CURRENT INTELLIGENCE WEEKLY SUMMARY

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CIA-RDP79-00927A001700010001-4
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November 18, 2004
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March 13, 1958
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SUMMARY
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Approved For Tease 2005/04/22 :CIA-RDP79-009?r7~A 01700010004 CONFIDENTIAL SEERET' (CURRENT INTELLIGENCE WEEKLY SUMMARY COPY N0. ~~ Q~;~ N0. 0036/58 13 Marcia 1958 nocu~r~r~T ~o. ova GHA,~IGE iN GLASS. o D DEGLASSiFiEJ CLASS. GHAN~ED TO,?' T NEXT REVIEW DATE: t~~ AUTF~I.~hIR 7Q-aww ~ CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE 25X1 CONFIDENTIAL -S,E~ ~ 25X1 State Department review completed Approved For Release 2005/04/22 :CIA-RDP79-00927A001700010001-4 Approved Fo!lease 2005/04/22 :CIA-RDP79-009211700010001-4 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. Approved For Release 2005/04/22 :CIA-RDP79-00927A001700010001-4 Approved Fclease 2005/0 ~ P79-009201700010001-4 CQN~lDENT1AL CURRENT INTELLIGENCE WEEKLY SUMMARY 13 March 1958 T H E W E E K I N B R I E F OF IMMEDIATE INTEREST INDONESIA . . . . e s Page 1 The Indonesian Government, which began military action against the Central Sumatran dissidents on ? March, has so far completed several landings on Su- oratra's east coast and-has occupied the airport and town at the Caltex oil center of Pakanbaru. An at- tack an the west coast in the vicinity of Padang may occur saon. Prospects -for agreement between Presi- dent-Sukarno and former Vice President Hatta for tbe. tatter's re-entry into. the government seem largely td have vanished. Meanwhile, Czechoslovakia, Poland, and the USSR have indicated a willingness to su l arms and other military support to D,lakarta. MIDDLE EAST DEVELOPMENTS . s . . Page 2 Nash is continuing his campaign against King Saud. The impact of these developments has been not only to underorine Saud's international position and prestige, but to add impetus. to the gradually growing demand far internal ref arms. Saud's troubles are likely to fu ken the osition of the Iraqi-Jordanian federation 25X1 n Lebanon, t e ca ne as een res u e , u ably will not result in a significant foreign policy shift. In the Sudan, the pro- - Western party won the tar est bloc of seats in the parlia- orentary election. MOSCOW CONTINUES SUMMIT CAMPAIGN . . Page 4 Premier Bulganin's call for an early foreign minis- - tars' meeting, contained in bis 6 March letter to Presi- dent Eisenhower and reiterated in Khrushchev's interview of 14 March, continues Moscow's efforts to focus attention on procedural arrangeorents for a heads-of-government meet- ing. In contrast to the USSR's earlier stands which opposed and then reluctantly accepted a procedural. foreign ministers' meeting in response to Western "wishes," Khrushchev is now welcoming such a meeting, apparently in tt~e expectation that pressure would thus be exerted on the West to forego its proposals for negotiations to clarify the nature and pur- pose of summit talks. ' CONFIDENTIAL S~eR~r i Approved For Release 2005/04/22: CIA-RDP79-00927A001700010001-4 THE WEEK IN BRIEF 25X1 25X1 25X1 25X1 PART I (continued) WESTERN EUROPEAN ATTITUDES ON SUMMIT PREPARATIONS . . . Page 5 The latest East-West diplomatic exchanges appear to have eased popular pressure in Western Europe for quick acceptance of Soviet requests for summit talks, The NATO governments agree in principle that present Soviet conditions are unacceptable but there remain some Differences of opinion on the basis for acceding to a meeting. The British Governments under severe attack from the Labor ition is inclined to relax Western conditions. CURRENT INTELLIGENCE WEEKLY SUMRiARY 13 March 1958 NOTES AND COMMENTS NORTH AFRICAN SITUATION . . . . . . . . . . Page 1 The two dominant North American political orga~aiza- tions, the Moroccan Istiglal and Tunisian Neo-Destour parties are planning an early joint conference to dis- cuss methods- to bring about Algerian independences a North African federations and evacuation of foreign troops from North Africa. A federation was endorsed publicly last week by both the Moroccan King and Tunisian Presi- dent Bourguiba. In Frances in response to growing da- mestie pressures for a new approach, Premier Gaillard has proposed a Western Mediterranean Pact. Internation- alization of the Algerian question is implicit in his proposals but Gaillard is sti]tl subject to strong right- ist pressure to maintain France?s position in Algeria. The latest French proposals arranged through the good offices mission are likely to be unacceptable to Bour- guiba. Approved F rlease 2005/0~/~.~~(~DP79-00901700010001-4 ADENAUER MOVES TO END CDU FOREIGN POLICY DIFFERENCES Page 2 West German Chancellor Adenauer?s move to resched- ule the Bundestag foreign policy debates wh~_ch Bundestag President Gerstenmaier had called offs is aimed at dis- pelling uncertainty resulting from recent conflicting foreign policy statements by various government officials. Adenauers back from a five-week vacations will try to re- store the authority of much-criticized Foreign Minister Brentanos but is confronted with an increasingly rebel- lious Christian Democratic Unions which has been clamor- in for she reservation of the appearance of flexibility. 25X1 SECRET ii Approved For Release 2005/04/22: CIA-RDP79-00927A001700010001-4 THE WEEK IN BRIEF 25X1 25X1 Approved For Re ase 2005/04/ 79-0092ZA0 1700010001-4 CURRENT INTELLIGENCE WEEKLY SUMMARY PART II (continued) COMMUNIST .BIDS FOR NEGOTIATION OF FAR EASTERN ISSUES Page 3 Seizing on the occasion of the SEATO meetings in Aianila, the Sino-Soviet bloc has advanced a number of "peace`' proposals on Asian issues and has mounted a new propaganda effort to discredit the United States in the area, The Communists have suggested an atom-free zone in Asia, a "collective treaty of peace,?' and negotia- tions on troop reductions in North and South Vietnam, 25X1 YUGOSLAVIA SEEKS ENHANCED INTERNATIONAL PRESTIGE , Page ~ Marshal Tito, stymied for some time in his efforts to play an inf luential-role in world affairsg hopes by seeking participation in a summit conference to enhance his regime?s prestige on the eve of national elections and a party coa~gr.~ss. Yugoslav participation has been, a major foreign policy-.objective since January, when Tito launched the idea of enlar in the talks to include some unattached states, 25X1 EGYPTIAN LABOR:` , e e a Page S .President Nasir?s regime faces a continuing prob- lem of popular resentment toward its labor and economic policies in Egypt while it devotes a major portion of its resources and attention to gaining foreign ?'vic- torieso'? -Nasir has found it necessary to suppress grow- ing dissatisfaction on the domestic labor front and has forced the resignation of the pro-Western leader of the Egyptian General-Federation of Trade Unions 25X1 25X1 EAST GERAiAI+t WORKERS OPPOSE LABOR SPEED-UP a , Page 6 The East German regime?s attempts to secure worker cooperation in-the revision of work norms are encounter - ing strong opposition,- Party Secretary Ulbricht, will- ing to purge some of his ablest lieutenants last month to promote a harder economic .line, now faces the likeli- hood of .labor disturbances and further damage to the East German economy if he pursues the course to which he is publicly .committed, He may have to acce;t onl token norm revision as a face-saving deviceo 25X1 USSR CONTINUES REVIEW OF INDUSTRIAL PLANNING AND SUPPLY Page 7 Important questions involving the relationship be- tween central planning .organs and regional councils of national economy appear to remain unresolved after eight months of operation under Khrushchev?s revamped indus- trial administration setup. Articles in the Soviet press suggest continuing attention is being paid to these ques- tions, chiefly the coordination of planning and the flow SECRET Approved For Release~Q5~~ :~A~P~9-00927A001700010001-4 CURRENT INTELLIGENCE WEEKLY SUMMARY 13 March 1958 PART II (continued) of materials and supplies. Soviet leaders appear to be still reviewing their first half-year?s experience with ?he new administrative system- in their attempts to develop ra;?? '_ '1 solutions to the problem of stimulating local ynitia~~ive while maintaining centralized planning control. NORTH KOREA ANNOUNCES FIRST FIVE-YEAR PLAN , Page 8 North Korea?s-First Five-Year Plan (1957-61) pro- vides for a continued emphasis on heavy Indus-try and schedules an annual growth in industrial production of nearly 22 percent, The plan, published on 3 March 1958 after 14 months of-the plan period had elapsed, sets goals that appear aut of-reach without considerable ad- ditional-aid fr?m the rest of the bloc. 25X1 25X1 LOCAL-.PARTY LEADERS PURGED IN-EAST CHINA PROVINCE Page I? The expulsion Pram the Chinese Communist-party on 9 Diarch of four top-level officials in Anhwei Province continues Peiping's methodical campaign to purge un- relialfile elements and to tighten discipline in the ranks. In other provinces additional local party leaders, es- pecially those connected with the courts and public se- curity organs are er ected to b? ex gilled in the next few months, 25X1 JAPANESE GOVERNMENT FACES PROBLEM ON TRADE ACCORDS WITH PEIPING a e . . . . Page 11 The recemt signing in Peiping of controversial trade accords--one a one-year pact for $10?,000,OUO in trAade each way and the other a five-year pact for $28U,O00,?OO-- confronts-the Kishi government with a major policy de- cision regarding Communist China. Although the trade agreement and memorandum for exchanging trade missions were negotiated by private Japanese interests, they re- quire official approval, which if granted would establish quasi-diplomatic relations between Tokyo and Peiping, Tokyo will probably be forced to make COncessiOns in an attempt to satisfy strop n Japan for increased trade with China, SHAKE-UP EXPECTED IN CHINESE NATIONALIST GOVERNMENT ~ Page 12 Revelation of the Kuomintang?s profiteering from ma- nipulgtion of foreign exchange controls will add to pres- sures for a~shake-up in the economic sections of the Chinese Nationalist Government. An intention to abolish certain government agencies-has already been announced. and a cabi_ 25X1 25x1. SECRET Approved For Release 2005/04/22ivCIA-RDP79-00927A001700010001-4 THE WEEK IN RftIEF Approved For,~ase 2005/04/L6~~R~P79-00927A~00~700010001-4 CURRENTcINTELLIGENCE WEEKLY SUMMARY 13 March 1958 PART II (continued) PAKISTANI GOVERNMENT FACES NEW THREATS IN PROVINCIAL ASSEMBLIES . . Page 12 Pakistani Prime Minister Noon?s Republican govern- ment, having successfully survived the budget session of the Natioxnal Assembly, faces new threats in East and West Palos-tan provincial assembly meetings. Political realignments in the West Pakistan. Assembly could threat- en the balance of power in Karachi, but attacks on Noon's supporters in East Pakistan seem less likel to be simi- larly effective. SUSPENSION OF CONSTITUTIONAL GUARANTEES IN CUBA ~ Page 13 Cuban President Batista?s 45-day suspension of con- stitutional guarantees on 12 March may provoke the most serious threat to 1~3~s regime since the abortive naval- - uprising at Cienfuegos last September.- Since electoral campaigning is impassible during the period of suspen- sion, the 1 June general elections will have to be ost- 25X1 poised, possibly until November. 25X1 DIFFICULTIES MOUNT FOR PERWIAN GOVERNMENT Page 14 Serious rioting in Lima on ? March highlights the mounting difficulties which beset Peruvian President Prado's 2O-me~nth-old attempt at derrocratic government. The economic stability .which has prevailed in Peru in recent years is threatened by worsening economic con- ditions which are reflected in the acceleratin de- preciation 4f the Peruvian currency. 25X1 POLITICAL AND ECONOMIC DISCONTENT GROWING IN ERITREA . Growing economic and political discontent in Eri- trea--federated with Ethiopia in 1952--is re-elected by the popular support for a general strike called on l0 March.; Political bppo~ition to Ethiopian domina- tion has been growing within the past six months, and there have been several anti-Ethiopian demonstrations. SECRET . Page I5 25X1 v Approved For Release 2005/04/22: CIA-RDP79-00927A001700010001-4 ~IiE WEEK IN BRIEF Approved For ~ase 2005/04/2~2~~79-00927700010001-4 CURRENT INTELLIGENCE WEEKLY SUMMARY PATTERNS AND PERSPECTIVES KHF~USHCHEVYS AGRICULTURAL. REORGANIZATION , Page 1 Khrushchev?a forthcoming reorganization of the ma- chine tractor stations by the transfer of the ownership of agricultural machinery to collective farms will be the mast extensive organizational change in Soviet sacial- ized agriculture since its establishment in the 1930?s. Some net gain in efficiency will probably result as cross- purposes and duplications of effort under the old system are eliminated. The plan seems out of reach from attack on political. grounds alone, having been approved by the party central committee, but map still be sub ected to foot-dragging-and sniping, 25X1 NEW EFFORT TO BRIDGE. SOCIALIST-COMMUNIST GAP IN FRANCE Page 4 The recent creation of the Union of the Socialist Left may be the most important postwar effort to unify a number of here,tofare scattered elements of the French far left and to ally them with the French Communist par- ty. The new organization may be exploited by the Commis- mists ~n their drive for unity of all left-wing parties. Long-standiag differences among the union?s members will probably limit it's effectiveness, but its announced poli- ties have a strong potential appeal to left-wing opinion in ,France, particularly on North Africa, missile bases, INDIA?S CONGRESS PARTY ONE YEAR AFTER NATIONAL ELECTIONS Page ? Lethargy and factionalism continue to be the main weaknesses of Nehru?s Congress party and detract -from the popularity-the party might otherwise obtain for its .noteworthy achievements in expanding India?s economy and extending Indian influence in intbrnation- al affairs, Despite pleas made by party leaders over the past two-years to rejuvenate provincial party ar- ganizations, almost no progress has been made, and the hard-working opposition parties are steadil;r makin in- roads into Congress territory. SECRL~'T 25X1 25X1 vi Approved For Release 2005/04/22: CIA-RDP79-00927A001700010001-4 THE WEEK IAT _~3RIEF Approved For e~l ase 2005/04/2~~~1~79-00927AwOF0~700010001-4 CURRENT INTELLIGENCE WEEKLY SUMMARY PART III (continued) INTENSIFIED S?V~IET ECONOMIC INTEREST IN SQUTH AMERICA Page 10 The Soviet Union in recent months has appeared in- tent on exercising a direct influence in South America, primarily through increased economic activity. Soviet moves in South America, to date principally designed to exploit the area's intensified economic problems, have been far less extensive than in the Middle East or Asia, but-they probably are forerunners of an expanded campaiga. Soviet objectives in South America are to weaken the influence of the United States, expand diplo- matic and commercial relations, and. lay the groundwork for eventual Soviet- oli i and ideological gains. ?~~,, 25X1 SECRET .Approved For Release 2005/04/22 iCIA-RDP79-00927A001700010001-4 THE WEEK IN BRIEF Approved Fo~ease 2005~~~I~RDP79-0092,~A~1700010001-4 COI~FIDE~ITIAL CURRENT INTELLIGENCE WEEKLY SUM1dARY OF IMMEDIATE INTEREST Military action by the Djakarta government to subdue the Central Sumatran dissidents -began on 7 March with landings on the east coast island of Bengkalis. Other landings on 10 March secured the ea.>3t coast points. of Pakning, Dumai., and Selat Paridjang, thus giving the government cantrgl.of the ap- proa.ches to the Siak River. On 12 March, following the bombing of the airfield at Pakanbaru, the Caltex oil center, para- troops occupied both the air- f ield and the town. Coincident with these operations was the movement of a.n additional force up the Sia,k River toward Pakan- baru. 9 5 5 ~ _ ,_.. `.- a- 0 ~, a ~ \ 105 ~` ,.'"'1,:~`' '' SO _ , - ,, ~ ~ a ~ ~_ . _ TH CHINA SEA _ ,~ ~ t A `Y A~ =->c= ~- ~ _ ...- ~ ~- -Medan ~' ~ S ~',, _ ~ ~c n '~ r - ~ Y 1133 T H. ~ N Q ~ \ t I ~ u 1. ~ ~, G PORE N K ) _ , Approved Foase 2005/04/22: CIA-RDP79-00920 1700010001-4 .SECRET, CURRENT INTELLIGENCE WEEKLY SUMMARY northern Bihar--a state where previously they had been rela- tively weak, The Congress party also lost a key parliamentary by-election last-month in east- ern Bombay to a United Maha- rashtra Committee candidate. His victory indicated invasion of a strongly Congress-oriented area by the opposition linguis- tic forces of southern Bombay. Continued stagnation in the Congress party's machinery and further inroads made by ogposi- tion groups into the party's territory could, by the time of the 1962 national elections, destroy much of the potential value being created for the Congress by its notable economic and international achievements. INTENSIFIED SOVIET ECONOMIC INTEREST IN SOUTH AMERICA The Soviet Union in recent months has appeared intent on exercising a direct influence in South America, primarily through increased economic ac- tivity. Soviet activities in South America to date,primarily designed to exploit the area's intensified economic problems, have been far less extensive than in the Middle East or Asia, but they probably are forerun- ners of an expanded campaign, Khrushc~iev, in interviews with Mexican and Brazilian newsmen in December and February in which he publicized Moscow's interest in closer economic and political relations, said that i;i~e possibilities of increasing the Soviet Union's trade with Latin America "remain untapped to a great degree." Soviet objectives in South America. are to weaken the in- fluence of the United States, expand diplomatic and commer- cial relations, and lay the groundwork for eventual Soviet political and ideological gains Apparently in the belief that bald efforts might arouse South American apprehensions, and . provoke US countermeasures, Moscow has approached the area cautiously and has concentrated its efforts in those states where the surplus of foreign exchange commodities presents a situation conducive to suc- cessful Soviet exploitation, Although regarded by Mos- cow as a colonial or semicolo- nial area, South America has not received the same priority in Soviet foreign policy as other countries in that cate- gory because its location, its strong economic and cultural bonds with the free world, and its defense pacts with the United States have led it to resist Soviet overtures. In early 1956, Foreign Minister Shepilov described these coun- tries as "raw material and agrarian appendages of the powerful American monopolies." In February 1958, Khrush- chev said that Soviet trade with other Latin American coun- tries could equal the nearly $180,000,000 level achieved with Argentina in the last four years, "but for this it is necessary to have favorable conditions, that is, normal diplomatic and trade relations." In-all of Latin America, the USSR has diplomatic missions only in Argentina, Mexico, and Uruguay, The satellites main- tain diplomatic or consular representation in these coun- tries and also in Bolivia, Brazil, and Colombia. Moscow has not made the conclusion of SECRET Approved For Release 2005/04/22: CIA-RDP79-00927A001700010001-4 PART III PATTERNS AND PERSPECTIVES Page 10 of 13 25X1 Approved Fo~eR ease 2005/04~~P79-0091700010001-4 CiJRRLNT INTELLIGENUL' IvEEIC.LY SUMMAFtx economic agreements conditional on the establishment of dipla- ~natic relations, but has used hints of attractive offers to stimulate interest in diplomatic relations, The USSR has attempted to exploit the situations of coun- tries where certain state-ovJned industries are unable to obtain ~~Yestern credits on satisfactory terms, I~hrushchev took the occa- sion of an interview with two Brazilian newsmen last November to I~ublicize Moscow's interest in resum~.ng commercial and dip- lomatic relations with Brazil, Just previously Soviet delegates in the UN had approached the Brazilian representative with a request for renewed diplomatic ties. The USSR had made no direct .overtures to Brazil,. app~.rently awaiting the government's re- sponse to Khrush- chev's bid and to satellite trade of- fers, which appeared simultaneously with a campaign by local Communists and Na- ~tion::ilists for re- establishing commer- cial and diplomatic relations with the USSR. Poland is supplying Brazil VJlth ,?p3aa, ~i)~, Odd worth of steel rails and has sold. at least .two merchant ships and, allegedly, has offered to con- struct a steel plant using some Soviet c~uipment and fi- na.ncing. The Brazil- ian press, reflect- ing widespread con- cern over falling coffee .prices and ~t;ile related foreign exchange crisis, has given heavy play to both zeal and imagined trade opportuni- ties with the bloc, Hn extenaive and apparently sobering anti-Communist carri- paign by the Foreign Ministry appears to have dimmed the possibility of Brazil's renewing diplomatic relations with the USSR, but there is still con- siderable pressure from the Con- gress and the press. for explor- ing trade opportunities with the bloc, Official studies an the use~tulness of such trade are under way, and the Foreign Ministry, possibly foreseeing the likelihood of formal trade ties, has been discussing ways o= tightening the country's presently inadequate security measures. Argentina Soviet Deputy Minister of :Ct'oreign 'a~'rade aiuzr~~in on 1$ Junui~ry received in Moscow an MEXICO ~ ~ ^ tt ylesico t1ry? ~~ f-,aP.~oRe~R.? '_ r' 4' _woRO .. ~..A~Y.ooc~~ ~ ~:{,o~. tii, ~4ar O ~ ~?J ( GU iwen COLOMBIA ~'~ ~ fr` ~~~\PERU\ l ` 11 ~, -USSR Diplomatic Mission 0 Satellite Diplomatic Mission p Satellite Consulate Soviet Bloc Trade Agreements ~ and Arrangements ? Soviet Bloc Culturol Societies Mote: Polish minister resident in Meaico has been accredited to Haiti, Honduras, Ricaragua, Costa Rica, Panama, and Ecuador. g,3 24931 .SECRET ~La Paz ~, y~/~ ~~`~-~ BRITISH VENEZUELA j \G/U IANA 111..-,~ (5 y_ SURINAM BoHDta '' J ~~ e ~ L,, xla de faneuo l PARAGU ~Y Can Paiilnl a - 1 ~ - _ ~.....~ ) Cordoba Paysandu Mendoza ? ~ ~I~ivera Yalparaiso~' 1 ~ ~nla Fe ` Rosario? a Santiago / Buenos Aires? ~ ( / La Plata ( CHILE ~_ i Taodil~ ~ 1 f ARGENTINA - t _ r~ 25X1 Approved For Release 2005/04/22: CIA-RDP79-00927A001700010001-4 PART III f?~~:".i:'.ui;.i~du i~~I7 PEh;.:~~E~;.TI~'~L Paige 11 of 13 Approved Foease 2005/04/22: CIA-RDP79-00921700010001-4 ,~ECI~ET, CURRENT INTELLIGENCE WEEKLY SU1~iMARY offensive in Uruguay has been intensified, and that the USSR has played a major role in this effort. In January, the Soviet commercial attache in Uruguay was reported to have offered a barter agreement by which the USSR would supply trucks and ma- chinery in exchange for meat-- of_which there is a shortage for export.. The Soviet' of- rails, and locozno.tives, anc~ that ~ f icials. stated.. on 18 January, an additional . contract of; however, that extension of So- $3,000,000 to $4,000,000 awaited viet trade was dependent on signature. MOSCOW is now Uruguayan acceptance of Soviet Argentine government trade dele- gation seeking to purchase elec- tronic and petroleum equipment with the approximately $20,000,- 000 it had accrued under bilat- eral-trade agreemen~cs with the bloc. On 29 January TABS an- nounced that the U5SR would supply Argentina with $5,000,000 worth of Soviet goods, includ- ing mining equipment, steel studying Argentine offers to purchase $30, 000, 000 to $,40,000,- 000 worth of goods, including fuel oil. The Soviet Embassy in Bue- nos Aires announced to the press on 9 January that Soviet com- mercial organizations could fur- nish Latin American countries with diverse industrial equip- ment for petroleum and power industries. The release fur- ther stated that if proper under- standing were reached, the USSR could provide complete instal- lations for companies and help in the preparation of Latin ~imerican specialists without requiring that any rights in the administration of those enterprises or participation in profits be granted. The USSR sent an impressive exhibit of oil equipment and other machinery and 40 techni- cians to the 50th anniversary exposition of the Argentine state oil monopoly in January. It is reported that 29 of the technicians plan to remain in Argentina, ostensibly to sell equipment, although Argentine efforts to buy such equipment in Moscow were unsuccessful. Uruguay Uruguay's vocal opposition to US trade policies. and its deteriorating economic situa- tion have made it an easy tar- get for bloc penetration. Re- cently, there have been indica- tions that the bloc e~~onomic oil bids submitted in early December through an Uruguayan firm. Soviet oil has been re- jected in the past because it did not meet local specifica- tions. It is possible that the USSR made its not altogether attractive offers solely to draw attention to recent effort s by American oil companies to collect overdue oil payments and recent closures of US-owned. meat packing plants in Monte- video, and to encourage Uruguay to ratify a trade treaty signed with the Soviet Union in 1956. The USSR, largest single buyer of Uruguayan wool, stated in January that all future wool purchases would be made direct- ly through the Soviet Legation in Montevideo rather than as previously through third coun- tries. The new procedure, which does not promise an in- crease in Soviet purchases, would give the USSR greater in- fluence in the country by forc- ing it to accept Soviet terms of payment. Colombia The first outward sign of success for the newly intensi- fied Soviet economic efforts in Colombia is the government's agreement to purchase 20,000 tons of Syrian wheat through Soviet trade representatives in exchange far coffee. During semiofficial Soviet-Colombian trade negotiations in January, SECF~.ET Approved For Release 2005/04/22: CIA-RDP79-00927A001700010001-4 PART III PATTERNS AND PERSPECTIVES Page 12 of 13 Approved Foease 2005/04/22: CIA=RDP79-00921700010001-4 _...... __ _ ._. _..... SECRET _ _ . CURRENT INTELLIGENCE WEEKLY SUMMARI~ Soviet commercial agents pro- posed that the USSR install a permanent trade representative in Bogota, an offer rejected by the Colombian foreign minis- ter.,., and participate in the Colombian Machinery Fair, Declining copper prices have prompted Chile to revise its long-standing policy of re- fusing to export copper to the Communist bloc. In the past two months,. it has been nego- tiating sales to the bloc ex- pected to total more than $20,- 000,000, It has indirectly sold 1,500 tons to the USSR, and is considering selling it an additional 10 300 tons. 25X1 The cessation of US stock- piling and recent Soviet tin sales in the free world have contributed to a critical soft- ness in tin prices which threat- ens the Bolivian economy. Two Bolivian Communist party offi~ cials recently returned from MpSCOW claiming that the USSR was ready, if the Bolivian Gov- ernment requested, to supply smelting plants and technicians for all classes of minerals, as well as petroleum equipment ' with long-term payments. Com- munist-dominated labor groups have attempted to increase the impact by demanding that the government accept .the alleged offer. Other Communist activities in South America help to advance Soviet economic and political objectives, Local ~;ommunist propaganda has pictured the USSR as a great potential market for the growing list of depressed South American raw materials and as a country eager to supply industrial equipment on easy credit terms. Although the gov- ernments of same of the coun- tries appear to be making use of this propaganda to call US attention to their foreign ex- change problem, the apparently Soviet-inspired internal agi- tation, in combination with fu- ture attractive bloc offers, could persuade the governments at least to ex lore the possi- bilities. (COncurxed 25X1 in by ORR) SECRET Approved For Release 2005/04/22: CIA-RDP79-00927A001700010001-4 PART III PATTERNS AND PERSPECTIVES Page 13 of 13 Approved For Release 2005/04/22 :CIA-RDP79-00927A001700010001-4 Approved For Release 2005/04/22 :CIA-RDP79-00927A001700010001-4