CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001500050001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 43
• Document Creation Date: December 16, 2016
• Document Release Date: February 7, 2005
• Sequence Number: 1
• Publication Date: November 14, 1957
• Content Type: SUMMARY

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CONFIDENTIAL
CURRENT
INTELLIGENCE
WEEKLY
COPY NO. 1-j
OCI NO.6413/57
14 November 1957
DOCUMENT NO. -
NO CHANGE IN CLASS. 0
0 DECLASSIFIED
CLASS. OA
NCXT REVIEW IEW DATT To. dtAD
E:
DATE & / REV!EWER:II
CENTRAL INTELLIGENCE AGENCY
CONFIDENTIAL
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State Department review completed 2 j/.3!/
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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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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 November 1957
MIDDLE EAST DEVELOPMENTS . . . . . . . . . . . . . . . . . Page 1
The beginning of Turkish military maneuvers on 11 No-
vember has resulted in renewed Syrian propaganda charges
that a Turkish attack is imminent. The Syrian charges ap-
pear designed primarily for internal political purposes.
The Turks are expected to withdraw some of the forces not
regularly assigned to the Syrian border area on comple-
tion of the maneuvers, but these probably could be re-
turned quickly. In Jordan, the Egyptian and Syrian cam-
paign against King Hussayn may mark an all-out effort to
bring down the King and his pro-Western government.
ECONOMIC PROBLEMS SHAK" NEW FRENCH GOVERNMENT . . . . . . Page 2
Rightist opposition to Premier Gaillard's proposed
tax increases has raised a serious threat to his ten-day-
old coalition. Even if he obtains National Assembly ap-
proval this week end for his request for sweeping econom-
ic powers, the prospect of labor pressure for wage hikes
and the revival of basic policy differences within his
cabinet make its life expectancy doubtful.
NOTES AND COMMENTS
INDONESIA . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Djakarta's anti-Dutch drive claiming Netherlands New
Guinea has had no apparent effect on official Dutch policy.
The Netherlands not only will refuse to negotiate Indone-
sia's claim but also appears willing to accept the loss of
Dutch commercial interests in Indonesia should Djakarta
seize them. Meanwhile the Communists have won a substan-
tial plurality in the 7 November local elections in the
sultanate of Jogjakarta, thereby continuing their elec-
toral gains in earlier contests in Java. Indonesia's
second national conference, which will make a further
effort to return the non-Javanese areas to direct Dja-
karta control, is scheduled to convene on 25 November
under the joint chairmanship of President Sukarno and
former Vice President Hatta.
CO TIAL
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THE WEEK IN BRIEF
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 November 1957
PART II (continued)
SITUATION IN LAOS . . . . . . . . . . . . . . . . . . . . Page 1
Prime Minister Souvanna Phouma hopes to present
a coalition government for investiture on 16 or 17
November. He will propose a cabinet headed by him-
self in' which his half-brother Prince Souphannouvong,
the chief Pathet negotiator, will have charge of im-
plementing the government's agreement with the Pathet
Lao. The transformation of the Pathet Lao into a po-
litical party and its participation in the government
will enhance its influence as well as its ability to
carry on subversive activities throughout the whole
country.
PHILIPPINE ELECTIONS . . . . . . . . . . . . . . . . . . . Page 2
Philippine President Carlos Garcia's election on
12 November, the victory of pro-American vice-presi-
dential candidate Diosdado Macapagal of the Liberal
party over Jose Laurel,.Jr., and the poor showing of
ultranationalist Senator Claro Recto indicate that
anti-American sentiment was not an important con-
sideration among the voters. Growing nationalism
may soon come to the surface, as one of Garcia's
first major undertakings is expected to be a review
of US-Philippine relations, including negotiations
for the "modernization" of the 1947 American mil-
itary bases agreement.
SOVIET DISARMAMENT TACTICS . .
Page 3
Soviet tactics in the UN disarmament debates dur-
ing the past two weeks have concentrated an bringing
pressure to bear on the Western powers to enlarge the
present UN disarmament machinery. Despite its threat
to boycott future talks of the present commission and
subcommittee, the USSR will probably participate in
further disarmament negotiations if the General Assem-
bly adopts a compromise measure enlarging the disarma-
ment machinery,
PLANS FOR NATO SCIENTIFIC COOPERATION . . . . . . . . . . Page 4
European hopes for progress at the NATO summit
meeting of 16-18 December are centered on prospects
for more scientific and technical cooperation, partic-
ularly the fuller use of West German talents and fa-
cilities and greater American participation.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 November 1957
PART II (continued)
WEST GERMAN MISSILE AND ROCKET ACTIVITIES . . . . . . . . Page 5
Reflecting a growing Western European interest in
West German participation in joint development of mod-
ern weapons, Bonn has already requested a revision of
the WEU treaty to permit production of an antitank mis-
sile and has set up within the Ministry of Defense a
research o aanization concentrating on a surface-to-air
missile.
KHRUSHCHEV'S ECONOMIC FORECASTS . . . . . . . . . . . . . Page 6
The figures for future production of selected items
mentioned by Khrushchev in his 6 November speech imply
a moderation of the headlong pace of Soviet growth dur-
ing the next 15 years, although he made no forecast of
total Soviet industrial output for 1972. The prelimi-
nary 1957 output data given by Khrushchev seem to have
made him conservative in his long-range forecasts.
Khrushchev's statement on consumer goods goals indi-
cates that pushing rapidly on all fronts simultaneously
is apparently now an accepted regime policy.
SOVIET ANNIVERSARY SPEECHES STRESS BLOC UNITY . . .
In his anniversary speech to the Supreme Soviet,
Khrushchev attempted to state his policy toward the
satellites in such a way as to circumvent the prob-
lem posed for Soviet policy by the principle of "dif-
ferent roads to socialism." The views expressed on
this occasion by party leaders from Communist China,
Poland, and Yugoslavia on the nature of the USSR's
relationships with bloc countries and the "different
roads" concept underscore the difficulties Khru-
shchev faces in the matter.
. Page 7
NEW DEVELOPMENTS IN CHINA TRADE SHIPPING . . . . . . . . . Page 8
Peiping's first regularly scheduled internation-
al shipping line will begin operations soon, using a
new Polish-built cargo ship. This line initially
will provide service between Canton, Hong Kong, and
Haiphong and may be expanded to include major South-
east Asian ports now primarily served by free world
vessels. At present more than one third of China's
trade with the non-Communist world is with South and
Southeast Asia. During the past two years, several
free world nations, Australia most recently, have as-
signed ships to newly inaugurated regular service to
the Chinese Communist mainland.
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PART II (continued)
NEW BRIDGE EASES CHINESE COMMUNIST TRANSPORT BOTTLENECK . Page 10
The two-decked rail and highway bridge over the
Yangtze River at Wuhan is now open to traffic. While
the mile-long structure will not be required to handle
its planned capacity of 120 trains a day until late in
the Second Five-Year Plan (1958-1962), it has already
served to ease the major bottleneck to north-south
transportation. Its completion well ahead of schedule
was made possible through the use of-an unusual system
of pier construction.
PEIPING UNDERSCORES OPPOSITION TO "TWO CHINAS" CONCEPT . . Page 12
Peiping's withdrawal from the International Red
Cross Conference in New Delhi was designed to under-
score its adamant opposition to a "two Chinas" solu-
tion for the Taiwan problem. Rather than participate
with the Chinese Nationalists, Peiping has also with-
drawn from other international events, including the
International Geophysical Year. Chou En-lai has
stated that in the future, Peiping will not establish
diplomatic relations with nations that-continue dip-
lomatic ties with Taipei.
ASIAN SOLIDARITY COMMITTEE PREPARES FOR CAIRO CONFERENCE . Page 13
The Communist-dominated, nongovernmental Afro-
Asian Solidarity Conference, sponsored by the Asian
Solidarity Committee, is to be held in Cairo from 26
December to 1 January. Preparations indicate that
the Sino-Soviet bloc and Egyptian nationalists will
try to define a "popular" anti-Western posture for
Asian-African countries on subjects such as anti-im-
perialism, national liberation, and racial discrimi-
nat ion.
KISHI'S SECOND ASIAN TOUR . . . . . . . . . . . . . . . . Page 14
Japanese Prime Minister Kishi will visit seven
Asian countries--South Vietnam, Laos, Cambodia, In-
donesia, Australia, New Zealand, and the Philippines--
between 18 November and 8 December. While his second
tour of Asia is designed in general to promote good
will and economic cooperation with the area, Kisbi
will give particular attention to Japan's remaining
reparations obligations and he will seek reactions to
a revised scheme for an Asian development fund.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 November 1957
PART II (continued)
DIEM'S VISIT TO INDIA . . . . . . . . . . . . . . . . . . Page 14
South Vietnamese President Diem's visit to India
in early November was a success in promoting cordial
relations between the two countries despite their di-
vergent foreign policies. While defending South Viet-
nam's anti-Communist posture, Diem apparently tried
to play down the differences between his policies and
Indian neutralism.
MOROCCAN PARTY SEEKS GREATER POWER . . . . . . . . . . . . Page 15
Morocco's Istiglal party appears to be renewing
its drive to establish a one-party government. It ap-
parently has set its sights on the post of premier
and wants to replace the King's son as chief of staff
of the Moroccan royal army. Heretofore the King, who
shares his theoretically absolute power with the Isti-
glal, has opposed a single-party system.
0
DEVELOPMENTS IN THE NENNI SOCIALIST PARTY . . . . . . . . Page 16
Peitro Nenni's Italian Socialist party has de-
cided to campaign independently in the 1958 national
elections. With Socialist reunification ruled out
at least until after the elections, Nenni's evident
hope is to hold his own party together and increase
its popular attraction by alternating appeals to pro-
and anti-Communist elements both inside and outside
the party.
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COMMUNISTS EXPANDING LABOR ACTIVITY IN SOUTH AMERICA . . . Page 17
A proposed expansion of activities of the Com-
munist Confederation of Latin American Workers (CTAL)
includes the establishment of an office in Chile re-
sponsible for all South America except Venezuela and
Colombia. At present only three influential national
labor confederations--in Brazil, Uruguay, and Ecuador--
are affiliated with CTAL. The Chilean Communist par-
ty has trained leaders capable of giving considerable
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 November 1957
PART II (continued)
MEXICO'S PROBABLE NEXT PRESIDENT . . . . . . . . . . . . . Page 17
Adolfo Lopez Mateos, capable minister of labor,
is expected to be nominated as candidate for presi-
dent of Mexico at the 15 November convention of the
dominant Institutional Revolutionary party (PRI), vir-
tually assuring his election in July 1958. His out-
standing labor mediation record has won the confidence
of the leftist and nationalist PRI wing led by ex-
President Cardenas and of the conservative business
wing whose spokesman is ex-President Aleman. Lopez
has also received support from local Marxist groups,
although he is not known to be sympathetic toward Com-
munists.
PATTERNS AND PERSPECTIVES
ECONOMIC DEVELOPMENT IN SOUTH AND SOUTHEAST ASIA . . . . . Page 1
Economic cooperation on a multinational basis is
receiving increased attention as a promising method of
raising living standards in South and Southeast Asia.
Although practical achievements to date have been lim-
ited, impetus for regional development schemes has been
generated recently by the wide interest shown at the
meeting in Saigon last month of the Colombo plan powers
and by the Japanese desire to establish a regional de-
velopment fund. The Communist bloc may attempt to rival
present efforts among the free nations of Asia to achieve
greater economic cooperation by offering competing proj-
ects of its own.
GOMULKA' S PARTY REFORMS . . . . . . . . . . . . . . . . . Page 5
Poland's Wladyslaw Gomulka--faced with a fragmented
and discredited party--has launched a campaign to change
the party's composition. He wants to cut it down to ap-
proximately half its size to facilitate the development
of a united and effective group. Gomulka believes the
success of his policies depends on the development of
what he calls "numanism" in party practice so that the
party can gain some degree of confidence and loyalty from
the Polish people.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 November 1957
PART III (continued)
FRANCE'S ADMINISTRATIVE OFFICIALS . . . . . . . . . . . . Page 8
France's ability to survive cabinet crises like the
recent 36-day interregnum between the Bourges-Maunoury
and Gaillard governments depends largely on a well-trained
and cohesive bureaucracy.. Continuity is maintained de-
spite changes in government by permanent administrative
officials who often exercise considerable influence on
policy.
ECONOMY OF TAIWAN . . . . . . . . . . . . . . . . . . . . Page 10
Economic conditions were favorable in Taiwan through-
out the past year, and industry on the island continued
its steady expansion. If American aid is continued at
present levels, the economy should continue to progress
and the present level of the armed forces can be main-
tained. Population growth and limited agricultural re-
sources, however, will ultimately require development of
light industry based on export markets if economic via-
bility is to be achieved.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PART I
OF.' IMMEDIATE INTEREST'
Syrian-Turkish Crisis Arab world, the United States, 25X1
Britain,and Turkey."
The beginning of Turkish
military maneuvers on 11 No-
vember has resulted in renewed
Syrian charges that a Turkish
attack is imminent. The ma-
neuvers appear to be on a rela-
tively limited scale. Air
participation has been reduced
below the level originally
planned, and one F-86 fighter-
interceptor squadron, deployed
near the Syrian border in Sep-
tember, has already returned to
its home base in northern Tur-
key. Following the maneuvers,
which are scheduled to end about
15 November, the Turks are ex-
pected to withdraw to per-
manent duty stations all forces
not regularly assigned to the
Syrian border area. Syrian
charges of Turkish military
provocations will probably con-
tinue for the duration of the
maneuvers, and appear designed
primarily for internal and in-
ter-Arab political purposes.
Jordan-
In Jordan, the Egyptian and
Syrian campaign against King
Hussayn may mark an all-out ef-
fort to bring down the King and
his pro-Western government.
The current Egyptian campaign,
which incites Jordan's Pales- Parliamentary by-elections
tinian Arab population to act have been scheduled for 23 and
against the monarchy and the 30 November to replace six op-
government, is similar to that position deputies who resigned
which preceded the assassina- in mid-October. Three "inde-
tion of Hussayn's grandfather, pendents;" approved by the gov-
King Abdullah, in 1951. Mean- ernment, have already been de-
hile, Moscow Arab-language clared elected unopposed. The
broadcasts have joined Cairo filling of the remaining three
and Damascus in denouncing Hus- seats will again permit conven-
sayn as an "ally and friend of ing a quorum in the legislature,
the bitterest enemies of ~ e whi y th
en take action to
T
tONFLDENIAl
V9 _r7c, "'I I- 0WWMft*_
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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hold elections to replace
eight other opposition deputies
who have fled or are under ar-
rest.
Ultimately, the govern-
ment desires to promulgate a
new election law which would
add 15 or 20 seats to the 40-
man legislature and ensure a
docile parliament.
Egyptian discussions during
the past week with Britain,
France, and the head of the In-
ternational Bank reflect prog-
ress toward settlement of some
of the financial problems aris-
ing out of last year's national-
ization of the Suez Canal. The
Egyptians now appear willing to
make some concessions in order
to gain a return to normal eco-
nomic relations. Talks with
the French have been resumed in
Geneva in what has been described
as a friendly atmosphere, and a
British official has again ex-
pressed optimism over the cur-
rent economic discussions in Rome.
In a 10 November interview
between Nasir and IBRD President
Black, it was agreed that the
bank would act as a mediator be-
tween the Egyptian government
and the shareholders of the f or-
mer Suez Canal Company. Nasir
urged Black to expedite the mat-
ter, but remained insistent on
the point that Egypt would deal 25X1
only with chosen representatives
of the shareholders and not with
company officials.
ECONOMIC PROBLEMS SHAKE NEW FRENCH GOVERNMENT
Rightist opposition to
Premier Gaillard's proposed tax
increases has raised a serious
threat to his ten-day-old coali-
tion. Even if he obtains early
National Assembly approval of
his request for sweeping eco-
nomic powers, the prospect of
labor pressure for wage hikes
and the revival of basic policy
differences within his cabinet
make its life expectancy doubt-
ful.
The adverse reaction of
the right wing of Gaillard's
cabinet to his emergency auster-
ity program for new taxes, a
price freeze, and stringent
disciplinary control over mar-
keting activities has quickly
underscored the shaky position
of the new coalition. The new
taxes and special powers of en-
forcement he wants are anathema
to many supporters of the Inde-
pendents and Peasants, who have
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CURRENT INTELLIGENCE WEEKLY SUMMARY
indicated they may abstain in
the National Assembly vote this
week end on special powers to
implement this program.
Such a move would make it
increasingly difficult for the
Socialists to justify their
participation in the government.
Many Socialists doubted the
wisdom of backing Gaillard,and
their leaders are fearful lest
austerity include a wage freeze,
which would alienate their la-
bor support and thereby
strengthen the appeal of the
Communists.
The need for tight fi-
nancial policies has received
wider public recognition--part-
ly as a result of the pessimis-
tic OEEC report on French fi-
nances--and Gaillard's position
vis-a-vis the deputies may be
strengthened by this develop-
ment. The slump in the value
of the franc on 14 November to
507 to the dollar (the legal
rate is 420) may also increase
his support in the special-pow-
ers vote. Moreover, his re-
fusal to be rushed into supply-
ing arms to Tunisia may re-es-
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tablish some of his credit
with the right.
Even if the new government
survives the immediate threat,
it faces a series of extremely
touchy problems over the next
two months. New labor agita-
tion for wage increases seems
inevitable; prices have in-
creased again this week and
are expected to climb further
as the extension of devaluation
pushes import costs upward. In
addition to the Communist-led
labor union's call for a "peace-
in-Algeria strike" on 15 Novem-
ber, the teachers and postmen
are going out on 19 November,
and further widespread demon-
strations are likely if labor
demands are not met.
In any event, latent left-
right differences will come to
the surface when pending re-
form proposals involving the
constitution, education, elec-
toral laws, and medical sub-
sidies emerge from the spe-
cial study groups where they
have been temporarily pigeon-
holed.
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14 November 1957
NOTES AND COMMENTS
Djakarta's continuing anti-
Dutch drive supporting its claim
to Netherlands New Guinea has
had no apparent effect on offi-
cial Dutch policy. The Nether-
lands' government plans to con-
tinue its refusal to negotiate
Indonesia's claim to that area
and is willing to sacrifice
Dutch commercial interests in
Indonesia should Djakarta's re-
taliation make that necessary.
President Sukarno has added his
voice to those calling for the
severance of trade relations
with the Netherlands and the
confiscation of all Dutch prop-
erty in Indonesia if the area
is not "returned" to Indonesia.
Meanwhile, in the sultanate
of Jogjakarta the Communist
party has a commanding two-to-
one lead over its closest oppo-
nent in the 7 November local
elections. The major non-Com-
munist parties--the National
party, Masjumi, and Nahdlatul
Ulama--follow in that order.
A breakdown of the vote gives
the Communists 143,000, the
Nationalists 72,000, the Mas-
jumi 50,000, Gerinda--a minor
party--41,000, and the Nahdlatul
Ulama 35,000. The Jogjakarta
poll is the last of the local
elections throughout Java, and
the results continue Communist
gains in the earlier Java elec-
tions, giving the Communist
party a larger electoral base
than any other political organ-
ization in Java.
Indonesia's second nation-
al conference is scheduled to
convene in Djakarta on 25 Novem-
ber for one week with a possible
three-day extension. Joint
chairmanship by President Sukar-
no and former Vice President
Hatta now appears likely despite
Prime Minister Djuanda's orig-
inal desire to give Hatta sole
responsibility for directing
the meeting.
Djuanda has announced that
working papers will be presented
at the conference on a variety
of subjects related to economic
development. Presumably this
conference will function much
as the September one did. This
will involve the division of
the delegates into a number of
working groups which will ap-
prove predetermined and vague
resolutions calling for coop-
eration, unity, and social jus-
tice.
In addition to civil and
military representatives of both
the Djakarta and the provincial
governments, the conference will
also include representatives of
"functional groups" and polit-
ical parties, experts in various
economic matters, and "pioneers
of Indonesian independence."
Included in the last group are
Semaun, a leading "national
Communist" figure, and Commu-
nist party Secretary General
D-. N. Aidit.
Prime Minister Souvanna
Phouma is planning to present
a coalition government for in-
vestiture on 16 November. His
timetable calls for the opening
of a special session of the
National Assembly on 15 Novem-
ber. at which time the Pathet
Lao would formally turn over
control of the two northern
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 November 1957
provinces to the government.
Souvanna in turn will propose
for investiture a cabinet headed
by himself in which Pathet
leaders Prince Souphannouvong,
his half-brother, and Phoumi
Vongvichit will head the Minis-
tries of Reconstruction and Re-
ligion. In addition, Souphan-
nouvong may be named minister
of integration. This would be
a major concession by the royal
government, since he would have
charge of implementing the gov-
ernment's agreement with the
Pathet Lao, for which he was
the chief negotiator.
Conservative opposition to
the present accords is rapidly
crumbling. Interior Minister
Katay has on several occasions
embarrassed Western officials
publicly in what appears to be
an effort to belie charges that
he is a Western "lackey." The
other leading conservative poli-
tician, Phoui Sananikone, also
seems to be preparing to re-
treat from a position he con-
siders politically untenable.
Souvanna reportedly claims that
Phoui's Independent party, Laos'
second largest, has agreed to
his timetable calling for in-
vestiture of a coalition govern-
ment on 16 November.
The Pathet Lao appears
eager for a settlement on the
present terms. Its transforma-
tion into a political party and
its participation in the gov-
ernment will greatly enhance
its influence as well as its
ability to carry on subversive
activities throughout the whole
country. Souphannouvong re-
portedly signed both the polit-
ical and military accords on 8
November, and the Pathets are
preparing the centers in which
their troops will be regrouped
for integration or demobiliza-
tion. Pathet Lao soldiers re-
portedly are surrendering daily
to the royal government in
groups of two and three, claim-
ing they hope this will assure
them better treatment than if
they wait for integration.
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The election of Carlos
Garcia to the Philippine presi-
dency in the 12 November ballot-
ing is primarily due to the ad-
vantages he held as incumbent
and to the well-entrenched ma-
chinery of the Nacionalista par-
ty. HiE~ comfortable margin of
victory over his nearest rival,
Liberal candidate Jose Yulo,
may also reflect his success in
identifying himself with the
foreign and domestic policies
of his predecessor in office,
the late Ramon Magsaysay. An-
other factor may have been the
election day typhoon which
struck hardest in opposition
strongholds in the northern
Philippines.
Garcia apparently will have
as his vice president the Liber-
al party's Diosdado Macapagal,
who is leading Nacionalista
candidate Jose Laurel, Jr. As
a congressman, Macapagal has
been regarded as able, pro-
American, and experienced in
international affairs. As vice
president, however, he could
have little voice in the ad-
ministration if denied the
customary appointment to a cabi-
net post.
In the congressional elec-
tions, the Nacionalistas will
retain control of both houses
of congress. They apparently
are winning at least 80 of the
102 congressional districts
and six of the eight contested
senatorial seats, giving them
control of at least 20 members
of the 24-man senate.
The expected defeat of
Laurel together 'with the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
fourth-place showing in the
presidential race of ultrana-
tionalist Senator Claro Recto
indicate that anti-American
sentiment played only a minor
role in the campaign. Growing
nationalist sentiment may again
be apparent when the Garcia ad-
ministration undertakes in the
near future to review US-Philip-
pine relations and to resume
negotiations for the "moderniza-
tion" of the 1947 American mili-
tary bases agreement.
An uncertain force in the
Philippine political future will
be the new Progressive party,
whose standard-bearer, Manuel
Manahan, placed a relative-
ly close third in the presi-
dential contest. The Progres-
sives were handicapped by
their lack of finances and
an established organization
in attempting to turn Manahan's
considerable popularity into
votes. As the effectiveness
of their claim to being the
preservers of the "spirit of
Magsaysay" fades, they may
throw in their lot with
the opposition Liberals.
SOVIET DISARMAMENT TACTICS
Soviet tactics in the UN
disarmament debates during the
past two weeks have concentrated
on bringing pressure to bear
on the Western powers to enlarge
the present UN disarmament ma-
chinery. Despite its threat
to boycott future talks of the
present commission and subcom-
mittee, the USSR will probably
participate in further disarma-
ment negotiations if the General
Assembly adopts a compromise
measure enlarging the disarma-
ment machinery.
On 27 October the USSR pre-
sented a resolution which would
replace the present 12-power
Disarmament Commission and its
five-nation subcommittee with
a permanent commission composed
of all 82 UN member nations.
Deputy Foreign Minister Kuznets-
ov on 4 November threatened that
the USSR would not take part in
further negotiations in the com-
mission and subcommittee "with
their present membership," a
qualification hinting that a
limited expansion of the dis-
armament machinery might be ac-
ceptable to Moscow. In comment-
ing on passage of the Western
24-nation resolution two days
later, Kuznetsov did not repeat
his threat of Soviet nonpartici-
pation.
India has consistently
pressed for enlargement of the
disarmament machinery, and,
with Canada, has been active
in working out an expansion.pro-
posal acceptable to the West
and the Soviet Union. An Indian
delegate stated on 12 No-
vember that the Soviet delega-
tion does not favor enlargement
of the subcommittee "at present,"
a hint apparently designed to
help gain Western agreement on
additions to the Disarmament
Commission which the USSR would
accept, before raising the ques-
tion of enlarging the subcommit-
tee. On 13 November the Soviet
delegation publicly promised to
give "serious thought" to such
a limited expansion plan.
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Efforts by the Soviet UN
delegation to translate the
effect of Soviet technological
achievements into political
gains on the disarmament issue
have not met with consistent
success. There are indications
that the heavy majority in favor
of the Western 24-nation reso-
lution in the Political Commit-
tee of the General Assembly on
6 November was facilitated to
some extent by announcement of
the launching of asecond Soviet
earth satellite on 4 November.
In addition to attempts
to create a sense of emer-
gency and frustration among
other delegations, Soviet dele-
gates have emphasized the
desirability of direct talks
with the United States on
disarmament. Kuznetsov pointed
on 5 November to the pros-
pect of conducting private
bilateral US-Soviet talks
under the aegis of an en-
larged disarmament commission.
European hopes for prog-
ress at the NATO summit meeting
of 16-18 December are centered
on prospects for more scientific
and technical cooperation, par-
ticularly the fuller use of
West German talents and facili-
ties, and greater American par-
ticipation.
Speeches during the past
ten days by Secretary General
Spaak and Prime Minister Mac-
millan have contributed to high
expectations for the meeting.
Macmillan's reference to the
"turning point in history" and
the need to contribute "some
national sovereignty" reflect
his government's determination
that the meetings bring more
than declaration of good inten-
tions.
In seeking an adequate
response to increased Soviet
missile capabilities, many Eu-
ropean governments are more
open-minded on German missile
production than ever before.
British Foreign Secretary Lloyd
has publicly implied that he
might favor easing of the WEU
restrictions on Germany to al-
low Bonn to participate in a
joint NATO program for modern
weapons production.
While Bonn hopes for a
relaxation of treaty restric-
tions; it probably would not
initiate a request without def-
inite assurances of support from
at least the UK and France.
Foreign Minister Brentano's non-
committal statements to the
press on 4 November stimulated
a burst of press speculation
which the American embassy in
Bonn suggests may have been in-
tended to test opinion through-
out NATO countries.
A number of the preliminary
ideas on how to achieve greater
cooperation reflect continuing
doubt regarding the extent of
the United States' willingness
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CURRENT INTELLIGENCE WEEKLY SUfARY
to participate in new arrange-
ments. Tne chief French NATO
representative has suggested
that NATO's European members
should plan allocation of pro-
duction of new weapons. Bonn
has suggested'that manufactur-
ing be allocated by the WEU
standing armaments committee
augmented by American and Ca-
nadian observers.
For reasons of prestige,
the British appear the most
anxious that the United States
make some token contribution
to the common effort by relin-
quishing its across-the-board
production. A high Defense
Ministry official has told the
American embassy that the Mac-
millan government's de-emphasis
of reliance on the nuclear de-
terrent would be politically
more palatable if the United
States would turn over to vari-
ous NATO allies the "right" to
make such weapons as antitank
missiles or heav tanks.
25X1
WEST GERMAN MISSILE AND ROCKET ACTIVITIES
Reflecting a growing West-
ern European interest in West
German participation in joint
development of modern weapons,
Bonn has already requested a
minor revision of the WEU treaty
to permit production of an anti-
tank missile and has set up
within the Ministry of Defense
a research organization concen-
trating primarily on a surface-
to-air missile.
Although the Foreign Minis-
try has denied that Bonn would
seek any general revision of
the treaty limitations on modern
weapons production, there is a
willingness to participate in
research and development proj-
ects within NATO which are per-
mitted by the WEU treaty. As
early as 1955, the Ministry of
Defense formed a section to co-
operate with private industry
in various phases of missile
work, and the press reported
that the defense budget for
1958 will include about $2,500,-
000 for missile research.
25X1
The Kobra, a small ant
itank mis-
sile, has been de
velop
ed by the
German firm of Bo
elkow
in Stutt-
gart, and a proto
type
was pro-
duced by the Swis
s fir
m of
Oerlikon in Octoo
er 19
56. Bonn
requested in Sept
ember
1957
that the WEU treaty be
revised
2
to permit Kobra p
roduc
tion in
Germany, and a favorable deci-
about 30 miles.
Private organizations such
as the Working Association for
Rocket Techniques in Bremen have
token the lead in the field of
experimental rockets, and sev-
eral rockets have been launched
for meteorological research.
The association has announced
ambitious plans for developing
an 11-stage rocket to launch an
earth satellite during the In-
ternational Geophysical Year. The
designers, former members of
the V-weapons group, are not
optimistic about completing the
.project during the IGY, but the
first stage was fired in Septem-
ber and is reported to be capa-
ble of reaching an altitude of
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CURRENT INTELLIGENCE WEEKLY SUI[MART
In his speech to the Su-
preme Soviet on 6 November,
Khrushchev made no forecast of
total Soviet industrial output
for 1972, but his figures for
future production of selected
items imply a moderation of the
headlong pace of Soviet growth
during the next 15 years.
Energy availability is a
case in point. Analysis of the
projected growth of output of
fuels suggests an average an-
nual increase through 1972 of
about 6.5 percent, as compared
with an average annual increase
of some 7.8 percent from 1950
to 1955. The importance of
petroleum, including the mas-
sive natural gas increases, in
total fuel supply will perhaps
double by 1972, while that of
coal will diminish. Electric
power production is to increase
at an annual rate of about 9.8
percent.
Despite the evident modera-
tion of industrial growth,
Khrushchev contended that "it
is a quite real and feasible
task to outstrip the United
States in a very short period."
He drew attention to the "chron-
ic crises" of capitalism, the
depressions that make capital-
ist economic growth "intermit-
tent," contrasting this to the
"uninterrupted development" of
planned socialist states. Tak-
ing into account his relatively
feasible forecasts for the
USSR in 1972 and an assist from
a hoped-for Western depression,
Khrushchev stated, "The level
of output in the United States
is no longer inaccessible...
as it might have seemed to some
people 25 or 30 years ago."
Khrushchev forecast 1972
output for 11 items, covering
a considerably broader spectrum
than the four items--coal, pe-
troleum, pig iron and steel--
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listed in 1946 by Stalin in a
somewhat similar "15-year fore-
cast." Besides additional pro-
ducer goods items--iron ore,
gas, electric power, and cement
--Khrushchev included consumer
GROWTH RATES OF
SELECTED SOVIET INDUSTRIAL PRODUCTS
SEMILOGARITHMIC SCALE (MILLION METRIC TONS)
STALIN'S FORECASTS
ACTUAL PRODUCTION
ORIGINAL SIXTH FIVE-YEAR PLAN
KHRUSHCHEV'S FORECASTS
650.750
75-R5
100-120
350-400
G
1955 1957 1960 1965 1972
71113
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CURRENT INTELLIGENCE WEEKLY S*MYARY
GROWTH A!
(MEASURED IN TW1$
goods--sugar, woolen fabric,
and leather footwear--which,
with his statements on housing
and agriculture confirming the
existing stepped-up programs,
served to notify the Soviet
people that their material well-
being is not being ignored.
For the consumer items cited,
rates of growth are not marked-
ly lower than those of the cited
producer items--despite the
continuing preferential growth
of heavy industry.
The preliminary 1957 out-
put data given by Khrushchev,
presaging only a slight overful-
fillment of the mod-
est 1957 plan for
total industrial pro-
duction, seem to have
made him conservative
in his long-range
forecasts. In agri-
culture, 1957 was
disappointing compared
with 1956, a bumper
crop year; less fa-
vorable weather re-
sulted in a harvest
much lower than last
year, and grain pro-
curement by the state
is apparently less
than three quarters
of last year's record
take. Khrushchev of-
fered no further pan-
aceas for agriculture, but spoke
of the possible future expansion
of the "New Lands" program in
Siberia and the Far East.
The course of pushing rap-
idly on all fronts simultaneously
is apparently now an accepted re-
gime policy. Future growth can-
nto be maintained without bal-
anced attention to the various
interdependent activities of the
increasingly complex and maturing
Soviet economy, with increased
reliance on the "carrot" of in-
centives rather than the "stick"
of coercion, 25X1
25X1
In his anniversary speech
to the Supreme Soviet, Khru-
shchev attempted to state his
policy toward the satellites
in such a way as to circumvent
the problem posed for Soviet
policy by the principle of
"different roads to socialism."
The views expressed on this oc-
casion by party leaders from
Communist China, Poland, and
Yugoslavia on the nature of
the USSR's relationships with
bloc countries and the "differ-
ent roads" concept underscore
the difficulties Khrushchev
faces in the matter.
In an attempt to limit the
principle's divisive effects on
the Communist world, Khrushchev
directed that more attention be
given to the similarities that
exist among the countries of the
Communist bloc rather than to
national differences. Bloc
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CURRENT INTELLIGENCE WEEKLY SUMMARY
unity, he said, can be main-
tained only if all socialist
states recognize and adhere to
the basic principles of Marx-
ism-Leninism and proletarian
internationalism, i.e, recogni-
tion that the USSR is the most
powerful of the Communist states
and that what is good for the
USSR is also good for them.
In an apparent effort to re-
assure the Poles and Yugoslavs,
Khrushchev'added that "all
countries of socialism, large
or small...have fully equal
rights."
Yugoslav Vice President
Kardelj described his country's
relations with the Soviet Union
as based on the "great idea of
proletarian internationalism"
--defined by the Yugoslavs as
support for the Kremlin in for-
eign policy matters--and on
"equality of independent peo-
ples." Polish Party First Sec-
retary Gomulka, as quoted in
Pravda on 5 November, listed
as the conditions of bloc unity:
national independence and recog-
nition of national peculiari-
ties, and the independence of
Communist parties.
Mao Tse-tung, while ac-
cepting as a "sacred interna-
tional obligation" the need to
strengthen bloc solidarity under
Soviet leadership, nonethless
observed that "we firmly main-
tain that all nations should
practice... principles of mutual
respect for sovereignty .... non-
interference in each other's
internal affairs, equality, and
mutual benefit," the principles
enunciated in the 30 October
1956 declaration.
Gomulka, too in his 6 No-
vember speech, acknowledged
that the Soviet Union occupied
the "first place in the family
of all socialist countries,"
which he described, however,
as having equal rights. In
contrast to the restraint ex-
pressed in the Yugoslav, Polish,
and Chinese comments, the ortho-
dox satellites described the hap-
piness of their peoples under
Moscow's benevolent guidance.
The need to combat "dogmat-
ism and revisionism"--the latter
designated by Mao as the greater
danger--was alluded to in the
majority of the anniversary
speeches, indicating that the
threat represented by the devia-
tions of Djilas and Nagy, spec-
ifically named by Khrushchev,
and the Polish liberals is a 25X1
matter of serious concern among
bloc leaders.
Peiping's first regularly
scheduled international ship-
ping line will begin operations
soon, using a new Polish-built
cargo ship. This line initially
will provide service between
Canton, Hong Kong, and Haiphong
and may be expanded to include
major Southeast Asian ports now
primarily served by free world
vessels.
Peiping for some time has
indicated an interest in estab-
lishing its own regular shipping
service to South and Southeast
Asia, since more than one third
of China's total trade with the
non-Communist world is with
these areas. The Chinese also
probably expect that a shipping
line will boost their prestige
in Southeast Asia.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 November 1957
erating range of
vessels based at
Taiwan.
Earlier additions to China's
merchant fleet have for the most
part served the needs of North
China, but vessels which have
recently arrived from Eastern
Europe have been assigned to
the southern coast. China is
expecting delivery of addition-
al cargo ships well suited for
operations in Southeast Asian
waters. Trained Chinese sea-
men now employed on Polish
vessels operating in
the China trade are
available for Pei-
ping's growing mer-
chant fleet.
Peiping has long
been sensitive to po-
tential threats to
its shipping in the
South China Sea. It
still does not run
vessels between North
and South China, as
the routes are sub-
ject to Chinese Na-
tionalist naval in-
tervention, but this
new international
shipping route is be-
yond the normal op-
As early as mid-
1955, the Chinese Com-
munists began the
development of port
facilities at Fort
Bayard for the promo-
tion of China's com-
merce with Southeast
Asian countries. This
port is now equipped
with modern cargo-
handling machinery
and is capable of ac-
commodating five
ocean-going vessels
at one time. In May
of this year, the Chi-
nese Communists began
to rebuild a pier in
Hong Kong for their
own use. The pier
probably will play
an important role in any expan-
sion of Chinese shipping into
the Southeast Asian area, as
well as serve the new Canton
Hong Kong?--. Haiphon. -run.
In the past two years, a
number of countries have started
shipping services to Commu-
nist China. Just recently an
Australian-steainship company.
assigned four vessels to a
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regular passenger and cargo
service between Australia and
Shanghai. Last month Canada
began cargo service between
Vancouver-and 'Tientsin. Ear-
lier Yugoslavia and West Ger-
many had assigned ships
to the
China.trade, while the USSR,
25X1
Czechoslovakia,
and Poland have
maintained their
regular
serv-
ice with Chinese
ports.
(Prepared by ORR)
NEW BRIDGE EASES CHINESE COMMUNIST TRANSPORT BOTTLENECK
It now appears that the
new two-decked rail and highway
bridge over the Yangtze River
at the central China metropolis
of Wuhan, opened to traffic last
month, will be the only major
railroad construction project
to be completed this year. Com-
munist China is not diverging
widely from its plan to lay
only 334 miles of new track this
year--as against 1,747 miles
in 1956--and is concentrating
instead on increasing the capac-
Hsiatung, in western Kansu, al-
most a year after rail-laying
had reached this point, and a
program for "rebuilding" the
Tienshiu-Lanchow line, finished
in 1952, is now under way.
The completion of the new
bridge at Wuhan well ahead of
schedule is, however, a signif-
icant achievement. The bridge
is 5,446 feet long and has nine
spans, each 415 feet long. Its
superstructure is 52.5 feet
high and 75 feet wide.
The upper deck has
two pedestrian walk-
ways eight feet wide
and a six-lane high-
way. The lower deck
carries pedestrian
walkways and a double-
track railway, only
'%,* one track of which
has been installed
ity of overworked older lines
through a program of double-
tracking and on improving
freight-handling'capacity in
stations and yards.
In addition, Peiping has
found it expedient to better
the standards on some of the
lines built with such notable
dispatch in the immediate past.
1'or example, the Trans-Sinkiang
line has only recently been
opened to passenger traffic to
so far.
Costing $30-33,-
000,000, the bridge s
only part of a $67,000,
000 project to make
Wuhan a major rail
center. The entire
project, which includes
new stations, track, and marshal-
ing,yards--as well as the rail
and highway bridges over the Han
River completed earlier--is ex-
pected to be finished in 1958.
Construction of the bridge
was greatly speeded through use
of an unusual: method of pier-
sinking said to have been sug-
gested by the chief Soviet ex-
pert on the bridge. It involved
sinking to bedrock a series of
hollow tubes of reinforced
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CURRENT INTELLIGENCE WEEKLY SUriARY
YUTAIMEN
STATION
SRUYO.FC,bI.,RAILROAD BRIDGE
OPENED NOV.195.
STATION
Wuhan
Rail Development
FACILITIES NERLY CONSTRUCTED OR
UNDER CONSTRUCTION (ALIGNMENT
AND LOCATION UNCERTAIN(
14 NOVEMBER 1957
24788
0 MILES 4
CHIANGAN STATION
MARSHALING YARD
IDGE
195
WV
concrete five feet in diameter.
These formed a basis for one
pier. Through these tubes 30-
36 cores, 4.5 inches in diameter,
were drilled into the bedrock
to a depth of at least 20 feet.
Steel rods were then driven into
the cores and the tubes filled
with concrete, firmly fixing
the whole to the bedrock.
Thereupon a steel coffer-
dam was lowered around the con-
crete columns and filled with
concrete, thus completing the
pier. Use of this method en-
abled the bridge builders, who
numbered about 15,000, to avoid
practically all underwater work
and to continue operations
throughout the year.
?UCHANG EAST UIOd ARARSHALI YARD
HSUCHIAPENG TAT ION
11\11 _/ ~
~ r ~
KVO
CHA
~
HU( CHENG
\
Rf-14R9*D AND HI OH11Av ,BRIDGE
The bridge is one of the
outstanding engineering achieve-
ments of the First Five-Year
Plan. It will not, however,
begin at once to operate at its
planned capacity of 120 trains
a day since the lines leading
onto the bridge will not be
able to handle such a number un-
til they are double-tracked.
The Peiping-Canton railroad is
scheduled to be double-tracked
as far south as Hengyang by
1962. The bridge will free the
rail ferries formerly used there
for use elsewhere, perhaps at
the Nanking crossing. It will
cut two hours or more from the
running time on through trains
between Peiping and Canton.
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CURRENT INTELLIGENCE WEEKLY SWIkARY
14 November 1957
PEIPING UNDERSCORES OPPOSITION TO "TWO CHINAS" CONCEPT
Communist China is giving
increasingly wide publicity to
its unyielding opposition to a
"two Chinas" solution for the
Taiwan problem. On 7 November
it dramatically walked out of
the International Red Cross Con-
ference in New Delhi after the
conference voted to seat the
Chinese Nationalist delegation
as well as the Chinese Commu-
nists.
Before their withdrawal,
the Communists had exerted
heavy pressure on the Indian
government to prevent the seat-
ing of the Nationalist delega-
tion. Other participants were
warned that their support of the
Nationalists would be construed
as a "hostile act." Chinese
Communist editorial comment
since the withdrawal reflects
Peiping's position that it will
not compromise on issues of this
kind even if they impede the re-
gime's campaign to win broader
international recognition. The
propaganda pictures Peiping as
"not eager" for American recog-
nition and describes "two Chinas"
as an "illusion" indicating an
impasse in America's China pol-
icy.
Anti-American invective
has accompanied similar with-
drawals by Peiping in the past
year from other international
occasions, such as the Olympic
games, film festivals, and
scientific and technical events.
After months of preliminary plan-
ning for participation, Peiping
withdrew at the last moment from
the activities of the Interna-
tional Geophysical Year. The
visits to Taiwan by Prime Minis-
ter Kishi of Japan and former
Premier Pinay of France provided
occasions for further vociferous
protests by Peiping against the
"two Chinas" formulation.
Peiping charges that Great
Britain, Japan, and France are
the countries most guilty of
following the American lead and
developing closer ties with Tai-
wan. Under no circumstances,
the regime's leaders say, will
Peiping enter the UN if the Na-
tionalists remain.
The Chinese declare they
will patiently await admission
to the UN and that in the mean-
time the UN will remain stymied
in its efforts to-solve major
international problems.
Communist China's pro-
fessions on the "two Chinas"
concept harmonize with its prop-
aganda campaign to "liberate"
Taiwan. Proclaiming that Tai-
wan is Chinese territory and
that the Taiwan issue is an in-
ternal affair, the Communists
insist that only their regime
can be represented in interna-
tional forums. American "in-
trigues" are held to be respon-
sible for continued Nationalist
accreditation to the UN and
other international bodies.
Chou En-lai has stated
that in the future Peiping
will not establish diplomatic
relations with nations that con-
tinue diplomatic ties with Taipei.
Apparently Peiping's relations
with Britain are not to serve
as a precedent for other coun-
tries. In 1954, Peiping recip-
rocated British recognition--
which had been extended in 1950
--without requiring the UK to
withdraw its consulate on Tai-
wan. This consulate, however,'
is accredited to the Taiwan pro-
vincial authorities rather than
to the Nationalist government.
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The Communist-dominated
nongovernmental Afro-Asian Sol-
idarity Conference, sponsored
by the Asian Solidarity Commit-
tee, is to be held in Cairo from
26 December to 1 January. Prep-
arations indicate that the Sino-
Soviet bloc and Egyptian nation-
alists will try to define a
"popular" anti-Western posture
for Asian-African countries on
subjects such as anti-imperial-
ism, national liberation, and
racial discrimination. Sino-
Soviet bloc delegates will push
the international Communist
line in dealing with such
agenda issues as the Algerian
war, the Syrian question, and
a ban on testing and use of
nuclear weapons.
The agenda also includes
discussion of "support of eco-
nomic and technical cooperation
among the Afro-Asian peoples,"
and conference propaganda may
call for an economic aid re-
lationship which would by def-
inition exclude the West but
include the USSR and Communist
China. Conference officials
expect delegates from 50 na-
tions.
Delegates from 21 Asian-
African countries and the Sino-
Soviet bloc attended a prepara-
tory meeting in Cairo in Octo-
ber. They included exiles and
opposition leaders from Jordan,
Iraq, and Lebanon, and left
Populist politicians from Syria.
"Freedom Fighters"--presumably
leaders of nationalist move-
ments--attended from the Camer-
oons and Algeria. Foreign
Ministries in countries where
no national solidarity commit-
tees exist were asked to act
as intermediaries in arranging
nongovernmental delegations to
the preparatory meeting.
President Nasi-' has emphat-
ically identified himself with
the conference through press
interviews and press releases,
and the preparatory committee
is headed by one of his close
personal advisers who also
heads the Islamic Congress.
The Egyptian Finance Ministry
has furnished quarters for the
preparatory committee and fi-
nanced it. This direct sup-
port by the Egyptian government
has tended to confuse the non-
governmental nature of the con-
ference.
Communist control of the
committee has been disguised
by the slow and discreet organ-
izational development and a
policy of delegating responsi-
bility to non-Communist Asians.
Its origin can be traced to
the Communist-front World Peace
Council which was never success-
ful in establishing itself in
Asia. At an unpublicized meet-
ing in December 1956, the com-
mittee decided to expand its
activities to include Africa
and, in connection with the
preparatory meeting, a commit-
tee representative said the
establishment of new national
committees in Asia and Africa
then had priority. The com-
mittee's emphasis on nation-
alism and national independence
in Asia is reflected in its
pattern of organization, which
places primary importance on
the national solidarity com-
mittees rather than on the ap-
parently weak secretariat.
Fellow-traveling members
of the committee maintain con-
nections with other Communist-
influenced or Communist-front
movements in Asia. Committee
leaders figured prominently in
the Afro-Asian Lawyers' Confer-
ence, the World Peace Council
meeting in June in Colombo, and
the Tokyo antinuclear weapons
meeting in August. 25X1
F__ I
25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Japanese Prime Minister
Nobusuke Kishi will make a sec-
ond tour of Asian countries be-
tween 18 November and 8 Decem-
ber, visiting seven nations--
South Vietnam, Laos, Cambodia,
Indonesia, Australia, New Zea-
land, and the Philippines--which
were not included in his tour
last May. Kishi views this trip,
as he did the earlier one, as
an opportunity to use high-level,
personal diplomacy to allay
latent suspicion of Japan and
to promote increased economic
cooperation. He will give major
consideration to outstanding
reparations obligations and he
will seek reactions to a revised
scheme for an Asian development
fund.
The prime minister expects
to pave the way for greater ac-
ceptance of Japan in the Asian
community and hopes that on
particular problems he will find
a sounder basis for cooperation
than he did in May. At that
time Kishi encountered a general
reluctance to accept his Asian
development fund idea as well
as a division of opinion with
regard to Tokyo's policy toward
Communist China.
The Japanese government has
been unable to reach reparations
settlements with Indonesia and
Routh Vietnam prior to Kishi's
visits to these countries. Since
Japan recognizes that reparations
settlements are a major factor
in its attempt to develop closer
economic relations with South-
east Asia, Kishi may be prepared
to break the deadlocks with new
offers.
In addition, Kishi may have
revised his thinking on the
Asian development fund. It has
been coolly received in Asia,
particularly with regard to joint
US-Japanese sponsorship; the
United States prefers a bilater-
al, project-by-project approach;
and Kishi's own roving ambassa-
dor in Asia has made recommenda-
tions which essentially reflect
the American position. Although
no official announcements have
been made, there are indications
that Kishi now believes a lim-
ited program including so-called
neutral or all-Asian funds and
excluding outside assistance
may have more appeal. The forth-
coming trip willgive Kishi an op-
portunity to test reaction to a
revised schme of this type.
25X1
South Vietnamese President
Diem's visit to India in early
November was a success in pro-
moting cordial relations between
the two countries despite their
widely divergent foreign poli-
cies. The friendly reception
accorded Diem by Indian offi-
cials and the local press indi-
cates India's growing sympathy
for South Vietnam and is in
sharp contrast to New Delhi's
attitude of only 4 few years
ago. This development is sig-
nificant in view of India's role
of arbiter between North and
South Vietnam as chairman of
the International Control Com-
mission.
In recognition of India's
special position, Diem had at-
tached great importance to his
New Delhi visit, although he
continues privately to express
disdain for Indian neutralism.
In his public statements in In-
dia, Diem emphasized the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
historical, cultural, and eco-
nomic ties linking India and
South Vietnam, cited common po-
litical and economic aspirations,
and made liberal references to
well-known Indian philosophical
teachings.
While minimizing foreign
policy differences, Diem de-
fended South Vietnam's strongly
anti-Communist position and
bluntly denounced the "Commu-
nist despotism" in North Viet-
nam as hindering national unifi-
cation. On the controversial
topic of SEATO, Diem praised
the organization's "purely de-
fensive" role against Communist
subversive maneuvers, but em-
phasized that South Vietnam was
not a member and was not active-
ly considering adherence to any
military alliance.
The joint communiqud is-
sued on 8 November by Nehru and
Diem reflected the desire of
both to find common grounds.
Specifically, the two leaders
noted that "the terrible ad-
vances in the development of
weapons of mass destruction"
made most urgent the maintenance
of world peace. It also stated
that "continued and increased
cooperation" between India and
South Vietnam was desirable "in
common pursuit of the economic
and social advancement of their
people."
With an eye to the future,
Diem apparently intended his
New Delhi visit to establish
rapport with India's neutralists.
He has frequently indicated con-
cern that South Vietnam is
threatened with isolation as a
result of growing neutralism in
neighboring countries, and prob-
ably considers that Indian sym-
pathy may prove an indispensable
asset in the future.
25X1
Morocco's Istiglal party,
frustrated last year in its
initial attempt to obtain a
monopoly of power when King
Mohamed V conceded it only ma-
jority representation in the
government, appears to be renew-
ing its drive to establish a
one-party government. With the
recent nomination of an Istiglal
leader to head the Ministry of
Defense, the party now holds
11 of 18 cabinet portfolios and
has set its sights on the post
of premier, occupied by Si
Mbarek el Bekkai, a close friend
of the King, and the position
of chief of staff of the Moroc-
can royal army, occupied by
the King's eldest son, Crown
Prince Moulay Hassan.
Although the King theoret-
ically remains an absolute mon-
arch, in practice he shares his
power with the Istiglal. Fear-
ing the prorepublic tendencies
of one wing of the party, he
has encouraged potential oppo-
sition parties as a counter-
weight to Istiqlal's efforts to
eliminate political opposition.
He is presumed to have at least
tacitly approved the formation
in September of the Popular
Movement, led by Mahjoubi Ahar-
dane, then governor of the Prov-
ince of Rabat, and Minister of
State Lahcen el Lyoussi, both
close to the King. Istiqlal
succeeded in having the party
banned on 24 October and sub-
sequently Ahardane was removed
from office. Premier Bekkai's
alleged association with the new
group presumably will be the
basis for the Istiglal campaign
to force the premier to resign.
Although the King approved
the ouster of Ahardane, Bekkai's
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CURRENT INTELLIGENCE WEEKLY SUYYARY
long service on the King's be-
half may save the premier.
Istigial is reported planning
to propose as premier Abdelkrim
Benjelloun, able minister of
justice toward whom the King is
favorably disposed. Should the
Istiqlal succeed in convincing
the King of its point of view,
the change-over probably would
not occur until after the King
returns in mid-December from
his visit to the United States.
Istigial tactics.
Meanwhile, Istigial, which
controls all organized labor
through its affiliate, the Moroc-
can Union of Labor, is continu-
ing to maneuver to obtain closer
control over the army and pre-
sumably to strengthen its links
with the irregular Moroccan Army
of Liberation. The party may
also attempt to strengthen its
organization in rural areas,
where Berber tribes have recent-
ly expressed dissatisfaction with
DEVELOPMENTS IN THE NENNI SOCIALIST PARTY
The sending of a Nenni So-
cialist delegation to Moscow
for the 40th anniversary cele-
brations, almost simultaneously
with the issuance of Nenni state-
ments criticizing the Communists
and the Social Democrats, serves
to illustrate the problem fac-
ing the Italian Socialist party
(PSI) as a result of its an-
nounced decision to campaign
independently in the 1958 Ital-
ian national elections. With
Socialist reunification ruled
out at least until after the
elections, Nenni's evident hope
is to hold his own party togeth-
er and increase its popular at-
traction by alternating appeals
to pro- and anti-Communist ele-
ments both inside and outside
the party.
Party delegates sent to
Moscow included only one from
the wing favoring independence
from the,.Communists, three oth--
ers from this group having
begged off at the last minute
on grounds of "illness" and
"visa delays." An apparent
balancing gesture to right-wing
elements appeared on 7 November
when the party daily Avanti re-
iterated earlier sharp criti-
cisms of the Soviet system and
said that the popular sovereign-
ty guaranteed by socialism has
not yet been achieved in the
USSR.
Shortly before, however,
Nenni had attacked the Democrat-
ic Socialists for putting the
"tombstone" on reunification
when their late October party
congress made a sharper PSI
break with the Communists a pre-
condition for reunion. Avanti
returned to the other tack on
10 November with a new call for
Socialist unity, for friendly
discussions with the Christian
Democrats, and for further clari-
fication of the PSI's relation-
ship with the Communists.
A further problem is posed
by the death on 3 November of
Giuseppe Di Vittorio, the Com-
munist chief of the Italian
General Labor Confederation
(CGIL), whose secretariat in-
cludes a number of PSI officials.
This event raises the tempting
possibility of replacing Di Vit-
torio by a Socialist, but at a
time when Nenni might prefer
not to have another point of
dispute with the Communists and
with certain elements in his
own party.
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COMMUNISTS EXPANDING LABOR ACTIVITY IN SOUTH AMERICA
A proposed expansion of
the activities of the Commu-
nist Confederation of Latin
American Workers (CTAL) in-
cludes the establishment of an
office in Chile responsible for
all South America except Vene-
zuela and Colombia.
The establishment of the
new office is likely to be ac-
companied by a stepped-up of-
fensive against US business in-
terests in Latin America which
may include mass strikes, pro-
test demonstrations, and other
militant actions. More ef-
ficient reporting for the WFTU
on agricultural and other eco-
nomic subjects is expected to
be another result of the planned
expansion.
Only three influential na-
tional labor confederations--in
Brazil, Uruguay, and Ecuador--
are formally affiliated with
the CTAL. In Chile, however,
CTAL has extremely cordial rela-
tions with the powerful Commu-
nist-dominated Single Labor Cen-
tral of Chile (CUTCH). Oscar
Astudillo, the head of the na-
tional labor commission of the
Chilean Communist party and
member of the CUTCH directorate,
is a CTAL executive board mem-
ber. CUTCH has offered to
help in setting up the new CTAL
office, thus mobilizing support
for the project among large
segments of Chile's organized
labor.
The new office, which will
publish the official WFTU pub-
lication, will include two mem-
bers of CTAL's present Mexico
City staff but will be staffed
primarily by Chileans. The
local Communist party is in an
excellent position to provide
the center with well-trained
workers, as has been evidenced
by the party's participation in
recent meetings in various
South American countries and in
particular by the role some of
its members have played in the
labor unrest in southern Peru
which led to the declaration of
a state of siege on 5 November.
The proposed CTAL center
probably will not be strongly
opposed by non-Communist Chilean
political leaders, who are now
campaigning for the 1958 presi-
dential elections and will try
not to offend the labor vote.
President Ibanez in particular
is indebted to the extreme left-
ist parties for their support
of two of his cabinet ministers
recently impeached by congress,
and he may accordingly try to avoid
any appearance of crackin down m
the leftists. 25X1
MEXICO'S PROBABLE NEXT PRESIDENT
Election of Adolfo Lopez
Mateos, capable minister of la-
bor, as president of Mexico in
July 1958 is already accepted
as virtually certain. The 15
November convention of the In-
stitutional Revolutionary party
(PRI)--which under various names
has governed Mexico for 40 years
--will probably nominate him by
acclamation
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Lopez has already received
enthusiastic public support
from all the diverse components
of the PRI. On 7 November,
President Ruiz Cortines, who
would like to see the moderate
policies of his administration
continued, told the American
ambassador that Lopez is his
personal choice. The Presi-
dent's wide powers traditional-
ly include the choice of a suc-
cessor, but in practice a candi-
date must be acceptable to the
somewhat divergent interests
represented by two powerful for-
mer presidents--Lazaro Cardenas
and Miguel Aleman.
The popular Cardenas, who
expropriated foreign oil hold-
ings during his 1934-40 admin-
istration, leads the PRI's left-
ist wing and represents the na-
tionalist, neutralist sentiments
strongly held by many Mexicans
and sometimes expressed in anti-
US attitudes. Cardenas' in-
fluence over Lopez Mateos, how-
ever, is unlikely to be any
greater than it was over Ruiz
Cortines.
Aleman, who gave indus-
trial development first priority
during his 1946-52 term, speaks
for the more conservative busi-
ness interests which have re-
cently been gaining influence
in PRI and government circles.
In order to overcome the pres-
ent leveling off of Mexico's
remarkable economic progress
of the past ten years, this
group wants a favorable climate
for private investment and an
administration responsive to
its concepts of stability.
Lopez has pleased labor
with consistent negotiation of
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wage increases and with his
emergency program in the un-
stable period following the 1954
peso devaluation. He earned
the confidence of management by
avoiding major strikes, thereby
helping maintain high industrial
production. The approval of
Lopez by usually divergent lo-
cal Marxist groups may indicate
they expect even more opportunity
for action under his presidency
than Mexico's traditional in-
dulgence of political leftists
has previously provided, although
he is not known to have shown
sympathy for Communists.
Now 48, Lopez Mateos was
a lawyer and teacher before be-
coming a senator in 1946. As
secretary general of the per-
manent central committee of the
PRI, he was active in the presi- 25X1
dential campaign of Ruiz Cortines
and became minister of labor in
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PATTERNS AND PERSPECTIVES
ECONOMIC DEVELOPMENT IN SOUTH AND SOUTHEAST ASIA
Economic cooperation on a
multinational basis is receiving
increased attention as a promis-
ing method of raising living
standards in South and South-
east Asia. Although practical
achievements to date have been
limited, impetus for regional
development schemes has been
generated recently by the wide
interest shown at the meeting
in Saigon last month of the
Colombo plan powers and by the
Japanese desire to establish a
regional development fund. The
Communist bloc may attempt to
rival present efforts among the
free nations of Asia to achieve
greater economic cooperation
by offering competing projects
of its own.
Obstacles to Cooperation
Regional economic coopera-
tion has often been advocated
as a method of achieving higher
living standards and greater
stability in the underdeveloped
countries in South and South-
east Asia. A number of formida-
ble political and economic ob-
stacles, however, have hereto-
fore discouraged any move to-
ward area-wide cooperation.
Chief among these has been the
intense nationalism of the newly
independent countries in the
area. This sentiment, developed
during the period of Western
colonialism, and the antagonisms
toward the Japanese growing out
of World War II have created
suspicions that there are ul-
terior motives behind any pro-
posals for regional development
emanating from these sources.
Japan's continuing efforts to
promote regional economic co-
operation as one alternative
to deeper entanglement with Com-
munist China and the rest of
the Soviet bloc has been handi-
capped by these fears.
Equally important is the
traditional distrust and con-
flict of interest among neigh-
boring South and Southeast
Asian countries. As a result,
these states hesitate to par-
ticipate in any multilateral
development scheme which might
benefit a rival.
The economies of most of
the countries in the area, es-
pecially in Southeast Asia, are
competitive rather than comple-
mentary. Each state is depend-
ent on similar exports, such
as rice, rubber, tin, and lum-
ber. Geographically, trade
and communications have devel-
oped in a generally north-south
pattern following the valleys
of the main rivers and outward
to Europe rather than laterally
across high mountains and Asian
national boundaries.
Finally, there is a cer-
tain amount of competition as
well as lack of coordination be-
tween the various organizations
interested in promoting regional
development. The Colombo plan,
for instance, has been criti-
cized for favoring members of
the Commonwealth, and some spon-
sors of the plan are reluctant
to see the development of SEATO
as a vehicle for economic aid.
In addition, various UN agen-
cies, such as ECAFE, are back-
ing regional projects and tend
to operate independently of
other organizations.
Factors for Cooperation
Despite these obstacles,
there has been some progress
toward regional economic coop-
eration. The United States in
fiscal 1957 committed almost
$1.126 billion for nonmilitary
aid to South and Southeast Asia.
This aid is divided among every
country in the area, except
Malaya, and at least indirectly
promotes regional cooperation.
An example of this was the Ameri-
can purchase of Burmese rice to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
NONMILITARY AID TO
SOUTH AND SOUTHEAST ASIA
JULY 1956 ? JUNE 1957
Countries in red i aid.
receive mil tary a* Except in Afghanistan, Ceylon, India, Indonesia, and Nepal, ICA allotments
have been primarily for defense support and nonmilitary projects closely
allied to the military program.
**Public Law 480 authorized the sale and transfer of surplus agricultural
commodities. These figures do not include barter agreements and dona-
tions which in fiscal 1957 amounted to approximately 20 percent of the
total commitments.
NOTE: Requests for additional aid have been received from all countries
except Malaya.
Estimated figures for 1958 indicate an over-all reduction of approximately
20 percent, with variations for each country.
14 NOVEMBER 1957
meet a food shortage in Paki-
stan. The proceeds are
being used for technical
assistance and training of
Burmese.
The countries
in South and South-
east Asia also belong
to various interna-
tional organizations
such as the Interna-
tional Bank of Recon-
struction and Devel-
opment, the Interna-
tional Monetary Fund,
and the Food and Agri-
culture Organization.
All of these organi-
zations have an in-
terest in encouraging
regional as well as
purely national eco-
nomic advancement.
In addition, there
are friendship and de-
fense treaties between
various countries
which are also a posi-
tive force for the
achievement of mutual
objectives through
cooperation.
There is an in-
creasing awareness
among indigenous of-
ficials of the desir-
ability of wider co-
operation. Hereto-
fore, these officials,
recognizing their
countries' severe eco-
nomic limitations,
have insisted that the best way
to achieve their goals of in-
dustrialization and econom-,
ic diversification--with or
without bilateral foreign
MEMBERSHIP IN INTERNATIONAL ORG
IIEIMEMBERS MEMBERSHIP APPLIED FOR 4 NONMEMBERS UNDER THE P*OTI{ O
UN ECAFE IRRD IMF
SECRET
ICA TOTAL*
PL-480**
AFGHANISTAN
$ 14,407,000
$7,200,000
BURMA
1,000,000
CAMBODIA
35, 500,000
400,000
CEYLON
6,088,000
2,200,000
INDIA
69,500,000
398, 500,000
INDONESIA
11,722,000
LAOS
44,552,000
MALAYA
NEPAL
4,600,000
PAKISTAN
99,010,000
68, 500,000
PHILIPPINES
33,913,000
27, 200,000
THAILAND
34,500,000
2,600,000
VIETNAM
259, 500,000
11,800,0001
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CURRENT INTELLIGENCE WEEKLY SUMMARY
14 November 1957
assistance--was by individual
national effort. At the re-
cently concluded Colombo plan
conference in Saigon, however,
a new note was sounded. Numer-
ous delegates expressed con-
siderable interest in the Japa-
nese idea of an Asian Develop-
ment Fund to finance projects
on a regional scale. There
have also been increasing in-
ruiries about the availability
SOME EXAMPLES OF TREATIES AMONG NATIONS
Of SOUTH AND SOUTHEAST ASIA
TREATIES
SPONSOR
PARTICIPANTS
CAMBODIA ? LAOS ? PAKISTAN
MUTUAL ASSISTANCE
UNRED STATES
-NKIPPIIM-TTNAWIND-VISTNAM
W INN AOlEEATFNTS
..
UNITED _ KINGDOM
MALAYA
TREATY
OP RRIENOSHP
6uRMA
NDA ? INDONESIA
THAILAND ? PAKISTAN
COMMONWEALTH
UNITED KINGDOM
NYLON A
PAKISTAN MALAYA
ANZAM
AUSTRALIA ANO
MEW ZEALAND
MALAYA
of assistance through the Ameri-
can Asian Development Fund, now
administered by the President's
office.
In addition to the demon-
strable material benefits to
be obtained from regional co-
operation, there appears to be
a growing concern over the
threat of Communist China. This
is probably best illustrated
by the increasing anxiety of
the Burmese government over the
problems of border demarcation
and Chinese infiltration and
the Cambodian government's fear
of Communist subversion of the
local Chinese. While this fear
has not yet been expressed to
any great extent in many coun-
tries, it may well become a
major factor favorable to the
growth of regional-mindedness
in the area.
Progress to Date
Practical achievements
thus far have been modest. ECAFE
is promoting international ex-
ploitation and control of the
Mekong River, which either bor-
ders on, or flows through, five
of the countries in Southeast
Asia. The riparian powers are
represented on a Mekong River
Commission, which has made sur-
veys and project proposals pre-
liminary to an ambitious scheme
of river valley development.
"Operation Brotherhood," under
which Philippine medical teams
are active in the hinterland
of Laos and Vietnam, is jointly
sponsored by the Philippine
and local Junior Chambers of
Commerce. Financed by the In-
ternational Junior Chambers of
Commerce, it has been widely
acclaimed both for its humani-
tarian aspects and as an out-
standing example of interregion-
al cooperation.
There have been a number
of recent proposals for the
future. The Japanese have in-
dicated that they are willing
to take the initiative in set-
ting up regional centers to
train various types of techni-
cians. The Colombo plan organi-
zation is studying the possi-
bility of broadening its stu-
dent exchange program to give
greater emphasis to regional
cooperation. Burmese officials
have suggested that annual con-
sultative meetings of regional
planners could be useful. Con-
sideration is also being given
to such specific undertakings
as an interregional telecom-
munications network and joint
Thai-Burmese utilization of the
power to be generated from the
Yan Hee hydroelectric project
in northwestern Thailand spon-
sored by the International Bank
for Reconstruction and Develop-
ment.
Sino-Soviet Bloc Efforts
Sino-Soviet bloc bilateral
economic aid programs have
proved their appeal in the area.
The bloc, particularly the USSR,
is now carrying out aid pro-
grams in India, Afghanistan,
and Burma. Communist China
has an effective aid mission
at work in Cambodia, and East
Germany is setting up a sugar
mill and Czechoslovakia a tire
factory in Indonesia.
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14 November 1957
Of at least equal signifi-
cance are the bloc's efforts to
expand its trade with the area.
The best known of these efforts
has been the triangular trade
involving Ceylonese rubber sent
to Communist China which is paid
for,"in part, with rice ob-
tained from Burma.
The Soviet Union and its
European satellites also took
advantage of the slump in the
rice market in 1955-56 to make
barter agreements
with Burma. Much of
this rice was di-
verted to North Viet-
nam and undoubtedly
played a large part
in averting a major
economic catastrophe
there in 'view of
the series of crop
failures. Wnile the
Burmese have been
largely disillusioned
with their barter ar-
rangements and are
seeking to disengage
in favor of cash cus-
tomers, their expe-
rience reveals the
vulnerability of the
countries in the area
to Communist trade
offers.
of their past and present co-
lonial policies. In addition,
the Soviet Union and,. more re-
cently, Communist China,have
the advantage of appearing to
Asians as examples of how back-
ward countries can make a quick
transition to become modern
industrial powers.
The national governments
of free Asia are all under sim-
SINO-SOVIET BLOC ECONOMIC AID TO SOUTH
AND SOUTHEAST ASIA
ECONOMIC AID
(JAN1954.OR1957)
TECHNICIANS PRESENT
(APflOX. AS OF 1957)
AFGHANISTAN
$145,100,000
380
BURMA
25,000,000*
35
CAMBODIA
22,400,000***
30
CEYLON
15,750,000***
1-2
INDIA
269,800,000
345
INDONESIA
100,000,000**
65
NEPAL
12,600,000 ***
-
* Burma has accepted credit only on the assumption that it
will be repaid in Burmese produce.
** Loan not ratified by the Indonesian government.
* * * Gifts from Communist China.
NOTE: Laos, Pakistan, and Thailand have been offered aid, but
have not accepted. Burma and Cambodia were offered larger grants
than they accepted. Nepal has announced after using a portion of the
Chinese grant, that it will use no more.
14 NOVEMBER 1957
The bloc probably will be
able to continue such deals as
its industrial capacity increases
and as long as its need for raw
materials remains high. More-
over, a comparison of the eco-
nomic and technical assistance
programs of the free world and
the Sino-Soviet bloc does not
necessarily provide an accurate
gauge of the political impact
they have on South and South-
east Asia.
The Soviet Union has long
been credited for its support
of Asian nationalism and oppo-
sition to imperialism, whereas
western nations, no matter how
significant their long-range
programs may be, bear the burden
ilar pressures to improve the
economic conditions of their
countries at a rate sufficient
to meet the expectation of their
peoples, and their tenure of
office is dependent on their
effectiveness. Whether closely
aligned with the West or neu-
tralist in character, in most
cases they speak for the domi-
nant political factions on the
national scenes that are least
influenced by the Sino-Soviet
bloc. If they fail to satisfy
their peoples, the opposition
parties which are most likely
to take over from them are of
the far left--left-wing social-
ist or outright Communist in
orientation. Con-
curred in by ORR)
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GOMULKA'S PARTY REFORMS
Poland's Wladyslaw Gomulka
--faced with a fragmented and
discredited party--has launched
a campaign to change the party's
composition. At the tenth cen-
tral committee plenum of the
Polish United Workers' party
in late October, he came to
grips with the fact that the
party had become a powerless
instrument in the countryside
and commands little support or
respect among industrial work-
ers.
Gomulka wants to cut the
party down to approximately half
its size to facilitate the de-
velopment of a united and ef-
fective group. A complicating
factor for Gomulka is that the
remaining skeleton of the once-
powerful party is composed of
full-time functionaries, many
of whom are Stalinist elements
COMPOSITION OF POLISH UNM WORKERS' P
(FIGURES IN PERCENTAGES)
Gomulka has been hamstrung
chiefly by the apathy and lack
of discipline of party workers
on the local level. The party's
prohibition of "administrative
methods"--i.e,, interference by
direct orders in the administra-
tion of government--has im-
mobilized local leaders. Many
of them have not adjusted to
the new methods of persuasion
without force. Since there has
been no threat of punishment
for a do-nothing attitude, many
local functionaries have failed
to implement new party policies,
and others have not accommodated
themselves to the abandonment
of policies they had come to
identify with orthodox Communism.
As a result, the contempt of
the populace for party official-
dom has been compounded.
The party thus faces dif-
1951
1953
1953
1954
1955
1956
1957
JAN-AUG
WORKERS
INCL. AGRICULTURAL)
49.3
48.2
47.7
48.1
45.1
44.6
37.0
PEASANTS
13.3
13.4
13.0
13.8
13.0
12.8
7.6
INTELLECTUALS
35.2
36.2
37.0
36.2
39.2
39.5
50.0
(INTO OFFICIALS
(19.5)
(19.3)
(19.1)
(17.7)
(15.6)
(16.0)
(23.0)
OTHERS
2.2
2.2
2.2
2.0
2.6
3.1
5.4
and bureaucrats who are thor-
oughly compromised in the eyes
of the Polish populace. Go-
mulka believes the success of
his policies depends on the de-
velopment of what he calls
"humanism" in party practices
so that the party can appeal
for the confidence and loyal-
ties of the majority of Poles.
Weak Party Control
In his efforts to assert
his power over the party and
get his programs implemented,
ficult problems in
its control over key
social and political
elements in the coun-
try. Although "en-
lightened" methods of
controlling the Sejm
have been adopted,
tight party control
over Sejm activities
continues, a situa-
tion causing growing
consternation among
non-Communist deputies.
The party has relin-
quished its detailed
control over politi-
cal parties and mass
organizations. Now it is only
necessary for these elements
to "cooperate" with the party,
with the result that an opposi-
tion espousing Western ideas has
infiltrated the most important
of these groups and is fighting
for control of them.
Gomulka's attempts to handle
youth problems have been almost
totally unsuccessful. The Com-
munist youth organization is
disunited and unpopular and prob-
ably numbers no more than 65,-
000 members, in contrast to its
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INTERNATIONAL RELATIONS
(Intar atlonal workers' movement,
satellites
USSR, ProPag da and
WORKERS' COUNCILS
AND MANAGEMENT OF
NATIONAL ECONOMY
FOREIGN AFFAIRS
(Relatto00 wlth Inro,gn
governments)
PEOPLE'S COUNCILS
Relallons be[w een people's
nc ils ana workers'
councils, agrlculN ral
predecessor, which in 1955 had
a membership of 2,000,000. A
separate youth organization af-
filiated with the Peasant party
has outdistanced the Communist
youth group and now numbers
over 100,000,
Changes in Composition
In an effort to gain unity
and a core of reliable party
workers, Gomulka has estab-
lished procedures for eliminat-
ing non-Communists, opportun-
ists, and the morally corrupt
within the party, as well as
his opposition factions--the
liberal revisionists and the
dogmatic Stalinists. The ex-
treme liberals constitute only
a small group which is demand-
ing greater democratization
and criticizing relations with
the USSR. Although they do
not hold key party rank or posi-
tion, they are highly vocal and
their ideas have infected many
party members. The Stalinists,
who are in opposition to Go-
mulka's policies, will be dif-
ficult to remove because a
large majority of the bureau-
crats on whom Gomulka depends
SOCIAL
(Health, tabor, social weIare, aM
soc tat problems)
for organizational work are
Stalinists.
Gomulka has moved against
the liberals with his recent
crackdown on the student weekly
Po Prostu and the expulsion of
Ifs--st-a-ff members from the
party. He has also sidetracked
Poland's most renowned liberal
revisionist, Leszek Kolakowski,
by arranging for him to study
in Western Europe for six months.
In moves against the Stalinists,
Gomulka has dispatched two
prominent party Stalinists to
diplomatic posts in Prague, re-
cently removed three provincial
secretaries in Koszalin, and
cleaned Stalinist opposition out
of the principal Warsaw party
organization.
Gomulka has also declared
war on apathetic elements of
the party membership. A recent
article in Gomulka's weekly
Polityka stated: "Two thirds
of the party members are pas-
sive and are in the party only
as a result of the incorrect
enlistment methods of previous
times; many of them now part
gladly with their membership
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cards.... The activists with
a few exceptions... have to be
taken by the hand. In situa-
tions of crisis they are ut-
terly helpless."
According to an official
announcement, the total party
membership is down to 1,283,-
761 from a high of 1,400,000
in 1954. A reduction of about
100,000 has occurred this year
through resignations and dis-
missals.
goal is
a membership of 800,000. The
party has failed to attract
and keep the majority of work-
ing-class members.
Gomulka's attack on cor-
rupt elements is aimed in part
at achievement of popular re-
spect for his discredited party.
Fully cognizant of the harm
done by the past excesses of.
the party, Gomulka wants to in-
still into party practices a
new code of ethics which he
calls "humanism" and thereby
gain the confidence of the Pol-
ish populace. Furthermore, in
a move apparently designed to
highlight the changes in the
party, it has been proposed
that the organization be re-
named the Polish Communist party.
To carry out the necessary
purges, Gomulka has decided to
depend on the party control com-
mission, the composition of
which has not been altered since
he took over party leadership.
Changes in Organization
Gomulka's plan for organi-
zational reform is designed to
achieve a reinvigorated role
for the party in Polish politi-
cal life. Changes have been
made in the organization of the
central committee staff in the
past year which tend to eliminate
the party's detailed administra-
tive control of all phases of
government operations and sub-
stitute in its place a function
of policy formulation and con-
trol over all major political
decisions.
In place of the old de-
partments using large numbers
of full-time party functionaries,
commissions are being established
composed largely of experts
drawn from government ministries
and agencies, to meet at speci-
fied periods to formulate poli-
cies. Only small secretariats
of the commissions now appear
to be in the central committee's
full-time employ. Implementation
of policies formulated by the
party now appears to depend
largely on commission members
working in their government
capacities.
In the process of this re-
organization, the party has
dropped 8,669, or approximately
half, Of its full-time party
functionaries this year. Of
this number 1,700 were from
central and provincial commit-
tees, and 6,950 were from dis-
trict, urban, and area commit-
tees. The trade union paper
Glos Pracy has complained that
further cuts must be delayed
until provision for other em-
ployment can be made, and /i 25X1
a
total reduction of 70 percent
is envisaged.
Prospects
Effective control from the
center will probably not have
been re-established by April
1958, the new date set for the
third party congress, at which
Gomulka will endeavor to complete
his reforms and elect a new cen-
tral committee. Nevertheless,
it is very unlikely that his
leadership of the party would
be jeopardized at that time.
Even with the withdrawal
or expulsion of those elements
apathetic and unsympathetic to
the party, a long time will be
required to restore to the party
membership a sense of real value
which in turn would engender
greater party discipline.
The efforts--not.new--to
eliminate corruption probably
will not succeed in doing more
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than eliminate the most notori-
ous offenders. Some 80 percent
of party punishments in 1954
were based on charges of cor-
ruption, a tendency defined by
a prominent defector as inher-
ent in all responsible party
jobs in Poland today. Rather
than eliminate all of extremist
opposition, Gomulka will prob-
ably attempt to intimidate ele-
ments over which he wishes to
gain control by making examples
of some of the more infamous
Stalinists and extreme liberals.
Neither group, however, could
be entirely eliminated without
grave consequences for the par-
ty.
FRANCE'S ADMINISTRATIVE OFFICIALS
France's ability to sur-
vive cabinet crises like the
recent 36-day interregnum be-
tween the Bourges-Maunoury and
Gaillard governments depends
largely on a well-trained and
cohesive bureaucracy. Conti-
nuity is maintained despite
changes in government by per-
manent administrative officials
who often exercise considerable
influence on policy.
Various factors are respon-
sible for the unusual power of
the top civil servant in France.
One is a long tradition of high-
ly centralized administration
which goes back to Napoleon and
even the absolute monarchy of
the 17th century. In its mod-
ern form this tradition is famil-
iarly illustrated in the pro-
vincial chief executive appoint-
ed by Paris, the prefect. His
powers in his own domain are
broad enough, however, to ob-
struct the policies of the gov-
ernment of the moment in Paris.
On the national level, a
similar situation obtains. The
power of the National Assembly
to determine new policy is un-
questioned, but the need for
continuity of administration
results in many opportunities
for permanent officials to in-
fluence government policy, par-
ticularly in the case of new
and short-lived cabinets. The
French system is such as to en-
sure that these top civil serv-
ants:.. are exceptionally well
trained.
The Bureaucratic Elite
Within the bureaucracy,
an. elite of several hundred
among the million-odd civil
servants holds the top advisory
posts in the key Ministries
of National Defense, Interior,
Finance, and Foreign Affairs
and fills the personal staffs
of the President of the re-
public and the premier. Made
up of individuals who have
weathered a rigorous system
of competitive education, this
elite maintains a considerable
degree of cohesion which ex-
tends across political, min-
isterial, and industrial lines.
A "super-elite" is composed
of top graduates who have suc-
cessfully passed a stiff exam-
ination to become inspectors
of finance. This group--which
includes Premier Felix Gaillard--
is particularly influential
in major public and private
financial circles.
The state professional
schools have an annual enroll-
ment of approximately 15,000.
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14 November 1957
Most of France's top public
administrators are likely, how-
ever, to be alumni of a select
group of graduate schools--in-
cliding the Polytechnic School,
$2 percent of whose graduates
are in the government service,
the "Graduate Normal School, and
the National School of Adminis-
tration. The last is an in-
stitution set up in 1954 to
train specifically for public
service a rigorously selected
group of students.
The influence of the top
administrative elite is par-
ticularly important in such key
assignments as the personal
staffs of the President of the
republic and the premier. The
two top men serving President
Coty--Charles Merveilleux du
Vignaux and Henri Friol--have
had distinguished careers, in-
cluding service in the cabinets
of other French political lead-
ers. His military adviser,
General Ganeval, has figured
prominently in reports of Coty's
political contacts with General
de Gaulle.
The influence of the grad-
uates of the specialized schools
in public administration is
heightened by the large number
of their fellows who have built
up successful political careers.
Mendes-France's performance in
the field of finance led direct-
ly to his political prominence,
and Gaillard's standing as an
inspector of finance was an
obvious asset 4n his investi-
ture on 5 Noveber.
A number of former premiers
and present first-rank polit-
ical leaders such as Edgar Faure,
Robert Schuman, Guy Mollet, and
Bourges-Maunoury are graduates
of the top professional schools,
as are Coty and Finance Minister
Pflimlin. Strategic diplomatic
posts are usually filled by
alumni of these schools. Herve
Alphand, ambassador to Washing-
ton, Jean Chauvel, ambassador to
London, and Maurice Couve de
Murville, ambassador to Bonn,
are examples.
The frequency of political
crises because of financial and
economic issues has given spe-
cialists in these fields quasi-
political influence. Directors
of the budget, taxes, foreign
exchange, and the treasury are
inspectors of finance, as is
the governor of the Bank of
France, Wilfrid Baumgartner.
Since most recent governments
have felt the pinch of finan-
cial necessity, Baumgartner has
had ,a major voice in determining
whether or not a bank advance
would be granted. Public loans
require the approval of Treasury
Director Pierre-Paul Schweitzer,
and Budget Director Gilbert De-
vaux occupies a strategic posi-
tion in governments chronically
in financial difficulties.
The national importance
of the bureaucratic elite is
further enhanced by the number
of key industrial and business
firms controlled by members of
the same educational fraternity.
Aircraft manufacturer Marcel
Dassault, whose company makes
the Mystere, Jean Marie, presi-
dent of the Companie Generale
Transatlantique, and automobile
manufacturers Jean-Pierre
Peugeot and Pierre Dreyfus of
the Renault Company all bear the
"elite" stamp.
Control Over Government Policy
With permanent officials
of this stature, a minister's
powers within his own ministry
are limited. Should he move
too far or too fast, the career
staff can usually slow him down
by strict adherence to regula-
tions which immobilize him in
red tape. This check on'policy
is strengthened by the tradi-
tional political complexion
taken on by individual minis-
tries despite the merit system.
The political right, for example,
is strong in the armed services
and the Paris Prefecture of
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14 November '1957
Police, while the center strong-
ly influences the Interior and
Foreign Affairs Ministries.
Mendes-France, when pre-
mier, soon ran afoul of a num-
ber of these limitations on
his power. Initially scornful
of the expertise of the Foreign
Ministry's career staff, which
he regarded as too much under
the influence of the Popular
Republicans who had controlled
the ministry for a decade, he
was forced to follow their guid-
ance before his tenure vnded.
Meanwhile, his reshuffling of
its personnel to,promote those
who favoredhis policies aroused
a 'violent campaign against him
which shook the confidence of
his supporters and France's
allies.
In the early days of the
Mollet government, career of-
ficials in the Quai d'Orsay
were successful in resisting
French disarmament delegate
Jules Moch's tendency to exceed
his instructions in East-West
disarmament talks and in toning
down the repercussions in French
policy of ideas for increasing
'East-West. eontae'ts launc.hed `by
:Foreign Minster Pineau without
consultation with the ministry.
French government admin-
istration, despite its capable
elite, suffers, however, from
bureaucratic sluggishness in
responding to-new requirements.
A wave of political strikes led
the Ministry of the Interior
to create the rank of "super-
prefect" to ensure unity of
command in the internal security
forces under civil authority.
Reforms of long-range importance
are now being undertaken by the
Foreign Ministry, which is still
organized along outdated lines,
with more consulates in Italy
than the United States. It is
overloaded with top grades,
whose incumbents'have the
privilege of refusing to serve
in undesirable. posts, and it
-deceives only a trickle of new
blood from the National 'School
of Administration. Secretary
General Louis Joxe has begun
to make changes, -however, and
an extensive reorganization
is inprospect.
Agriculture and Industry
Economic conditions were
favorable in Taiwan throughout
the past year, and industry an
the island continued its steady
expansion. The agricultural
crop year 1956-57 was a record,
one, and the high price of
sugar on the world market
brought the Nationalist govern-
ment much-needed foreign ex-,
change. Two new fertilizer
plants began production, and
expansion of the transportation,
chemical, fertilizer, and min-
ing industries continued at a
rate of from 5 to 10. percent
per year.
The gross national product
continued to increase at a more
rapid rate than the population,
'now around 10,000,000. The
limited amount of available
arable land will, however, force
Taiwan--already a net importer
of grain--to develop in the
relatively near future light in-
dustries based on export markets
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14.November 1957
in order to earn for-
eign exchange now gained by
agricultural exports.
A new Four-Year Plan, ap-
proved by the Executive Yuan on
9 May, envisions a total capi-
tal investment of approximately
$800,000,000 and an increase in
national income of 25 percent
by 1960. American officials
believe the plan is based on un-
realistic assumptions, however,
and feel it will be difficult
to fulfill. The government is
apparently not prepared to hold
down rising military expendi-
tures and to economize enough
to fully implement the plan.
TAIWAN
P CAPITA wad l
(DOLLARS)
WHOLESALE PRICE INDEX
(1951=loo)
1951 1952
14 NOVEMBER 1957
Inflation
1956 1957
M122
Inflation has continued
despite economic growth, and
the cost-of-living index--based
on 1952 levels--rose nearly 10
percent between October 1956
and October 1957. This increase,
which has been slow and steady,
has generated considerable pres-
sure from underpaid military
and government officials for
wage raises. Some relief for
these individuals will probably
be forthcoming, but this in it-
'~wierc
self will create additional in-
flationary pressure.
This creeping inflation
stems largely from the govern-
ment's failure to budget re-
sources realistically and its
attempt to expand simultaneously
its military forces, private
consumption, and investment.
The budgetary imbalance for fis-
cal 1957 will be about $25,000,-
000 if planned expenditures are
not reduced. Defense expendi-
tures will total more that.50
percent of the national budget.
Foreign Trade and Investment
In 1956'the Chinese Nation-
alist government, with American
support, began a much-publicized
campaign to increase foreign
trade with Southeast Asia and
to promote foreign investments
on Taiwan. It was hoped that
Nationalist prestige could be
boosted and export markets ex-
panded to help reduce the is-
land's deficit in international
transactions, which since 1951
has remained substantially un-
changed at approximately $75,-
000,000 per year. Committees
were established within the gov-
ernment and some tentative steps
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14 November 1957
were taken to simplify entry
and exit regulations, but the
principal motive of the Nation-
alists was propagandistic rather
than economic.
Officials have admitted
that the measure of Nationalist
interest in specific trade proj-
ects is usually the extent to
which the United States will
underwrite them. The National-
ists have indicated reluctance
to allocate their own resources
to the Southeast Asian program
and permit a diversion of exist-
ing American aid. They do not
accept the American view that
each project must be economical-
ly feasible.
They also have been reluc-
tant to consider seriously sug-
gestions to abolish Taiwan's
complicated system of multiple
exchange rates, which must be
altered before extensive trade
and foreign investment projects
can begin. They argue that the
differential in the rates fur-
nishes an important segment of
government revenue, and that
inflationary pressure would be
heightened if the artificially
high rates were reduced to lev-
els which would make buying and
selling on international mar-
kets possible.
A basic hostility to for-
eign investment exists among
some members of the government,
particularly in the legislature.
Repeated demands have been made
to investigate the circumstances
of a contract leasing the facil-
ities of the government-owned
Taiwan Shipbuilding Company to
an American syndicate to build
two 36,000-ton supertankers.
Although the contract appears
to be sound from a financial
viewpoint and successful com-
pletion of the project would
greatly aid the economy and pres-
tige of Nationalist China, so
much xenophobic opposition has
appeared that it is problemati-
cal whether the venture can be
carried out. Preparation for
construction of the tankers
has already fallen behind sched-
ule. Foreign Minister George
Yeh has stated that the Chinese
fear exploitation by "rich for-
eigners" and are reluctant to
offer "even partial ownership
of companies to foreign invest-
ment."
Future Prospects
Little progress can thus
be made in expanding foreign
trade and increasing foreign
investments in.the foreseeable
future. A basic change in at-
titude on the part of the gov-
ernment and Chiang Kai-shek is
necessary before progress can
be made in reducing Taiwan's
balance-of-payments deficit.
Conversely, the island will con-
tinue to require American aid
to make good the imbalance.
Given present levels of
American aid, the prospects are
good for the next few years for
continued progress and relative
stability in the Taiwan economy.
It should be possible to hold
inflation within bounds and
maintain the armed forces at
their present strengths. In
the future, however, as the
population increases, the de-
velopment of additional export
industries will be necessary,
requiring a revision of the
present attitudes of government
officials. Development of an
economy capable of functioning
without American aid would be
virtually impossible unless 25X1
the size of the armed forces
were reduced.
SECRET
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 25X1 Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500050001-2
Approved For Release 2005/02/17 : CIA-RDP79-00927AO01500050001-2