CURRENT INTELLIGENCE BULLETIN - 1954/05/30

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03002531
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: May 30, 1954

Approved for Release: 2019/08/02 C03002531 E
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CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO
NO CHANGE IN CLASS.
LI DECLASSIFIED
CLASS. CHANGED TO: IS S C
NEXT REVIEW DATE: '�C)
AUTH: HR 70-2
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
CO3002531
AGENCY
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SUMMARY
FAR EAST
1. Yoshida seeks American economic aid and close co-operation on
China policy (page 3).
2. Comment on Formosa air alert (page 3).
SOUTHEAST ASIA
3. French in Saigon see indications of early assault on Tonkin delta
(page 4).
4. Communists may want northern Laos for extension of "pan-Thai"
movement (page 4).
SOUTH ASIA
5. Karachi to impose "governor's rule" in East Pakistan (page 6).
NEAR EAST - AFRICA
6. Egyptian officials bitter over US failure to obtain British action
on Suez (page 7).
EASTERN EUROPE
7. Disagreement over area of applicability may slow development
of Balkan Pact (page 8).
8.
LATIN AMERICA
9. Guatemalans reported "planting" arms to "prove" American plot
(page 9).
10. Guatemalan Communist leader relieved of his post (page 10).
2-.
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FAR EAST
1. Yoshida seeks American economic aid and close co-operation on
China policy:
Prime Minister Yoshida told Ambassador
Allison in Tokyo on 27 May that on his forth-
coming visit to the United States and Britain
he will press the argument that close tripar-
tite co-operation on China policy can accelerate the separation of Commu-
nist China from the Soviet Union. He insists that Japan is in the best posi-
tion to understand the Chinese and to develop China policy. He also re-
peated previous intimations that his continuation in power depended on his
obtaining American economic aid when he visits the United States in June.
2. Comment on Formosa air alert:
Although the Chinese Nationalist air force
commander has said that the "red" air alert
on Formosa of 29 May was not a practice alert,
it is still possible that this incident merely represents a Nationalist at-
tempt to underline the need for increased American assistance.
A raid, like that described by the Nationalists,
would be within Chinese Communist capabilities. If it occurred as reported
it might have been an effort to discover the extent of Nationalist air defense
capabilities and to test the reaction of the Nationalist and American forces
to the threat of a raid.
Two Communist air units with about 50 TU-2
conventional light bombers are believed to be located within operating
range of Formosa, and it would be possible for MIG-15 jet fighters to
stage from fields in Fukien and Chekiang within combat radius of Formosa.
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SOUTHEAST ASIA
3. French in Saigon see indications of early assault on Tonkin delta:
Two Viet Minh regiments recently at Langson
on their way to China for training have been
ordered back to the Thai Nguyen area, the
American army attach�n Saigon reports
(see map, p. 5).
The attachie comments that the French see in
this recall a possible indication of a major attack on the delta. Also, he
says, the French now believe that Viet Minh recruits, in training near the
delta, will be used to bring Viet Minh units arriving from Dien Bien Phu
up to full strength rapidly.
The recruits in training near the delta could
be used to fill out the depleted Dien Bien Phu divisions or could be formed
into new regular units. The French had previously believed that if the
battalions were formed into regular units, they would not be committed to
battle this summer.
4. Communists may want northern Laos for extension of "pan -Thai"
movement:
The Communists' insistence on maintaining Viet
Minh forces in Laos and Cambodia may be moti-
vated by a desire to take over northern Laos,
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This would be a step in a "pan-Thai" move-
ment exploiting the Thai peoples of northwest Vietnam, Laos, Thailand
and Burma.
Comment: There is a racial identity and
cultural affinity among the peoples of Thailand, Laos, western Tonkin,
southern Yunnan and the Shan States. of Burma. Many observers believe
that Peiping's establishment of the Thai Autonomous Area in the south-
ernmost part of Yunnan in February 1953 was intended as the first step
toward the creation of a Greater Thai State, which would attract Thais of
all nationalities.
SOUTH ASIA
5. Karachi to impose "governor's rule" in East Pakistan:
The Pakistani government has decided to
impose "governor's rule"--direct rule by the
provincial governor acting on instructions
from Karachi--in East Pakistan, according
to Prime Minister Mohammad Ali. Defense Secretary Iskander Mirza
has been designated governor; his first task will be to arrest known
Communists.
The central government hopes to win over the
people of East Pakistan by a stepped-up radio information program and
by the distribution of food, cloth and certain other necessities. It en-
visages restoration of parliamentary rule within one year.
Martial law is not to be imposed unless
absolutely necessary.
Comment: The imposition of governor's rule
after the smashing defeat of the Moslem League in the recent elections
in East Pakistan will almost certainly lead to increased friction between
the eastern and westem parts of the country, but the central government
is considered capable of maintaining order.
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The appointment of an individual as important
as Mirza, who has been a strong force in the central government, indi-
cates the seriousness with which Karachi views the situation in East
Bengal.
NEAR EAST - AFRICA
6. Egyptian officials bitter over US failure to obtain British action on Suez:
Prime Minister Nases chef de cabinet for
political affairs and the Egyptian member
of the Sudan Governor General's Commission--
both of whom are pro-West--have expressed
bitterness to an American embassy official at the failure of the United
States to obtain British action on the Suez canal base. They state that
Nasr is incensed over the fact that the British have not even replied to
his offer of five months ago to make a major concession on future availa-
bility of the base.
The two officials warned that events in South-
east Asia are having strong repercussions in Egypt and that the tide of
neutralist sentiment is rising. They maintained that positive action alone
could divert this present adverse trend and that the Egyptian regime,
faced with continued British obduracy and an American wait-and-see atti-
tude, might be "forced to seek alignment with Delhi and Djakarta."
Ambassador Caffery comments that the disillu-
sionment expressed by these two officials is typical of the low state of
morale among many of the West's best friends. The ambassador again
warns that "time is running out" for the West to reach a solution of the
base question.
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EASTERN EUROPE
7. Disagreement over area of applicability may slow development of Balkan
Pact:
8.
Both Yugoslavia and Turkey now wish to
extend the area of applicability which would
be included when the Balkan Pact is trans-
formed into a military alliance, according
to Director General Kyrou of the Greek Foreign Office. Yugoslavia re-
quests an amendment to include attacks through Rumania and Hungary,
and the Turks desire that Asian Turkey be included if the Yugoslav pro-
posal is accepted.
The original assumption was that the alliance's
automatic commitment would apply only to an attack by or through Bulgaria.
While Greece favors the inclusion of Rumania and
Hungary in the formula, it opposes the Turkish amendment on the ground
that it would destroy all hope of the "eventual harmonization" of the Balkan
and NATO alliances. Kyrou thinks these differences of opinion may ac-
complish the delay in formalizing the alliance which the United States and
Britain sought in their recent demarches at Athens and Belgrade.
Comment: The Greek hesitancy on the inclu-
sion of Asian Turkey is puzzling, since that area is covered by the North
Atlantic Treaty.
The Western powers have expressed the hope
that any communique issued after Tito's forthcoming visit to Athens be
so worded as not to rouse Italian public opinion and thus jeopardize a
Trieste settlement.
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LATIN AMERICA
9. Guatemalans reported "planting" arms to "proVe" American plot:
The Guatemalan government is "planting"
American arms on or near United Fruit Com-
pany properties on the Caribbean coast and
ft '
r" the caches within 30 days,
The arms and accompanying false �acumen a on
will reportedly be used to "prove" United Fruit Company complicity in
a plot against the Arbenz regime. Subsequently, the government plans
to attack the United States violently and may expropriate the company.
Comment: If successful, this plot could do
much to convince other Latin American nations that current Guatemalan
policy is justified by the hostile intentions of American investors, princi-
pally the fruit company. Guatemala's propaganda has long maintained
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that the Communist problem there is insignificant and that the real
reason for deteriorating relations with the United States is State
Department support of "imperialistic" foreign investors who try to
block all social and economic reform in Guatemala.
10. Guatemalan Communist leader relieved of his post:
Jose Manuel Fortuny was relieved on 26 May
as secretary general of the Guatemalan Labor
(Communist) Party because of illness, accord-
i ng to the party's newspaper. His temporary
successor is to be Bernardo Alvarado Monzon,
who has held the second ranking post in the party.
An unconfirmed report adds that Fortuny is to
undergo an operation, possibly in Europe.
Comment: Fortuny's "illness" may be an
excuse to confer with international Communist leaders. He last returned
from Moscow in January 1954, after spending about two months in the USSR.
The party's founder and its leader since 1947,
Fortuny is closely identified with the successful policy of bringing the
party openly into the political arena and forging it into an influential mass-
supported political organization. His close personal ties with President
Arbenz have, to a great extent, made this possible.
Alvarado Monzon, his 307year old successor,
has been closely associated with Fortuny since 1949, but lacks the latter's
stature.
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