow the pace of inflation in 1953, the amount of currency outstanding
has more than doubled during the past year.
SOUTHEAST ASIA
4. Magsaysay prepared to recognize Associated States:
Philippine president Magsaysay expressed
his determination, during conversations
with an American embassy officer on 5
February, to achieve recognition of Indochina
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during the present session of the Philippine Congress. He welcomed
a suggestion that the Nacionalista stalwart, Senator Recto, be sent on
a mission to Indochina in order to overcome his opposition to recogni-
tion.
Comment: The Magsaysay administration
appears to have repudiated the stand taken by the preceding administra-
tion that recognition of the Associated States would imply Philippine
subservience to American foreign policy.
Thailand is at present the only Asian country
maintaining diplomatic relations with the Associated States.
5. French believe Viet Minh moving 312th Division into northern Laos:
The French believe that the Viet Minh 312th
Division, with which they have had no contact
for almost a week, is moving either to rein-
force the 308th Division in its advance on
Luang Prabang or to attack the Plaine des
Iarres to the east, the American army attach�
in Saigon reports.
the 308th Division has out le upp y um s and must slow
its advance toward Luang Prabang. Viet Minh units both
in northwestern Tonkin and upper Laos are short of rice, owing to trans-
port difficulties, air attacks, and French destruction of hidden stocks,
and that additional rice supplies have been requested of the Chinese.
Comment:: Supply difficulties restricted the
Viet Minh campaign in northern Laos last year. With recent improve-
ments in supply routes in the border area of western Tonkin and prepara-
tory stockpiling in Laos, however, the Viet Minh has improved its supply
situation. In the past, the French have consistently underestimated the
Viet Minh's logistic capabilities.
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6. Situation in Tonkin delta described as "rotten":
A French officer in Saigon, responsible for
estimates on the over-all situation in Indo-
china, told the American army attache that
the situation in the delta is "rotten." He said
that French briefings for Americans usually
sholi the situation better than it is. In his opinion, a French military
victory in the delta is impossible.
In speaking of areas overrun by the Viet
Minh, he said that French experience had shown that after visits of
propaganda units and displays of armed force by the Viet Minh, the
population of those areas would "never be the same."
Comment: Information provided last
November by the Vietnamese civil administration in Tonkin revealed
that a sizable increase in the number of villages under enemy control
had occurred even during the rainy season when nearly all French
reserves were inside the delta defense perimeter. The current dis-
persal of the French mobile reserve from the delta has permitted
heavy enemy infiltration.
7. India agrees to buy 600,000 tons of Burmese rice:
The Indian government has agreed to purchase
about 600,000 tons of rice from Burma, accord-
ing to the American embassy in New Delhi. The
price is reported to be around 35 pounds sterling
per ton, and deliveries are expected to begin within a month or two.
Comment: This large sale' which will amount
to about three fourths of Burma's carry-over from its 1953 rice stocks,
should reduce pressure on the government to develop trade with the Orbit.
It should also remove, at least temporarily, the threat of large-scale
agrarian unrest.
The Rangoon government has been able to ob-
tain firm commitments for only 25 percent of the nearly 2,000,000 tons
expected as surplus for export from the current rice crop, which is now
almost completely harvested.
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SOUTH ASIA
8. Alleged dissatisfaction in Indian parliament with Nehru's neutralism:
I young Congress Party members
in the Indian parliament are markedly dissatis-
fied with Prime Minister Nehru's neutralist
foreign policy,
The members of this group, who represent a majority of the party's strength
in parliament, hold that neutralism is impractical, and 70 percent of them
believe India should align itself openly with the West.
Comment: This is the first report suggest-
ing that there is strong pro-Western sentiment in the Indian parliament.
There is little possibility, however, that the attitudes of younger Congress
Party members, even if accurately reported, will have any immediate
influence on Nehru and his older advisers, who are in firm control of the
party machinery. It is probable, however, that within the Congress Party
there is considerably more resentment against Nehru's one-man rule than
appears in public.
LATIN AMERICA
9. Guatemala may attempt to purchase F-51's from European seller:
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Comment: In view of the United States
position regarding arms shipments to Guatemala, it is unlikely that
any Lattn American government would knowingly act as an intermediary
in this proposed deal.
Several Western European countries, including
Italy and Switzerland, have surplus F-51 aircraft. In the past, however,
all Guatemalan efforts to obtain planes from Western Europe have failed.
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