INDICATIONS OF AN INCREASE IN THE SOVIET ECONOMIC OFFENSIVE AND ITS POSSIBLE CONNECTION WITH THE RETURN OF THE SOVIET AMBASSADORS.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP65-00756R000500130052-6
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 19, 2016
• Document Release Date: September 25, 1998
• Sequence Number: 52
• Publication Date: August 2, 1957
• Content Type: REPORT

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2 August 1957
SUBJECT: Indications of an Increase in the Soviet Economic
Offensive and its Possible Connection with the
Return of the Soviet Ambassadors.
1. Following the June purge the USSR has concluded or in-
dicated a desire to conclude a number of significant economic
deals with "under developed" nations most of which are peri-
pheral to the Sino-Soviet bloc. The Soviet economic offensive
has been increasing for several years and continued to expand
during the first six months of L957. It should be noted however
that the expansion in the first half of 1957 resulted primarily
from the implementation of credits previously arrived at, from
a growing number of Soviet technicians in the underdeveloped
areas and from increased Bloc trade. Soviet credits extended
during the first half of 1957 were minimal and indeed showed a
marked contrast from the considerable credits granted in 1956.
They are also in marked contrast with the credits extended in
late June and July.
2. Summarized below are indicators of the expansion of
the Soviet economic offensive since the June purge. It is
possible that these activities were contemplated prior to the
purge and it should also be noted that several were in various
stages of culmination prior to that time.
YUGOSLAVIA: The Soviet and East German decision in late
July to implement the $250, 000, 000 agreement with Yugoslavia
for the development of Yugoslavia?s aluminum and nitrogen in-
dustry after the Soviet Union pleaded an inability to so do
last winter.
TURKEY: The reported conclusion in Moscow in late July
following a two-months stay by the Turkish delegation in the
USSR whereby the USSR will install a glass factory in Turkey
and the initiation of discussions which may lead to the building
of a chemical factory by Russian technicians.
SYRIA: The reported agreement in late July by the USSR
to lend Syria $112, 000, 000 including funds for Syrian develop-
ment projects. The loan is repayable within 10 years and the
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agreement reportedly also will include a reduction or cancellation
of arms payments.
ICELAND: The offer in late June or early July of a $25, 000, 000
Soviet credit to Iceland to finance the purchase of East German fishing
vessels.
AFGHANISTAN: The announcement on 30 July, at the end of
the visit of Afghan King Zahir to the Soviet Union, that Foreign
Ministers Naim and Gromyko had agreed that the USSR would ex-
pand Soviet economic assistance in that country.
INDIA: The expected arrival in late July of a high-level
delegation in New Delhi to discuss the utilization of the
$126, 000, 000 loan extended last November for the implementation
of which the Soviets have been pressing. The delegation is also
expected to discuss technical aid for India in the construction
of heavy equipment. It had been reported that this delegation
was to be headed by M. A. Menshikov the Soviet Ambassador
to India.
EGYPT: The decision of the Egyptian Government in late
July to establish the General Petroleum Company which will have
exclusive rights for the exploration, production and marketing
of oil and for which the Soviet Union will supply part of the
capital and will provide technicians and machinery.
CEYLON: The statement by Khrushchev on 24 July to the
Ceylonese Ambassador that the USSR would assist Ceylon in
developing its rubber industry and would take all the resulting
increase in production.
IRAN: The sending of Soviet engineers in early July to
Tehran to discuss with Iranian officials the improvement of
Iran's Caspian Sea ports and joint ventures to develop water
resources along their common borders.
3. The Chief Directorate for Economic Relations (GUES)
has been elevated to the status of a state committee under the
Council of Ministers. The elevation of this organization,
under M. G. Pervukin, at least reflects the importance the
Soviet economic offensive has already achieved and may portend
a further broadening of effort in this field. Most students of
public administration would acknowledge a natural tendency of
an organization to expand its activities even though its promo-
tion in hierarchical dignity may have been in recognition of
past achievement.
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4. A number of Soviet ambassadors have returned to Moscow
during July or have remained there following the June central
committee plenum. An examination of the attached listing in-
dicated that a majority of the returnees are from either under-
developed nations or nations peripheral to the Soviet Union, Per-
haps several ambassadors returned for specific individual reasons,
but the large number of those returning and the geographic pattern
of posts suggest that matters of common concern are under dis-
cussion. It is possible that the ambassadors may have been briefed
on the purge but this appears unlikely in view of the geographical
pattern of returnee posts-. Furthermore, Vinogradoff, the ambas-
sador to France, was at the June plenum and presumably would
already be briefed. The same is true with Pegov, the ambassador
to Iran, whose return reportedly has been postponed by various
travel difficulties imposed by the Iranians. A reaffirmation of
Soviet foreign policy probably could be handled by normal diplomatic
communication. It is also somewhat unlikely that a wholesale purge
of ambassadors would occur at this time,
5. Since the ambassadors are almost exclusively from periph-
eral areas to the Sino-Soviet bloc it seems most likely that a major
Soviet foreign policy tactic affecting those areas is under discussion.
The Soviet intent to neutralize these areas has been manifest for some
time. It seems most likely that some Soviet move designed to
accomplish this objective may be under consideration. One
possibility, perhaps in conjunction with others, might be an expanded
Soviet economic offensive. The presence of ambassadors would be
helpful in appraising the success of the program to date and in
reviewing the programs for the future. There is no evidence for
this line of speculation except for the indications of increased
Soviet activity in this field particularly in most of the geographical
areas from which the ambassadors have returned. It is worth noting
however, that the Soviet economic delegation which is supposed
to have just arrived in India reportedly was to be headed by the Soviet
ambassador.
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2 August 1957
SUBJECT: RECALL OF SOVIET DIPLOMATS TO MOSCOW
1. The following Soviet ambassadors left their posts for Moscow on the
dates shown:
NAME
POST
DATE DEPARTED
PARTY POSITION
Tevosyan, I. F.
Japan
August
CC member
Zimyanin, M. V.
Vietnam
17 July
Auditing
Commission
Zarubin, G. N.
U. S.
25 July
CC candidate
Yudin, P. F.
China
Not in Peiping
(Unconfirmed)
20 or 23 July
CC member
Menshikov, M, A.
India
?
CC candidate
Vinogradov, S. A.
France
Charge Identi-
Auditing
fied 19 July
Commission
Zakharov, A. V.
ECOSOC,
17 July
*Dep Fon Min
Geneva
Shpedko, Ivan
Pakistan
Early June
Career Diplomat
Karavayev, B. I.
Ethiopia
2 June
Yershov, P. I.
Switzerland
12 June
m
Yakushin
Thailand
June
Shchiborin
Burma
June
Kisilev
Egypt
June
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NAME POST DATE DEPARTED PARTY POSITION
(Preceding five went to Moscow in June and have not
yet returned to their posts)
Ryzhov
Turkey
August
*
Degtyar, M. V.
Afganistan
17 July
Believed to be
(Arrived Moscow)
vet party worker
Slavin
Denmark
17 July
*
Smirnov, A. A.
West Germany 23 July
Veteran Party
worker
Teplov, L. F.
Sudan
24 July
*
Gribanov, M. G,
Norway
17 July
*
Lapin (Unconfirmed) Austria 21 July
Those marked * are not known to hold party positions although it is
assumed that they are at least party members.
2. There are also reports that large number of less important
diplomatic officials, particularly from the Near East, are going back
to Moscow. Information on these is not available.
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