CURRENT INTELLIGENCE WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000300070001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: December 15, 2016
• Document Release Date: May 11, 2004
• Sequence Number: 1
• Publication Date: June 11, 1954
• Content Type: REPORT

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COPY NO.
15
C?NFI?EHT1A
OCI NO.
6723
CURRENT
INTELLIGENCE
WEEKLY
11 June 1954
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CENTRAL INTELLIGENCE AGENCY
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State Dept. review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly has been prepared prima-
rily for the internal use of the Central Intelligence Agency.
It does not represent a complete coverage of all current
situations. Comments and conclusions represent the im-
mediate appraisal of the Office of Current Intelligence.
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SUMMARY OF CONTENTS
THE SOVIET WORLD . . . . . . . . . . . . . . . . . . . Page 4
CRISIS IN EAST PAKISTAN SEVERELY TESTS KARACHI GOVERN-
MENT . . . . . . . . . . . . . . . . ... . . . . . .
. Page 6
The Pakistani government will probably succeed in
restoring order in East Pakistan through its imposition
of "governor's rule." Karachi has shown appreciation
of the basic problems in the area, by proposing to
"clean up" the provincial government and institute
short-term economic improvements.
NEGOTIATIONS FOR THE RELEASE OF AMERICANS IN CHINA Page 8
Peiping now appears willing to release American
civilians held in China in exchange for the return of
Chinese students detained in the United States, but
has insisted on direct negotiations with American
officials.
DOMESTIC POLITICAL FACTORS LIMIT BRITAIN'S FREEDOM OF
ACTION ABROAD . . . . . . . . . . . . . . . . . . . . . Page 9
Growing public support for a more "independent"
approach to foreign affairs limits the British govern-
ment's freedom of action abroad. Although the Anglo-
American alliance has not been seriously weakened,
co-operation may be further impeded in such areas as
the Far East and Southeast Asia.
INCREASING PROBLEMS CONFRONT SELF-GOVERNING SUDAN . . . Page 11
Six months after the inauguration of self-government
in the Sudan, a situation has arisen which threatens the
Sudan's political development.
MAGSAYSAY'S PROGRAM BOGGED DOWN IN POLITICS . . . . . . Page 13
The Magsaysay administration, now in its sixth month
and with a party fight on its hands, has made little prog-
ress toward its announced goals. A major party split was
staved off at a caucus on 7 June, but there may be a
change in political alignments at the special session of
the congress expected later this month.
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POOR SATELLITE CROP PROSPECTS FOR 1954 THREATEN SUCCESS
OF NEW COURSE . . . . . . . . . . . . . . . . . . . . . Page 15
The almost certain failure of Satellite agriculture
to meet targets set for this year under the new economic
course will require readjustments in over-all planning
which will slow the rate of growth of heavy industrial
production for several years to come. Indications are
the 1954 crops will be no better than last year's poor
harvest; the important bread grain and possibly fodder
crops will be the least satisfactory.
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THE SOVIET WORLD
The Communists are continuing to take a hard line at Geneva
in the apparent belief that military developments in Indochina
and the political situation in Paris will eventually force the
French government to move toward the Communist position. Molotov's
8 June speech again clearly indicates that the Communists will
not enter a cease-fire agreement or abandon their maximum demands
at this time. His only new proposal is for the Indochina partici-
pants to discuss political and military problems on alternate days,
and for representatives of the two opposing commands to discuss
political questions just as they have been discussing military
matters.
Current military discussions at Geneva have apparently made
little progress. The Communists have made clear that they will
bring up again their demands for a regrouping of the opposing forces
in Laos and Cambodia as well as in Vietnam. They also imply that
certain irregulars of the Viet Minh may be excluded from the re-
groupment scheme and thus be left free to harass non-Communist areas.
The third week of restricted sessions was occupied almost en-
tirely with discussing proposals for supervision and guarantees
of an armistice. The Communists have so far demanded representation
on any international commission, whereas the West insists that this
commission must be truly impartial. They have insisted that the
mixed Indochinese committees not be subordinated to the international
commission, while the West takes the opposite view. Chou En-lai's
most recent proposal that the international commission attempt to
arbitrate disputes which the mixed committees cannot resolve may,
however, represent a modification of the Communist position. This
proposal seems to envisage that supreme authority would rest with
the nine participants in the Indochina discussions, to which the
international commission would refer disputes it cannot resolve.
Nevertheless, these various proposals still give the Communists a
veto at all three levels of supervisory authority.
The most recent Soviet statement on the question of nuclear
energy was a 29 May Pravda article, which constituted the first
public rejection of President Eisenhower's atomic pool proposal.
The article reiterated the main points in Moscow's answer to the
proposal last December and reflected considerable concern that
the United States might move to establish such a pool without Soviet
participation. Pravda denounced the plan as designed to create an
international atomic energy cartel which would give American "ruling
circles" control of atomic research in all capitalist countries. In
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addition to heavy criticism of the President's proposal as
designed to use only "a certain part" of atomic stocks, the
article repeated the Soviet demand of last December that as
a first step toward solving the question of nuclear weapons,
there should be an unconditional ban on atomic, hydrogen and
other mass destruction weapons by a "five-power" agreement not
to use these weapons.
The Pravda article was apparently timed to coincide with
the resoluttio f the World Peace Council in Berlin on 1 June,
which parroted the Kremlin's call for a ban,on the use of nuclear
weapons and in addition made the demand that there be "no experi-
ments with atomic and hydrogen bombs."
Meanwhile, at the UN disarmament talks in London, Soviet
delegate Malik on 1 June again voiced Soviet objections to the
President's proposal and stated that useful discussion could
take place only after an international agreement had been reached
which would unconditionally prohibit use of nuclear weapons. He
introduced a resolution to that effect, and indicated his govern-
ment might present a resolution at the ninth General Assembly em-
bodying this Soviet proposal.
Such a move would formalize what has appeared to be the
development of an intensive "peace front" campaign for a ban on
all weapons of mass destruction, designed to regain the "peace
initiative" and obscure the Kremlin's rejection of the atomic
pool proposal. Moscow's current and possibly future approach to
the question of nuclear weapons was succinctly expressed in a
recent New Times article which stated that "the movement against
the use _`5T atomic and hydrogen weapons ... is even more widespread
than . the Stockholm Peace Appeal, which was signed by more than
500 million people."
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CRISIS IN EAST PAKISTAN SEVERELY TESTS KARACHI GOVERNMENT
The Pakistani government will probably succeed in restoring
order in East Pakistan through its imposition of "governor's rule"
--direct control of the province by Karachi through the appointed
governor. This action alone will not solve the problems underly-
ing popular disaffection in the area, but Karachi has shown appre-
ciation of these difficulties by proposing to follow with a "clean-
up" of government in the province and short-term economic improve-
ments.
The chaos-in East Pakistan, which precipitated Karachi's move,
has largely developed since the United Front swept the Moslem
League from power in the mid-March provincial elections. Dissident
elements within the Front.. the Communist Party, and possibly Indian
agents exploited widespread grievances, and demanded immediate ful-
fillment of the Front's campaign promises. Apparently, they hoped
thus to strengthen their position in the legislature and win cabi-
net representation.
The inability of the United Front to maintain its unity an4
the relgctance of 82-year-old Chief Minister A. K. Fazlul Huq and
his cabinet to control the agitation encouraged the dissidents.
The Front's disunity was reflected in the pursuance of separate
policies by its three major components--the Communist-infiltrated
Awami Moslem League, the Krishak Sramik Party, and the Nizam-i-
Islam. Huq's delay in nominating a full cabinet, which was due
largely to his difficulty in finding men both loyal to him and able
to command a majority in the legislature, further emphasized fac-
tional rivalry.
The continuing agitation of dissident politicians and Commu-
nist elements, playing on East Pakistan's sensitivity to Karachi's
"colonial" policies and the people's animosity toward Indian refu-
gees and West Pakistanis, resulted in labor riots and other dis-
turbances in late March. About ~7 people were killed and 120 in-
jured. These riots were followed by a disturbance in Dacca, the
provincial capital, On 15 May serious rioting again broke out at
Pakistan's largest jute mills; about 400 persons were killed and
over twice as many injured. Special police and local military
units did not restrain the mobs, allegedly because high official.
.on the scene, including a pro-Communist member of Huq's cabinet,
withheld the necessary orders.
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In addition, Huq issued public statements which suggested
that he was seeking political separation of East and West Paki-
stan. He also contributed to the friction between the provin-
cial and central governments by publicly denying Prime Minister
Mohammed Ali's charges that Communist and other anti-Pakistani
agents--presumably Indian--were responsible for the riots.
On 30 May, Karachi assured its immediate control of the
situation when Ali promulgated governor's rule under Pakistan's
tough and able defense secretary, Major General Iskander Mirza.
This action was taken after a two-week series of meetings be-
tween the cabinet and the provincial chief ministers. Karachi's
delay in following this course was due primarily to its reluc-
tance to exacerbate relations with the province.
The roundup of dissidents, begun after the 15 May riots, is
continuing. Huq is under house arrest and at least four members
of his cabinet have been detained. The army, with about 13,000
men in the province, is patrolling the major cities. . ;
Karachi's action demonstrates it will try to hold East Paki-
stan by force until the situation cools. The central cabinet be-
lieves this period may last a year--possibly until the.national
elections planned for 1955. The short-term prospects of this
approach appear favorable. The army is believed capable of main-
taining order and the government has a good case against Huq due
to his "traitorous" pro-independence speeches.
Success over the longer run, however, depends on the ef-
ficacy of the "cleanup" measures and the economic improvements
Karachi has promised. These promises include increases in the
supplies of food and consumer items at lower prices.
Karachi's preoccupation with the East Pakistan crisis will
probably distract it for some time from participation in inter-
national affairs, but is not expected to have any major effect
on Pakistan's attitude toward American aid or its Western, partic-
ularly its pro-American, orientation.
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NEGOTIATIONS FOR THE RELEASE OF AMERICANS IN CHINA
The Peiping regime appears willing to release American
civilians held in China in exchange for the return of Chinese
students detained in the United States. Peiping has insisted,
however,.on direct negotiations with American officials, which
it will presumably publicize as another step toward recognition
of the regime.
Approximately 51 American civilians are being held in
Communist China. Of these,32 are known to be in prison, three
are presumed to be under arrest, and 16 are unable to obtain
exit permits. Not included in this count are the 21 American
prisoners of the Korean war who refused repatriation or the
several hundred other American military prisoners believed
held in China. There are 43 other Americans, including 11 who
hold official or quasi-official positions in the Peiping regime,
who apparently do not wish to leave China.
A Chinese Communist hint in early May that Americans in
China were being held as hostages for the return of Chinese
students in the United States was confirmed at a preliminary
meeting in Geneva between Chinese officials and Humphrey
Trevelyan, the British charge in Peiping. The talks bogged
down when the Chinese delegates insisted on negotiating directly
with American officials.
American diplomats accompanied Trevelyan to an exploratory
meeting with the Chinese on 5 June. Communist propaganda, which
interprets Peiping's participation at Geneva as de facto recogni-
tion, is expected to publicize this meeting as another step
toward recognition. The Communists may call in subsequent meetings
for explicit discussion of the questions of recognitionJand China's
seat in the UN.
Of the 4,500 Chinese students in the United States in June
1951--when the regulations for the control of foreign nationals
were promulgated--approximately 450 sought to leave the country.
Only 120 of these have been detained, and the United.States
government has decided that some of these can now be repatriated.
If direct negotiations prove unsuccessful in obtaining
the release of the Americans in China, future action will be
confined to representations by diplomatic officials of nations
friendly to the United States which recognize the Peiping
regime. These attempts have not been successful in the past,
and would not be expected to succeed in the future.
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DOMESTIC POLITICAL FACTORS LIMIT BRITAIN'S
FREEDOM OF ACTION ABROAD
Growing public agreement with Aneurin Bevan's contention
that Britain should adopt a more "independent" approach to
foreign affairs and a desire to retain bipartisan support for
its foreign policy limit the Conservative government's free-
dom of action abroad. Although the Anglo-American alliance
shows no signs of a basic weakening, there is apprehension
in Britain about these ties and co-operation may be further
impeded on such issues as Southeast Asian defense and Far
Eastern policies in general.
The government's evident desire to move both independently
and cautiously in international relations springs largely from
its evaluation of Britain's national interests and Western
cold-war strategy. Churchill and other Conservative leaders
have for some time been urging the general British view that
East-West tensions have eased. The British led the way in
NATO's shift to the "long-haul" concept of military strategy,
a move aimed at reducing the burden of rearmament. They are
still trying doggedly to reduce Western export controls, an
action calculated to bolster the British export trade.
Domestic political conflict also limits the flexibility
of British foreign policy by weakening bipartisan support to
a greater extent than at any time since the war. This con-
flict is most bitter within the Labor Party. Attlee's mod-
erate right-wing leadership is coming under increasing at-
tacks from Bevan, whose emotional appeal to the rising popu-
lar reluctance to rearm West Germany threatens to reverse the
official Labor policy. Bevan has also capitalized on distrust
of American foreign policy and fear of Far Eastern "adventures."
Strong personal antagonisms among the dominant trade union
group make Bevan's chances of capturing personal leadership
of the party poorer than ever, but rank-and-file support for
his views is growing.
The unwillingness of both Labor factions to face a final
showdown will almost certainly incline the party as a whole
further toward Bevanism. The government has reacted most
sharply to Bevanite charges that it is subservient to Washing-
ton, whose attitude toward Communism is widely regarded as"
inflexible and impetuous.
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The Conservatives command a workable parliamentary
majority for their policies, and are confident of winning
the next general election. They do not, however, foresee
substantial gains if the election is held in the near future.
Spokesmen for both Labor Party factions admit privately that
only an economic crisis could return their party to power.
The government must take into account, moreover, a change
in its own standing with the voters. The Conservatives took
office in October 1951--after polling a smaller popular vote
than Labor--with an excellent reputation for competence in
foreign affairs and in full anticipation of severe criticism
on domestic issues. Now they enjoy widespread support for
their moderate domestic policies, and are increasingly anxious
that their actions abroad meet with parliamentary and public
approval. The political atmosphere is further clouded by
Churchill's silence about his personal plans for the future.
All these unsettling factors tend to make the govern-
ment increasingly sensitive to public opinion, particularly
in seeking bipartisan support for its foreign policy. High
officials frequently argue that British opinion would not
stand for the government's appearing unwilling to negotiate
with the Communists. Eden's efforts to serve as an "honest
broker" at Geneva have won him quch wide commendation at
home that his policies toward Southeast Asia, especially his
efforts to enlist the willing co-operation of Asian Common-
wealth members, seem assured of continued approval. The pro-
posed visit by top officials of the Labor Party to Peiping
this summer will strengthen the feeling in Britain that closer
relations with Peiping are possible, and that Britain can exer-
cise special influence on the Chinese Communists.
At the same time, there is apprehension in both major Bri-
tish political parties about relations with the United States,
close ties with which are still regarded as the keystone of
British foreign policy. A Foreign Office spokesman told news-
men on 20 May that the Anglo-American alliance was facing its
"worst crisis" since the war.
Nervousness about Washington's intentions and reactions
is not likely, however, to deter the British from pursuing
their own cold war tactics. This is an area in which they regard
themselves as more skilled than Americans. In view of the
situation at home and their desire to encourage moderation in
international relations, the British will probably persist in
their attempts to promote genuine East-West negotiations.
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INCREASING PROBLEMS CONFRONT SELF-GOVERNING SUDAN
Six months after the inauguration of self-government in
the Sudan, a situation has arisen which threatens the Sudan's
political development. The principal elements in this situa-
tion are: (1) Internal dissension within the governing National
Unionist Party (NUP); (2) an imminent showdown with the pro-
independence Umma Party--the major opposition; and (3) the
prospect of the early withdrawal of all British officials from
the administration.
Signs of internal dissension have recently appeared in the
Egyptian-sponsored National Unionist Party, which won a substan-
tial victory in the elections last November. The party, founded
in Cairo in November 1952 as a coalition of Sudanese politicians
favoring union with Egypt, is dependent on the Khatmia religious
sect for its popular support. Accordingly, party leaders have
sought to maintain a careful balance between the Khatmia and
the prounionist politicians. However, the several unionist
factions in the NUP are currently involved in a struggle to domi-
nate the party and Egyptian maneuvers may result in serious fis-
sures in the NUP and consequently reduce Egypt's influence among
Sudanese politicans.
Developments in Egypt, particularly the emergence of a
military dictatorship under Colonel Nasr, have adversely af-
fected the Sudanese attitude toward union with Egypt. General
Nagib, because of his Sudanese background, was regarded as a
hero in the Sudan and his loss of position has been a severe
blow to the prounionists.
A spokesman for the Khatmia recently indicated that despite
previous statements that the sect supported a form of union with
Egypt, the Khatmia now favors two independent countries working
co-operatively together. Leaders of the Khatmia are confident
of their ability ultimately to control the policy of the NUP as
a result of its dependence on the support of the sect's followers.
Accordingly, Egyptian efforts to dominate the NUP are likely to
alienate the Khatmia further and could lead to a serious split
in the Unionist government.
The long-standing deep-seated rivalry between the orthodox
Khatmia and the Ansar sect, which dominates the Umma Party,
has produced another problem for the Ashari government. In
April the government openly challenged the opposition by removing
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the representative of the Umxra Party from the Governor General's
Commission and replacing him by a NUP supporter. Although the
action failed to precipitate the immediate crisis which had
been feared, the Ansar has indicated that it does not intend
to acquiesce in continued NUP domination. When parliament re-
convenes in October, a showdown between the two groups may be
expected.
In non-Moslem southern Sudan--traditionally anti-Egyptian--
there is increasing tension over encroachment from the Moslem
north. The southerners vigorously object to the replacement of
British officials by Moslems and demand "Southernization" rather
than "Sudanization" of the administration in the south. In
December a group of 23 southern members of parliament, opposed to
union with Egypt, formed a new party, the Liberal Party, supporting
full independence of the Sudan and the rights of the south. Any
attempt by the NUP government to impose its will on the south is
likely to lead to demonstrations by the tribes which could lead
to serious disorders.
Britain has apparently concluded that the best policy to
follow in the interest of future Anglo-Sudanese relations is to
withdraw all British civil servants from the Sudan as soon as
possible. Such a move, London feels, would prevent the British
from being used as scapegoats for future difficulties and at the
same time satisfy the NUP's demand for immediate "Sudanization"
of the administration.
The British governor general has, accordingly, approved a
proposal providing for the withdrawal of all British officials
from the civil administration, the army, and the police force by
1 May 1955. There are, however, few qualified Sudanese available
to fill these posts, and the premature departure of some 1,200
experienced officials will severely handicap the development of
an efficient administration in the Sudan.
The British have indicated their determination to suppress
any disorders as long as they remain in effective control of the
Sudan. The departure of the British could, however, become the
signal for a widespread bitter struggle.
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MAGSAYSAY'S PROGRAM BOGGED DOWN IN POLITICS
The Magsaysay administration, now in its sixth month and
with a party fight on its hands, has made little progress toward
its announced goals. A major party split was staved off at a
caucus on 7 June, but there may be a change in political align-
ments at the special session of the congress expected later this
month. In any case, there is little prospect that the hopes
raised by Magsaysay's landslide election will soon be fulfilled.
The president retains his great popularity and the general
support of the press but has been unable to win full control of
the Nacionalista Party organization that nominated him and rode
to power with him. At the caucus on 7 June, Magsaysay received
a pledge of full support, but although members of the old guard
were present, Senator Claro Recto, their leader, was not. When
informed of the caucus results he reiterated his intent to
criticize the administration "whenever, in my judgment, it is
in the public interest to do so."
The general attitude of the party's old guard was expressed
recently by the party chairman who, in a sideswipe at Magsaysay,
related the story of a man who asked for and received shelter in
a house, then wanted the entire house as his own. The American
embassy in Manila reports that once-ardent supporters of Magsay-
say now believe more than the president's "human touches" are
required to get the Philippines out of its rut.
In his early weeks in office, Magsaysay's political inex-
perience frequently led him to defer to the advice and sugges-
tions of the party wheelhorses, whose motives he did not
question. When Senator Recto in early February first chal-
lenged Magsaysay's leadership and pro-Western orientation, the
president recognized the need for an eventual showdown. He
subsequently has been able to achieve little more than face-
saving victories, and key foreign policy issues have become
increasingly controversial. For instance, an agreement
finally reached with Japan on the long-standing reparations
controversy was abandoned following sharp congressional
attacks.
During the regular session of congress which closed on
20 May, both houses were primarily preoccupied with efforts
to maintain restrictions on the executive power. The support
for Senator Recto's brand of ultranationalism was reflected
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in the introduction of some 50 nationalization bills--directed
chiefly against the Chinese--that would have excluded foreigners
from various activities. The most important of these--one to
exclude foreigners from retail trade--was passed and the presi-
dent is reported to have committed himself to sign it before
reading it. The patronage demands of the Nacionalistas have
delayed important cabinet appointments and the administration
was not well enough organized to push through any important
reform legislation.
Recent reports that Magsaysay intended soon to force a
political realignment probably account, in large part, for the
appearance of unity he was able to obtain at the caucus. He
was said to be planning a new party based largely on the
present Democratic Party, which was organized last year by
Carlos Romulo, who is now Magsaysay's personal envoy to the
United States. To the Democrats would be added such Nacional-
istas and opposition Liberals as could be induced to cast their
lot with the president.
The possibility of a party split has apparently given pause
to Nacionalista leaders. The influential Senator Laurel, who
is usually in Recto's corner and who, according to information
of mid-May, favored excluding the president from the party's
councils, more recently stated he would stick with Magsaysay
until it became "unbearable and impossible" to do so. At the
caucus, Laurel's efforts apparently were directed toward
avoiding a party split.
A political reshuffle is'still a possibility, and it may
take place during the coming special session of congress. it
is doubtful, however, that any realignment would meet the
needs of the situation.
Senator Cabili, a Democrat, first proposed the realignment,
and the motives of his party--which would form the basis for
the new group--are open to doubt. The party is strongly
influenced by wealthy sugar producers whose economic interest
in retaining close ties with the United States leads them to
oppose Senator Recto's brand of nationalism. But the party's
backers have little interest in the reform program that
brought Magsaysay his landslide victory. Moreover, Magsaysay
himself has not yet demonstrated the political or administ'ra--
tive skill necessary for effective leadership.
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POOR SATELLITE CROP PROSPECTS FOR 1954 THREATEN SUCCESS OF NEW COURSE*
The almost certain failure of Satellite agriculture to meet
targets set for this year under the new economic course will
require readjustments in over-all planning which will slow the
rate of growth of heavy industrial production for several years.
All present evidence indicates that 1954 crops will be no better
than last year's poor harvest; the important bread grain and
possibly fodder crops will be the least satisfactory.
When the new course for agriculture was outlined, Satellite
leaders must have realized that the increased investments scheduled
would have only marginal effect this year. They may have hoped,
however, that the shift in emphasis from coercion to incentives
would elicit sufficient peasant response to meet the higher l054
goals even before the agricultural investment program was fully
implemented. It now appears that the greater incentives resulted
chiefly in peasant expectation of further concessions.
This year's output has been handicapped by bad weather,
Fall sowing plans were underfulfilled in all the Satellites,
Albania, which achieved less than 95-percent fulfillment, had
the best record. A drought throughout the area during last fail's
plowing and sowing, followed by long periods of low temperature,
retarded the growth of grains, and lack of snow cover during
December exposed the grain to killing frosts, Cold and rain de-
layed the planting of spring grains, thus increasing the danger
from the hot dry weather normal in June and July. In turn, the
planting of potatoes, sugar beets, and vegetables was delayed.
In addition, poor organization and a lack of agricultura._1
machinery--deficiencies which the new course has so far done
little to correct--increased peasant apathy. Large-scale peasant
withdrawals from co-operatives in Hungary and Czechoslovakia last
fall and winter further disrupted Satellite crop planting plans,
Thus, an inadequate and disgruntled labor force was obliged to
increase its efforts to reseed fields in the spring and at the same
time meet the expanded spring targets within a shortened plowing
and sowing season.
Soviet domestic agricultural requirements are likely to
prevent the USSR from extending substantial assistance to the
Satellites. Faced with inadequate crops and little hope of
greater Soviet assistance, the Satellites will probably be forced
to reduce agricultural exports or postpone plans for increasing
domestic food consumption,
* Based on a study prepared by the Office of Research and Reports.
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A reduction of Satellite agricultural exports to the West
would necessitate a reduction of imports of industrial raw
materials and industrial equipment, thereby causing further
setbacks to the industrial programs. If priority is given to
meeting export goals, then the resulting food shortages will
have a continued adverse effect on already low worker morale
and productivity which the new course is designed to improve
in order to make possible continued industrial growth.
Numerous developments indicate that the regimes now
recognize the necessary improvements in agriculture will require
several years. East Germany and Hungary have announced that the
primary task of their second five-year plans will be raising
agricultural production to a satisfactory level. Czechoslovakia
has announced a program, extending through 1957, for a large
increase in the agricultural labor force, which requires the
transfer of some industrial workers to the farms. Other Satellites
have also stressed plans for a large expansion in agricultural
training facilities, and for providing more effective management
in agriculture, particularly in the collective farms.
The plans to continue the diversion of material and human
resources to agriculture over the next five or six years show a
more realistic appraisal of the problems that must be overcome.
However, such a program, requiring the substantial diversion of
resources from industry, will contribute to a lower rate of
heavy industrial growth during this period.
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