CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001600010001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 50
• Document Creation Date: December 16, 2016
• Document Release Date: February 8, 2005
• Sequence Number: 1
• Publication Date: December 26, 1957
• Content Type: SUMMARY

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CONFIDENTIyj
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. /-/,
OCI NO_ 6419/57
26 December 1957
DOCUMENT NO. -L--
NO CHANGE IN CLASS. ^
0 DECLASSIFIED
CLASS. CHANGED TO: T SO
~/'
NEXT REVIEW DATE
F. 'Wr
AUT ~ fl 7
DATE: REVIEWER:
CENTRAL INTELLIGENCE AGENCY
I I I OFFICE OF CURRENT INTELLIGENCE
CONFIDENTIAL
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25X1
25X1
State Department review completed
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THIS MATERIAL CONTAINS INFORMATION A'FECT-
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
26 December 195.7
T H E W E E K I N B R I E F
PART I
OF. IMMEDIATE INTEREST
INDONESIA . . . . . . . . . . . . . . . . . . . . . . . Page 1
President Sukarno's forthcoming trip abroad will
include visits to India, Pakistan, Ceylon, E t
25X1 and Japan,
Sukarno hopes to use the trip both to restore his health
and to stimulate greater support from Afro-Asian coun-
tries for his campaign to acquire Netherlands New Guin-
ea. Despite continuing evidence that army and moderate
elements in Indonesia are trying to stabilize the sitar
ation created by the anti-Dutch drive, the. Communists
are continuing to consolidate their gains. Food short-
ages are increasing and negotiations with the Dutch ap
25X1 pear unlikely,
25X1
RECENT KREMLIN-DIPLOMATIC MOVES . . . . .. ... . Page 2
The USSR has rejected by implication the NATO con-
ference proposal for a foreign ministers' meeting on
disarmament. Foreign Minister Gromyko countered with
a proposal for a special session of the UN General As-
sembly or an international disarmament conference and
joined Khrushchev in calling for a "summit conference
of representatives of capitalist and socialist coun-
tries." While the Soviet leaders were careful to leave
the door open should they later decide that a foreign
ministers' meeting could be exploited as a forerunner
of a summit conference, they appear confident that
constant repetition of their bids for bilateral Soviet-
American talks and for an East-West heads-of-government
conference will generate increasing public pressure on
Western governments to accept Soviet terms for negotia-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
NOTES AND COMMENTS
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in Pravda contained warnings against loose talk and care-
less contact with foreigners, and a veiled threat of in-
SOVIET ECONOMIC PLAN AND BUDGET FOR 1958 . . . . . . . . . Page 1
The USSR's economic plan and state budget for 1958
indicate the continued preoccupation of Soviet leaders
with those problems which last year forced a reduction
in the earlier planned rates of growth. Measures will
again be taken to increase fuel, energy, and raw materi-
,als output, agricultural production, housing construc-
tion, and labor productivity in order to lay the round-
work for future economic growth.
KOZLOV APPOINTED RSFSR PREMIER . . . . . . . . .Page 3
The appointment of Frol R. Kozlov, until now the
party boss of Leningrad, as chairman of the Council of
Ministers of the Russian Republic brings another Khru
shchev suppcxrter from the provinces to Moscow, in addition
to the three appointments to the party secretariat an-
nounced on 18 December.
SEROV DEFINES TASKS OF SOVIET SECRET POLICE . . . . . . . Page 4
The "entire work" of the Soviet secret police is
directed against the subversive activities of foreign
intelligence services and "other enemies of socialism,"
according to state security chief Serov. His article
vestigation ,of offenders .:by the secret police.
HUNGARY MAY BE SETTING STAGE FOR TRIAL OF IMRE NAGY
. . . Page 5
The Hungarian regime seems to be building up to an
early trial of former Premier Imre Nagy and other revo-
lutionary leaders. Such a trial would be intended to re-
mind Hungarians that they have no alternative to contin-
ued Communist rule of their country.
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PART ..II. .(continued')
TITO MAY DELEGATE SOME OF HIS RESPONSIBILITIES . . . . . . Page 6
Yugoslav President Tito during the coming year may
transfer.some of his functions to his two vice presi-
dents, Kardelj and Rankovic. Tito would probably be mo-
tivated by a desire to relinquish some of the more oner-
ous responsibilities.of.bis office and to provide for
an orderly transfer of power during his lifetime. A re-
duction in Tito's official activity would not diminish
his personal authority or prestige.
25X1
THE ECONOMIC OUTLOOK IN THE EAST EUROPEAN SATELLITES . . . Page 8
At the end of the third quarter of 1957, most of.
the East European satellites had attained levels of in-
dustrial production generally high enough to enable
them to fulfill their 1957 goals, which called for in-
creases in output ranging from 6 percent in East Germany
to 26 percent in Albania. Consumer goods output and
housing still lag far behind.
MIDDLE EAST DEVELOPMENTS . .
Page 9
Syrian radical nationalist spokesmen are reiterating
their hope that the West will support their efforts to
keep the Communists from capturing the leadership of Arab
nationalist movements. Egyptian officials have also em-
phasized a desire for better working relations with the
West, although Nasir has made public new charges of im-
perialist conspiracies against him.. Israel's cabinet dif-
ficulties continue as a result of Prime Minister Ben-Guri-
on's determination to punish opposition elements who
breached cabinet "discipline."
THE AFRO-ASIAN SOLIDARITY CONFERENCE . .
. . . . . Page .10
Because of the Communist orientation of the Afro-
Asian Solidarity Conference meeting in Cairo from 26
December to 1 January, no non-Communist Asian government
has officially endorsed it. The Communists have, however,
already gained some degree of success in developing a
quasi-official appearance for the conference by prevail-
ing on parliament members from many Asian countries to
serve as delegates.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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PART II (continued)
FRANCE TAKING CONCILIATORY LINE ON NORTH AFRICA ... . . . Page 11
The Gaillard government's increasingly flexible ap-
proach to North African issues is seen in its willingness
to use Moroccan mediation for reaching a cease-fire in
Algeria and in its new proposals for a Tunisian settle-
ment. Arab suspicions have not yet been overcome and
influential French rightists remain adamant against con
cessions, but there are signs that French opinion as a
whole is becoming more conciliatory on the Algerian ques-
tion.
EUROPEAN REACTIONS TO NATO CONFERENCE .'. . . .?. . . . . Page 12
Western European opinion evidently sees the pros-
pects of new high-level East-West talks as-the most.
significant outcome.of the meeting of the NATO heads
of government. These expectations were not diminished
by the apparent Soviet rejection of the communiqu4's.
proposal for a foreign ministers' conference. At the
same time., misgivings over the establishment of missile
bases persist..
BONN READY FOR TRADE AND REPATRIATION AGREEMENT WITH
MOSCOW . . . . . . . . . . . . . . . . . . . . . . . . . Page 13
West Germany expects to conclude an agreement with
the USSR early in 1958 which will meet some of its orig-
inal demands for repatriation of Germans in return for
granting Moscow a broad consular agreement and a three-
year trade pact with quotas considerably above present
trade levels. In addition to these concessions to Mos-
cow, Bonn is separately considering a liberalized cul-
25X1 tural exchange program.
ITALIAN CHRISTIAN DEMOCRATS PREPARE FOR ELECTIONS . . Page 14
The Christian Democratic party is starting to or-
ganize for the spring national elections, aware that
as the party controlling the Italian government for the
past ten years, it will be the major campaign target of
the other parties. Secretary General Fanfani reportedly
plans to use the elections as a means of building a
homogeneous party organization, but he will be handi-
capped by the necessity of not antagonizing potential
coalition partners during the campaign. 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PART II (continued)
POLITICAL CRISIS THREATENS IN SOMALIA . . . . . . . . . . Page 15
A ministerial and party crisis threatens in the
Italian-administered UN trust territory of Somalia,
as a result of growing tribal factionalism and dis-
cord within the government over ties with Cairo. The
prime minister and the minister of the interior, who
represent different tribal groups, are feuding and
have threatened to resign. Two others of the six minis-
ters have recently tried to resign.
ARGENTINE PRE-ELECTION DEVELOPMENTS . . . . . . . . . . Page 16
The major Argentine political parties have now
selected presidential candidates for the general elec-
tions scheduled for 23 February. Important leaders of
the still-outlawed Peronista party are to meet with
Peron in Caracas on 28 December to discuss election
strategy, although Peron no longer controls all Peron-
ista groups No coalitions have been formed among the
smaller parties
25X1
PEIPING'S OFFER TO SETTLE OVERSEAS CHINESE CITIZENSHIP
ISSUE . . - . . . . . . . . . . . . . . . . . . . . . . Page 17
Peiping's efforts to win additional adherents
among Overseas Chinese may gain new momentum from the
Indonesian parliament's approval on 17 December of a
treaty allowing Overseas Chinese the choice of retain-
ing Chinese citizenship or becoming Indonesian citi-
zens. Willingness of Peiping to abandon the tradi-
tional view that all Overseas Chinese are automatically
citizens of China is intended to contrast with Chinese
Nationalist equivocation on the citizenship issue and
to make a favorable impression on Southeast Asian gov-
25X1 ernments.
CHINESE COMMUNISTS TO TAKE HARDER LINE ON MINORITY
PEOPLES . . . . . . . . . . . . . . . . . . . . .
. Page 19
The Chinese Communists' attack on "parochial nation-
alism" among ethnic minorities reflects a failure to win
over these people by conciliation. The drive for "social-
ist education" in minority areas, launched in late Novem-
ber, is an indication that the Chinese Communists are
adopting a harsher line toward the 35,000,000 minority
peoples in China. At the provincial party congress in
Yunnan which closed on 10 December, deputies were told
that nationalism among minorities must be vigorously op-
25X1 posed.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PART II (continued)
BURMESE PRESSING PROPAGANDA OFFENSIVE AGAINST INSURGENTS . Page 20
The Burmese government, using recently defected mem-
bers of the insurgent Burma Communist party, is carrying
out a propaganda offensive which may weaken insurgent
morale: and undercut the "peace through negotiations" cam-
paign of the party leadership and associated overt front
groups. The government is also embarked on a widely ad-
vertised scheme to "rehabilitate" surrendered insurgents
through work brigades and in some cases individual finan-
cial assistance.
SINGAPORE CITY COUNCIL ELECTIONS . . . . . . . . . . . Page 21
The results of Singapore's city council elections
on 21 December, in which leftists made a strong showing,
were a severe blow to the strongly anti-Communist govern-
ment of Chief Minister Lim Yew Hock and his Labor Front
party. They may also foreshadow a growing leftist threat
to the government's position in the more important legis-
lative assembly elections tentatively scheduled for next
September. The poor showing of Labor Front candidates sug-
gests that even if Lim's efforts to align the colony's
major non-Communist parties eventually succeed, he and his
party may be relegated to relatively minor roles in such a
coalition.
PATTERNS AND PERSPECTIVES
SOVIET DIPLOMACY EXPLOITS TECHNOLOGICAL ACHIEVEMENTS . . . Page 1
The course of Soviet foreign policy since Moscow's
ICBM announcement on 26 August reflects an effort by the
Soviet leaders to convey the impression that their tech-
nological achievements have given them a political and
psychological advantage over the Western powers which can
be translated into important diplomatic gains. The ma-
jor objectives of the current Soviet diplomatic offensive
are to demonstrate that the West's "positions of strength"
policy has been unable to force Communist withdrawals, and
to induce the West to accept postwar Communist gains by
formal recognition of the status quo. Despite their fre-
quent claims of a decisive shift in the "balance of forces"
in favor of the Sino-Soviet bloc, the Soviet leaders proba-
bly do ndtbelieve that their technological successes have
produced any basic changes in::the strategic situation. 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 December 1957
PART III (continued)
FINLAND'S ECONOMIC DIFFICULTIES . . . . . . . . . . . . . Page 7
Finland's conclusion of a trade agreement on 4 Decem-
ber with the Soviet Union underlines its economic depend-
ence on the Sino-Soviet bloc. To preserve its Western
markets, Finland devaluated its currency last September.
The government of Premier von Fieandt which took office
on 29 November faces a formidable task in stabilizing the
25X1 country's economy.
INCREASING FACTIONALISM IN THE SOUTH KOREAN LIBERAL
. . . . Page 9
Factionalism is increasing in the South Korean Lib-
eral party because of the declining health of Party Chair-
man Yi Ki-pung and the maneuverings of other party leaders
who are aware of his disability and oppose his leadership.
Should Yi be forced to retire from active politics, the en-
suing struggle for political advantage within the party
would be difficult for even President Rhee to control. The
party, in the meantime, faces a serious dilemma over how to
conduct its campaign for the 1958 National Assembly elec-
tions, which will probably be held in May.
RAMIFICATIONS OF-THE-1957 MOSCOW YOUTH FESTIVAL -. . . . . Page 12
The impact of last summer's international youth festi-
val in Moscow on foreign delegates and Moscow citizens
points up the problems the Soviet Union faces in attempt-
ing a broad cultural exchange with the non-Communist world.
While the USSR impressed many delegates as a powerful but
peace-loving nation, this was achieved at the price of ex-
posing thousands of Soviet youths and Muscovites to a wide
range of non-Communist views. The overwhelming welcome ac-
corded foreign participants and the zeal of Soviet citizens,
despite strong official disapproval, in seeking contacts with
individual foreigners revealed an intense interest and curi-
osity in all things foreign.
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President Sukarno's forth-
coming trip abroad will include
visits to India, Pakistan, Cey-
lon, Burma, Egypt, and Japan,
25X1 addition to restoring his
"health," Sukarno hopes to pro-
mote more forthright support
for Indonesia's campaign to "re-
gain" Netherlands New Guinea--
West Irian. He apparently has
in mind the stimulation of pub-
lic demonstrations in various
Afro-Asian countries, thinking
that such international pres-
sure will compel the Netherlands
to give up Irian.
Despite continuing evidence
that army and moderate political
elements in Indonesia are trying
to slow the pace of the anti-
Dutch drive and stabilize the
situation, the Communists are
continuing to consolidate their
newly won positions, particular-
ly in the management of seized
Dutch property. The Communists,
however, apparently are being
careful not to overplay their
gains.
Communists are anxious to avoid
any action which might precipi-
tate the fragmentation of Indo-
nesia.
Signs of the developing
economic crisis are increasing-
ly ominous. Food shortages in
particular are being reported
i n more areas, both on Java and
on some of the outer islands.
This situation, resulting pri-
marily from the breakdown of
distribution channels, is being
aggravated by floods in Central
and West Java and by the hoard-
ing of available rice stocks.
The prospects of obtaining re-
lief from nearby areas, more -
over, are not bright, as offi-
cials in Singapore and Malaya
have stated they have no rice
to spare, and both Burma and
Thailand have had relatively
poor harvests.
In regard to possible nego-
tiations with the Dutch, Dutch
Foreign Minister Luns stated
on 23 December that The Hague
is prepared "in principle" to
negotiate mutual problems, but
added that recent events had
reduced the possibilities for
such talks to an "extremely
narrow basis." There is no in-
dication that the Dutch are pre-
pared to negotiate on their
sovereignty over Netherlands
New Guinea--the key issue as
far as the Djakarta government
is concerned. There"is no con-
firmation of Indonesian Foreign
Minister Subandrio's claim of
West German mediation efforts,
and it is presumed Bonn would
be cautious about intervening
in a matter on which the Dutch
are so highly sensitive.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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Khrushchev and Gromyko have
promptly rejected, at least by
implication, the NATO conference
proposal for a foreign ministers'
conference on disarmament. Gro-
myko charged on 21 December that
this proposal was included only
to "mislead the peoples who
really desire an end to the arms
race" and stated that the USSR
cannot accept the West's terms
"as in any way conducive to dis-
armament." He countered with
a, proposal for a special session
of the UN General Assembly or
an international disarmament
conference, and repeated Khru-
shchev's previous bid for a
"summit conference of represent-
atives of capitalist and so-
cialist countries."
A widely publicized TASS
account of Gromyko's speech
which gave the impression of an
outright rejection of a foreign
ministers' conference was prob-
ably intended to generate fur-
ther public pressure on Western
governments to accept Soviet
terms for a summit conference.
The official position as stated
by Gromyko, however, rejected
only the specific Western terms
for a foreign ministers' meeting
and thus left the door open
should the Soviet leaders later
decide that such a meeting could
be exploited as a forerunner of
a summit conference. The dis-
crepancy between the TASS ac-
count and Gromyko's actual state-
ments recalled the tactics used
by the Soviet Foreign Ministry
press officer in trying to cre-
ate the impression that Bul-
ganin's. notes of 5 November 1956
to the prime ministers of Brit-
ain, France, and Israel at the
height of the Suez crisis con-
tained threats of unilateral
Soviet military action.
Both Khrushchev and Gromyko
in their speeches to the Supreme
Soviet repeated proposals for
reducing international tension
which were outlined in Bulganin's
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CURRENT INTELLIGENCE WEEKLY SUMMARY
letters to NATO members prior
to and during the Paris confer-
ence. They repeated Soviet
calls for a summit conference
of Western and Communist govern-
ments, and Khrushchev urged that
such a meeting be preceded by
bilateral negotiations-between
the United States and the So-
viet Union. Krhushchev ruled
out discussion of "questions
on which there are ideological
differences" and demanded, as
a precondition, that the West
"recognize the coexistence" of
capitalism and communism, ac-
cept the status quo, and dis-
avow "cold-war methods."
In its foreign policy reso-
lution, the Supreme Soviet fore-
shadowed Khrushchev's 23 Decem-
ber announcement in Kiev of ad-
ditional cuts in military man-
power by "instructing" the So-
viet government to "consider
the question of a further re-
duction of the armed forces of
the USSR," while at the same
time keeping their "remaining
strength" at a level sufficient
to ensure Soviet defenses pend-
ing an international arms cut.
It called on the United States,
Britain, and France to follow
the Soviet example and under-
take similar unilateral cuts.
By thus supplementing its
proposal for a self-imposed ban
by the nuclear powers on the
use and testing of nuclear weap-
ons effective 1 January, Moscow
hopes to present a sharp con-
trast between the USSR's "peace-
ful posture" and Western moves
to strengthen NATO militarily,
and at the same time to publi-
cize the impression that even
with reduced forces,technologi-
cal advances will continue to
give the Soviet Union a mili-
tary advantage over the West.
In a further move to at-
tract world-wide attention to
the USSR's program for reducing
tension and strengthening in-
ternational confidence, the So-
viet Foreign Ministry on 25 De-
cember delivered notes to all
foreign missions in Moscow
transmitting the text of the
Supreme Soviet resolution.
Moscow has also attempted
to sound out American reaction
to its bids for bilateral Soviet-
United States talks. Yuri Zhu-
kov, head of the Committee for
Cultural Relations with For-
eigners, told Ambassador Thomp-
son on 22 December that in the
final analysis, East-West prob-
lems could only be resolved by
Soviet-American discussions.
He claimed that America's al-
lies had prevented such talks
in the past but that the Brit-
ish seem to have changed their
position and now would favor
USSR-US talks.
Zhukov's probing suggests
that the Soviet leaders may be
planning to follow the cautious
and equivocal bid for bilateral
heads-of-government talks in
Bulganin's letter of 10 December
to President Eisenhower with a
formal and definite call for
such a meeting. The Russians
probably expect to benefit
from either acceptance or
rejection by the United States.
Acceptance, in their view,
would undercut American ef-
forts to strengthen NATO,
while rejection would facili-
tate Soviet efforts to dem-
onstrate that only the United
States stands in the way
of a substantial improvement
in East-West relations.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 December 1957
PART II
NOTES AND COMMENTS
SOVIET ECONOMIC PLAN AND BUDGET FOR 1958
The USSR's economic plan
and state budget for 1958, pre-
sented to the Supreme Soviet on
19 December, indicate the con-
tinued preoccupation of Soviet
leaders with those problems
which last year forced a re-
duction in the earlier planned
rates of growth. Measures are
being 'taken. to increase
fuel,, , energy, and raw ma-
tertals output,. agricultural
production, housing. construc-
tion, and labor productiv= ..
ity in ., oi?der. ' to lay the
groundwork for further economic
growth. Priority in the de-
velopment of heavy industry is
reaffirmed as the basis both
for "catching up with the US"
in per capita industrial output
the security
in
g
ur
ens
"
and for
of the state."
Continuity in planning
being stressed more than in
past. According to
planning chief Iosef
Kuzmin, the "main
trends" of the 1958
economic plan were
"determined by the
goals of the seven-
year (1959-1965) plan,
a draft of which is
already being pre-
pared." Kuzmin also
stated that Gosplan
drew up the broad
outlines of the 1959
plan--simultaneously
with its work on the
1958 plan--in order
to meet criticisms
military expenditures at the
level prevailing since 1956.
As a result of regionali-
zation of industrial administra-
tion, an increased share of
centrally budgeted funds passes
through local and republic budg-
ets--about 50 percent of total
funds for 1958 compared to 24
percent planned for 1956 and
32 percent planned for 1957.
The explicit military al-
location was set at the equiva-
lent of $24.1 billion (96.3
billion rubles), virtually the
same level as reported for
1956 and planned for 1957. It
should be noted, however, that
appreciable outlays for military
programs are not covered by the
explicit defense allocation.
is
The allocation of
$4.55
the
billion (18.2 billion
rubles)
958 SO Y ?
q, Pa. AAR-
SCE IAA CIJJ. lii%i%i~%------ /
EXPLICIT
N15TR;4lON i / ! L d g
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T
that planning was disconnected
The accompanying budget
submitted by Finance Minister
Arseni Zverev indicated con-
tinued emphasis on the develop-
ment of industry, rapid in-
creases in allocations for sci-
entific research, and announced
to finance Soviet research in-
stitutions--an 11 percent in-
crease over 1957 and a one-
third increase over the 1956
planned allocation--reflects
the high priority given to
scientific development. This
allocation is for funds to sci-
entific institutions and does
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PART II NOTES AND COMMENTS
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USSR: SELECTED INDUSTRIAL OUTPUT' TARGETS
PRODUCT
COAL
PETRO
ELECTRIC" SOWER
PIG IR4 .. ...
STEEr.
not represent the total research
and development effort of the
Soviet Union.
Growth of industrial out-
put for 1958 which is planned
to rise 7.6 percent--8.3 percent
for producer goods and 6.1 per-
cent for consumer goods--seems
pegged deliberately low. This
may be a hedge against possible
transitional disruptions which
might accompany the "shake-
down" period of Khrushchev's
reorganization. Kuzmin, however,,
USSR: INDUSTRIAL LABOR .'PRODUCTION
j i > v ,Y> A PLAN
5f A ...RAG I ,,
Efforts will continue to
be made in 1958 to correct those
growth lags'in the production of
basic industrial raw materials
and fuels which emerged in 1956
to jeopardize the speed of future
Soviet industrial growth. Thus
Kuzmin announced plans to in-
crease production capacities
for iron ore some 35,000,000
tons during 1958-1959, for coal
mining 37,100,000 tons during
1958, and for electric power
5,000,000 kilowatts during 1958.
Kuzmin placed major stress on
PRELIM- ~--PLANNED-'
NARY
attributed the achievement of
a 10-percent rise in industrial
output in 1957, as against the
7.1 percent planned, to the
beneficial effects of the
reorganization.
the need for accel-
erated growth in petro-
chemicals output as
the basis for synthet-
ics. In this connec-
tion, more than 70
percent of the planned
increase in centralized
investments for 1958
is accounted for by
increases in three
branches of industry
--chemicals, gas and
petroleum, and fer-
rous metallurgy.
Output targets
for specific industrial
products indicate 1958 growth
about matching or somewhat
above the annual average growth
rates implied by Khrushchev's
40th anniversary forecasts of
output for 1972. Except for
SECRET
OUTPUT
ANNUAL PERCENTAGE .INCREASES
UNITS
REPORTED
1956
PRELIMINARY'
1957
PLANNED
1958
AVERAGE
1951-1957
PRELIMINARY
1957
PLANNED
1958
AVERAGE
1958.1972
AV. ORIGINAL
SIXTH P1'P
MIL TONS
429.2
462 9
488.9
8.5
7.7
5.8
2.8
8.7
MIL TONS
83.8
98.8
112.6
14.7
18.0
14.0
9,4
13.3
BIL KWH
192.0
209.5
231.0
12.7
9.1
10.3
9.8
13.5
MIL TONS
35.8
37.1
39.1
9.8
3.6
5.4
5.3
9.9
MIL TONS
48.6
51.1
53.6
9.3
5.1
4.9
5..3
8.6
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 December 1957
petroleum, given targets are
below the original rates of
increase specified by the super-
seded Sixth Five-Year Plan.
Increases in output of in-
dustry, according to Kuzmin,
depend largely on labor pro-
ductivity increases.
Kuzmin's speech reflects
the persistent nature of the
Soviet agricultural problem.
The 17-percent increase planned
in gross output of agriculture
for 1958 over 1957 in large
measure involves an attempt to
regain the bumper harvest levels
of 1956. Unlike other portions
of the 1958 plan, this agricul-
tural output goal appears over-
ambitious; its fulfillment will
KOZLOV APPOINTED
The appointment of Frol R.
Kozlov, until now the party
boss of Leningrad, as chairman
of the Council of Ministers of
the Russian Republic (RSFSR)
brings another Khrushchev sup-
porter from the provinces to
Moscow, in addition to the three
appointments to the party sec-
retariat announced on 18 Decem-
ber. The decision to effect the
change was presumably reached
at the central committee plenum
which met on 16 and 17 December.
M. S. Yasnov, the former chair-
man, was appointed to serve as
deputy to Kozlov.
Kozlov, a long-time party
official, was raised to candi-
date membership in the party
presidium in February 1957 and
to full membership at last
June's party plenum. He rose
to prominence through the
Leningrad party apparatus. In
1950 he replaced V. M. Andrianov
as city party chief, and in
July 1952 transferred to the
oblast party organization as
depend largely on exceptionally
favorable weather.
Construction of urban hous-
ing, in accordance with the
August 1957 decree on housing,
is planned to expand by nearly
30 percent in 1958. It will
comprise about one third of
total construction expenditures,
about the share planned for 1957.
Retail trade turnover is planned
to increase by 7.3 percent, to
$165 billion (660 billion ru-
bles) for 1958, an increase con-
siderably below that planned
for 1957. Planned output of
consumer goods by industry
is to rise during 1958
only 6.1 percent.
(Prepared by ORR)
RSFSR PREMIER
Andrianov's second secretary.
In April 1953 he stepped down
temporarily when N. G. Ignatov
assumed the posts of city boss
and second secretary in the
oblast. In November 1953,
after a shake-up in the Lenin-
grad party organization which
was a.pparently.instigated by
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 December 1957
Khrushchev, Kozlov became ob-
last party boss.
While the post of premier
of the RSFSR has not had great
political importance in the past,
the appointment of a man of
Kozlov's stature may reflect
the republic's large and vital
role in overseeing and coordi-
nating the activities of the
68 regional economic councils
(sovnarkhozy) set up within
its territory under the new
industrial reorganization
scheme.
As a result of the latest
shift, the key post of party
first secretary is now vacant
in the Ukrainian and Uzbek
Republics and in the Leningrad
and Gorkiy Oblasts. Appoint-
ments to these important "step-
pingstone" positions will in-
dicate how free a hand Khrush-
chev has in makine such selec-
tions.
SEROV DEFINES TASKS OF SOVIET SECRET POLICE
The "entire work" of the
Soviet secret police (KGB) is
presently directed against the
subversive activities of for-
eign intelligence services and
"other enemies of socialism,"
according to state security
chief Ivan Serov. Writing in
Pravda on the 40th anniversary
off- ie security services, the
chairman of the KGB cautioned
that American and other intel-
ligence agencies are seeking by
every possible means to in-
filtrate spies and diversionists
into the Soviet Union. Calling
on the general populace to co-
operate with the KGB in unmask-
ing such enemies, Serov sternly
warned workers in science and
technology that a wagging tongue
is a boon for the enemy and that
"chatterboxes" would be punished.
Serov's warning was echoed
on 22 December by M. P. Svet-
lichny, chief of the KGB
Directorate for Moscow Oblast,
who cautioned citizens against
"careless" contacts with for-
eigners. Both articles in-
dicated that the secret police
would step up counterintelli-
gence activities in the USSR,
and Serov noted that several
"operational deficiencies" had
recently been eliminated from
security work.
These warnings and the
veiled threat of investigation
of offenders by the secret
police are likely to make con-
tacts between Western and Soviet
citizens increasingly difficult.
Serov's allusion to the ousting
of American diplomats in recent
months and his claim that it
was necessary during World War
II to keep watch on the intelli-
gence activities of "some
countries who were members of
the anti-Hitlerite coalition"
suggest that Western diplomats
and travelers may be subjected
to increased surveillance and
harassment by the KGB.
Apparently in order to
counteract any fears of a re-
newed era of police terror,
Serov made it clear that the
"consequences of the cult of the
individual" and the negative
effects of the reign of Beria
and Abakumov had been eliminated.
He stated that their henchmen
had been removed from the state
security service and that the
secret police were again under
the direct leadership and un-
remitting control of the Com-
munist party, the main source
of its power. There can be no
doubt, he said, that the workers
in state security will continue
to be worthy and reliable
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 December 1957
protectors of the motherland
and loyal sons of the Communist
party.
At a 22 December meeting
devoted to the anniversary of the
security service and attended by
several members of the Soviet
party presidium, Serov reiterated
the devotion of the KGB to the
party and stated that "it is im-
perative for the USSR to have
militant state security organs re-
liable in every respect."
HUNGARY MAY BESETTING STAGE ' FOR' TRIAL OFIMRE NAGY
The Hungarian regime dur-
ing the past week has appeared
to be building up.'-to an early
trial of former Premier Imre
Nagy and other high officials
of the revolutionary government.
Such a trial would be in-
tended to convince Hungarians
that they have no alternative
to continued -Communist rule of
their country. Concurrently
the regime, assured of continu-
ing Soviet economic aid by the
grant of long-term credits for
heavy industry, is taking steps
to crack down on. :economic of-
fenders.
Attacks on Nagy reached a
high point ats:the recent meet-
ing of the National Assembly,
at which high officials assailed
him as a "revisionist traitor."
In a particularly vituperative
address, First Deputy Premier
Ferenc Muennich declared that
Nagy and his associates--"with
foul hyprocrisy"--turned the
Hungarian people against "its
best friend, the Soviet Union."
Supreme Prosecutor Geza
Szenasi was still more categor-
ical in his charges, although
he apparently did not present
25X1
a formal indictment. He ac-
cused "the traitorous group
led by Imre Nagy" of allying it-
self with "Horthyites, clerical
reactionaries, and right-wing
leaders of former coalition
parties" to clear the way for
the counterrevolution and then
--"in open treason"--leading
the revolution to overthrow the
state. Szenasi also slammed
the door on United Nations ef-
forts to secure clemency for
the revolutionary leaders by
declaring that the "liquidation
of the counterrevolution" was
Hungary's internal affair. 25X1
A wave of trials involving
armed participants in the na-
tional uprising was in progress
last week throughout the country.
In one of these trials, the
proSecation charged .that the
participants "followed the or-
ders of Imre Nagy and Maleter"
and opened arms depots to the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 December 1957
revolutionari..es In another
mass trial., Catholic priests
and semina,ria.ns--including the
former secretary of Cardinal
Mindszenty--are accused of
"looting" the files of the
State Bureau of Church Affairs
on the cardinal's orders.
Nagy has been accused of il-
legally releasing the cardinal.
There has also been a. big
propaganda build-up to prove
that Nagy is a Communist here-
tic. In an 18 December ad-
dress at the Academy of Scien-
ces by Dezso Nemes, a candi-
date politburo member, Nagy
was accused among other things
of refusing to humiliate him-
self after he was expelled
from the party in 1955 and,
instead, writing a defense
"which he had his friends in
the West publish."
These developments have
been accompanied by a much
harder line in internal af-
fairs. Muennich charged dur-
ing the recent National
Assembly meeting that "the hos-
tile elements have shifted their
harmful activity to the domain
of our economic life," and called
for activation of organs of the
new state control apparatus,
People's Supervision, throughout
the country. These would report
through a top committee directly
to the Council of Ministers and
deal with economic offenses and
laxness which "could not be pros-
ecuted through the ordinary state
organs."
These developments suggest
that the Kremlin is no longer
concerned about the Yugoslav
reaction to trials of revolu-
tionary leaders. The decision
to try Nagy was reported to have
been taken at the Moscow con-
ference of Communists in Novem-
ber. The Yugoslav delegates in
bilateral talks with the Hun-
ga.ria.ns were stated to have
"fought hard" against the de-
cision but agreed to limit their
public protests in the event
trial to generalities only.
F77 I
TITO MAY DELEGATE SOME OF
Yugoslav President Tito
during the coming year may
transfer some of his functions
to his two top vice presidents,
Ka.rdelj and Rankovic. Such a
step would probably be moti-
vated by a desire on the part
of Tito to relinquish some of
the more onerous responsibili-
ties of his office and to pro-
vide for an orderly transfer of
power during his lifetime. The
regime is so completely centered
on Tito's personal authority
and prestige that a reduction
in his official activity would
not diminish his control. It
seems unlikely, however, that
any change will take place be-
fore next spring.
A recent plethora of of-
ficial comment about Tito's
HIS RESPONSIBILITIES
health could have been intended
to set the stage for an announce-
ment of his less active partici-
pation in public affairs. In a
mid-November conversation with
an American embassy official in
Belgrade, a. member of the Yugo-
slav party central committee im-
plied that changes among the top
Yugoslav leaders were likely to
take place soon. On 30 November,
however, a member of the Yugoslav
Foreign Ministry disclosed to
the embassy that changes had been
"postponed."
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.SECRE T
CURRENT INTELLIGENCE WEEKLY SUMMAhY
In his inter-
view with American Ambassador
Riddleberger on 6 December,
Tito said treatment of his ill-
ness has been effective and that
he is much better. Official
releases have attributed Tito's
prolonged stay at Brioni to his
need to recover from an acute
attack of lumbago.
A logical shift in the
Yugoslav hierarchy and the one
t i ELJ
most persistently rumored would
have Tito retain the presidency
but turn over direction of the
Executive Council of the Federal
People's-Assembly to Vice Presi-
dent Ka.rdelj and formal leader-
ship of the party to Vice Presi-
dent Rankovic.
The consensus is that in
conjunction with the government-
al changes, Vladimir Popovic,
Yugoslav ambassador to China,
will replace Koca, Popovic as
foreign minister and the latter
will become a vice president to
assist Kardelj. Secretary of
Defense Gosnjak would replace
the ailing Vladimir Baka.ric as
president of the Croatian Repub-
lic. Economic 'boss Vukmanovic-
Tempo would take over as secre-
tary of defense and Bakaric
might either replace Vukmanovic
as vice president in'charge of
economic affairs or retire.
The steps required to ef-
fect any top-level personnel
changes in the government are
relatively easy, although the
Federal People's Assembly would
have to amend the constitution,
according to which the president
of the republic is ex-officio
head of the Federal Executive
Council, if Kardelj is to assume
the latter function.
Nationalist rivalries within
the party which may have recently
been aggravated may eventually
become a problem, but the un-
usually strong cohesion among
the top leadership is such that
relinquishment by Tito of secre-
tary generalship of the party--
a post he has held since 1937--
will not lead to disruptive fac-
tionalism, a.t least as long as
Tito lives,
Rumors of changes have be-
gun to diminish during the past
few weeks, and an editorial on
4 December in Yugoslavia's lead-
ing newspaper, Borba, praised
the stability oT--Yu-goslav lea.d-
ership, in effect denying rumors
that changes were imminent. The
most logical time to make any
changes would be following the
election of the new Federal As-
sembly next March and the party
rnnarcncc crrhad>lari for April.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
At the end of the third
quarter of 1957, most of the
East European satellites had
attained levels of industrial
production generally high enough
to enable them to fulfill goals
planned for the entire year.
These goals called for increases
in output ranging from 6 per-
cent in East Germany to 26 per-
cent in Albania. Hungary, an
exception, will probably not
achieve its goal of a 2.4-per-
cent increase. Consumer goods
output and housing still lag
far behind. Appreciable in-
creases in consumer goods pro-
duction, however, have been
SECRET
made in Rumania and Hungary--
brought about in the latter
case primarily by credits from
the USSR.
Dissatisfaction with eco-
nomic conditions could lead to
unrest in Poland and East Ger-
many, but Czechoslovakia, the
most stable economically of
all the satellites, is increas-
ing its industrial production
at a rapid rate and is the only
satellite which has not received
a recent loan from the Soviet
Union. Polish industrial out-
put is above plan but will prob-
ably be only about 8 percent
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CURRENT INTELLIGENCE WEEKLY SUMMARY
above the 1956 level. This is
the lowest rate of growth for
Poland since the war. Poland's
major problem will continue to
be its inability to improve
living standards significantly.
East Germany is becoming
increasingly dependent on Soviet
aid, largely because of its in-
ability to expand the raw mate-
rials and fuel base-and its con-
tracting manpower supply. The
intensification of these econom-
ic problems has caused acrimoni-
ous debate in the East German
politburo over steps to improve
the faltering rate of growth
and eliminate arrears in ex-
ports. The regime is seeking
ways to raise work norms in the
hope that costs will be lowered
and output increased, but is
unlikely to succeed because of
strong worker opposition to norm
changes.
Hungary's struggle to re-
store industrial production to
the pre-revolt level has been
hampered by labor's reluctance
to cooperate with the regime.
Without continuing aid from the
Soviet Union and other satel-
lites in the form of industrial
raw materials, fuels, and for-
eign exchange, Hungary cannot
maintain its workers' living
standard at the present rela-
tively high level.
Poland and Czechoslovakia
may have set new records for
crop production this year, and
East Germany's output was above
that of the good 1955 season.
Harvests in the southern satel-
lites were also well above last
year. These increases resulted
largely from favorable weather,
but expanded acreage, increased
supplies of fertilizer, more
agricultural machinery, and
greater incentives were also
important factors. Food for
local consumption from indige-
nous production for the consump-
tion year 1957-58 will be great-
er than in 1956-57, except per-
haps in East Germany. No short-
ages of food that would change
the normal consumption pattern
are anticipated in the satellites;
however, irritating localized
shortages will time
to time. (pre- 25X1
pared by ORR)
Israel
Israel's cabinet crisis
continues as a result of Prime
Minister Ben-Gurion's determina-
tion to deliver a body blow to
those who oppose his policy of
seeking stronger ties and guar-
antees from Western countries.
The opposition members of the
cabinet who aroused Ben-Gurion's
wrath by revealing prematurely
his plan to send an emissary to
West Germany were instructed by
their party to refuse to resign,
thus compelling the prime minis-
ter to resign himself if he
wishes to revamp the cabinet.
Under these conditions, the
formation of a new coalition
cabinet may be a long-drawn-out
process; however, tough negoti-
ating over cabinet posts has
never yet seriously impeded the
operations of the government or
blocked the conduct of business
by the Israeli parliament.
Egypt
Egyptian President Nasir's
speech in Port Said on the an-
niversary of the evacuation of
British and French forces an-
nounced no new policies. Al-
though Nasir took the occasion
to jibe at "imperialists" whose
plots he said had gone awry,
he named no specific nation in
connection with this charge.
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Egyptian officials and other
Arab intermediaries who are in
touch with the Nasir regime con-
tinue to emphasize their desire
to see an improvement in Arab-
Western relations. One device
for this purpose which has the
support of Egyptian Foreign Min-
ister Fawzi and UN Secretary
General Hammarskjold is an in-
ter-Arab bank which would use
special UN technical assistance
funds in addition to contribu-
tions from the major Arab states,
and, it is hoped, oil-rich Ku-
wait, to finance development
projects throughout the area.
Hammarskjold, who spent
Christmas with the UNEF troops
in Gaza, may have touched on
this subject during his visit
in Cairo. The proponents of
the project see political as
well as economic benefits flow-
ing from it. They argue that
the economic developments it
could support might in time
lead toward a Palestine settle-
ment, since economic stability
would permit political stabil-
ity and this in turn would give
hypersensitive governments the
strength to negotiate serious-
ly with Israel.
Syria
Similar overtures toward
better relations are coming
from Syria, although not as in-
sistently as from Egypt. Baath
leader Akram Hawrani assured an
American official last week
that he hoped to keep the Com-
munists and the USSR from be-
coming the leading "banner wa-
vers of Arab nationalism," and
indicated Western support should
be forthcoming for this purpose.
Hawrani's archrival, Defense
Minister Azm, wound up his
visits to Moscow and Prague,
however, with assertions that
he looked forward to additional
and closer ties between Syria
and Egypt and the Sino-Soviet
bloc.
Yemen's Crown Prince Badr
also was feted by the Soviet
bloc last week; he stopped in
Bucharest and Warsaw for talks
on the establishment of trade
and possibl diplomatic rela-
tions.
Because of the Communist
orientation of the Afro-Asian
Solidarity Conference meeting
in Cairo from 26 December to
1 January, no non-Communist
Asian government has officially
endorsed it. All but Indonesia
and Burma, moreover, have urged
their nationals not to attend.
The Communists have had
some success, however, in giving
the conference the appearance
at least of having a degree of
approval by some Asian govern-
ments. The chairman of the
preparatory committee, for in-
stance, was Dr. Anup Singh, a
member of the Indian parliament.
Several delegates from other
countries appear to have some
semiofficial standing.
In this connection, two
Laotian "parliamentary study
groups" headed by leftist
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 December 1957
politicians are planning to stop
off in Cairo for the conference,
while 30 to 45 Japanese--in-
eluding government party Diet
members--will also be present.
Burma is to be represented
by a five-man delegation se-
lected by the Communist-influenced
National United Front opposition
and financed by the government
party, the Anti-Fascist People's
Freedom League. The Indonesian
delegation with parliamentary
members from various parties
will seek the conference's en-
dorsement of Djakarta's efforts
to force the Dutch to give up
West Irian. Malaya is tenta-
tively to be represented by
three legislative councilmen be-
longing to the dominant Alliance
party. Although there has been
no definite word on representa-
tion from Cambodia and Thailand,
there have been reports that
left-wing parliament members of
both countries are planning to
make the trip to Cairo.
The sponsors have taken
great pains to make sure the
conference will give the im-
pression of being well attended
and having extensive popular
support. To this end, they have
been prepared in a number of
cases to provide both travel and
local expenses. They may also
augment the delegations of non-
Communist countries by accredit-
ing expatriates residing in
Egypt and nearby countries.
The general reluctance of
Asian governments to criticize
the conference is probably due
to the fact that it has the
popular "Afro-Asian" label and
because it will capitalize on
popular slogans of anticolonial-
ism and "peace." Many of the
governments of countries with
delegates at the conference may
also find it difficult.to
counter the exploitation of
the delegates' reports when
they return.
FRANCE TAKING CONCILIATORY LINE ON NORTH AFRICA
The Gaillard government's
increasingly flexible approach
to North African issues is seen
in its willingness to use Moroc-
can mediation for reaching a
cease -f ire in Algeria and in its
new proposals for a Tunisian set-
tlement. Arab suspicions have
not yet been overcome and in-
fluential French rightists re-
main adamant against concessions,
but there are signs that French
opinion as a whole is becoming
more conciliatory on the Al-
gerian question.
French tension over the
whole North African situation
has apparently been eased by
a combination of factors, in-
cluding the moderate tone of
the recent UN resolution on
Algeria, the belief that the
pacification campaign is suc-
ceeding, and National Assembly
approval of a basic Algerian
statute.
Premier Gaillard now
appears ready for positive
steps toward a cease-fire, and
Foreign Minister Pineau may have
implied that more than a cease-
fire is in the offing when he
told the assembly's Foreign
Affairs Committee on 13 December
that France would use the Mor-
occan offer "to reach a detente."
Most of the cabinet favor using
Moroccan good offices and Pineau
hinted that discussions with
Rabat have already been under-
taken.
The rightists, however,
are moving toward complete
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CURRENT INTELLIGENCE WEEKLY SUMMARY
opposition to Gaillard for call-
ing for use of Moroccan good
offices.. These elements ap-
parently have the support of
Minister for Algeria Robert
Lacoste, who has called the
Moroccan offer a trap that could
lead France into direct negotia-
tions with the rebels. The
stiffening attitude is also re-
flected in the upper house's
delay in considering the basic
statute.
The decision to offer
Tunisia a liberal settlement is
evident in the instructions to
French Ambassador Gorse, who left
for Tunisia on 20 December armed
with broad negotiating powers.
Premier Gaillard has guarded
against subsequent obstruction
on the part of French officials
by obtaining their advance ap-
proval in detail to the pro-
posals for contracting the
French military position in
Tunisia. The new leniency appar-
ent toward.Morocco on economic
questions is another step. toward
reducing French-Arab tensions.
A striking indication of
changing French public attitudes
toward Algeria is a recent unan-
imous resolution by the General
Council of the Gard Department
in southern France calling for
negotiation of a cease-fire as
soon as possible. The influen-
tial Paris daily, Le Monde, sees
this resolution as marking "the
profound evolution" taking place
in an area whose economy is most
directly linked with Algeria.
France's top economic ad-
ministrator told Ambassador
Houghton on 9 December that the
position of assembly deputies on
the Algerian problem was not so
rigid as their votes to date
might indicate, and added that
many of them are aware that the
present policy is not leading
to a satisfactory solution.
Responsible Frenchmen have sug-
gested to American officials
that a settlement might be
initiated by someone outside of
France with the interests of
the racial elements in Algeria
being guaranteed by Tunisia
and Morocco and by the
European Community of Six.
Arab suspicions have not
yet been overcome, however.
EUROPEAN REACTIONS TO NATO CONFERENCE
Western European opinion
evidently sees the prospects of
new high-level East-West talks
as the most significant outcome
of the meeting of the NATO heads
of government. These hopes were
not extinguished by the apparent
Soviet rejection of the communi-
qud's proposal for a foreign
ministers'conference. At the
same time, misgivings over the
establishment of missile bases
persist.
In hailing the move toward
resumed negotiations with the
Soviet Union, West German papers
attributed this to Chancellor
Adenauer's powerful championing
of the European public's demands.
The progovernment Der Kurier as-
serted that "the gray emmi nce
in Paris was not Bulganin but
Kennan"--a reflection of the
wide European appeal of George
Kennan's recent BBC lectures
calling for new attempts to
negotiate with Moscow.
French comment, despite
some disappointment at the com-
munique's failure to provide
clearer support of France's
North African position, also
applauded the conference for
having opened the. way to
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26 December 1957
East-West talks. The French
also feel the conference accepted
the French view that the alli-
ance should expand nonmilitary
cooperation and concern itself
with developments outside the
NATO area.
Despite approval in princi-
ple of intermediate-range mis-
siles for European defense, sev-
eral omens of future trouble
appear in the conference reac-
tions. The American embassy in
Brussels notes the growth of
considerable opposition in Bel-
gium to acceptance of IRBM's.
The head of the political sec-
tion of Bonn's Foreign Ministry
told reporters that although
the United States had the legal
right to introduce any long-
range missiles it wished for
its own forces, in fact such a
move would create a political
problem and require Bundestag
approval.
Only the British Parliament
has debated the conference's
results. The opposition Labor
party used the 20 December de-
bate to climax its bitter attack
on the terms of stationing Ameri-
can planes and missiles in the
United Kingdom, thus laying the
groundwork for a possible re-
opening of this question should
Labor return to power in the
next general election.
Labor "shadow" defense
minister Brown charged that the
British government lacked "any-
thing like sufficient control"
over its own destiny. Dissatis-
faction with the political as-
pects of the conference was also
shown by pro-American Laborite
MP Denis Healey's assertion
that NATO was in "the process
of disintegration" because the
alliance was frozen to outdated
positions--presumably referring
to its rejection of Moscow's
and the British party's propos-
als for a nuclear free zone or
a neutral belt in Central Eu-
rope.
BONN READY FOR TRADE AND REPATRIATION AGREEMENT WITH MOSCOW
West Germany expects to
conclude an agreement with the
USSR early in 1958 which will
meet some of its original de-
mands on repatriation of Germans
in return for granting Moscow
a broad consular agreement and
a three-year trade pact with
quotas considerably above pres-
ent trade levels.
When talks began in mid-
July, the Germans expected to
get a satisfactory repatriation
agreement in return for a one-
year trade agreement and with-
out giving in to Soviet demands
for a full-scale commerce and
navigation treaty. Bonn has
now greatly reduced its terms.
Its draft proposal, under con-
sideration by the Soviet nego-
tiators, accepts Soviet demands
for a three-year trade agree-
ment providing for total trade
of $936,000,000. If fulfilled,
this would be a marked increase
over the present annual rate of
$200,000,000.
As an annex to the trade
and payments agreement, Bonn
may sign a treaty of commerce
and navigation, including a
most-favored-nation clause. The
Germans will also accept the
Soviet proposal for a broad
consular agreement providing
in principle for the opening of
consulates, instead of merely
assigning consular functions to
the embassies as originally
proposed by the Germans.
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patriation drops Bonn's original
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CURRENT INTELLIGENCE WEEKLY SUMMARY
demand for the return of some
70,000 "administrative settlers"
who went to Germany or joined
the German army during the war.
It now asks only for the 30,000
"treaty re8ettlers" in the USSR,
who are persons of undisputed
German citizenship transferred
from the Baltic area under a
Nazi-Soviet agreement. Bonn
later intends to request the re-
turn of about .75 German scien-
tists and their families now in
the USSR.
Ambassador Lahr, head of
the West German delegation to
Moscow, expects these latest
proposals to result in an agree-
ment soon after the talks re-
convene in mid-January. In a
further effort to normalize
relations with the USSR, Bonn
is ; separately ?. considering "
talks in Bonn for a liberal-
ized cultural exchange -pro-
gram.
ITALIAN CHRISTIAN DEMOCRATS PREPARE FOR ELECTIONS
The Christian Democratic
party is starting to organize
for the spring national elec-
tions, aware that as the party
controlling the Italian govern-
ment for the past ten years, it
will be the major campaign tar-
get of the other parties. Sec-
retary General Fanfani report-
edly plans to use the elections
as a means of building a homo-
geneous party organization, but
he will be handicapped by the
necessity of not antagonizing
potential coalition partners
during the campaign..
The Christian Democratic
national council is scheduled
to meet in January to decide on
a method of establishing the
party's electoral lists. Fan-
fani has been building a strong
organization in the past four
years, and it is anticipated
that the party bureaucracy will
give priority to its militants
at the expense of many of the
present deputies. The new par-
liamentary group therefore is
likely to be more responsive to
party discipline than the pres-
ent one.
Fanfani apparently also is
attempting to reduce the elec-
toral activity of Catholic Ac-
tion's conservative Civic Com-
mittees and of the left-of-
center Italian Christian Workers
Association in order to keep
the campaign more closely under
party control, These nation-
wide, mass-membership Catholic
organizations draw their support
from the same groups as the
Christian Democrats and compete
with the party's fund-raising
and organizational efforts.
Moreover, there are sometimes
embarrassing ideological dif-
ferences, as in the case of the
Civic Committees' previous at-
tempts to include extreme right-
ists in an anti-Communist elec-
toral alliance.
A 100-man special committee
has been set up to plan the
party platform. It is expected
to emphasize economic and social
questions, and to call for a
foreign policy adapting Italy's
traditional attitudes to present
international situations. The
local party federations are to
play up whatever accomplishments
of the government are most popu-
lar in their particular areas.
Christian Democratic elec-
tion strategy will probably be
formed in the expectation that
the party will have to depend
on the votes of at least one
other party to form a govern-
ment. The most likely partners
are the Democratic Socialists,
but the Liberals may be an al-
ternative, and the Christian
Democratic campaign cannot an-
tagonize either possibl art-
ner.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 December 1957
POLITICAL CRISIS THREATENS IN SOMALIA
A ministerial and party
crisis threatens in Somalia
as a result of growing tribal
factionalism and discord within
the government over ties with
Cairo. The prime minister and
the minister of the interior,
who represent different tribal
groups, are feuding and have
threatened to resign. Two
others of the six ministers have
recently tried to resign.
Tribal disunity in this
UN trust territory has been re-
flected among Somali officials
despite the Italian administra-
tion's efforts to keep the gov-
ernment functioning and to teach
the fundamentals of local gov-
ernment to the representatives
of desert nomads. The Somali
Youth League, which controls 43
of the 60 Somali seats in the
SOMALI TRIBAL
SECRET
legislature and has a virtual
monopoly of educated personnel,
may split into its main tribal
components.
Tribal tension in the league
and in the government it domi-
nates is polarizing around the
prime minister, who is of the
Hawia tribe, and the minister of
the interior, who belongs to
the Darot tribe. The Darots,
who are in a minority in the
government, complain of dis-
crimination and accuse the prime
minister of being a dictator.
The minister of interior has
publicly accused the prime min-
ister of implication in an as-
sassination attempt against him.
Dissension within the Youth
League also results from Cairo's
growing influence in Somalia's
affairs. In August
PATTERN
1957, pro-Egyptian
Hagi Mohamed Hussein
was elected president
of the league. His
victory in part re-
flected the nomads'
belief that the pro-
Western leaders of
the league residing
in Mogadiscio had be-
come too urbanized and
had lost touch with
their tribal support-
ers, Hagi Mohamed
also profited from
his absence from So-
malia since 1952 as
a student in Cairo and
his noninvolvement in
local party politics.
There now are about
six pro-Egyptians on
the 19-member central
committee of the league.
Hagi Mohamed re-
turned to Somalia in
late November and al-
most immediately
started interfering
in politics. He has
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 December 1957
publicly criticized the Italian
administration and has been
selected as the league's chief
delegate to the Afro--Asian
Solidarity Conference at Cairo
this month, where he is ex-
pected to attack Western in-
fluence in Somalia. He has
tried to replace several pro-
Western Somali political lead-
erso
On 10 December, two min-
isters tried to resign from the
government in protest over Hagi
Mohamed's activities, but the
Italian administrator refused
to accept the resignations.
More recently the prime minister
and the minister of the interior
threatened to resign. The So-
mali prime minister, called back
from Khartoum, has been confer-
ring with political leaders to
resolve the situation.
Hagi Mohamed will probably
use his position as league pres-
ident to make a strenuous effort
to become the new prime min-
ister following the 1958 legis-
lative elections. Should he
be victorious, Somalia is
likely to become more closely
oriented to Cairo.
The major Argentine politi-
cal parties now have selected
presidential candidates for the
general elections scheduled for
23 February. Important lead-
ers of the still-outlawed Peron-
ista party are to meet with
Peron in Caracas on 28 December
to discuss election strategy,
although Peron no longer con-
trols all Peronist groups.
Peron may revise his existing
instructions calling for sabo-
tage of the elections.
The two main contenders in
the general elections continue
to be the two factions of the
old Radical party which split
last January into the People's
Radical Civic Union (UCRP) and
the Intransigent Radical Civic
Union (UCRI). The factions
split mainly over the timing
and method of nominating Arturo
Frondizi, who is now the UCAI's
leader and presidential candi-
date, The UCRP's presidential
candidate, chosen in party
primaries on 15 December for
both national and provincial
offices, is Ricardo Balbin. Both
Frondizi and Balbin have cam-
paigned on nationalistic plat-
forms stressing nationalization
of petroleum resources and public
utilities, although both have
indicated privately they might
be somewhat more realistic and
flexible after assuming power.
More conservative opinion
is represented by a number of
small parties which individual-
ARGENTINA
CONSTITUENT ASSEMBLY ELECTIONS
28 JULY 1957
PERCENT SEATS
OF VOTE WON
25X1
25X1
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UCRP-
24
19
75
.
UCR1
21
2
.
5
77
OTHER PART
3
5
IES
0.2
53
BLANK VOTE---
24
31
.
NONE
100.00
205
ly have little prospect for na-
tional office under the elec-
toral system which allots two
thirds of the seats in the
lower house to the winning party
and the other third to the run-
ner-up. So far, however, in-
formal discussions of coalitions
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among the smaller parties have
come to naught.
The followers of Peron,
who are considered largely re-
sponsible for the two million
blank ballots cast in last
July's constituent assembly
elections, have adhered to
Peron's continued ban on join-
ing electoral coalitions. Sev-
eral groups of his former sup-
porters have, however, disobeyed
his orders not to form new par-
ties designed to circumvent
the government ban on the Peron-
ista party. Of these neo-Peron-
ista parties, two have tenta
tively nominated for president
Alejandro Leloir, last presi-
dent of the Peronista party.
Leloir would be ineligible for
the presidency under a govern-
ment decree disqualifying former
Peronistas from holding office,
and it is not clear whether he
would be able to serve even as
an elector. The electoral col-
lege meets on 17 March.
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PEIPING'S OFFER.TO SETTLE OVERSEAS CHINESE'CITIZENSHIP ISSUE
Peiping's efforts to win
additional adherents among
Overseas Chinese may gain new
momentum from the Indonesian
parliament's approval on 17
December of a treaty allowing
Overseas Chinese the choice of
retaining Chinese citizenship
or becoming Indonesian citizens..
Willingness of Peiping to aban-
don the traditional view that
all Overseas Chinese are auto-
matically citizens of China is
intended to contrast with Chi-
nese Nationalist equivocation
on the citizenship issue and
to make a favorable impression
on Southeast Asian governments.
More important, the Chi-
nese Communist proposals seem
designed to foster the impres-
sion that Peiping is prepared
to make substantial concessions
to achieve a satisfactory set-
tlement of the issue. Taipei
on the contrary merely urges
the Overseas Chinese to improve
their relationship with the gov-
ernment of the country of resi-
dence.
During a recent meeting of
the Overseas Chinese Affairs
Commission, an official Chinese
Communist agency, Peiping re-
affirmed the proposals made by
Chou En-lai at Bandung
in
1955
that Overseas Chinese
be
per-
mitted to choose between
Chi-
nese citizenship or citizenship
in the country of residence.
Peiping's new "work program"
for Overseas Chinese de-empha-
sizes the usual insistence on
"patriotism toward the mother-
land" and contains none of the
customary appeals for Overseas
Chinese investments and remit-
tances.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
30,000 LAOS
250,000 CAMBODIA
261,000 BRITISH BORNEO
. (Brunei, N. Borneo
an.1 s'arawnkJ
300,000 THE PHILIPPINES
300,000 BURMA
SOUTH VIETNAM
SINGAPORE
0 Number of ethnic Chinese in each country 3,000,000
"Percent of total population
One of Peiping's specific
objectives in restating its
policy may have been to improve
relations with the newly inde-
pendent Federation of Malaya,
which has a large Chinese mi-
nority.
The response of Southeast
Asian governments to this and
previous approaches by Peiping
has not been enthusiastic.
These highly nationalistic re-
gimes regard this problem as
an internal matter over which
they exercise unilateral juris-
diction.
Yellow
Sea
East
Chino
Sea
ZERR. of
NEW .
CHINESE IN SOUTHEAST ASIA
Even Indonesia, the only
country in the area to respond
favorably to Peiping's propos-
als for settling the dual na-
tionality issue, stalled for
more than two years before
parliament acted on the citizen-
ship treaty. This action may
well have been taken more in
recognition of China's strong
support on the West Irian
issue than from a change
of heart on the part of
the Indonesian government to-
ward the Chinese Communist
proposals.
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NORTH
IETNAM
SINGAPORE
PACIFIC OCEAN
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CURRENT INTELLIGENCE WEEKLY SUMMARY
26 December 1957
CHINESE COMMUNISTS TO TAKE HARDER LINE ON MINORITY PEOPLES
Peiping's attacks on "paro-
chial nationalism" among ethnic
minority groups in China re-
flect a failure to win over
these people by a conciliatory
policy of gradual assimilation.
At a symposium of the National-
ities Affairs Commission on 20
November, it was announced that
nationalism among minority
groups must be vigorously op-
posed. Since then the evils of
this attitude have received in-
creased emphasis--in contrast
with.the previous stress on'the
dangers of "chauvinism" among
the Chinese majority.
In the past, the regime has
made an elaborate show of favor-
itism toward China's 35,000,000
LOCATION AND NUMBERS OF CHINA'S
NATIONAL MINORITY OPLES
DECEMBER 1957
24281
MINORITY GROUP 1953 POPULATION
Korean 7?""':,"7= :. 1,120,000
Pup 1,248,000
Mongol
Manchu 2,419,000
Miao 2,511,000
`ih, /V1-,