BRIEFING FOR DEFENSE APPROPRIATIONS SUBCOMMITTEE OF HOUSE APPROPRIATIONS SUBCOMMITTEE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP61-00357R000300210005-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 16, 2016
• Document Release Date: March 1, 2005
• Sequence Number: 5
• Publication Date: January 30, 1958
• Content Type: BRIEF

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BRIEFING FOR DEFENSE APPROPRIATIONS SUBCOMMITTEE
PPROPRIATIONS
OF HOUSE , xMWR S -ee !MTTT,EE
A, ta,
I. Several new tendencies on Soviet political scene since I
last briefed your committee late in January last year.
A. Externally
1. Lines of conflict with West have been tightened.
2. "Reduction of ten ions" no longer major Soviet
foreign policy C 6 t I " ctf%&T
B. Internally
1. Attempt to stabilize and consolidate - check the
pace of change
2. Return to a certain rigor in policy and ideology
but no reversion to police state.
3. Khrushchev firmly in control, but maneuvering for
. succession may be underway.
II. Trends in Foreign Policy
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1. New militancy and assertiveness in Soviet policy.
2. Examples: Berlin, Middle East crises (particularly
Iraq) and apparent support of China at Quemoy.
B. Return to harder course deemed desirable by Soviets
because of:
1. Danger to Soviet authority in Eastern Europe.
CENTRAL 1VJELLW%WXe1j6N'portunities because of breakdown in
CLASSIFICATION
Canceled democratic procedures in certain non-bloc countries.
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3. Soviet feeling of enhanced military-economic posi-
tion relative to West,
a) In their view, good prospects for increased
Bloc economic stren th--
g Imo
economic
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crisis in West,
b) In their view, growing Communist influence in
Asia, Africa, Middle East - decline of western
influence.
Co Despite more confident and militant attitude, still
wish to avoid nuclear war with USA at present.
1. Despite their progress in ballistic missiles, US
retaliatory capability threatens Soviet survival
in war.
2. They believe in achievement of final victory
through political struggle.
3. Continuing possibility of limited warp, especially
indirect aggression, if they think it can be used
without unacceptable risk--this might lead to
miscalculation.
III. Trends in Soviet Economy
A, Growth rate twice that of US over last decade and in
last five years more than three times. Soviet rate
expected to continue.
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1. US retains lead in GNP
1957 - Soviet GNP = 45% of US
1965 - Soviet GNP = estimated about 55% of US
1957 total value of Soviet consumption (or what
consumers receive) one third of US
3. Investment - equal to two-thirds of US investment
B. Soviet defense expenditures will expand gradually.
Value of expenditures for military purposes roughly
same as US defense expenditures:
2. As Soviet economy expands military expenditures
can increase by 45 percent over the next 4 years
without imposing significantly heavier burden.
IV. Seven Year Plan goals announced by dir. N ushchev at
Central Committee meeting last November ratified
by Party Congress now in session.
A. "Catching up with USA."
1. Soviet claim - by 1970 - USSR will be in first
place in per capita output and absolute output.
2. Specific Seven Year Plan goals (1959-1965) show
this claim far too optimistic - nevertheless
ambitious expansion planned.
3. Continuing emphasis on heavy industry and large
military programs.
B. Specific Seven Year Plan goals generally feasible
except in agriculture.
1. Will strain economy and some programs may be
curtailed.
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C. In addition to supporting development of military
power, continuing rapid growth of Soviet economy
challenges Western world by:
1. Political-economic impact in foreign countries
(Finland). _ L 4 v ~"
2. Attracting underdeveloped countries who seek
quick end to poverty.
3. Creating potentially disruptive influence on
traditional western economic relationships.
V. Soviet Economic Offensive
A. Trade and aid is economic adjunct to Soviet campaign
of penetration in underdeveloped areas
1. Total magnitude of program relatively small,
imposing little burden on Soviet economy.
2. But concentrates on uncommitted countries,
where comparatively small investment offers
prospect of high political gains.
B. In 3J years prior to mid-1958, grants and credits
extended by Bloc to underdeveloped countries in
Free World totalled more than 2 billion dollars.
1. Of this total, about $1.2 billion extended by
USSR itself, rest by other Bloc countries.
(Comparable figures for USSR loans to Bloc
countries: $5 billion of which $1.4 billion in
new credits, remainder cancelled debts).
2. About $740 million has actually been expended,
the rest has not yet been drawn.
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C. About three-fifths of total actually expended in
non-Bloc world has been in the form of arms deliveries
to Syria, Egypt, Yemen, Iraq, Afghanistan, and
Indonesia, largely in the form of surplus equipment.
D. These same countries, plus Ceylon, India, Burma,
and Cambodia, have received the bulk of the economic
aid.
E, Number of Bloc technicians in underdeveloped countries
increased by more than 50 percent in 1958 over 1957.
1, In first half of 1958, there were at one time or
another about 3,700 Bloc technicians in 17 under-
developed countries.
2. About one-third of this total were military
specialists,
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VI. Soviet Subversive Offensive
A. Under Khrushchev USSR making continuing effort to
build up international Communist apparatus, especially
since November 1957 Communist meetings in Moscow.
This apparent in
1. Increased training in bloc countries by members
Free World CP's; in 1957-58 trainees from more
than 20 CP's went to USSR and in summer '58 five
Latin American CP's sent trainees to Communist
China. (Estimate several hundred in all.)
2. Control and support of Free World CP's being
improved.
v A.
begun in 1957.
b. Increased contacts now taking place between
Soviet embassies abroad and CP leaders, and
emphasis being placed on regional coordina-
tion of CP activity -- e.g., secret sessions
of Latin American Communists in Mexico City
and Buenos Aires in 1958.
c. New ideological journal -- Problems of Peace
and Socialism -- successor to Cominform
journal began publication at Prague in 16
languages in September 1958.
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B. According to International Communist balance sheet,
(published in Kommunist) 1958 saw growing influence
of CP's in Italy -- although to us this is question-
able -- Finland, Japan, India, and Indonesia, and
progress by number of Latin American parties --
Argentina, Brazil, Chile, Uruguay, Cuba, Venezuela,
and Colombia.
1. According to Soviets themselves, Communist set-
backs occurred in Western Europe, particularly
France, Netherlands, and Denmark, and in CP of
USA.
C. In international Communist front field, reorganization
and strengthening also taking place.
1. Big effort being made to "capture" leadership
elites of Asia and Africa through Afro-Asian
Solidarity movement.
2. "Orthodox" front activities (e.g., WFTU) con-
tinuing, but subsidies of ______ ___ _-___' _s
subsidiary activities such as
scholarship programs, aid to refugees and
"rebels" -- as to Algerians in Tunisia, --
3. Bloc also giving financial support to non-
Communist "national liberation movements" such
as Cameroon Democratic Union which instigated
violence in French Cameroons.
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VII. Trends in Science and Technology
A. Great emphasis in support of aspirations to national
power, animated by intense spirit of competition
with West.
1. Achievements in critical military and industrial
areas are impressive - Earth satellites, etc.
2. Absolute size of scientific effort smaller than
in US - concentrated in fields related to
national power.
3. Announced expenditures increasing yearly.
4. Significant scientific and technological advances
likely in greater frequency than in past.
(Greater corps of trained personnel with better
equipment.)
B. Reorganization of economic administration under way
since 1957.
1. New scientific coordination bodies and centralized
planning.
Scientists given greater planning role.
3. Continuing emphasis on applied research.
4. Encourage individual initiative.
C. In some fields, Soviet scientists excel -- for example,
pure mathematics, theoretical physics.
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VIII. Ballistic Missile Capability
A. Everyone in intelligence community seriously con-
cerned about Soviet missile capability.
1. Expert views differ slightly on exact timing of
threat.
2. Ballistic missiles up to 700 n.m. operational now;
probably 1,100 n.m. also.
3. Estimates warn of possibility -- soon to be
probability -- of operational ICBMs.
4. Think Soviets intend to build toward substantial
ICBM force rapidly.
C. Operational deployment of shorter-range missiles.
1. Ballistic missiles produced in several Soviet
plants during past several years.
2. Operational capability may still be very limited,
but could include as many as several hundred
missiles of 700 n.m. and a few 1,100 n.m. range.
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IX. Long Range Bomber Force has approximately 1,450 bombers -
400 BULL (B-29 type) - 950 BADGER jet medium (B-47 type) -
100-125 BISON jet (B-52 type) and BEAR turboprop heavy.
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COMMUNIST CHINA
I. Peiping's domestic economy in 1958 largely dominated by
the "giant leap forward".
A. "Giant leap" and associated programs produced
marked increases in production, especially in
industry.
1. However, large portion of industrial increases
came out of small, rural plants where quality
low and uneven.
2. Claim of doubling grain and cotton output not
credible.
B. Party has called for production increases in 1959,
which only half as large as those claimed this year
but still fantastically ambitious.
1. If 1959 output of foodgrains reached -- 525,000,000
tons -- would equal some 60 percent of the rest
of the world's output in 1957.
a. This astounding level to be reached while
acreage is cut in new "basic field" system
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under which some land taken out of cultiva-
tion and part of remainder farmed very
intensively.
b. They seem to believe that yields can be
raised without limit, but we think this is
fantastic and unreasonable.
II. Communes
1. Introduction of communes one of farthest reaching
social experiments of modern times and Mao's greatest
gamble to date.
III. Chinese Communist Scientific and Technical Progress
A. Communist China acutely conscious of deficiencies
in science and technology.
1. "Giant leap forward" will require better techno-
logy to support expansion of industry and agri-
culture.
2. Progress to be pushed through Chinese Academy
of Sciences, establishment of new institutes and
laboratories, increased budget.
3. Technical assistance from USSR and Bloc of
paramount importance - at least 7,000 Chinese
have been sent to USSR for training.
B. Will continue to emphasize such critical fields of
applied science as nuclear energy, electronics,
metallurgy, power.
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1. Research reactor, built by USSR, now in opera-
tion (7-10 Megawatts).
2. Preparing to produce advanced communications
equipment based on Soviet prototypes.
3. Claim steel production of 11 million tons in
1958 (double that of 1957, and hope nearly to
double again in 1959).
a. About three-fourths of 1958 production was
by modern methods.
b. Remainder "back-yard" production, of some
use but admittedly low quality.
4. China moving rapidly toward self-sufficiency
in conventional weapons manufacture.
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Considering level at which they started, Chinese
Communists making good progress -
1. but buildup of native scientific capability will
take some years.
2. at present, dearth of facilities for training
at higher levels.
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IV. Sino-Soviet alliance has continued firm, with wiping
remaining junior partner, but partner and not more
satellite. However, many reports, and some evidence, of
friction in 1958.
A. While Peiping followed Soviet lead in denouncing
Tito last May, vehemence of Chinese attack apparent-
ly disconcerted Moscow.
Be Moscow seemed uneasy about Peiping's big talk dur-
ing flurry in Taiwan Strait last summer, and may
have counselled caution.
Moscow clearly displeased by recent Chinese claims
that communes are best organization form for Com-
munist society. Peiping has modified its claims,
but Moscow still seems unhappy about fact of com-
munes, which are not in Russian pattern.
D. While Khrushchev and Mao publicly praise each other,
many recent reports that each regards other with
misgivings.
V. We expect cohesive factors in Sino-Soviet alliance to
remain stronger than divisive factors for some years to
come. However, there may be continuing friction in com-
ing years.
A. Peiping is going ahead with communes program, and
Mao will probably write a doctrinal justification
of it.
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B. Peiping is now pressing Moscow to make available
additional exports of machinery and equipment for
Chinese industrialization. The USSR may believe
China's demands are greater than it is easily able
to supply.
1. Mikoyan's statement that China paying for every-
thing it gets is apparently correct.
C. Peiping may also be asking for nuclear weapons which
Soviets would almost certainly be reluctant to fur-
nish.
CRITICAL AREAS
A. Berlin
1. Soviet initiative to convert Berlin into Free City
probably designed to:
a. Force negotiations on future status of Germany
on terms favorable to the Bloc.
b. At minimum to gain some degree of recognition
of East German regime by West.
2. West German political parties agree that Soviet
peace treaty proposal unacceptable.
B. Middle East
1. Nasir's major drive on Communists.
2. Nasir appears confident that USSR will not retaliate.
3. Soviet agreement to advance $100,000,000 credit for
Aswan Dam. (Signed 27 December)
C. Iraq
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19 Premier Qasim not preventing increase of Communist
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influence.
2. Actually facilitating Communist buildup to counter
influence of West and UAR.
3. Iraq has concluded $170 million arms deal with USSR.
4. Soviet military mission and three shiploads of heavy
arms have arrived.
E. Taiwan Straits
1. Periodic shelling rather than heavy barrages by
Communists to maintain degree of tension.
2. occasional heavy shelling to demonstrate continued
Communist control.
3. Propaganda alleging US efforts to replace Chiang and
create "third force".
F. Cambodia
1. Thailand and Viet Nam disturbed by growing friend-
ship of Cambodian Premier Sihanouk with Chinese
JCommunists, are plotting with Cambodian dissidents.
G. Cuba
1. Castro consolidating control.
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2. Too early to predict orientation of Castro government.
3. Communist party given legal status.
4. No firm indications on future status of Guantanamo
naval base.
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