CURRENT INTELLIGENCE BULLETIN - 1954/01/08

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03003775
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 7
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: January 8, 1954

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8 January 1954
3.3(h)(2)
Copy No. 84
CURRENT INTELLIGENCE BULLETIN
DOCUMENT NO. _16'
NO CHANGE IN CLASS.
DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE: Op9
AUTH: HR 70-
DATE: ip R._ REVIEWER:
Office of Current Intelligence
CENTRAL INTELLIGENCE AGENCY
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SUMMARY
FAR EAST
1. Inadequate Japanese defense budget nears final cabinet decision
(page 3).
2. Indians impressed by Chinese Communist construction program
(page 3).
SOUTHEAST ASIA
3. Philippine vice president to visit Indonesia (page 4).
NEAR EAST - AFRICA
4. Iran again requests $252000,000 loan from Export-Import Bank
(page 4).
5. Comment on first Sudanese prime minister (page 5).
6. Moroccan city reportedly under "state of siege" (page 6).
EASTERN EUROPE
7. Czechs request meat instead of strategic goods from Austria
(page 6).
WESTERN EUROPE
8. Reynaud denies intention to seek negotiations with Viet Minh
(page 7).
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FAR EAST
1. Inadequate Japanese defense budget nears final cabinet decision:
Barring last minute changes, top Japanese
officials are expected to submit to the cabi-
net for final decision on 12 January a draft
1954 defense budget described by the Ameri-
can embassy as "disappointing" and "inadequate." The draft calls for
total defense appropriations of 138.4 billion yen (about $384,000,000)
during the next fiscal year, as compared with "minimum" American
recommendations of 155 billion yen (approximately $430,000,000)�
The budget limits the increase in Japanese
ground forces to 24,000 for 1954, 6,000 less than what the United States
regards as an acceptable minimum.
Comment: Foreign Minister Okazaki told
Ambassador Allison on 28 December that the budget would not fall far
short of the figure of 155 billion yen suggested by the United States, as
compared with 123A billion expended in fiscal 1953.
2. Indians impressed by Chinese Communist construction program:
were greatly impressed
by the tremendous amount of construction,
rebuilding and cleaning up in Communist Chin
They expressed the view that Peiping is
seeking a position of real independence vis-a-vis the Soviet Union and
would welcome the normalization of relations with the United States.
Comment: Peiping's construction program
similarly impressed several non-Communist diplomats who were given
a tour of Manchuria last month. These tours are part of the Chinese
effort to exploit "neutralist" sentiment, especially in the Far East.
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There is no evidence of Chinese eagerness for diplomatic relations
with the United States.
SOUTHEAST ASIA
3. Philippine vice president to visit Indonesia:
Vice President Garcia of the Philippines
will pay an official visit to President Sukarno
of Indonesia during January;
The
American embassy in Manila believes it reasonably certain that Garcia
will invite a military mission to visit the Philippine armed forces and
will suggest that Sukarno appoint a small number of cadets to the Philip-
pine Military Academy.
Comment: Ambassador Cumming in Djakarta
has reported that the Indonesian foreign minister recently expressed
great admiration and respect for Magsaysay. He readily agreed to the
ambassador's suggestion that, in certain fields, Indonesia might benefit
from employment of Philippine technical advisers.
NEAR EAST - AFRICA
4. Iran again requests $25,000,000 loan from Export-Import Bank:
Foreign Minister Entezam asked Ambassador
Henderson on 5 january whether Iran could
soon receive the $25,000,000 Export-Import
Bank loan which has been pending for two
years. Entezam said funds are urgently needed for economic develop-
ment programs which cannot wait for renewed oil revenues.
He argued that Iranian good will has been
sufficiently demonstrated to convince the United States and the Export-
Import Bank that granting of the loan will not diminish eagerness to
settle the oil dispute.
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Granting the loan prior to settlement of
the oil dispute, he added, would help to convince Iranians of Ameri-
can friendship. It would also strengthen Prime Minister Zahedi's
popularity during negotiations.
Comment: Iran will face a severe
financial crisis when emergency American aid expires in March
or April. Continued foreign financial aid will be needed and more
requests for such aid can be expected.
Several requests by Mossadeq for imple-
mentation of the Export-Import Bank loan were denied, presumably
because of Iran's unfavorable financial position following oil national-
ization.
5. Comment on first Sudanese prime minister:
The selection of Ismail Azhari, a pro-
Egyptian political agitator without parliamentary experience, as
the first prime minister of the Sudan is likely further to embitter
Anglo-Egyptian relations and handicap the development of Sudanese
self-government.
Azhari, leader of a small pro-Egyptian
splinter group until appointed president of the Egyptian-sponsored
National Unionist Party in 1952, has been closely associated with
Egypt since 1944. His open support of Egypt's position has dis-
credited him among some Sudanese who consider him to be an
"Egyptian hireling."
The choice reflects the current strength
of Egyptian influence in local affairs. Azhari's selection, however,
is not likely in the long run to promote party unity and may contribute
to subsequent Sudanese opposition to Egyptian interference.
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6. Moroccan city reportedly under "state of siege":
The city of Fez has been under a "state
of siege" by French troops and French-
controlled native tribes for ten days,
Comment: Maintenance of the French
position in Morocco is assured by some 56,000 loyal troops. Despite
mass arrests of Moroccans, however, the French have been unable to
halt the increase in terrorist acts which occurred following the deposi-
tion of the former sultan last August.
EASTERN EUROPE
7. Czechs request meat instead of strategic goods from Austria:
Czechoslovakia has suddenly offered to
reduce its proposed imports of Austrian
all bearings, aluminum and 30 to 40
ther finished-goods items under the 1954
negotiation, and requested in their place
an import quota of $2,500,000 worth of Austrian pork, beef and fats,
according to the American high commissioner in Vienna. He comments
that the Austrian government probably will be reluctant to curtail tra-
ditional shipments of finished goods, manufacture of which employs
large numbers of Austrian workers.
Comment:
Czechoslovakia and Hungary have been attempting to import
bee grain, but this is the first firm evidence of Orbit willingness
to sacrifice imports of high-priority strategic goods from the West in
order to procure foodstuffs.
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WESTERN EUROPE
8. Reynaud denies intention to seek negotiations with Viet Minh:
Vice Premier Reynaud's executive secre-
tary approached American embassy offi-
cials in Paris on 6 January to deny the
statement of American columnist Joseph
Alsop that Reynaud wants France to negotiate with the Viet Minh.
The vice premier, he said, favors evacuation only as a last resort,
and supports active prosecution of the Indochina war until international
negotiations are possible, preferably as part of any post-Korea political
conference or in five-power talks including Communist China.
In the embassy's opinion, Reynaud is trying
to retract statements he now believes went too far. The embassy also
thinks that Secretary for Associated States jacquet, who stated on 5
January that the vice premier was pressing the cabinet to adopt imme-
diately a policy of withdrawal from Indochina, may have exaggerated
Reynaud's position.
Comment: Reynaud's position as redefined
here suggests that he is noVIRTarto insist more than ever on the need
for international negotiations on Indochina. In particular he may urge
even harder that at Berlin Premier Laniel should accept any Soviet pro-
posal for five-power talks on the Far East.
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