CURRENT INTELLIGENCE BULLETIN - 1956/12/20

• Document Type: SPECIALCOLLECTION
• Keywords: 2018 Sanitization
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03161776
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: December 20, 1956

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DOCUMENT NO.
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20 December 1956
Copy No. 112
NO CHANGE IN CLASS.
DECLASSIFIED
CLASS. CHANGED TO:
NEXT REViEW DATE:
TS
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D ,1_11v1 EWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
/ 1/2) 7/ 3/7/34 WAffl 1037Z4
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CONTENTS
1. ARAB STATES POSSIB
SUBSIDY FOR JORDAN
2 BOLIVIA'S NEW ECONO
G TO ASSUME
(page 3).
ILIZATION PROGRAM
MAY PROVOKE C IS (page 4).
3. ISHIBASHI COMMENTS ON US-JAPAN RELATIONS
Noforn) (page 5).
40 IMPLICATIONS OF BEN-GURION'S REFUSAL TO RETURN
GAZA TO EGYPT (page 6).
5. LAOTIAN PREMIER AND PATHET CHIEF OUTLINE SETTLE-
MENT ) (page 7).
6. 31,LITAIN TO OFFER SINGAPORE FULL SELF-GOVERNMENT
(page 8).
7. BURMESE ATTITUDE ON ECONOMIC RELATIONS WITH THE
SINO-SOVIET BLOC (page 9)0
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STATES POSSIBLY PREPARING TO ASSUME
SUBSIDY FOR JORDAN
A Jordanian mission is preparing to go
to Cairo to discuss a subsidy for Jordan
from the Arab states,
Other information indicates that
Prime Minister Nabulsi will head the mission, which will
also visit Riyadh and Damascus
Cairo has been in contact with Nabulsi
through Egyptian intelligence channels to request that abro-
gation of the Anglo-Jordanian treaty be postponed until de-
parture of foreign troops from Port Said and to reaffirm
Egypt's willingness to assist Jordan at any time.
Recent moves to accentuate Jordan's dis-
sociation from Iraqi influence and consolidate the position of
ultranationalists in the government appear designed to meet
preconditions for receipt of Arab aid. Readjustment of Jor-
dan's traditionally close relations with Iraq has progressed
rapidly since the beginning of December. Iraqi troops were
withdrawn from Jordan on 11 December at Jordan's request,
while Syrian and Saudi Arabian troops remained. On 18 De-
cember Jordanian authorities
returned to Iraq the arms and ammunition
which Iraq had previously contributed to the Jordanian army
and national guard. Cairo was advised a short time later that
Jordan's King Hussain had agreed that "necessary steps would
be taken" forwithdrawal of the Iraqi ambassador in Amman.
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V
2. BOLIVIA'S NEW ECONOMIC STABILIZATION PROGRAM
MAY PROVOKE CRISIS
�
The Bolivian economic stabilization pro-
gram, promulgated on 15 December, has
led to sharp increases in the price of con-
sumer goods and may touch off serious
popular unrest and a political crisis, including the resigna-
tion of President Siles Zuazo. Siles, on 18 December, asked
Ambassador Drew for the US reaction in the event he stepped
down in favor of Vice President Chavez, who, he explained,
had better relations with Congress and the powerful Bolivian
Workers' Central. Drew comments that "in view of Siles'
unpredictable mystique and the extreme tension he is under-
going, one cannot guess what he will do!' The cabinet has al-
ready resigned to avoid further questioning by left-wing dep-
uties who oppose the stabilization program.
The stabilization plan, which is backed by
credits of the International Monetary Fund and US government
agencies, is intended to check inflation. Initially supported by
key labor and political leaders, it will bring about sweeping
changes in the Bolivian wage and price structure, with the
Bolivian worker probably bearing the greatest hardship
in the initial phases of implementation.
Juan Lechin, leftist president of the Senate
and head of the Bolivian Workers' Central, has withdrawn his
support of the program, and other labor leaders may follow
suit on grounds that it is prejudicial to the interests of the la-
boring class.
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�
3. ISHIBASHI COMMENTS ON US-JAPAN RELATIONS
Tanzan Ishibashi, Japan's prime min-
ister-designate, has indicated in press
interviews that he regards the mainte-
nance of "closest ties" between Japan
and the United States as essential. He
owever, that this does not mean "blind subservience"
to the United States, since "occupation" attitudes still persist,
and a lack of understanding of Japanese and Far Eastern condi-
tions has caused many American mistakes. He intends to "ar-
gue heatedly" with Washington until there is mutual understand-
ing and co-operation.
Ishibashi has been cautious in discussing
his policy toward Communist China. The press believes that
he will work for expanded trade, but will not seek early res-
toration of formal diplomatic relations with Peiping. Ishibashi
himself states that he will try to solve the Communist China
issue "with the full co-operation and leadership of the United
Statesr
Comment
Ishibashi's press interviews may have been
designed to allay American suspicion of his
policies, and to correct impressions which resulted from his
"misunderstandings" with the American occupation authorities.
expect him to make an early approach to
the United States to set a definite date for the withdrawal of
American forces stationed in Japan under the US-Japan secu-
rity treaty.
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4 IMPLICATIONS OF BEN-GURIONIS REFUSAL TO RETURN
GAZA TO EGYPT
Israeli premier Ben-Gurion's public an-
nouncement that "in no circumstances"
would Israel permit Egypt to reoccupy
the Gaza strip will give Moscow added
ammunition in its campaign to urge Egyp-
tian intransigence over a Suez and Sinai solution. Soviet
statements to Egyptian officials have stressed that Israel
would not be content to return to the status quo ante.
Although Ben-Gurion's statement leaves
open the possibility of the transfer of Gaza to an authority
other than Egypt, Moscow will undoubtedly renew its prop-
aganda attacks on Israel, possibly making further strong
official warnings to Tel Aviv,, The USSR probably would op-
pose turning over the area to UN forces, which it would term
a violation of Egyptian sovereignty.
Egypt has not claimed the Gaza strip as
Egyptian territory, but has occupied it since the Arab-Israeli
war of 1948-49. While Ben-Gurion's statement technically
does not change the official Israeli position on the disposition
of Gaza, it makes clearer Tel Aviv's growing determination to
incorporate the strip into Israel.
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5. LAOTIAN PREMIER AND PATHET CHIEF
OUTLINE SETTLEMENT
Souvanna said that in a few days he would
ask the assembly to approve Souphannouvong's entry into the
cabinet. Souphannouvcmg indicated that in return he would
disavow publicly any connection with outside powers or ide-
ology, and renounce all control over the Pathet Lao forces,,
which would then pass under royal government control. One
month from the date of this declaration, according to Souvanna,
the whole settlement, including restoration of royal authority
over the two provinces, would be completed.
Comment Souphannouvong's promises, though prob-
ably not sincere, will almost certainly
assure assembly approval of a coalition cabinet. The form
of the settlement as outlined by Souvanna appears to meet the
conditions reportedly posed by the cabinet and the deputies
in Souvanna's Nationalist Party.
The Viet Minh, who have closely followed
the course of negotiations in Vientiane, consider formation of
a coalition government before elections an important objective.
Their approval of a settlement along these lines
instructed the Pathet repre-
sentatives in Vientiane to build support among assembly dep-
uties for the Souvanna Phouma government.
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6. BRITAIN TO OFFER SINGAPORE FULL SELF-GOVERNMENT
The British Colonial Office has decided to
offer Chief Minister Lim Yew Hock, now
in London, full self-government for Singa-
pore,
the
ri realize their new plans entail calculated risks, but
believe there would be considerable advantage for the locally
elected governments of both Singapore and the Federation of
Malaya in being publicly dissociated from Britain.
Under the proposed arrangements, internal
security would be a local responsibility but with both Britain
and the Federationof Malaya participating in a purely advisory
internal security council. The Singapore government would
recognize Britain's right to maintain military bases in the col-
ony, and Britain would retain the right to rescind the constitu-
tion in the event the Communists threaten to take over.
Comment Self-government talks broke down last May
when Britain demanded that it retain control
over internal security matters. Lim can be expected to accept
the current proposals, or at most request only minor changes.
London wishes to strengthen Lim, whose per-
formance against the Communists in Singapore has exceeded all
expectations, by giving him the credit for having achieved Singa-
pore's independence. The British may also believe it necessary
to establish some formal basis for their military position at
Singapore because long-term political trends there will move
against them. By retaining the right to intervene, Britain would
still limit Singapore self-government in a manner not envisaged
for Malaya.
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7. BURMESE ATTITUDE ON ECONOMIC RELATIONS WITH
THE SINO-SOVIET BLOC
Comment on:
Burma, which recently took a strong
political stand against the Soviet Union
because of its intervention in Hungary,
is still showing reluctance to expand its
economic relations with the Communist
Orbit except on a cash basis.
Rangoon's instructions
to its ambassador in Peiping to discourage the North
Korean charge, who had previously proposed that the two
countries open trade negotiations.
The ambassador was informed that Ran-
goon was reluctant to enter into such relations with North Korea
if they were to be conducted on a barter basis.
Burma's "hard experi � the Last Luropean
Satellites in this connection andJ Rangoon was now
even unable to meet commitments for cash sales of rice, Burma's
chief export. Burma's dissatisfaction with Sino-Soviet barter ar-
rangements is indicated by the fact that although Burma is com-
mitted on paper to export up to 50 percent of its rice available
for export to the bloc this year, it has endeavored to keep such
exports to a minimum.
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