CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000600060001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 32
• Document Creation Date: December 16, 2016
• Document Release Date: March 22, 2005
• Sequence Number: 1
• Publication Date: August 25, 1955
• Content Type: SUMMARY

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CONFIDENTIAL
(CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO.
OCI NO.
20
6663/55
25 August 1955
DOC.UMENt NO.
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CENTRAL INTELLIGENCE AGENCY
I I I OFFICE OF CURRENT INTELLIGENCE
State Department review completed
CONFIDENTIAL
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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 Summary has been prepared
primarily 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 immediate appraisal of the Office of Current Intelligence.
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 CONFIDENTIAL
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 1955
AMERICAN-CHINESE TALKS . . . . . . . . . . . . . . . . . . Page 1
The Chinese Communists at Geneva have been giving ground
on some points in devising a, formula for the repatriation of
Americans and Chinese. Peiping is now resisting an early dead-
line for the release of all Americans ,still detained in China.
Chances are about even, however, that the Chinese will sooner
or later commit themselves to a deadline if the alternative
is termination of the talks.
FRENCH NORTH AFRICA . . . . . . . . . . . . . . . . . . . Page 2
The disorders in Morocco have precipitated a political
crisis in France. Premier Faure is expected to reach a
preliminary understanding with the Moroccan nationalists
which will be acceptable to the French assembly.
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Yugoslavia Increasingly Unco-operative With US: Several
recent Yugoslav actions point up Belgrade's increasing
unwillingness to co-operate with the United States.
Yugoslavia's attitude appears to be caused by a. feeling
of greater security, which in turn is largely accounted
for by the continued improvement in relations with the
Soviet bloc. Page 1 25X1
USSR Gains Prestige at Atoms-for-Peace Conference: The USSR's
policy of os er ng t e Geneva spirit" an "a. new inter-
nationalism" governed the conduct of the Soviet scientists
in all phases of the UN-sponsored conference on the
peaceful uses of atomic energy. The Soviet Union appears
to have moved beyond what was largely a purely propaganda
position to a major effort to demonstrate its real
accomplishments in the peaceful uses of atomic energy.
As a result, Soviet participation at Geneva considerably
enhanced the prestige of the U SR's atomic energy program.
I I . . . . . . . . . . . Page 2
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 1955
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Soviet Bloc Offers to Afghanistan: Continued offers of
Soviet bloc aid and technical assistance to Afghani-
stan and measures taken by both sides toward implement-
ing earlier agreements suggest that the Communist-
sponsored projects have resulted from long-term plan-
ning on the part of Moscow. The Afghans may, however,
regard increased contacts with thE Soviet bloc mainly
as a psychological and practical tactic in their
dispute with Pakistan. Page
Czechoslovakia Plans to Reduce Troop Strength: Czecho-
s ova a s announcement of plans to cut its armed
forces is probably designed to strengthen the propa-
ganda value of the Soviet troop reduction plan; the
other Satellites may soon follow suit. The planned
Czech reduction would not appreciably reduce the
bloc's over-all military capabilities.
Page 5
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Soviet Bloc Redefection Campaign: The Soviet bloc's
campaign to induce Soviet and Satellite emigres to
return seems to be meeting with some success. Its
immediate objective seems to be to sow dissension
among emigrgs and discourage their participation in
anti-Communist activities, rather than to bring great
numbers of them back to their homelands. Page 6 25X1
Harvest Prospects Poor in European Satellites: Harvests
in all the European Satellites except Poland have
been delayed for the second consecutive year by
adverse weather and an inadequate labor force. As
a result, there may be abnormal harvesting losses
and poor quality grain again this year. age 6 25X1
Economic Crisis Forces Burma to Turn to US for Help: Burma's
request for a $50,000,000 loan from the Un to States
represents an important change in Burma's rigorously
neutral foreign policy. The request was made necessary
by an impending balance-of-payments crisis due mainly
to the emergence of a buyers' market for rice 25X1
Page 7
Shigemitsu's Visit to Washington: Japanese foreign minister
Shigemitsu's visit to Washington is primarily designed
to enhance his personal prestige. He plans to discuss
in general terms a wide variety of problems. age 8 25X1
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Indonesia: There has been a decided change in the polit-
ical atmosphere in Indonesia since the departure
of the All government. The most striking change has
been the friendly attitude of government officials
toward the United States. Page 10 25X1
Philippines: The decision of the Nacionalista Party con-
vention on 21 August to delegate final selection of
its senatorial candidates to the Magsaysay-controlled
party executive committee is virtually certain to
result in Senator Recto's exclusion from the party
ticket for the November election. In consolidating
his political position, Magsaysay apparently has made
concessions to the powerful "sugar bloc" which
dominates the Democratic Party and has little sympathy
for his reform program. Page 11 25X1
Afghan-Pakistani Situation: A last-minute stiffening in
Pakistan's attitude-apparently has prevented settlement
of the dispute with Afghanistan on the basis of a com-
promise formula suggested by Afghanistan. Pakistan
now proposes to await an attempt at mediation by
Turkey. I I Page 11 25X1
Implications of the Syrian Election: The new Syrian cabinet,
which will Be appointed after Quwa.tli's inauguration as
president on 6 September, will presumabl ive Syria a
government more favorable to the West. Page 11 25X1
Sudanese Developments: The mutiny of part of the Sudanese
army stationed n the southern Sudan has overshadowed
major steps the country has taken since 16 August to-
ward deciding its future status. There appears to be
a continuing trend toward independence rather than union
with Egypt. F_ I Page 12 25X1
Saar Referendum Campaign Renews French-German Frictions: An
unexpectedly strong revival of rent - erman friction
over the Saar has occurred in the first month of the 90-
day campaign,period preceding the 23 October Saar
referendum. Campaign observers have noted that approval
of the 1954 French-German Saar settlement is no lon
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Argentine Unrest Continues: The Argentine government appears
to be planning sterner measures to curtail demonstra-
tions by the opposition. New government charges against
Catholics and new Peronista Party pronouncements suggest
a revival of the antichurch campaign--a development
which could cost Peron some of his vi-ta-1 arm support.
. . . Page 14
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 1955
PATTERNS AND PERSPECTIVES
USSR EXPLOITS DIFFERENCES BETWEEN WEST AND MIDDLE EAST . . Page 1
During recent weeks Moscow has moved to capitalize on
differences between Middle Eastern states and the Western
nations. Soviet overtures have been directed mainly to Egypt,
but also to Saudi Arabia and Syria--the three countries which
have most opposed Western-sponsored defense arrangements in
the Middle East. The USSR apparently has made a number of
offers of economic aid technical assistance, trade,and
military equipment.
MAJOR DEVELOPMENT OF YELLOW AND YANGTZE RIVERS PLANNED . . Page 4
Communist China.has announced that beginning in 1957
major programs will be started for the permanent control of
the Yellow and Yangtze Rivers and the economic development
of their valleys. These programs are expected to follow
closely recommendations of American surveys, made from
1943 to 1947, which predicted enormous agricultural and
industrial benefits from flood control,, irrigation, hydro-
electric power generation, and improved navigation on
these rivers.
TURKEY'S ECONOMIC DIFFICULTIES COMPLICATE RELATIONS WITH US.Page 5
Turkey's economic difficulties and related domestic
political problems have led its government to adopt a cooler
attitude toward the United States. Nevertheless, Turkey's
co-operation with the Western powers in defense matters
almost certainly will continue.
PROSPECTS FOR LONDON TALKS ON CYPRUS ISSUE . . . . . . . . Page 6
The three governments meeting in London on 29 August
to discuss Cyprus are firmly committed to their respective
positions concerning the union of Cyprus with Greece. There
is little room for compromise between the British and Turks on
the one side and the Greeks on the other.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
';25?-Augusts-1955
AMERICAN-C!!INESE TALKS
The Chinese Communists at
Geneva have been giving ground
on some points in devising a
formula for the repatriation
of Americans and Chinese.
Peiping is now resisting an
early deadline for the release
of all Americans still detained
in China. Chances are about
even, however, that the Chinese
will sooner or later commit
themselves to a deadline if the
alternative is termination of
the talks.
Chinese Communist repre-
sentative Wang Ping-nan has
apparently withdrawn his demand
for Indian investigation of the
case of any Chinese national at
the request of "his government."
The original Chinese formula
would have permitted Peiping
to bring pressure to bear on
Chinese who do not wish to re-
turn to China.
That Peiping had hoped to
be able to exert such pressure
was indicated by Wang's repeated
request, in the early days of
the talks, for the names of all
Chinese nationals in the United
States. The request was re-
jected, and Wang has not re-
cently returned to it. The
draft Peiping is now consider-
ing makes explicit that the In-
dian embassy in Washington may
investigate only the cases of
those Chinese who feel they
are being prevented from re-
turning.
Wang on 18 August proposed
a draft agreement under which
Peiping would recognize that
all Americans in Communist
China are entitled to return,
and would declare that measures
have been and will be taken so
they can "exercise their right
to :return." This proposal al-
ters the language of Wang's
earlier formula, which specified
that Americans "involved in un-
finished civil or criminal
cases" could leave Communist
China only after the settle-
menit of their cases.
While Wang has strongly
imp7Lied that many or most Ameri-
cans will be freed as soon as
agreement is reached on a re-
patriation formula, both of
Wang's proposals have been de-
signed in part to allow Peiping
to save a little face by not
making a mass release of Ameri-
cans. Wang has heatedly argued
that a mass release would re-
pudiate Chinese judicial pro-
cedures.
Moreover, the Chinese
Communists almost certainly
wish to hold back some Ameri-
cans until satisfied that ar-
rangements for the return of
Chinese from the United States
are working satisfactorily.
Finally, some of Wang's remarks
have suggested that Peiping has
not abandoned its hope of in-
ducing other American firms to
pay :ransom for some of their
personnel involved in civil
cases, and of extracting con-
cessions for the release of
persons alleged to be "spies."
Peiping appears to believe
that it has already taken a
conciliatory position on the
issue of repatriation and that
it is not obliged to move much.
further. Chances are about
even,, however, that Peiping
will sooner or later commit
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OF IMMEDIATE. INTEREST Page 1 of 3
 25 August 1955
itself to a deadline for com-
pleting the release, if the
alternative is termination of
the talks.
Peiping implied before
the talks began that it wished
to discuss, under the second
agenda item of "other practi-
cal matters at issue," such
topics as economic restric-
Conservative deputies in
the French National Assembly
threatened to withdraw support
of Premier Faure if he made
"important concessions" in the
conversations at Aix-les-Bains
between his government and
Moroccan leaders. Faure re-
fused to confer in his quick
visit to Paris on 24 August
with the leaders of his right-
ist critics, however, and he
expressed the intention of
AREAS OF DISTURBANCE IN ALGERIA AND MOROCCO
19-21 AUGUST 1955 PRESS REPORTS
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*.KASBA TADLA
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.RABAT
.CASABLANCA .
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O UED-~l~ .
tions and American and Chinese
Nationalist military and in-
telligence operations in the
China area. Peiping may hope
to avoid a repatriation dead-
line and then take the posi-
tion that the release of Ameri-
can "spies" will depend on a
cessation of intelligence
operations in the China area.
getting the opinions of all
elements in Morocco.
The right-wing parties
are split on the question, and
in the event of a rightist
defection, Faure can count on
the counterbalancing support
of the Socialist Party for a
liberal policy toward Morocco.
In view of mounting public
pressure for an agreement with
the Moroccan nationalists, Faure
will probably take the risk.
N TEA
D E A D
NATIVE
EUROPEAN
TOTAL
ALGERIA
5 6 2
69'
6 3 1
MOROCCO
1250
iso
iaoa
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CURRENT INTELLIGENCE WEEKLY SUNUM
25 August 1955
A special cabinet meeting
will probably be held shortly,
and Faure may decide then
whether to recall parliament.
Much will depend on the atti-
tude of Foreign Minister Pinay,
who has heretofore backed the
conservative deputies. If
Pinay, as expected, backs
Faure on a program acceptable
to the Moroccan nationalists,
the premier will probably be
able to put it through without
serious parliamentary difficulty.
This would mean replacement
of Sultan Mohamed ben Ara.fa by
a regency and the creation of
a Moroccan government acceptable
to moderate nationalist elements.
Grandval would then be expected
to remain as resident general,
although he is reported ready
to resign because of his disa-
greement with military leaders
over the ruthless nature of
their "clean-up" operations.
Pressure is mounting among
the French settlers in Morocco
to force Gra.ndval's resignation,
and there is increasing evidence
of a. serious struggle between
Grandval and his subordinates
over the administration of the
protectorate.
The violence which broke
out in Algeria and Morocco on
20 August demonstrated the
existence of some co-ordination
and central direction of
nationalist activity. Despite
press speculation that the
outbreak in the Constantine
Department of Algeria was
synchronized with attacks in
Morocco, the absence of similar
incidents in the departments
of Oran and Algiers suggests
that a master plan for North
Africa does not yet exist.
Co-ordinated terrorist
activity in eastern Algeria
resulted in some 600 dead.
Bombardment and strafing of
Moroccan settlements on 21
and :22 August raised the over-
all :French North African death
toll for the week end to
nearly 2,000, according to
press accounts. Actual figures
are probably substantially
higher.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 1955
NOTES AND COMMENTS
Yugoslavia Increasingly
Unco-operative With Us
Several recent Yugoslav
actions point up Belgrade's
increasing unwillingness during
the past year to co-operate
with the United States. Yugo-
slavia's attitude appears to be
caused by a feeling of greater
security, which in turn is
largely accounted for by the
continued improvement in rela-
tions with the Soviet bloc.
The most forthright state-
ment of the current Yugoslav
position. was made on 19 August
by Vice President Vukmanovic-
Tempo. He said that Yugoslavia
would renounce future American
economic aid if compliance with
Battle Act restrictions remained
a condition for such aid.
This is in contrast to the as-
surance given by Yugoslav of-
ficials following the Soviet-
Yugoslav talks that, while Bel-
grade might eventually reconi-i`
sider its policy of not shipping
strategic goods to the bloc, it
would not do so for some time
to come.
Though Vukmanovic added
that*Belgrade would not contra-
vene-the Battle Act hastily,
his'position is the strongest
elaboration to date on the pub-
lic statement made by Tito late
in July that future aid could
be accepted only if no strings
were attached. Failure to com-
ply with the Battle Act would
endanger Yugoslav receipt this
year of about $34,000,000 of
American economic aid and of
600,000 tons of surplus wheat
and 24,000 tons of surplus
cotton which have been: request-
ed from the United States.
In the same conversation,
Vukmanovic complained about
high interest rates on past
loans obtained in the West and
indicated that the USSR was pre-
pared to provide long-term loans
at low interest. According to
one rumor, the USSR has offered
$100,000,000 at 2 percent for 10
to 12 years. Vukmanovic specif.-
ically blasted West Germany,
warning that Belgrade is prepar-
ing to default on payments on
its medium-term debt to the
Germans because of their failure
to satisfy Belgrade's claims
for sums confiscated by,the
Germans during World War II,.
He even expects a break in trade
relations, although Germany is
Yugoslavia's best customer.
In recent weeks no progress
has been made toward obtaining
better Yugoslav co-operation in
the inspection required by law
to accompany American military
aid, despite Yugoslav profes-
sions of good will on the matter.
Although warned of the effect
on American aid programs of
Yugoslav production of Soviet
MIG ,jets, the Yugoslavs still
appear to be considering their
manufacture.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 19515
Meanwhile, Yugoslav re-
lations with the East have con-
tinued to improve. The Yugo-
slav parliamentary delegation
to the USSR came back apparent-
ly generally impressed by the
new Soviet friendship. There
were some cautious comments,
however, such as one by the
delegation leader, quoted by
the Soviet press., that events
since 1948 "have left their
marks."
All the top Soviet leaders
then present in Moscow attended
the reception given for the
delegation by the Yugoslav
USSR Gains- Preatigw at
Atoms-for-Peace Co-n-Ye-rence
The USSR's dedication to
"the Geneva spirit" and "a new
internationalism" governed the
conduct of the Soviet scientists
in all phases of the UN-
sponsored conference on the
peaceful uses of atomic energy.
Moscow has tried for
several years to seize the
initiative in this field by
making a number of dramatic
propaganda moves. Now, how-
ever, the USSR appears to
have moved beyond what was
largely a purely propaganda
position prior to its own
atomic energy conference in
duly to a major effort to
demonstrate its real accomplish-
ments in the peaceful uses of
atomic energy.
Soviet scientists im-
pressed Western delegates with
their apparent freedom to enter
into substantive discussions
and their willingness to learn
embassy. The party was de,_.
scribed by Ambassador Bohlen as
a "fraternal love feast" in
which "comrade" was the only
form of address used between the
Soviets And the Yugoslavs.
Yugoslavia's more independ-
ent policy toward the West prob-
ably arises from-an increasing
sense of security. Belgrade's
policy is consistent with the
basically anti-Western, anti-
capitalist attitudes of the Yugo-
slav Communists. They probably
believe that they can blackmail
the West into giving aid on their
terms. On the-other hand, they
evidently believe that the
threat of aggression by the
Soviet bloc has disappeared and
hope to satisfy an increasing
amount of their economic needs
from that source,
through an exchange of ideas,
The attitude of the Soviet
scientists evidently reflected
a real desire to benefit from
exchanges of information with
the West. The only obvious
restraint for security reasons
was a careful protection of data
that could reveal the sources of
raw uranium or the location of
Soviet nuclear installations.
Soviet papers submitted to
the conference on the atomic
power station, including a
series of photographs, drawings,
and charts reflecting the ex-.
perience gained through its
operation, especially impressed
the delegates. They revealed -'
for the first time the types of
nuclear fuels used.
The Soviet papers reflected
a broad base of nuclear research
capable of supporting intensive
investigation of a weapons pro-
gram and nonmilitary projects.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 1955
The information revealed also
suggests that the USSR has a
high level of competence among
both its top-flight scientists
and technicians, and that there
is a high degree of apprecia-
tion in the Soviet government
of the value of a wise basic
research program.
The most surprising an-
nouncement made was that the
USSR will soon complete a 10,
billion electron volt particle
accelerator for high-energy
nuclear physics research, which
will be the largest accelerator
in the world. This suggests
that Soviet science will soon
be in a pre-eminent position
in this field.
The Soviet delegation
avoided propaganda topics pri-
vately and publicly throughout
the conference. At no time
was there an allusion to mil-
itary aspects of atomic energy,
the question of banning atomic
weapons, or the injured Japa-
nese fishermen. The Soviet
scientists participated in a
number of discussions about
Western atomic projects for
peaceful uses, but they did
not belittle them or compare
them unfavorably with the
Soviet program.
Only in the case of the
Soviet atomic power plant did
some of the Soviet delegates
depart from their restrained
approach. The plant was pre-
sented to the conference as an
important Soviet "first," the
"only plant of its kind in the
worlld." This has been one of
the outstanding Soviet propa-
ganda themes for more than a
year.
Soviet propaganda has re-
peatedly called for an exchange
of scientific knowledge with
the West, and has pointed to
the Geneva meeting as an ex-
ample of the kind of exchanges
that should be continued. In
order to emphasize their own
program, the Soviet delegation
announced that the USSR was
offering assistance to seven
Communist states for the pur-
poso of developing programs
for the peaceful uses of atomic
energy.
The conference held by the
USSFL in July on the peaceful uses
of atomic energy was attended by
representatives from 41 nations.
While this conference was almost
completely boycotted by the
West, several scientists from
smaller non-Communist countries
have since given favorable ac-
counts of the Soviet program.
Similar appraisals have been
made,especially by scientists
from underdeveloped areas, of
the Soviet presentation at the
Geneva meetin
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Soviet Bloc Offers to Afghanistan
Continued offers of Soviet
bloc aid and technical assist-
ance to Afghanistan and meas-
ures taken by both sides toward
implementing earlier agreements
suggest that the Communist-
sponsored projects have resulted
from long-term planning on the
part of Moscow. The Afghans
may, however, regard increased
contacts with the Soviet bloc
mainly as a psychological and
practical tactic in their dis-
pute with Pakistan.
Soviet ambassador Degtyar
presented Moscow's most recent
offer during a meeting on 10
August with Foreign Minister
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Qizil Qalu
f KhAni3bAd
Pul-i-Kbumri
KABUL
AFGHANISTAN
DEVELOPMENT SITES
25 AUGUST 1955
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The USSR is also reported
to have offered $60,000 worth
of equipment for the Kabul
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Poland has offered
ma.e is s, equipment and tech-
nicians--who would be Soviet
personnel--for installing water
systems in Kabul and Qandahar.
These reported new Commu-
nist offers have more political
implications than previous ones.
The medical project would in-
volve the stationing of perma-
nent Soviet personnel in Afghan-
istan, and the water system for
QandaLhar would bring Communist
influence into southern Afghan-
istan, where the West tradition-
ally has predominated.
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Dara Suf
SULPHUR
FIELDS
GHANISTi'AN
HELMAND RIVER
,AUTHORITY
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 1955
A new postal agreement
was signed by the USSR and
Afghanistan on 14 August. This
agreement probably was a direct
follow-up of the transit trade
agreement signed in June giv-
ing Afghanistan discounted
rates for the next five years.
Other recent developments
reported by the American em-
bassy include the arrival in
mid August of the first ship-
ments of Soviet consumer goods
in Kabul from the newly estab-
lished port of Qizil Qala on
the Oxus, which the USSR and
Afghanistan have agreed to de-
velop jointly. Soviet engi-
neers were reported in mid-
August directing preparations
for exploiting sulphur deposits
in the Mazar-I-Sharif area,
and they are said to be in-
terested in developing the coal
deposits at Dara Suf to obtain
fuel for a sulphur processing
plant.
ISoviet engineers
will survey railroad lines in
Afghanistan which would link
with the Soviet system. A
Prague radio broadcast on 3
August announced that the first
machines and equipment for a
cement plant to be constructed
in Afghanistan were being de-
livered from Czechoslovakia.
There have been reports
that the USSR is withholding
promised and badly needed emer-
gency shipments of POL supplies
to Afghanistan, for the purpose
of forcing settlement of the
Afghan-Pakistani dispute. Acute
POL shortages in Kabul, Qandahar,
and the Helmand Valley suggest
that shipments have stopped.
Foreign Minister Naim has de-
nied that the Soviet Union has
yet attained sufficient influ-
ence to exert real pressure,
but admits that it will be able
to do so when the recently
agreed transit arrangements
come into effect.
The embassy also reported
on 18 August that a new element
has been introduced into Soviet
and Afghan efforts to depreciate
the American-sponsored'Helmand
Valley development project. A
"whispering campaign" in Qanda-
har and Kabul is urging Afghans
to "go to Kabul and see what
the Soviets are doing." This
suggests that Communist per-
sonnel in Afghanistan may now
for the first time be attempt-
ing political exploitation of
the Soviet bloc aid proJects.
25X1
Czechoslovakia Plans to Reduce
Troop Strength-
The Czech government's an-
nouncement of 24 August that it
intends to cut its armed forces
by 34,000 men before the end
of the year is probably de-
signed to strengthen the propa-
ganda value of the recently an-
nounced Soviet troop reduction
plan. This Czech move may soon
be followed by similar announce-
ments from the other Eastern
European Satellites.
While the planned reduction
would mean an 18-percent cut in
Czech armed strength, it would
not appreciably diminish the
Soviet bloc's over-all military
capabilities.
Czechoslovakia has long
been faced with a labor short-
age, especially in agriculture,
and the release of troops from
military service may ease this
problem.
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25 August 1955
Soviet Bloc
e e ec n Campaign
The Soviet bloc's campaign
begun in the fall of 1954 to
induce Soviet and Satellite
emigres to return appears to
be gaining momentum. The
campaign is being promoted
officially by the authorities
concerned and by overt and semi-
covert propaganda emanating
from individuals and special
cover organizations.
Soviet redefection efforts
are centered in the so-called
Committee for Return to the
Homeland, a "voluntary" group
headed by Major General N. F.
Mikhailov. The Mikhailov
committee is comprised of 18
Soviet scientists, writers,
artists, Stalin Prize winners,
and Heroes of the Soviet Union
who allegedly have been granted
permission by the East Germans
to set up their headquarters
.on the "territory of the German
Democratic Republic."
The committee publishes a
newspaper, pamphlets, and
bulletins which are mailed
from its headquarters in East
Berlin. Refugees are sent
personal letters from former
acquaintances who have already
returned to the Soviet Union
and_ from relatives and friends
at home saying that conditions
have changed and suggesting a
return. There also have been
several cases involving
personal contact by Soviet
officials or their employees.
Organizations similar to
the Mikhailov committee have
been established in the Satel-
lites. In addition, amnesties
Harvest Prospects Poor in
European Satellites
Harvests in all the Euro-
pean Satellites except Poland
have been delayed for the second
consecutive year-by adverse
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for refugees returning home
were proclaimed by the Hungarian
and Czechoslovak governments in
April and May, and by the
Rumanian government in June.
Last fall the Bulgarian govern-
ment extended for another year
an amnesty proclaimed in 1953.
The amnesties have been
given extensive publicity in
the press and radio and by
Satellite missions abroad.
Refugees and defectors returning
home have given press and radio
interviews and appealed to their
former companions in the West
to return.
The Soviet Union and the
Satellites are beginning to
claim sizable success from
these efforts.
between 100 and 200 persons
had returned since last fall,.
mostly from refugee camps in
Europe. A later report states
that between 15 July and 12
August approximately 120 Soviet
emigres, ex-residents of various
South American countries, passed
thr{oughVienna as repatriates to
the USSR.
The immediate purpose of
the redefection campaign prob-
ably is to sow dissension
among emigres and to discourage
their participation in anti-
Communist activities, rather
than to bring great numbers of
them back to their homelands.
weather and an inadequate labor
force. As a result.,:there may
be excessive harvesting losses
'and poor quality grain again
this year.
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25 August 1955
A late spring retarded
the development of fall-sown
grains--wheat and rye--thus
causing them to mature two to
three weeks later than normal,
at approximately the same time
as the spring-seeded grains--
wheat, rye, barley and oats.
Neither men nor machines are
available in sufficient quan-
tity to harvest both plantings
simultaneously, so some losses
from overripening are inevi-
table.
Rainy weather between 15
July and 15 August, particu]aarly
in Hungary, Czechoslovakia,
Rumania and Bulgaria, has com-
plicated both harvesting and
threshing.. Wet: fields and
lodged grain have restricted
the use of machinery and made
it necessary to increase hand
labor. In countries such as
Czechoslovakia and Hungary,
which have a shortage of farm
labor, there have been numer-_
ous government appeals for vol-
unteers to help with harvest-
ing? Judging from past experi-
ence, however, it is doubtful
that there will be much re-
sponse to these appeals.
In areas where the grain
has been cut, the wet shocks
are now standing in the fields.
In the absence of proper dry-
ing facilities, some govern-
ment, officials have advocated
threshing the grain while still
wet, which would lower the
quality.
The summer rains will,
however, be beneficial to root
crops, corn,a nd-hay harvested
later--provided the present
delays do not prevent the har-
vesting of these cro s when
they are ready.
25X1
Economic Crisis Forces Burma
To -urn to b e p
Burma's request for a
$50,000,000 loan from the
United States represents an im-
portant change in Burma's rigor-
ously neutral foreign policy.
The request was made necessary
by an impending balance-of-
payments crisis.
Although Burma is rich in
natural resources, economic
activity lags far behind pre-
war levels because of wide-
spread insurgency as well as
governmental inexperience and
inefficiency. Until 1952,
however, high prices for rice
not only sustained Burma's
economy, but permitted the ac-
crua:L of substantial foreign
exchange reserves.
Since 1952, a buyers'
market in rice has emerged
which has cut deeply into
Burma's foreign exchange earn-
ings and caused the accumulation
of large stocks of unsold rice.
In attempts to dispose of
these, Burma turned to the Orbit,
and in negotiations continuing
over nearly a year, finally
signed barter agreements with
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25 August 1955
the Soviet Union, Communist
China and several of the Euro-
pean Satellites.. Actual deliv-
eries of rice under these con-
tracts have been slow, however,
and imports of goods to pay for
the rice appear to have been
even slower. To date, the
agreements have contributed
little to the improvement of
Burma's foreign exchange re-
serve position.
Meanwhile, Burma's mili-
tary costs have continued at a
high level and heavy expendi-
tures have been incurred in
connection with a somewhat
grandiose welfare-development
program. As a result, it is
now estimated that foreign
exchange holdings may fall
below the legal currency re-
serve requirements by the end
of September.
To meet the crisis, the
government has moved to restrict
imports, thereby risking in-
flation, and is cutting down
on the welfare-development
projects, which is politically
unpopular and wasteful in so
far as they have already been
Shigemitsu's Visit to Washington
Japanese foreign minister
Shigemitsu's visit to Washing-
ton, designed primarily to im-
prove his personal prestige, is
favored by Democratic Party
leaders as a stratagem to
begun. Burma also approached
I nd is for a loan, and New
Delhi has offered to advance
$10,,000,000 immediately and a
similar sum in November.
Premier Nu, however, has ex-
pressed a preference to obtain
the loan from a single source--
the United States.
The Burmese ambassador in
Washington has indicated that
an American loan would be used
for three purposes: (1) to
counter inflation by permitting
the importation of essential
consumer goods; (2) to maintain
the required level of reserves
against currency circulation;
and (3) to finance certain
economic development projects.
A loan for these purposes
would be little more than a.
stopgap. There may be an
improvement in the rice market;
in particular, India may again
enter the Burmese market next
year. Such a development would
alleviate Burma's difficulties,
but restoration of Burma's
secondary line of production is
essential before economic
stability can be achieved.
strengthen the position of Prime
Minister Hatoyama and the party.
Shigemitsu has indicated
he desires the talks to be gen-
eral in nature. Proposed
topics include a canvass of the
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25 August 1955
world and Far East situations
from the Washington and Tokyo
viewpoints; the problems of
Japan's defense and its support
of the American security forces;
the release of war criminals;
the eventual return to Japan of
the Bonin and Ryukyus Islands;
a reduction in trade controls
with Communist China; and other
economic matters.
Shigemitsu desires to re-
place-the present security
treaty with a mutual defense
pact:. He may hope that a mu-
tual. defense pact would give
the Japanese greater authority
in determining the nature and
extent of the defense measures
to be undertaken and would per-
mit Japan to veto the deploy-
ment: of atomic weapons. He
will. also present Japan's six-
year defense plan, which sug-
gests that American ground
forces might be withdrawn in
1958.
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25X1
Several recent develop-
ments in Djakarta indicate a
decided change in the political
climate since the departure of
the All government.
The most striking change
,has been the friendly attitude
of government officials toward
the United States.
The youthful new foreign
minister, Anak Agung, has
stated that although Indonesia
would continue to pursue an
"independent" foreign policy,
he would personally handle all
American matters. He inquired
whether discussions concerning
a treaty of friendship,
commerce anc navigation could
be resumed in the near future.
Other cabinet members.have
gone out.of their way at of-
ficial functions to seek out
Ambassador Cumming for warm and
friendly attention, in contrast
to the "cool, correct" treat-
ment accorded Communist diplo-
mats. Even President Sukarno
has expressed interest in
securing American funds to
stimulate Indonesia's economic
development.
Several prominent persons
identified with the government,
including the minister of the
interior, have expressed their
belief that elections will be
held as scheduled on 29 September.
The Harahap government is
bound to encounter a number of
serious obstacles in carrying
out its program. Harahap can
never be completely sure of
being supported by the smaller
parties in his coalition on any
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August .1955
given issue,. and these parties
hold the balance of power in
parliament. The opposition
parties, which include the
Communists, may be expected.to
rklly.their forces in a con-
Philippines
The decision of the
Nacionalista Party convention
on 21 August to delegate final
selection of its senatorial
candidates to the Magsaysay-
controlled party executive
committee is virtually certain
to result in Senator Recto's
exclusion from the party ticket
for the November election.
In consolidating his polit-
ical position, Magsaysay .
apparently has made concessions
to the powerful "sugar bloc"
which dominates the Democratic
Party and has little sympathy
for his reform program. Several
delicate process.
certed effort to overthrow Hara-
hap. Thus the shift to -a pro-
Western orientation, within
the framework of an "independ-
ent" foreign policy, will be a
particularly difficult and
members of this bloc, which
already held several key eco-
nomic positions in the govern-
ment, have been appointed by
Magsaysay to the newly reorgan-
ized National Economic Council,
which is to take over responsi-
bility for economic planning
and development.
Magsaysay's designation
last week of a "sugar" man to
be acting chairman of the eco-
nomic: council also indicates
that he has granted this special
interest group a major role in
25X1
25X1
the determination of Philippine
economic policies.
25X1
Afghan-Pakistani Situation
A last-minute stiffening
in Pakistan's attitude apparent-
ly has prevented settlement of
the dispute with Afghanistan on
the basis of a compromise formu-
la suggested by Afghanistan.
Pakistan has instructed its
embassy in Kabul to reject the
Afghan offer and now.proposes
to await an attempt at media-
tion by Turkey.
,,The formula devised by Af-
ghan foreign minister Naim ap-
peared to meet earlier Pakistani
conditions for settlement. The
American embassies in both coun-
tries had been authorized to
convey, if necessary, an informal
understanding on Pushtoonistan
propaganda between Pakistan an
Afghanistan.
25X1
Implications of the
Syrian ection
The election of Shukri al-
Quwatli as president of Syria
should provide the country with
at least a temporary breathing
spell after the alarms and ex-
cursions created by leftist in-
fluence during the last seven
months. The new cabinet which
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25 August 1955
is to be appointed following
Quwatli's inauguration on 6
September is likely to be a coa-
lition of the conservative Na-
tionalist and Populist Parties,
whose falling out last February
gave the leftists-their chance.
Although Quwatli had been
recognized as Egypt's favorite
and almost certainly owes Cairo
political debts he w:M'.'.be caDJed
on to pay, he has indicated that
he will not sign , the proposed
Egyptian-Syrian-Saudi pact and
has protested that,he is neither
anti-Iraqi nor anti-'Western.
The "resignation" of For-
eign Minister Azm'.and several
colleagues immediately.after
the election, in which Azm was
the only candidate'rwho opposed
Quwatli in the actual balloting,
removes a major. source of anti-
Western intrigue,' ,from the gov-
ernment.
The American embassy in
Damascus believes it-.ominous
for the future, however, that
Azm demonstrated more strength
than had.been expected., He may
now be the recognized leader of
an opposition group which will
probably include the"leftist
25X1
Sudanese Developments
The mutiny-'of: part: of the
Sudanese army stationed in the
southern Sudan has overshadowed
the major steps. the country has
taken since 16 august toward
deciding its future status.
.The mutiny. is probably a
result of Egyptian-inspired
agitation to arouse. southern
Sudanese fears of:domi:nation by
the. north should the Sudan opt
for independence. It appears
to have directly, affected only
three or four amy._posts in the
southern provinces. The muti-
Arab Socialist-Resurrectionists
and the lone Communist deputy,
party leader Khalid Bakhdash.
This group will play on the
personal differences which are
almost certain to arise in a
coalition of Syrian conserv-
atives.
25X1
While the conservatives
wil]L presumably give Syria a
government more favorable to
the West, they are not likely
to develop a program offering
any very permanent internal
stability. Quwatli's ability
to handle the army remains to
be proved, and unless the army
is made decisively subordinate
to civil authority, fundamental 25X1
improvement in Syria's internal
situation seems unlikely.
nous units were made up of
southern soldiers under north-
ern officers. Latest reports
are that the bulk of the muti-
neers have surrendered, but
complete restoration of order
is likely to take some time.
The mutiny occurred on 17
August, the day following the
announcement of completion of
"Sudanization" of the government
--the first step toward ending
the Anglo-Egyptian condominium.
The Sudan parliament had passed
on 113 August a::resoltiition
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25 August'.1955
calling on the two administer-
ing powers to set up the inter-
national commission which is
to supervise elections for a
constituent assembly. Under
the terms of the Anglo-Egyptian
agreement of 1953, the. assembly
is to determine whether the
Sudan should be independent or
unite with Egypt.
The British and Egyptians,
long deadlocked on whether they
and the Sudanese should be mem-
bers of this commission, reached
agreement at theelev.enth hour
to leave the composition up to
the Sudanese. On 22.August the
Sudanese parliament determined
Saar Referendum Campaign Renews
French-German Frictions
An unexpectedly strong re-
vival of French-German friction
over the Saar has occurred in
the first month of the 90-day
campaigning period preceding
the 23 October Saar referendum.
Campaign observers have noted
that approval of the 1954
French-German Saar settlement
is no longer certain.
Three previously proscribed
pro-German parties have launched
a vigorous campaign against the
proposed statute, which would
give the Saar a "European"
political status while.leaving
it tied economically to France.
Their success in attracting
public sympathy is due in con-
siderable measureto,the fact
that pro-German sentiment has a
legal political-outlet in the
Saar for the first time. Their
activities have-;;been marked,
however, by violence, reportedly
abetted by theS.aar Communist
Party, which also opposes the
statute..
Saar premier Johannes
Hoffmann's.leadershi-p of the
that the seven members should
be India, Yugoslavia, Czecho-
slovakia, Pakistan, Norway,
Sweden and Switzerland.
This decision is basically
a victory for pro-independence
elements and for the British,
who feared Egyptian representa-
tives would use their position
to attempt to influence the
elections. The inclusion of
India, Yugoslavia and Czecho-
slovakia, however, was almost
certainly at Egypt's request.
There appears to be a continu-
ing trend toward independence
rather than union with Egypt.
pro-statute cause affords an
easy target for the pro-German
parties, which represent him
as the symbol of French domina-
tion. He has been shaken by
the pro-German onslaught to
the point of considering advis-
ing his followers as a last
resort to boycott the referen-
dum, according to the American
consul at Strasbourg.
West German chancellor
Adenauer, who signed the Saar
settlement with former French
premier Mendes-France last
October and feels honor bound
to support it, now finds him-
self somewhat isolated in main-
taining this position at home.
Although he has requested his
own Christian Democratic party
not to meddle in the Saar re-
ferendum, the other West German
parties--as well as individual
Christian Democrats--are making
no ;secret of their efforts to
bring about a rejection of the
statute. They are reportedly
sending funds and quantities of
campaign literature into the
territory.
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25 August.1955
Last October the French
and Saar governments antici-
pated approval of the .European
statute by an 8"0:percent major-
ity, and in .mid-J lySaar gov-
ernment officials- claimed to
be still confident -that a sub-
stantial majority would accept
the statute. Early this month,
several members of:the referen-
dum supervisory commission were
said to. have doubts whether the
European statute-would be.ap-
proved on 23 Oct,ob;er.
The French government of-
ficially warned ;B.onn. on' 10
August that nonapproval of the
statute would automatically re-
store French control.. French
fears of an early reunion of
the Saar with resurgent Germany
would be immediately stimulated,
even if the statute : "were adopted
by only a slim majority.. Bonn
admits that it has noalterna-
tive plan worked out in the
event that the statute is re-
jected.
Counterbalancing French-
German friction generated by
the referendum campaign. is the
basic sentiment for rapproche-
ment motivating both.Adenauer
and French foreign minister
Argentine Unrest Continues
The Argentine ' government
appears to be planning` sterner
measures.to curtail demonstra-
tions by the opposition. New
government charges against
Catholics and new:"Peronista
Party pronouncements suggest a
revival of,the anti"church
campaign.
Following:widespread anti-
government demonstrations on
15 and 17 August.,,Jnterior Min-
ister Albrieu issued a public
statement that '.'toleration has
a " limit", and the'- "'"government
PART II
Pinay. Recent events in the
Saar, however, may lead to some
bitter exchanges, as indicated
by a Bonn official's comment to
American representatives that
the long-term French-German
trade agreement concluded on
5 August, hailed publicly as a
concrete step toward rapproche-
ment, in fact represented
German "concessions" in the
context of the Saar discussions,
The pro-German agitation
may lose much of its present
momentum as the implications
of rejection of the statute
become clearer and as Hoffmann,
a skilled political in-fighter,
hammers on the themes of
"Europeanization" and of the
continuing prosperity for the
Saar in economic union with
France. Saarlanders might be
strongly influenced if the WEU
referendum commission officially
protested the tactics of the
pro-German parties as an effort
to impede its task. Meanwhile,
the current situation in the
Saar constitutes a potentially
serious threat to the French-
German rapprochement of which
the Saar agreement was to have
been the keystone.
is ready to safeguard security
and tranquility." He accused
priests in Buenos Aires of
using the pulpit to start a
"campaign of disobedience
against the government."
Further criticism of the
clergy was contained in press
accounts of a meeting of the
Peronista Party council, which
condemned "those who use reli-
gious dogma and their church as
instruments of low political
ends." In the first public
Peronista meeting since the
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25 August 1955
16 June revolt, party officials
declared on 19 August that the
political truce with the op-
position was over and "we are
starting to fight on whichever
field our opponents may choose
and with whatever arms they
want."
A renewal of the antichurch
campaign could cost Peron part
of his vital support from the
army, especially among officers
of the middle and lower ranks.
Meanwhile, continuing attacks
on police stations, other dis-
turbances, and speeches by op-
position leaders suggest that
the opposition will be satisfied
only with a completely new gov-
ernament. Army leaders are pre-
suma.bly weighing this and other
pressure for the removal of
Peron against the strength of
the president's numerous and
still powerful following.
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25 August 1955
PATTERNS AND PERSPECTIVES
USSR EXPLOITS DIFFERENCES BETWEEN WEST AND MIDDLE EAST
During recent weeks Mos-
cow has moved to capitalize on
differences between Middle East-
ern states and the Western na-
tions in connection with defense
planning. Soviet overtures have
been directed mainly to Egypt,
but also to Saudi Arabia and
Syria--the three countries
which have most opposed Western-
sponsored defense arrangements
in the Middle East.
The USSR apparently has
made a number of offers of eco-
nomic aid, technical assistance,
trade, and military equipment.
The offers have given these
states an opportunity to apply
pressure on the West to meet
their demands or face the al-
ternative of greater Soviet in-
fluence in the Middle East.
Egypt
The most recent Soviet
offers to Egypt allegedly were
made to Prime Minister Nasr
and other Egyptian officials by
D. T. Shepilov, member of the
central committee of the Soviet
Communist Party and chief editor
of Pravda. Shepilov,;who was in
Cairo for ceremonies celebrating
the anniversary of the coup
which deposed King Farouk, is
the highest-ranking Soviet of-
ficial to have visited the Mid-
dle East since World War II,
and he had a number of meetings
with Egyptian officials.
While Nasr has apparently not
yet, agreed to accept Soviet aid,
there can be little doubt that
he has considered the offers
seriously, even if only as le-
vers to use against the West.
Closer relations between
the USSR and Egypt have been
furthered especially by their
mutual hostility toward the
Turkish-Iraqi pact and, more
recently, by Nasr's ambition
for an "independent" foreign
policy. This has created an ex-
cellent opportunity for Moscow
to persuade the Nasr regime
and a substantial number of its
supporters among the Free Of-
ficeers in the army that the
USSR and Egypt have a parallel
approach to the most important
aspects of Egyptian foreign
policy. The USSR is certainly
aware that Egyptian efforts to
purchase arms in the West have
not been completely successful,
and that Nasr is under consider-
able pressure from the Free Of-
ficers on whom he relies for
support, to get arms, from the
USSR if necessary.
It appears, therefore, that
Shepilov's visit to Egypt may
have., been timed to take advan-
tage of Egypt's internal situ-
ation as well as its differences
with the West, possibly on the
assumption that such a propi-
tious opportunity might not soon
reappear.
Saudi Arabia
On the day Shepilov arrived
in Cairo, Soviet ambassador
Lavrentiev in Tehran told the
Saudi ambassador there that the
USSR was interested in establish-
ing diplomatic relations with
his country. King Saud told
Ambassador Wadsworth on 6 Au-
gust that the USSR had coupled
this proposal with an offer to
supply Saudi Arabia with
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 On 11 August, during Saud's
state visit to Tehran, the king
told Ambassador Chapin that
Saudi Arabia had been unsuccess-
25 August 1955
25X1
military equipment, but that
he had not replied.
ful in its attempts to get arms
from Britain and the United
States, and that the USSR had
offered such equipment on high-
ly advantageous terms.
- ----------- -
5'Istanbul
L
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LAC K
T U R K E Y
MEDI EPRAN 'AN
Alexa1ibna ;
it
In connection with estab-
lishing relations between the
two countries, Saudi deputy
foreign minister Yasin told Am-
bassador Wadsworth that Lav-
rentiev had offered "any guar-
antee you desire" against So-
viet aggression and had expressed
Soviet readiness to sign a pact
guaranteeing Near Eastern neu-
trality if Washington would
do the same. Lavrentiev's
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SOVIET ACTIVITIES IN
THE NEAR EAST
25 AUGUST 1955
E 'Embassy 0 Commercial Office
L Legation P Permanent Trade Delegation
C Consulate V VOKS Representative
{Soviet Friendship Society)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 1955
proposal appears to be a direct
extension of Bulganin's state-
ment at Geneva to the effect
that the USSR was prepared, to-
gether with "other powers,"
to guarantee the neutrality
of any country desiring such
a guarantee. In his report
to the Supreme Soviet, Bulganin
specifically referred to the
Near East as one of the areas
where the movement for a policy
of neutrality was growing.
As in the case of Egypt,
Moscow apparently is trying to
develop a policy that will be
effective in exploiting Saudi
differences with the West and
especially with the United
States, whose agreement for the
Dhahran air base ends its first
term in June 1956. The king
and Saudi officials have made
it clear that they desire more
American economic and military
aid than they are now receiving.
Moscow may be using the offers
of military aid as a means of
encouraging Saudi Arabia to
weaken its ties with the West
by refusing to renew such ar-
rangements as the Dhahran agree-
ment.
Syria
During the past several
months, the Syrians also have
received offers of various
types of aid from the USSR, in-
cluding military equipment.
These offers apparently have
been of a more general nature,
however, than those made to
Egypt and Saudi Arabia. Most
of the latest reports have
stemmed from the visit of a
Syrian parliamentary delegation
to the USSR during the period
that Shepilov was in Cairo.
When the delegation returned,
the Syrian press reported
that Bulganin had "pledged" to
give Syria economic assistance.
Moscow possesses the capa-
bility to fulfill all the offers
it reportedly has made to the
Middle Eastern states. In mat-
ters of economic and technical
assistance, the USSR is we l1
equipped for constructing such
projects as the high dam on the
Nile envisioned by the Egyptians.
It could also easily deliver the
arms reportedly offered--includ-
ing tanks, destroyers, heavy
artillery, MIG fighters and jet
bombers--without setting back
its own program.
The USSR has never yet ex-
ported military equipment to a
non--Orbit state. Czechoslovakia,
however, has exported arms to
various Latin American and Near
Eastern countries, including
Egypt. The recent Soviet offers,
and the circumstances under
which they were made, suggest
that the USSR now might be will-
ing to export limited quantities
of military equipment, especially
to underdeveloped countries such
as Egypt, in which Moscow might
hope to gain political influence
and encourage neutralist and
anti-American policies. .
If arms agreements are actu-
ally reached, Moscow probably
will be careful to picture them
as legitimate, mutually benefi-
cial barter deals without polit-
ical connotation.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 195.5
MAJOR DEVELOPMENT OF YELLOW AND YANGTZE RIVERS PLANNED
Communist China has an-
nounced that beginning in 1957
major programs will be started
for the permanent control of the
Yellow and Yangtze Rivers and
the economic development of
their valleys. These programs
are expected to follow closely
recommendations of American sur-
veys made from 1943 to 1947,
which predicted enormous agri -
Tsingtao
25X1
cultural and industrial benefits
from flood control, irrigation,
hydroelectric power generation,
and improved navigation on these
rivers.
The first phase of the Yel-
low River project--which was
drawn up last year with the help
of a team of Soviet specialists
--will cost about two billion
dollars and provides for com-
pletion of two large dams by
1967. One of these, a dam and
hydroelectric station at Sanmen
gorge, is to be started in 1957
plete, but by 1967 major dams
will. have been completed, at
least on the Yellow River, to
end the threat of floods which
have periodically caused major
agricultural and human disasters
in both these heavily populated
river valleys. Expansion of
irrigation in the Yellow River
basin is expected by 1967 to
increase annual food output by
2,7:10,000 tons. Irrigation
benefits from the Yangtze River
project should be at least as
great.
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and completed in 1961.
The Yangtze River scheme,
a project of similar magnitude,
is being surveyed now by Soviet
experts and is to be started
during the second Five-Year
Plan, 1958-1962.
Both programs probably
wilL require 50 years to com-
Yellow and Yangtze River Development Plans
SCAN
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25 August 1955
The hydroelectric potential
being developed under these
programs is extremely important
to Chinese industrial expansion
plans in Central, North and
Northwest China. The Chinese
plan to have 1,000,000 kilowatts
of generating capacity at the
Sanmen Dam and part of another
1,000,000-kilowatt plant near
Lanchow in operation by 1967.
Low water flow during winter
will limit the year-round gen-
erating capacity of these plants
to about 280,000 and 400,000
kilowatts respectively, but even
By 1967, the Chinese prob-
ably will have installed part
of the power plant at the Io-
hang Dam on the Yangtze, for
which American surveys recom-
mended a 10,000,000-kilowatt
plant. Most of this capacity
is available all year. Capac-
ity of electric power plants
in all of China is now only
3,0D0000 kilowatts,
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25X1
TURKEY'S ECONOMIC DIFFICULTIES COMPLICATE RELATIONS WITH US
Turkey's economic diffi-
culties and related domestic
political problems have led its
government to adopt a cooler
attitude toward the United
States. Nevertheless, Turkey's
co-operation with the Western
powers in defense matters almost
certainly will continue.
The Turkish Democratic
Party administration, which
started its second four-year
term in May 1954 with an over-
whelming majority in parliament,
aims to expand the country's
production and to develop rap-
idly its retarded economy. The
government's program, however,
has been overly ambitious and
poorly executed. It apparently
has not understood the relation-
ship between the physical and
financial aspects of development
and the importance of economic`
stability for orderly economic
development. Inflation has been
allowed to get out of hand and
the external payments deficit
has reached unmanageable propor-
tions.
Although the government
is now giving some indication
that it may be getting._ready,
to tackle its economic problems
rea;Listically, it has in the
past shown a marked hostility
toward a realistic appraisal
of -these problems and toward
any suggestions for correcting
them.
When Ankara failed in the
spring of 1955 to obtain a
$300,000,000 credit from the
United States to support its
program, an apparently govern-
ment-inspired campaign designed
to force the American hand in
connection with the loan was
launched in the Turkish press.
The press takes the line that
Turkey is entitled to American
aid because of its unique con-
tribution to the free world and
that, any American suggestions
concerning Turkey's economic
policies are presumptuous.
Progovernment newspapers
reported that rejection of the
credit "exploded like a bomb"
these figures exceed by many
times the power capacity of
thermal plants now in these
two areas.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 1955
and called the American action
"lamentable." Other papers re-
marked that Turkey could not
accept "economic and financial
tutelage" from any nation, no
matter how friendly. The press
gave little publicity to the
$30,000,000 in aid which was
granted. As a result, a con-
siderable public reaction has
developed.
Acting Foreign Minister
Zorlu, commenting in mid-August
to Ambassador Warren on the
deterioration in the cordial
relations between Turkey and
the United States, pointed to
speculation in the press that
the United States was no longer
as interested in Turkey as pre-
viously because of the Soviet
peace offensive. Zorlu said
Prime Minis bar Menderes was
very nervous about the. economic
situation, commenting bitterly:
"Your people are all theoretical.
They do not understand the
practical aspects."
Zorlu insisted that the
government is trying to allay
press speculation on American
intentions, but that it is im-
possible at present to explain
the extent of aid to be expected
from the military and economic
conversations which are now go-
ing on.
The government's economic
policies have become a domestic
political issue. The opposi-
tion Republican People's Party
has accused the government of
inept handling of the negotia-
tions. Recent reshuffling of
a few top leaders also suggests
that some behind-the-scene
differences have developed.
The government leaders
and politicans are concerned
over the opposition's activity.
There is no indication, however,
that the Democratic Party's con-
trol is now threatened or that
a serious change in relations
with, the United States is oc-
curring. Any reduction in over-
all aid to Turkey automatically
creates certain dissatisfactions
and problems, but long-range
American security interests
in the area should not be seri-
PROSPECTS FOR LONDON TALKS ON CYPRUS ISSUE
The three governments
meeting in London on 29 August
to discuss Cyprus are firmly
committed to their respective
positions concerning the union
of Cyprus with Greece. There
is no room for compromise be-
tween the British and Turks
on the one side and the Greeks
on the other.
Greece intends to be "mod-
erate and reasonable," accord-
ing to Foreign Minister Stepha-
nopoulos, who nevertheless will
almost certainly demand early
application of the principle
of self-determination to Cyprus.
Since the majority of the
Cypriots are clamoring for
enosis--the union of Cyprus
with Greece--"self-determination"
means Greek annexation of the
island. The concessions which
Athens is willing to make are
all based on the assumption that
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 1955
the island will be transferred
to Greek sovereignty. Britain
has already been promised
extensive base privileges and
Turkey is likely to be offered
privileged treatment of the
Turkish minority and the right
to recruit soldiers from among
Cypriot Turks.
Because enosis is an emo-
tional issue of paramount im-
portance in Greece as well as
on Cyprus, Athens will insist
on self-determination as the
basis of any solution. Public
sentiment has forced the Rally
government to compete with the
opposition parties in devotion
to enosis, and a surrender of
that principle at London might
be fatal to the regime.
The Cypriot Nationalist
leader, Archbishop Makarios,
has promised to take the issue
to the Greek people if their
government makes any agreement
on Cyprus unacceptable to his
followers. In that event,
Makarios prophesies the fall
of the Papagos government--a
threat which, because the
archbishop is a Greek national
hero and because the Rally has
lost popular support, is not
idle.
An official of the British
Foreign Office recently told
the American embassy in London
that the conference would be
abortive if the Greeks demanded
enosis soon. The British
apparently hope to play the
role of mediator between the
Greeks and Turks. But if the
Greeks demand immediate enosis,
London will be obdurate, al-
though it "will continue to
let the Turks wield the
scimitar."
Britain apparently has no
hard-and-fast plan to present
but proposes to obtain formal
declarations of the Greek and
Turkish positions and then to
"play by ear." London appears
willing to compromise, but not
at the cost of antagonizing the
Turks or of conceding its own
position.
Britain insists on retain-
ing sovereignty over Cyprus for
an indeterminate time. It is
prepared, however, to issue a
declaration of eventual self-
determination for Cyprus. There
has been a British suggestion
for holding a plebiscite within
ten years, but the Greeks cannot
agree to wait that long for
enosis.
Several ideas for the im-
mediate future of the colony
have been considered, including
the grant of a constitution
providing for a legislature with
an elected majority and the es-
tablishment of a Greek-Turkish-
British condominium over the
island.
Ankara has a public opin-
ion problem on the Cyprus issue
similar to that of Athens.
Acting Foreign Minister Zorlu,
who will head the Turkish dele-
gation at London, claims that
the government could not sur-
vive if it permitted the trans-
fer of Cyprus to Greece. Zorlu
says he will be as "flexible and
reassuring" as possible, but
will firmly oppose Greek claims
to sovereignty over the island.
Turkey's only concession toward
ameliorating the situation ap-
parently will be agreement to
a "liberalization" of the British
administration of Cyprus.
Greece has already applied
for inscription of the Cyprus
issue on the agenda of this
year's UN General Assembly and
Turkey has again launched a dip-
lomatic campaign aimed at frus-
trating the appeal. Popular
feeling is running high in Greece
and Turkey and recriminations in
the press of both countries are
evoking latent, deep-seated
animosities.
Archbishop Makarios, who
severely criticized Athens for
accepting the British invitation
to the` conference, has announced
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 August 1955
that the Cypriots will not be
bound by any decision unsatis-
factory to them even if Greece
is a party to it. Britain and
Turkey will not accept enosis,
and Makarios may be forced into
more open support of National-
ist extremists in order to re-
tain his personal leadership
of the enosis movement.
Organized violence against
the British authorities contin-
ues despite increasingly strin-
gent British security measures.
The outbreaks are likely to be-
come more frequent and wide-
spread during the London talks
and during any UN debates.
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NFI4ENZtA1.
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