CURRENT INTELLIGENCE BULLETIN - 1957/02/15

• Document Type: SPECIALCOLLECTION
• Keywords: 2018 Sanitization
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03161994
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: February 15, 1957

Approved fojr5etleam,2.2�1,9,/j42./04 C0,00529010,994,
15 February 1957
Copy No.
131
3.3(h)(2)
3.5(c)
T LLI E
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DOCUMENT NO.
NO CHANGE IN CLASS.
DECLASSIFIED
CLASS. CHANGED TO: TS
NEXT REVIEW DATE:
AUTH. HR 70-2
DAT
r *
REVIEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
TOP SECRET
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CONTENTS
1. FURTHER INCREASE OF FRENCH-BUILT JET AIRCRAFT
IN ISRAEL (page 3).
. KASHMIR RESOLUTION SUBMITTED TO UN SECURITY
COUNCIL (page 4).
3 POSSIBILITY OF NEW HUNGARIAN UPRISING IN MARCH
FORESEEN (page 5).
\V 4. YUGOSLAV-SOVIET IDEOLOGICAL DISPUTE IMPERILS
STATE RELATIONS (page 6).
-5. IRAQ SEEKS $238,000,000 CREDIT
(page 7).
�
6. CAMPAIGN TO PROMOTE ANTI-WESTERN SENTIMENT
UNDER WAY IN INDONESIA (page 8).
7. CHINESE CUT CONSTRUCTION PROGRAM
(page 9).
ANNEX--Conclusions of the Watch Report of the Intelligence
Advisory Committee
(page iu).
15 Feb 57
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1. FURTHER INCREASE OF FRENCH-BUILT JET AIRCRAFT
IN ISRAEL
Comment on:
Israeli air strength has been increased
by the arrival of "36 bombers" in Israel
at the end of January.
Recent reliable information reports 63
French-made Ouragan jet fighter-bombers in Israel in early
February--in contrast with a previous high of 33 in mid-No-
vember. This sharp increase may reflect awareness, from
the experience of fighting in Sinai, of Israel's need to modern-
ize its ground attack elements.
Forty-five French-built Mystere IV swept-
wing jet fighters were also reported in Israel as of the second
week in February. Since this figure is somewhat below a high
of 66 such aircraft at the end of October, it probably reflects
withdrawal of supporting French air elements.
It is apparent that the French, in possible
anticipation of a new Soviet arms agreement with Egypt, have
not heeded the UN resolution of 2 November cal1in_fora ban
on shipment of war materiel into the area.
15 Feb 57
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2. KASHMIR RESOLUTION SUBMITTED TO UN
SECURITY COUNCIL
Comment on:
ndia has already strongly objected to
he US and UK against the resolution on
ashmir submitted by them to the UN
ecurity Council on 14 February. The
esolution poses serious problems for
ndia, which is opposed to any step which
ay lead to a change in the status quo.
he resolution contains references to
akistan's suggestion that UN troops be
pace.in s mir and requests the president of the council
to examine with the governments of India and Pakistan this
and any other proposals likely, in his opinion, to contribute
to the demilitarization of the state or to the settlement of the
dispute.
The 10-0 vote in the Security Council on
the plebiscite resolution on 24 January and the anti-Indian
tenor of subsequent press and diplomatic comment from both
European and Asian nations suggest that the council would
strongly favor the new resolution. Though the USSR may ob-
ject to the wording of the resolution, it seems unlikely to use
its veto merely to oppose study of any helpful proposal. An
abstention by the USSR presumably would leave India with the
choice of co-operation or open defiance. There are numerous
signs that India is unusually nervous over its position.
Pakistan has stated it is not "fully satis-
fied" with the text but accepts the resolution as a step forward.
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6.111.-4 Nar,11 U.,/
3. POSSIBILITY OF NEW HUNGARIAN UPRISING IN
MARCH FORESEEN
In the opinion of the American legation
in Budapest, the war of nerves which
the Hungarian populace is waging against
the regime and the Soviet occupation
forces may conceivably develop into an open revolt on 15
March, a traditional national holiday. The legation notes
that "all logical analysis" argues against another full-scale
uprising but observes that logic in this case may be "inade-
quate!' It comments that any uprising would inevitably bring
defeat and consequent further loss of resistance leadership
and destruction of communications between underground
groups.
Comment Despite regime warnings that ruthless
action will be taken against any form of
outbreak, certain Hungarian resistance quarters have ap-
parently been agitating for a full-scale renewal of the re-
bellion on 15 March, Other elements, however, fear that
a new uprising would be unwise and are calling for silent
demonstrations on that date as a means of proving popular
solidarity against the regime.
The Hungarian regime has arrested many
leaders of the rebellion, outstanding intellectuals and a num-
ber of the principal figures of former workers' councils, but
it has proceeded relatively slowly in coercing industrial work-
ers upon whose labor the reconstruction of the country depends.
Some workers--many of whom may still possess arms--ap-
parently hope that a second rebellion would bring about West-
ern intervention,
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4 YUGOSLAV-SOVIET IDEOLOGICAL DISPUTE IMPERILS
STATE RELATIONS
Comment on:
The ideological dispute between the
USSR and Yugoslavia appears to have
reached a, deadlock which is likely to
affect general relations between the
two nations. Until now both Moscow
and Belgrade have publicly declared
their desire to keep the ideological
differences from affecting interstate
relations in view of the damaging re-
percussions such a development could cause. Soviet foreign
minister Shepilov, however, declared in effect on 12 Febru-
ary that further development in Yugoslav-Soviet state rela-
tions will be contingent on modification of Belgrade's ideo-
logical views. Belgrade's Borba replied on 13 February that
the Yugoslays will not compromise their convictions, and
further asserted that it was up to the USSR to desist from at-
tacks on Yugoslavia. Implicit in this was the warning that
a deterioration of all relations--both party and state--can
probably be prevented only if the USSR backs down.
The Yugoslav ambassador in Poland, just
back from consultations in Belgrade, called Shepilov's re-
marks about Yugoslavia "stupid" and "foolish" and stated that
Belgrade-Moscow relations are deteriorating.
It must now be becoming increasingly
clear to the Yugoslays that a "comradely" dispute with the
USSR is being ruled out, and that any repair of the rift will
require a complete change in attitude by one of the parties.
Presumably Yugoslavia and the USSR will develop a relation-
ship based merely on "coexistence" between differing systems--
something akin to the relationship in the years immediately fol-
lowing Stalin's death.
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CONFIDENTIAL
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111.4 1611 A
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5, IRAQ SEEKS $238,000,000 CREDIT
Iraq's Prime Minister Nun i Said
on 10 February instructed his deputy
prime minister now in Washington to
try to obtain a $238,000,000 credit
from the United States, the Interna-
tional Hank for Reconstruction and Development, or from
both. Nun i Said commented that the shutdown of the Iraq
Petroleum Company (IPC) pipelines may cost the Iraqi gov-
ernment $28,000,000 in reduced oil revenues by 31 March
and that the total cost might reach $238,000,000 should the
pipelines remain inoperative through March 1958.
The prime minister added that the
credit would be drawn against as needed until pumping is
resumed, at which time Iraq would repay the loan within
the shortest possible time.
Comment
This request suggests Iraq has de-
cided that its pressure on Syria to re-
open the pipelines is futile.
Despite the sharp reduction in oil rev-
enues, Iraq's fiscal position remains sound. The Central
Bank's gold, sterling and foreign exchange holdings totaled
at least $400,000,000 at the end of 1956. In addition, the
Iraq Development Board had a reported cash surplus of as
much as $200,000,000 on 31 December.
The request for a $238,000,000 credit
is apparently designed to ensure that Iraq's economic devel-
opment program is not interrupted by the current cutback in
oil revenues. Since Iraq has been accumulating oil revenues
faster than they are spent, repayment of such a proposed
credit could be made from these surplus funds.
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6, CAMPAIGN TO PROMOTE ANTI-WESTERN SENTIMENT
UNDER WAY IN INDONESIA
Indonesian sentiment against the Dutch
has visibly increased in the past few days
largely as a result of a deliberate govern-
ment propaganda effort, according to the
merican ambassador in Djakarta. The government evidently
hopes to divert public attention from domestic problems and
at the same time demonstrate mass support for its claim to
Netherlands New Guinea in the forthcoming debate at the UN.
The Communists and extreme nationalists, meanwhile, have
exploited and expanded the campaign into an attack on West-
ern "subversion;' particularly on the part of the United States.
The ambassador states that hints by an
Indonesian Foreign Ministry official of violence against Dutch
property and citizens in Indonesia should not be taken lightly.
Comment The Ali government's effort to shift the
blame for all of Indonesia's problems to
foreign influences is a reflection of its increasingly precarious
position. Under the circumstances, the current propaganda
campaign of both the government and the Communists may be
a prelude to mass demonstrations and violence directed against
Dutch and other foreign interests.
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CONFIDENTIAL
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7. CHINESE CUT CONSTRUCTION PROGRAM
Comment on:
China's construction program this year
is to be considerably smaller than the
extensive program undertaken last year,
according to the official People's Daily.
Investment is to be limited to around one
third of total governmental revenues as
against roughly 45 percent last year. The reduction was
made necessary by serious shortages of critical raw materi-
als and funds which developed as a result of over-investment
in 1956.
Chou En-lai had foreshadowed such a move
as early as last November when he called for "suitable re-
trenchment" in 1957 spending to be accompanied by an ener-
getic austerity campaign, which is now gaining momentum
throughout China.
Peiping apparently hopes that these reduc-
tions will not affect the major heavy industrial projects, or
cause postponement of the promised gradual rise in living
standards. Most of the present cuts will have to be absorbed
by what Peiping still regards as less essential building. A
foreign press source in Peiping reports that in 1957 projects
involving expansion of cotton mills, sugar refineries, and
meat-processing plants are being postponed, and no nonindus-
trial building, except schools and housing, is to be permitted.
According to the journal of the State Planning Commission,
1957 investment will have to be concentrated in such lagging
industries as iron and steel, electric power and building ma-
terials, sectors in which serious shortages have developed.
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ANNEX
Watch Report 341, 14 February
of the
Intelligence Advisory Committee
Conclusions on Indications of Hostilities
On the basis of findings by its Watch Committee the Intel-
ligence Advisory Committee concludes that:
A. No Sino-Soviet Bloc country intends to initiate hostilities
against the continental US or its possessions in the imme-
diate future.
B. No Sino-Soviet Bloc country inte\nds to initiate hostilities
against US forces abroad, US allies or areas peripheral
to the Orbit in the immediate future.
C. A deliberate initiation of hostilities in the Middle East is
improbable in the immediate future. The crucial issues of
Israeli withdrawal and Suez Canal control, as well as rising
tension within Jordan, constitute possibilities for violence.
15 Feb 57
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