BI-WEEKLY PROPAGANDA GUIDANCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-03061A000100010012-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 20, 2016
• Document Release Date: April 23, 1998
• Sequence Number: 12
• Publication Date: September 14, 1959
• Content Type: PERRPT

Approved For Release 2007/03/03 ' CIA-RDP78-03061 A960100010012-8
14 September 1959
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133., The Great Leap Backward
1959
78-03061 AODO 100010012-8
The cb munique of the Eighth Plenary SScasioon of the CCE Central Committee
reportedly, heat in Lushan. .Kisn, si from 2 to l6. August was made public on Z August.
The co n unique a4mlts to i4ncompeteaat planning, erroneous statistics and weaknesses
in the economy. It propoises l-arge scale retrenchment in econornic planning for 1959,
admitting, for example, that 1958 go ;la for grain. production were too high by 3516. It
adds that co. sid rab1e oppo ai.ti.on to the c nirnune system still exists in China in the torn
of -"right opportunist ideas" which "overernphast the seriousness of certain defects
which -xcurred in the `great leap forward' and its cox mune mo re nents. " TThis charge
appears to have been directed not only at cadres on the working level, but at elements
of top leadership and gives evidence of dissension within China"* ruling hierarchy.
Finally, the communique demands that the party o}rercome rightist tendencies. "put
politics in command, fully mobilize the manses, go all out, and .trive.to fulfill and
overfulfill this years leap forward p"inn." Although there is evidence that the Chinese
Communist economy is badly it need of adjustment and. althougb planning and production
errors promise untold hardships for the Chinese people, there is no present evidence
that the economy is a failure or is likely to founder be ause of admitted errors.
25X1
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 14 September 1959
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.134. Interniationai Development Association
s zscre+aised monetary stabil$ty ha-s opened the possibility of more extensive European
Participation in long term lending to underdeveloped countries. The creation of IDA
will shift some of the available European funds into long term loans. 25X1
the meeting of the Governors of.the World Bank in '% ashington in late September.
Multilateral aid extended through international organizations is highly appealing to
underdeveloped countriesi since it avoids the political overtones implicit in bilateral aid.
The existing organization, the IBED, makes loans only for economically sound projects
and requires repayment in hard currencies. Since the underdeveloped countries need
large amounts of capital and find it difficult to borrow money on "bankers terms". it
has long been desirable to create an international institution which would fill this gap.
In 1949 a Special. United Nations Fund for Economic Development (SUNFED) was proposal
which would provide low interest, long term loans for development purposes. Although
supported by many.of the underdeveloped countries, some of Western Europe, and the
Soviet bloc, the U.S. and the U.K. have consistently, opposed it. It is feared that SUNFE
would not provide adequate control over the use of money and that the U. S. Congress
would not support a rneaatngful U. S. ,contribution. IDA, which would be administered by
the World Bank and not the UN, is designed to assure a more effectively administered
method. of providing cheap development loans allowing long term repayment*
partially
in soft currencies and lour tntervat rates. During late 195.7 and 1958, the . leveling' out
of the 'world's economic activity has temporarily shifted the U. S. balance of payments
to a debtor, position. There has bean 'a resulting gold flow to Europe which has
considerably strengthened the current dollar and. gold reserves of the European countries
Thi t
The United States Government will propose the creation of a new internatio a1
town agency, to be known as the international Development Association (IDA), during
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135. Crisis its Sino-Lrdian .Relations
3061A b $195
iens#On between India and tle Chinese Peoples Republic (CPR) has inure: se
slmad'l's race the Tibetan, revolt in March 1959. The Chicoms have declared Ir diasi and
7 tbetan currency illegal in Tibet. harrassed Indian traders and "firms s ; t A"_
Indian pilgrims stay out of Tibet. All actions are violations of the 1954 trade agreement
?
between India and the CPR. Reports that Chicom troops were massing on the Bhutan
border coupled with propaganda statements emanating from Lhasa that the Bhutanese,
Sikkimese and Ladakhis ""must again be made a united family under China" -hr aught forth
Prime Minister Nehru's statement that India would defend Bhutan and Sikkim against
invasion. On 25 August a detachment of Chicom soldiers invaded the Subansiri Division
of the Northeast Frontier Agency (NEFA) and captured. the Indian post at Longju. Nehru'-
angry reaction to this incursion followed bar the announcement that Indian defense forces
would man the entire border was received enthusiastically by the Indian people. On ?
September Nehru submitted to Parliament a white paper revealing the deterioration of
relations between India and the C} R since 1954 despite the facade of friendly coexistence
during this period. Chicom border violations relate to Chicom' 'Icartographic aggression'.
wherein 30, 000 square rniles.of Indian territory are shown as 'elonging to the CPR.
India has officially protested the .inaccuracy of the Chacom maps. The McMahon Line is
firmly recognized by India as the border between Tibet and India. The CPR has never
formally ratified the agreement (1914) establishing the Line. However. Nehru stated that
when Chou .En-Lai visited India in 1954, he had given Nehru to understand that he agreed
to the Line. Border incidents along the Himalayan frontier have been occurring for the
past nine years and probably have been intensified at then tune because the CPR wishes
to prevent Indian Influence in Tibet. The CPR's evasiveness and bellicosity in settling
border disputes is illustrated by her negotiations with Burma and her 4 September note
to Nehru denying Chicorn aggression in NEFA and accusing India of a border violation in
the same area. India"*' current problems with the CPR on the northern frontier may
encourage India and Pakistan to adjust their outstanding differences, most important of
which are the kCashmir and Indus waters disputes. 25X1
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136. European Cooperation and Integration
`14 September 1959
78-03061 A000100010012-8
The Post-World War II movement towards the integration of Europe has
culminated in the formation of the European Economic Community (EEC) and the
associated Coal and Steel Community (CSC) and EURATOM. Recent developments on the
European scene have revealed the fragility of these organizations before the forces of
nationalism. The CSC has been faced with the task of resolving the coal glut in Europe.
Its High Authority recommended that production controls be established and import
quotas be fixed to relieve the pressures from excess coal production which was
particularly serious In Belgium where lags in closing down unprofitable mines contribute
to overproduction. This recommendation of the High Authority was turned down by the
CSC Council primarily at the instigation of the French and Germans. Although there
would have been technical difficulties in enforcing the High Authority's recommendations
and although a general program of controls is contrary to the advantages of a free
market, the decision was a distinct setback to the cause of European integration. The
smaller countries fear this is an example of a growing tendency for the submergence of
their interest to those of the larger countries. The Ruhr industrialists are not particular
enthusiastic about the Common Market (EEC). siding with the general position of Erhard
that a larger free trade area with less supranational overtones would be superior.
Adenauer continues. ardently to favor integration. The French, returning to their
traditional nationalism, are somewhat equivocal over the Common Market. The French
Premier Debre has long been an opponent of the integrationist movement. The final
factor is the formation of the grouping known as the Cuter Seven: the UK, the three
Scandinavian countries, Portugal, Switzerland, and Austria. This group hopes to
associate itself with the Common Market through some form of Free' Trade Area. Such
proposals were previously rejected by the French, who have little to lose economically
by the exclusion of the Outer Seven. The Germans on the other hand, have extensive
economic interests with the Seven and there is considerable pressure for arriving at soar:
satisfactory relationship between the two groupings. 25X1
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137. The CENTO Ministerial Council Meeting
Athree-day meeting of the Central Treaty Organization Ministerial Council
(CENTO officially became the new' name of the Baghdad Pact on 19 August 1959) will
open in Washington on 7 October. The Council Meeting--scheduled at the January
1959 Ministerial Council meeting in Karachi, long before the Eisenhower-Khrushchev
exchange visits were arranged--will occur between Khrushchev?s visit to the U. S.
and Eisenhower?s return visit to the Soviet Union, probably to commence the second
or third week of October. It is possible that the CENTO Council meeting might be
interpreted in Moscow and elsewhere as a U. S. manifestation of the "position of
strength" policy which Communist propaganda for many years has condemned as the
principal deterrent to an easing of Cold War tensions. The Baghdad Pact, an outgrowth
? of the 244 February 1955 Turkish-Iraqi Treaty of Mutual Cooperation, has been a
major target of Communist propaganda against those aspects of U. S. foreign policy
manifested by overseas military bases and military pacts such as NATO and SEATO.
Moscow?s decrease in propaganda against the Baghdad Pact-CENTO nations following
Iraq's withdrawal from the Pact in no way implies any diminution in its antipathy
toward such pacts. Four of the five original member nations--Turkey, Iraq. Iran
and Pakistan--comprised the "norther tier"of nations defensively arrayed against
possible Soviet military aggression. Iraq's withdrawal following Quasimas 1958 coup
d?etat resulted in the transfer of the organization's headquarters to Ankara. Great
Britain is the only non-Middle East nation with membership in CENTO, The U. S.
while not a member, participates in three of CENTO?s four committees, notably the
military, economic, and counter eubver#ion committees. The U. S. also provides
some personnel for the international staff. In addition to military aid, the U. S. has
provided $27, 67 million to various economic projects sponsored by the organisation.
Despite considerable pressures from CENTO memberre the U. S. does not intend to
join CENTO because the Middle East Doctrine and bilateral pacts with the Middle
East members of CENTO afford all the U. S. support that formal U. S. membership
would provide. CENTO in its military aspects, has a senior planning staff, but there
is no unified command structure as in NATO. The agenda for the Ministerial Council
meeting has not been announced, but is not expected to feature other than normi4xi
CENTO economic, and military affairs.
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