CURRENT INTELLIGENCE WEEKLY SUMMARY

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CIA-RDP79-00927A001700030001-1
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March 27, 1958
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SUMMARY
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Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 CONFIDENTIAL S~fAFZ CURRENT INTELLIGENCE WEEKLY SUMMARY COPY NO. 14 OCR NO.0038/58 27 March 1958 CLASS. CHANGED TO: NEXT REVIEW DATE: DOCUMENT NO. NO CHANGE IN CLAM 0 0 DECLASSIFIED DATE.M&EVlEWER: CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE CONFIDENTIAL .,, .S Et RECORDS CENTER AFtER USE 25X1 State Department review completed JOB _;Z BOX Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 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 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Next 7 Page(s) In Document Denied Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 CURRENT I NE ' ALY SUMMARY %WW CONFIDENTIAL OF IMMEDIATE INTEREST KHRUSHCHEV ASSUMES SOVIET PREMIERSHIP Soviet party First Secre-- tary Khrushchev, by assuming the premiership, has taken one of the final steps in negating completely the post-Stalin myth of collective leadership. He has apparently disregarded the risks of being accused of be- coming a latter-day Stalin, and there appear to be no forces in the party presidium to stop him. As in Stalin's day, the personality of the leader will -greatly affect Soviet policy. A Khrushchevian flavor is al- ready apparent in virtually all aspects of Soviet domestic and foreign affairs. Khrushchev has gone far down Stalin's road. He has moved faster, but has not yet had to use terror. Khrushchev's assumption of the premiership in addition to his duties as party first secre-- tary may be explained in part by his desire to be recognized as.the top Soviet government representative for purposes of high-level international nego- tiations. This alone, however, is probably insufficient reason for him to assume the additional burdens of office and the lia- bilities inherent in a further personal build-up. Khrushchev probably feels he can best run the show alone and that the Council of Ministers under Bul- ganin was a hindrance to putting his policies into c f ect rapid- ly. Similarly, he undoubtedly chafed under committee rule, considering it a system which was too cumbersome and produced too many compromise decisions for his impatient nature. Khrushchev has indicated recently that he intends to rely more and more on the party at the expense of the government; this trend will undoubtedly con- tinue.despite his new day-to- day responsibilities as head of the government. He has shown phenomenal ability in the past to delegate authority and this practice will have to be expanded. The recent decentrali- zation of state administration and the decrease in the size and authority of the Council of Ministers.. make the premiership somewhat less rigorous than it was under Stalin. The composition of the Council of Ministers is almost certain to change. There have been indications that some min- isters will not be reappointed at the Supreme Soviet session, and other shifts are likely to follow once Khrushchev is in his stride. The key posts of defense and foreign affairs, however, will probably not be affected. The Supreme Soviet meeting was `probably preceded by-a par- ty central committee plenum where changes in the party hier-. archy as. well as Bulganin's removal were approved. An official listing of party pre- sidium members attending the Supreme Soviet moves Pospelov from first among the candidates to last, replacing Pervukhin, 25X1 who recently became Soviet am- bassador to East Germany. CONFlDENT- PART I OF IMMEDIATE INTEREST Page 1 of.5 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 SECRET CURRENT INTELLIGENCE WEEKLY 8IARY SOVIET SUSPENSION OF NUCLEAR TESTS A resolution will be read to the Supreme Soviet session that opened on 27 March stating that "the Soviet Union, from today, will stop all tests with nuclear weapons," according to the press. A uflilaterT l suspension would be intended to put pres- sure on the Western powers to stop their tests without agree- ment on an inspection system for test suspension and to in- crease pressure on the United States for a summit conference. The Soviet statement was preceded by a 14 March speech by Khrushchev and private diplo- matic hints pointing to a uni- lateral Soviet suspension of both testing and production of nuclear weapons. The tempo of Soviet testing since the first of January has been the highest observed in the history of the Soviet nu- clear weapons development pro- gram, perhaps indicating an at- tempt to complete the present series of tests quickly in order to announce a test moratorium at a time when the United States is about to begin a new test series. Moscow probably believes the public impact of its 'demon- strations over the past six months in the field of weapons systems would eliminate any ap- pearance of military weakness which might otherwise have been suggested by a unilateral sus- pension. Ambassador Thompson has noted recent references by Khrushchev to the dangers of radiation, which probably were psychological preparation for a Soviet announcement of uni- lateral suspension. A major aim of such a So- viet announcement would be to undercut Western efforts to en- force a suspension of tests through an inspection system. Soviet leaders have always been wary of any form of inspection in the USSR yet probably antici- pate that world opinion will eventually force some type of control if not suspension of tests. The Soviet action would have a heavy impact in Britain, where the Labor party is advo- cating a temporary test sus- pension and some of its mem- bers are publicly demanding a complete halt in nuclear weapons production. (Concurred in by OSI) SECRET PART I OF IMMEDIATE INTEREST Page 2 of 5 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 25X6 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 ' SECRET"' Indonesian Government forces have secured the east coast of Central Sumatra,.in- eluding the Caltex and Stanvac oil production areas, and are now moving overland toward the dissident centers of Padang and Bukittinggi. Dissident troops, which put up their chief re- sistance in these areas at river crossings, probably will con- tinue to harass government forces at such points as the latter proceed westward. Dis- sident commander Lt. Col. Hus- sein's strategy allegedly is to conserve his forces' strength for a major defense effort in the west, where mountainous ter- rain will be more favorable to his troops. The most serious clashes to date have occurred in N6rth Sumatra. These followed the withdrawal of dissident units southward from Medah to Siantar and then toward Prapat, and the appearance of other dissident units from Tapanuli. The gov- ernment claims substantial dis- sident surrenders. Insurgent forces are now returning to Tapanuli, and the Siantar-Prapat area appears to be under govern- ment control. In North Celebes, a lull in military activity continues. Lt. Col. Somba, North Celebes dissident commander, has ar- ranged an alliance with a guer- rilla organization of some 300 men, and has recalled to service inactive and retired personnel of both the Indonesian Army and the former Royal Netherlands Indies Army. . In Djakarta, the government is preparing to submit for par- liamentary approval a Chinese Communist agreement of $20,000,- 000 which would provide for a textile factory, 20,000 tons of rice, and 70,000,000 yards of textiles. In view of present shortages in Indonesia, ar- rangements are being made for deliveries of the rice and SEC1 FT PART I OF IMMEDIATE INTEREST Page 4 of 5 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET textiles before the loan agree- ment is finalized. An Indonesian Foreign Min- istry official has said he un- derstands Russian officers will continue to serve on the mer- chant ships recently purchased from the Soviet Union untila sufficient number of Indonesians are qualified, and that the Rus- sians will also instruct in the. merchant marine school on the use of the vessels. Increased Indonesian Com- munist party activity is re,- CURRENT INTELLIGENCE WEEKLY SUMMARY SECRET flected in an anti-US, anti- SEATO student demonstration at the American Embassy in Djakarta on 25 March, the appearance of anti-Western slogans on Djakarta streets, and a wave of anti-SEATO, noninterventionist petitions to the American Embassy from Communist-front groups. Al- though all activity thus far has been orderly, the Commu- nists have the capability to inspire mass demonstrations which could easily 1 elt out of control. MALAYA PoaE"?`? SUMATRA .Tandjung Pinang RIAU ISLANDS B 0 R N E 6 PART I OF IMMEDIATE INTEREST Page 5 of 5 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 ^ Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 UV I'' - V Ll ~ in "" CURRENT INTELLIGENCE WEEKLY SUMMARY NOTES AND COMMENTS The month-long parliamen- tary recess beginning 28 March will give Premier Gaillard a respite but will not free him from rightist clamor on the Tu- nisian issue or from possible Socialist demands for conces- sions to labor, either of which might result in cabinet resigna- tions and cause the downfall of his government. The Socialists and Independents are increas- ingly at odds as the campaign for the 20 April General Council elections in the departments develops. Gaily rd's most pressing problem is -#~o avoid a showdown on Tunisia. '-Many Independents were determined to provoke a crisis on this issue, and both they and the Social Repurblicans have set up "watchdog" commit- tees to function during the re- cess. Both parties have taken strong positions against any concessions to Tunisia on Bi- zerte, the airfields, or "neu- -trality" in the Algerian war, but they are following a wait- and-see strategy until Gaillard makes some definite .response' to the good'offices propos- als. Meanwhile, a rash of 48- hour strikes is expected in early April among transportation, power, and postal workers. These labor disputes could seriously embarrass the government if the Socialists feel obliged to de- mand wage increases for labor. Gaillard has managed so far to maintain the major aspects of his austerity program. The electoral campaign is deepening the rift between the wings of the coalition, par- ticularly as pressure for work- ing out deals for the 27 April run-offs aggravates political tensions. Socialist party Sec- retary General Guy Mollet has charged that the Independents' electoral program is directed principally against his party. He warns that if some local In- dependent leaders attempt to form run-off alliances with': the, Poujadists, the Communists will be provided with an oppor- tunity to make an attractive 25X1 offer to the Socialists for a united stand against a "fascist menace." Delegates of the dominant Moroccan Istiglal and Tunisian Neo-Destour parties; and the Algerian National Liberation Front (FLN) will hold a congress on 27 April in Tangier with the objective of establishing the bases for a united Maghreb (North African federation) and of seeking the means to realize such a union. The delegates probably will also seek more effective support for the Al- gerian rebellion. The creation of a united Maghreb is also viewed by these groups as a way to lure Algerian nationalists from Cairo's influence, as well as to maintain pressure on Rabat and Tunis to prevent concilia- tory arrangements with Paris. The Algerian nationalists, who have intermittently debated the advisability of creating a C 0 qwaT "AL PART II NOTES AND COMMENTS Page 1 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 NNW SECRET government-in-exile, may hope that Morocco and Tunisia, which may have discouraged such an undertaking, can be maneuvered into sponsoring it in order to launch a united Maghreb. Tunisian President Bour- guiba is impatiently awaiting Paris' response to the latest good offices proposals for im- proving relations. He has in- dicated that he can make no more concessions and that if Paris does not endorse the proposal he will press for UN action. Gaillard has apparently been stalling for time until the Na- tional Assembly adjourns for the Easter recess on'28 March. Despite assurances to the contrary, Bourguiba still fears the French military may attempt to reoccupy the country or that a French-backed coup may be at- tempted against him. The FLN has publicly declared that all its facilities would be placed at his disposal should hostili- ties break out with France. In Algeria, Minister La- coste has again declared that the battle of the Tunisian bor- der is being won. While Lacoste has been optimistic regarding implementation of the new basic statute, he has set back from 1 April to July the date when appointive local councils are to be ready to assume responsi- bility. As watered down by successive amendments, the basic statute is unlikely to satisfy Algerian aspirations for first- class citizenship and responsi- bility for their own affairs. In Morocco, pressure is being built up for a firmer posture toward France and Spain. When informed that France would withdraw 10,000 of its 40,000 troops in Morocco, Rabat indi- cated it expected a complete evacuation. Meanwhile, a new attempt may be made to reach 25X1 an amicable settlement of Mo- rocco's territorial dispute over Southern Morocco. SOVIET TACTICS ON THE GERMAN QUESTION The Soviet Union, to in- tensify pressure on the West for a summit conference, is trying to create an impression of flexibility on the German question. Moscow is handicapped in this effort by its continu- ing opposition to German unifi- cation which, under any feasi- ble scheme, would be less de- sirable in the Soviet view than the status quo. Moscow hopes to avoid summit discussion of this topic and instead has pro- posed discussing a German peace treaty at the summit. In its 19 March aide-memoire to Bonn, the USSR suggested that such a treaty be concluded with a delegation agreed upon by the East and West German gov- ernments. The USSR's present sugges- tions resemble that country's tactics in 1952 before it ac- ceded to Western insistence that free elections be the first step toward unification. A Ger- man peace treaty, proposed by Moscow as an agenda item in a note to the United States on 28 February, has been advertised by Soviet spokesmen as a move toward unification. The Soviet ambassador to Bonn has claimed that'the peace treaty proposal was based on suggestions made by West German Bundestag Presi- dent Gerstenmaier in discus-' sions with Soviet officials. The Soviet aide-memoire of 19 March denied that two separate German treaties would SECRET PART II NOTES AND COMMENTS Page 2 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET 10 December 1957 Letter to President Eisenhower 8 January 1958 Letter to President Eisenhower B January 1958 Proposals to NATO and India, Egypt, Sweden, Afghanistan, and Austria "It goes without saying that questions directly relating to Communist China can be solved only with its participa- lion" I February 1958 Letter to President Eisenhower 28 February 1958 Aide-memotre to President Elsen- hower 1 March 1958 Letter to Pineau 6 March 1958 Letter to President Eisenhower 14 March 1958 Letter to Macmillan 24 March 1958 Aide-memolre to President Eisen- hower Agree first to hold sum- mit conference - then pro- cedural questions can be handled through diplomatic channels In the nearest future; time, place, definite com- position, and agenda of summit conference to be determined by conference of foreign ministers Suggested: June 1958 - firm agreement on date should be reached (in dip- lomatic talks in near fu- ture) before fore min- isters con erence To be determined by for- eign ministers' conference - USSR favors "early con- vocation In accord with the aspirations of all nations" Calls merely for "meeting of the heads of government" NATO and Warsaw states - also "some" neutrals - (of paramount importance that talks be on highest level with participation of heads of government) 1) all NATO and Warsaw states with participation of such neutrals as India, Afghanistan, Egypt, Yugo- slavia, Sweden, Austria, or 2) narrower composition: two or three from each grouping, or 3) US, USSR, and one neutral. To be determined by foreign ministers' conference: possible, AR NATO and Warsaw states and a number of neutrals, e. g., India, Afghanistan, Egypt, Sweden, and Austria Parity basis - e, g., West: France, US, UK, Italy; East: USSR, Poland, Czecho- slovakia, and Rumania and some neutrals mentioned in 8 January proposals (Sweden, Afghanistan, Austria, Yugo- slavia, India) To be determined by foreign ministers' conference PRELIMINARY FOREIGN MINISTERS MEETING USSR against preliminary for- eign ministers' conference (biased participants; might pre- clude summit meeting) Preliminary foreign ministers' conference would create ob- stacles to summit talks; hold such conference after (to draw up agreements recd at sum- mit) Wish to avoid making summit conference conditional on out- come of foreign ministers' con- ference (biased participants, create obstacles to summit con- ference) - if agreement on hold- ing summit conference reached, procedural questions can be settled through diplomatic channels April 1958 - to be strictly Limited to organizational questions - in a place acceptable to the other par- ticipants - same composition as summit conference, or, if nar- rower conference desired: US, UK, France, Italy, USSR, Po- land, Czechoslovakia, Rumania, India, Yugoslavia, and Sweden. (But such possible limitation should in no way predetermine composition of summit confer- ence) Suggested: Geneva, April 1958 - in diplomatic talks in near future composition, time, and place of foreign ministers' conference could be determined as well as time of summit conference - for- eign minis(ers' conference could prepare agenda and determine composition of summit conference Some questions involved could be settled through diplomatic channels- but USSR ready to meet US sugges- tions on foreign ministers' confer- ence half way - it could be called in April to draw up agenda and de- termine composition, time, and place of summit conference Suggested: April - limited to deter- mining agenda, composition, time, and place of summit conference Same as 14 March 1958 note to Macmillan (above) 1) US, USSR, UK (a) ban use nu- clear weapons, (h) suspend tests as of 1 January 1958 for 2-3 years. 2) atom-free zone in central Europe 3) NATO-Warsaw nonaggression pact 4) Middle East - agree not to infringe independence, no use of force 5) halt propaganda 6) restore normal trade 7) scientific, cultural, sports con- tacts 8) US- USSRtrcaty of friendship (USSR willing discuss questions other participants might find necessary) After confidence established: (A) cut armed forces and arma- ments (B) nuclear weapons: complete ban, stop manufacture, de- stroy stockpiles (C) withdraw foreign troops from NATO-Warsaw states (D) establish system collective security Proposals 1b, 2, 3, 5, and 6 above, and 9) reduction foreign forces in NATO- Warsaw states (also steps (A) thru (D) at future stage of negotiations) Proposals 1 through 7 and 9 above and: 10) measures to prevent unexpected attack; disarmament controls- -control posts -800-kilometer zone aerial photography east and west of line dividing NATO and War- saw states Proposals 1 through 6 and 9 and 10 above, and 11) (a) USSR ready to examine question of intercontinental rockets if West willing to agree to (biban atom and hydrogen weapons, (c) end tests and (d) liquidate for- eign military bases USSR willing discuss other "construc- tive proposals" - all participants should be In tali accord on necessity of consider- ing such proposals (discussion of Security Council veto, Eastern Europe, and Ger- man unification ruled out) Proposals 1 thru 6, 9, 10, 11 (points a and d only) and "other constructive proposals"....also: 12) conclusion German peace treaty (with East and West German par- ticipation) 13) development personal contacts (discussion Eastern Europe and German unification ruled out) On 15 March 1958 USSR expanded this proposal to include: -ban on use cosmic space for military purposes, and rocket launching only under agreed International program; -elimination foreign military bases, primarily in Europe, Middle East, and North Africa -international control through UN of above obligations -UN agency for international coopera- tion in study of cosmic space Issues should be included on agenda by mutual agreement - discussion of reunification of Germany In con- nection with atom-free zone and of cessation of manufacture of fissiona- ble materials in connection with test ban ruled out Proposals 8, 11 (points (a) and (d) only), 12 and 13 - USSR prepared at any time to sign agreement on point (B) above "with appropriate Interna- tional control"- prepared to discuss other construc- live proposals... (but none which fall in province of internal affairs of other states - e. g. , Eastern Europe and German unification) - also: 14) ways of strengthening UN (but not giving up Security Council veto) Proposals of 8 January 1958 - also: 11 (a and d), 12, 13, 14 and "other constructive proposals" - still un- willing to discuss Eastern Europe, German unification, elimination of Security Council veto Proposals identical to those mentioned in 28 February 1958 alde-memoire SECRET PART II NOTES AND COMMENTS Page 3 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 d r%w ...SECRET. CURRENT INTELLIGENCE WEEKLY SUMMARY be necessary or that a confed- erated German state must first be formed to negotiate the."? treaty. Yet Moscow continues to oppose German reunification, a step which would be necessary before a peace treaty could take effect. Further, Moscow would insist, as in the past, on an advance pledge of neu- trality for a reunified Germany. For-this reason, the proposal for a peace treaty as a topic for discussion at the summit has had a negative response in West Germany. SECRET PART II NOTES AND COMMENTS Page 4 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET ~?.r CURRENT'INTELLIGENCE WEEKLY SUMMARY. 27 March 1958 SOVIET STEEL INDUSTRY The Soviet steel industry will probably be able to achieve an annual production of 100,- 000,000 to 120,900,000 metric tons of crude steel in about 15 years, as proposed late in 1957 by Khrushchev. The Soviet goal is equivalent to about 90 percent of present US capa- city. Construction plans will probably not be fully met in 1958 and 1959, but by the end of 1960 the effects of inadequate invest- ment in the past, particularly in iron ore mining, will gress in February 1956, when a behind-the-scenes-struggle between the technologists ad- ministering ferrous metallurgy and the.planners emerged. The decision in late 1956 to accept a limited increase in production while concentrat- ing capital and material re- sources on eliminating the imbalance has resulted in lower 25X1 USSR: CAPACITY INCREASES I N IRON AND STEEL INDUSTRY MILLIONS OF METRIC TONS probably be largely TYPE OF 1956 overcome. CAPACITY PLAN ACTUAL Although efforts have been made over the years to balance the growth of all parts of ferrous metallurgy, Soviet planners have at the ORE MINING & PROCESSING BLAST FURNACE STEELMAKING 1957 1958 1959 ORIG.61H PLAN ACTUAL PLAN PLAN 5-YR PLAN 20.0 7.OEST. 10.0 24.7 84.0* 1.0 2.1 2.1 4.7 7.1 16.8 1.4 3.0 2.1 ESL 2.5 - 15.8 * May have been raised to 91,000,000 tons. 27 MARCH 1958 same time insisted on greater steel output without providing the necessary investment. This policy was reflected in the Fifth Five-Year Plan (1951-55) when crude and finished steel production exceeded goals, but nearly all other targets in ferrous metallurgy were missed. The problem was not openly aired until the 20th party con- growth rater for Steel production and made the ferrous metallurgy goals of the Sixth Five-Year Plan (1950-60) unattainable. Goals more consistent with 15-year tar- gets are expected in the upcom- ing Seven-Year Plan. In 1957 the planners sched- uled production increases small- er than in 1956,and this year's plan calls for still more modest SECRET PART II NOTES AND COMMENTS Page 5 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 N-W sICKI-1 CURRENT INTELLIGENCE WEEKLY S production increases. Plans for the construction of new capacity during 1958 and par- ticularly 1959 indicate a con- tinuing effort to balance seg- ments of the industry by con- centrating on expansion of the industry's raw material base. The USSR's crude steel output last year, second largest in the world, was up 5 percent from 1956, which compares with rises of 4 percent in West Ger- many and 5 percent in Britain and a 2-percent drop in the United States. Soviet crude steel production during the first quarter of 1957 was 44 percent of that of the United States but is expected to rise to 73 percent in the first quar- ter of 1958, principally as a result of the reduced American production rate. In crude steel production capacity, how- ever, the Soviet industry grew by 5 percent in 1957 and the American b over 9 percent. Prepared by ORR) 25X1 HUNGARY RESUMES MEASURES AGAINST "COUNTERREVOLUTIONARIES" After a short lull, the Hungarian regime in recent weeks has returned to the practice of holding secret trials of "coun- terrevolutionary criminals" and publicizing the sentences in a final effort to dispose of the remaining cases of persons ac- tive in the 1956, revolt and suspected sympathizers. Its policy has been to punish such elements severely. The minister of justice has ordered that trials be speeded up. Two leaders of the impor- tant Csepel Island group of revolutionaries were recently put to death, after the Supreme Court reversed its original ac- tion commuting their death sen- tences; nine other Csepel work- ers reportedly have been hanged recently. In the provincial city of Szeged in southern Hun- gary, ten defendants received sentences ranging from two years'imprisonment to long prison terms and death. A writer, Andras Sandor, received a somewhat moderate sentence of eight years on charges of organizing a national committee in Sztalinvaros and inciting the populace against the secu- rity police and the USSR. Final- ly, the trial of Sandor Racz and Sandor Bali--leaders of the important central revolutionary workers' council--is expected "momentarily" in Budapest. This wave of trials suc- ceeds a period of relative calm following the confirmation of Janos Kadar as party first sec- retary and the elevation of Ferenc Muennich to the premier- ship on 27 January--a lull which may have been intended to get the "new" regime off to a good start. The regime, however, never relaxed its intention to wreak vengeance on its oppo- nents--as indicated by state- ments of both Kadar and Muen- nich--and it is currently con- ducting a purge of the legal profession to ensure rigorous fulfillment of its objectives. Sporadic deportations from Budapest to the provinces are continuing as a convenient way of getting rid of individuals who showed any sympathy for the revolution. Some workers have been dismissed from their jobs as "unreliable," according to the official trade union news- paper. Finally, as a minor form of harassment, a number of Buda- pest residents have had their driver's licenses canceled, SECRET PART II . NOTES AND COMMENTS Page 6 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 SECRET. . 27 March 1958 .CURRENT INTELLIGENCE WEEKLY SUMMAR'f' apparently because of political unreliability. The regime has not yet indicated its intentions con- cerning former Premier Imre Nagy and his colleagues, still interned in Rumania, but it has indicated an intention to call revolutionary hero General Pal Maleter to account. Pub- lic statements relating to Nagy suggest that no final decision has been reached on his fate, although the campaign against "revisionism" has been pressed with considerable vigor. The Nagy case is connected with bitter factional strife within the Hungarian party, In any case, the timing an procedures used in the Nagy case will be de- cided in relation to Moscow's estimate of international re- percussions, 25X1 25X1 SECRET PART II NOTES AND COMMENTS Page 7 of.19 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET CZECHS MOVING TOWARD COMPLETE COLLECTIVIZATION OF AGRICULTURE The Czech regime's recent action requiring settlement by the end of March of arrears in compulsory deliveries of agri- cultural produce appears to signal the reopening of the collectivization campaign, which in 1958 should bring Czecho- slovakia close to total agri- cultural socialization. Last fall the government decreed that private peasants and agri- cultural cooperatives would have up to 1960 to liquidate debts in installments. Moving up the deadline to the end of March this year will place the heaviest burden on those with farms of 12 to 50 acres,which make up the major portion of the remaining private holdings. This action will,~provide a powerful lever for forcing pri- vate farmers into collectives, if they do not meet back de- liveries,;which in many cases will be impossibly high. The regime has also raised 1958 compulsory delivery quotas for all farmers, with the great- est demands falling on private peasants with small holdings of up to 12 acres, and is re- quiring those factory workers who operate small farms to make deliveries to the state for the first time since 1953. These actions provide a legal means for expropriating the land of private farmers and a method for combating infla- tion in the countryside. Last year the government was forced to pay higher prices for pro- duce because farmers held back compulsory deliveries. Now, those who manage to eke out payments will be left with lit- tle more than enough to meet expenses. The socialist sector, which comprised 44 percent of all agricultural land at the beginning. of 1957, reached 65 percent by the end of the year. Collectivization goals were raised repeatedly, and an SECRET PART II NOTES AND COMMENTS Page 8 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRETy CURRENT INTELLIGENCE' WEEKLY SUMMARY 27 March 1958 CZECHOSLOVAKIA DISTRIBUTION OF AGRICULTURAL LAND JAN 1957 JAN 1958 (ESTIMATED) intensified collectivization drive reduced the area of agri- cultural land in the private sector by one third. Should this year's drive be pushed equally hard,. as the-US Embassy believes it will be, well over 80 percent of the agricultural land could. be socialized, and Czechoslovakia, with Bulgaria, would then approach the Soviet standard of complete socializa- tion. While officials contend that production goals for the Second Five-Year Plan (1956-60) can be met only if all land is socialized, collectivization generally results in at least temporarily lowered agricultural production. Underfulfillment of last year's plan for agri- cultural output can in part be ascribed to the fact that land was collectivized faster than mechanized farm equipment was made available. Collectiviza- tion also caused many farm work- ers to migrate to cities. With insufficient machinery and a reduced agricultural labor force, production goals for 1958 will be extremely difficult to achieve. I(Pre- 25X1 pared by PEIPING ELICITS PLEDGES TO MEET EXTRAVAGANT ECONOMIC GOALS Peiping, in a far-reaching campaign to achieve levels of production greatly in excess of those now planned, is encourag- ing ministries, localities, and enterprises to make extravagant pledges. The campaign goes far beyond a normal exercise in so- cialist competition and will probably result in some upward revisions in official targets for both 1958 and the Second Five-Year Plan (1958-62). The extent to which indus- trial targets have been raised is reflected in a suggestion from Peiping that the gross val- ue of industrial production this year might rise by as much as 33 percent over last year, as com- pared with the 14.6-percent in- crease called for in the 1958 plan. approved last month. Con- struction schedules have been speeded, and a number of indus- tries which were called on late last year to pass Great Britain in output in about 15 years are now pledging to do it in five or ten. An "overwhelming majority" of the nation's counties now plan to fulfill five years ahead of schedule the main targets of the 12-year agricultural devel- opment program, just revised late last fall. Over 764 coun- ties and cities, farming 30 per- cent of China's cultivated land, have undertaken to reach the SECRET PART II NOTES AND COMMENTS Page 9 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 ,- SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 27 March 1958 program's 12-year grain yield goals this year, and 115 other counties and cities have prom- ised to meet the program's cot- ton yield goals in 1958. An official of the Ministry of Ag-'. riculture comments that if these pledges are fulfilled and'.' other areas follow suit, China's agricultural output will increase by "more than 10 or even 20 percent a year," as against the aver- age annual rate of only 3 or 4 percent in the past five years. Peiping hopes to attain a sizable por- tion of the increases in industrial produc- tion by pressing plants to produce more at less cost. At the same time heavy reliance is being placed, both for 1958 and the future, on pacity has its limitations" and pointed out that not every work- er can meet Stakhanovite stand- ards. While some party leaders probably sympathize with this view, they are not openly ques- tioning the new line. The Chi- nese Communists are building a strong head of political pres- COMMUNIST CHINA: PLEDGED PLAN OVERFULFILLMENT MILLION METRIC TONS, EXCEPT AS NOTED) 1958 PLANNED I PLEDGED STEEL COAL CHEMICAL FERTILIZERS ELECTRIC POWER BILLION KWH HOGS MILLION HEAD SUGAR small and medium enterprises at the local level. Peiping first began to explore the potentiali- ties of such enterprises a year ago and has given them new em- phasis in the present campaign. Industrial ministries are draw- ing up "standardized blueprints" for local use. Peiping has ex- pressed the hope that every county in the nation will estab- lish "substantial numbers" of enterprises which would use'a minimum of state funds but would still increase industrial pro- duction by "leaps and bounds." Peiping has admitted there is some opposition to the pro- gram and has called present dis- cussions of the problems in gov- ernment offices and production centers a "severe struggle be- tween progressive and backward views." Those opposed to rapid achievement of higher production targets--among both managerial personnel and the workers--have argued that "human working ca- 6.25 150.7 7.0 168.0 150.0 1.01 1962 PLANNED I PLEDGED 12.0 230.0 15-16 300.0 220.0 sure behind their effort to meet raised production goals, and the regime will probably suc- ceed in developing the proper "enthusiasm," even among con- firmed skeptics. There is little evidence that the planning commissions in Peiping have successfully blended the extravagant and of- ten contradictory output pledges into a balanced plan, in order to avoid the serious competition for scarce funds and raw materi- als which occurred during the last great upsurge in 1956. When this is done, some of the more grossly inflated goals now proposed will have to be modi- fied, especially since they are predicated on wildly optimistic increases in agricultural out- put. The net result will prob- ably be some upward revision in the official plans both for 1958 and the Second Five-Year Plan. Prepared 25X1 by ORR) SECRET PART IT NOTES AND COMMENTS Page 10 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET` " CURRENT INTELLIGENCE WEEKLY SUMMARY JAPAN - NATIONALIST CHINA RELATIONS . The impasse between Japan and Nationalist China continues over whether the Chinese Commu- nists are to be allowed to fly their flag over a projected trade mission in Tokyo. The Japanese have proposed sending a special representative of Prime Minister Kishi to Taipei to explain the government's po- sition regarding the private trade agreement recently con- cluded with Peiping, but the Nationalists have indicated that the representative would be welcome only if he brought a satisfactory statement re- garding the flag issue. The Japanese appear to be attempting to find a formula which, while it indicates gov- ernment approval of the pri- vately negotiated trade agree- ment, would satisfy Taipei on the flag issue. Nationalist Foreign Minister Yeh has strong- ly denounced a Kishi statement to the effect that Japan would not take cognizance of any Chi- nese Communist flag flown in Japan. The Nationalists have al- ready broken off trade rela- tions with Japan and may take additional measures designed to force the Japanese Government to disapprove i f lying i the Commu- nist flag. Demonstrations may be organized and possible action against the Japanese Embassy in Taipei may occur if these get out of hand. Another meas- ure might be promotion of an Overseas Chinese boycott of Japanese goods, which in the opinion of most observers would not be very effective. It is also possible that Taipei might order the seizure of Japanese shipping within the operating radius of the Nation- alist Navy, particularly ships bound for Communist China. Chiang Kai-shek has announced his intention to break rela- tions with Japan if the Chi- nese Communist flag is raised in Tokyo. Peiping radio has main- tained a discreet silence on the subject of the Taipei-Tokyo impasse, although Moscow radio has attempted to exploit the issue by asserting that Chiang Kai-shek's strong stand is the result of American support. The Chinese Communists probably feel that the political gains to be won are important enough for them to remain adamant on the flag issue. 25X1 25X1 CHANGES IN NORTH KOREAN LEADERSHIP Kim Il-sung, North Korean premier and party boss, has recently elevated several lead- ing Communists to the party presidium, the first additions to the party's highest ranking organ since the third party congress in April 1956. Most of the promotions have gone to individuals who are believed to have helped Kim put down the attacks against his policies in the fall of 1956. Their appointments assure continua- tion of Kim's policies of em- phasizing heavy industrial production and combating any liberal tendencies. The only individual pro- moted to full membership on the presidium is former alternate SECRET PART II NOTES AND COMMENTS Page 11 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 27 March 1958 member and party theoretician, Kim_ Chang-man, who takes the seat forfeited by the leader of those purged in 1956. As a leading intellectual, Kim Chang-man last year was given the job of eliminating liberal tendencies at the university in Pyongyang. Two new alternate members of the presidium have been named. One, Han Sang-tu, is director of the organization commission under the central committee. He replaced Kim Sung-hwa as chairman of the Korean Federation of Trade Unions when the latter was implicated in the "antiparty" plot of 1956. The highly placed individuals in this conspiracy had hoped to re- verse Kim Il-sung's program of heavy industrialization and divert funds to the manufacture of consumer goods and light in- dustry. Reportedly they also accused the premier of practic- ing the "cult of the individual," but, after failing to win suf- ficient support at a central committee plenum, they were de- nounced and later purged. Also promoted to alternate presidium membership was Kim Ik-son, the chairman of the con- trol commission under the cen- tral committee. Since the con- trol commission has quasi-police powers, its chairman is in an ex- cellent position to support Kim II-sung in any future purge of opposition elements. In addition to these chang- es, Pyongyang announced on 8 March that alternate presidium member Pak Ui-wan had been re- placed as vice premier by Min- ister of Finance Yi Chu-yon, who holds the important party post of chairman of the auditing com- mission under the central com- mittee. Since Pak has not been identified as an alternate mem- ber of the party presidium for six weeks, he probably has lost that position as well. He had previously been relieved of his most powerful post--chairman of of the state construction com- mission, which had been under attack for several months for its inefficiency and backward- ness. PRO-COMMUNIST LEFT THREATENS UPSET IN LAOTIAN ELECTIONS The left-wing opposition alliance dominated by the Com- munist-led Neo Lao Hak Zat (NLHZ) is waging a vigorous electoral campaign in Laos and may emerge the victor in the 4 May elections unless the con- servative parties forge a uni- fied slate of candidates and overcome their complacency. . Campaigning for the first time since its recognition in November 1957 as a legal polit- ical party and successor to the dissident Pathet Lao, the NLHZ is masking its revolutionary aims by posing as a loyal opposition supporting established Laotian traditions, the crown, and Buddhism. Conservative spokes- men have failed to sharpen the issues by attacking these NLHZ pretensions, possibly because Prime Minister Souvanna Phouma feels this would be inconsistent with his rationalization of the Pathet Lao settlement terms on the grounds that the Pathets were not Communists but mis- guided Laotian nationalists. The NLHZ has a number of strong candidates and, together with its fellow-traveling ally, the National Union party, a SECRET PART II NOTES AND COMMENTS Page 12 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 SECRET low 00~ --- CURRENT. INTELLIGENCE WEEKLY SUMMARY 27 March 1958 network of political activists canvassing full-time at the village level. It is also ex- ploiting popular revulsion at corruption in Vientiane, where the ostentatious living and conspicious consumption of the politicians is in marked con- trast to the villagers' need for basic improvements, med- icine, and blankets. The party is also benefit- ing from the growing instabil- ity within the Laotian Govern- ment as a result of the impasse in American-Laotian monetary reform negotiations and the suspension of American aid payments. There are indica- tions that left-wing elements are organizing anti-American demonstrations and that these tensions may be exploited as a campaign issue. Finally, the unified slate of 21 leftist candidates ensures the left against a split in its elec- toral support. conservative parties continue to wage a competitive campaign and fail to reduce their pres- ent 53 candidates to a unified slate approaching 21, it is quite possible the left-wing alliance might win more than half the con- tested seats in the 59-member assembly. GOVERNMENT PARTY SWEEPS CAMBODIAN ELECTIONS The personal command of Crown Prince Sihanouk over the government and people of Cam- bodia was emphatically demon- strated in the sweeping victory of his Sangkum party in the 23 March elections to the 62-seat National Assembly. The party won 61 seats, one seat remain- ing vacant. The major political and ideological development of these elections, however, was the adoption of an all-out anti- Communist line by the hereto- fore neutralist Sangkum.. Sihanouk's personal pop- ularity and active support of all Sangkum candidates, even before the election campaign began, virtually assured suc- cess to each of the hand-picked men by overwhelming proportions. {haen in Kampot, the Cambodian city considered most strongly pro-Communist, the Sangkum can- didate won 88 percent of the vote cast. The ideological position of the Sangkum during the cam- paign was first stated in early January when Sihanouk personally denounced Cambodian Communists. Although he has continually in- sisted on Cambodian neutrality in foreign policy and is increas- ingly irritated by "unsolicited" Western advice and "misunder- standing" of his domestic anti- Communist stand, he neverthe- less has sought clearly to iden- tify the close interrelation between Cambodia's internal Communists and international Communism. The PracheachQn (Commu- nist) party, running only five candidates, three of whom with- drew on the eve of the election, attempted to blur the election issues by its espousal of the SarfL'kum.. party and by asserting its 'Loyalty to Prince Sihanouk. Its spokesmen urged voters to ignore party labels and to SECRET PART II NOTES AND COMMENTS' Page 13 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 ..... SECRET1% of CURRENT INTELLIGENCE WEEKLY SPRY choose representatives on the basis of personal qualities, alone. To counter the Prachea- chon party, however, the gov- ernment labeled it the "party of destruction and foreign al- liances," associating it with the Viet Minh. Despite the overwhelming victory of Sihanouk's Sangkum party and the party's strong anti-Communist ideology, how- ever, the danger of Communist infiltration in Cambodia con- tinues as the government's principal political problem. Among the elected Sangkum can- didates, selected with Sihanouk's support, there are now five with known Communist affilia- tions and one of these is con- sidered the actual leader of Cambodia's Communists Tension is mounting in Cuba with the approach of the early April deadline set by rebel leader Fidel Castro for the beginning of the "final phase" of his fight against President Batista. Castro has announced that his forces are invading all of Oriente Prov- ince, that they are intensify- ing action throughout the country, and that a general strike will be called when conditions are ready. Support for the general strike plan may be growing: student and Catholic youth groups, Castro's National Labor Front, and even the outlawed Popular Socialist (Communist) party have declared their sup- port, but the leader of the powerful Confederation of Cuban Workers has reiterated his op- position to a politically in- spired strike. Castro claims many members of the armed forces have responded to his plea to desert and join the rebel movement, and it is prob- able that some, especially among those stationed in Oriente Province, have actually done so. However, desertion is not believed to have become a seri- ous problem for the government. cent and by making several changes in top military com- mands designed to tighten con- trol over the country. He has placed the Havana police force under the direct supervision of the army. He has also attempted to induce defections from Cas- tro's forces by offering a general amnesty and intimating that the revolutionaries, if they lay down their arms, may be given an opportunity to par- ticipate in the general elections, which have been postponed from 1 June to 3 November. Batista has further said he would con- sider favorably any request formally presented by the op- position for UN or OAS super- vision of the elections. Batista is countering Castro's moves by increasing army strength by some 30-per- SECRET PART II NOTES AND COMMENTS Page 14 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET CURRENT INTELLIGENCE WEEKLY 8 RY 27 March 1958 Fundamental differences between Britain and France may cause negotiations for estab- lishing a Western European Free Trade Area (FTA) to link Britain and ten other OEEC countries with the six of the Common Market to break down at the meeting of the Ministerial Intergovernmental Committee on 31 March-1 April. ~p 30 a' 20 10 ~0\ 0 10 20 30 / 1 THE PROPOSED FREE TRADE AREA 1 o :qt:=::: " (ALL OEEC COUNTRIES) FEq . N' ' - ~o _ ' . C " .::b?? POPULATION GNP 1955 S J R N a E 1956 Milli (Billion D 9 ( ons) ollars) 30 EUROPEAN ECONOMIC COMMUNITY (EUROPEAN COMMON MARKET): BELGIUM-LUX ........ 9.2 9.75 FRANCE .......:........43.6 52.00` WEST GERMANY..... 51.6 ITALY .................... 48.2 41.80 21.70 NETHERLANDS ....... 10.9 8.20 Ev TOTAL ....... 163.5 I33.45 9 3~ COUNTRIES THAT PROBABLY WILL O FINLAND JOIN FTA WITH FULL OBLIGATIONS: r W AUSTRIA ............... 7.0 4.21 R~ ".:..-. ....r:,. ._ LF` " ' N o _ Oslo '?} " ? ''.; Helsinki'; ' ,,[~ Siacxnolm?:::'-?.:='i' E~~'" ? DENMARK ............... 4.5 NORWAY ..... ....... 3.5 SWEDEN ............ ... 7.3 SWITZERLAND ....... 5.0 UK .....................51.2 TOTAL ..... . 78.5 4.15 3.38 8.74 6.24 57.40" 84.12 s 0~ .~ O ? r ? `'a . '"- OB COUNTRIES THAT PROBABLY WILL RF - ub,~ SA? :: ;' - . JOIN FTA WITH SPECIAL CONDITI GREECE 8 0 ONS: 2 15 Nr .O. ..i_" ............... . ICELAND ............... .2 IRELAND ............... 2.9 . .16 1.52 % PORTUGAL ............ 8.8 1.78 TURKEY .... _ 24.8 3.92 TOTAL ....... 44.7 9.53 - N' GRANDTOTAL ...... 286.7 227.10 IBe,;;n? ( ! W-- *1956 ANY( POLA N D Prague . CI E CH O ti " L 0 VA KIA Vi , S Wl~ enna " A11g TRIA ?RudaOesf Rouo': ? H"NO A R Y Odessa 40 ' (rsyen>: ~U RUMANIA `?:Jg~ O lg.ade _? ... 40 P~'~ad ra N ~ nuco rest YUGOSLAVIA BULGARIA S .- -. ...C ?K 5 A 4 -- n t .. GR EEC.E K "j' U R E Y Member nations of the Free Tr e ine nd the OEEC Area a a Member nations of the European Ed Economic Community (European F d:. `Q ' Common Market) LEHAV 0 200 400 600 800 Miles ?iriPm, - ' - S 0 200 400 600 800 1000 1200 Kilometers E `4 ;% .~ ' ' ??` - -? - ORGAN ? . : . ?::: .'. '( '"'" ) .'..I .::ir.':: ISRA SAO NT A P 24854 27 MARCH 1958 ]0 0 y ' :20 R' ` q SECRET PART II NOTES AND COMMENTS Page 15 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 27 March 1958 Other ECC members, while agreeing that some protection- ist concessions will be neces- sary to secure ratification by the French Assembly, are con- cerned over the French request for a delay. Some spokesmen for West Germany, Italy, and the Netherlands see in failure to establish an FTA a danger of two rival economic groups arising and hence of a basic political cleavage in Western Europe "from which only the Russians would benefit." Bel- gium has assumed the role of mediator between France and Britain. With the approach of the intergovernmental committee meeting, both France and Brit- ain have shown some willing- ness to make at least tactical concessions to prevent an open rupture. In mid-March, France's chief delegate to the OEEC re- ported that growing awareness of the French isolation and of the political division of Europe that might result from failure of the negotiations had led both Premier Gaillard and Maur- ice Faure, secretary of state for foreign affairs, to switch from opposing to supporting the FTA. France now has agreed to let its original memorandum be adjusted to the views of the other five EEC members. On the British side, the Foreign Office now seems ready for some concession on the ex- clusion of agricultural imports from the FTA, a point on which Britain has rigidly insisted heretofore. At next week's meeting, an ingenious compromise form- ula submitted during the last few days by Italy has raised the possibility that progress may be made on the highly contro- versial problem of tariff levels on imports passing through other FTA countries into EEC coun- tries. Britain and France, however, still remain so far apart in their basic views of the proper scope and function of an FTA that little substantive progress is to be expected at this time. AUSTRIA PURSUING MORE ACTIVE FOREIGN POLICY The Austrian Government is pursuing a more active foreign policy than has been the case since passage of its neutrality law in 1955. Top government of- ficials have scheduled trips to Moscow and other world capi- tals during the year and Chan- cellor Raab is again demonstrat- ing an interest in playing the role of mediator of East-West problems. For the first time, the coalition Socialists are receptive to various "disengage- ment" proposals which Austria might support. The new trend is exemplified in the preparations for the visit to Moscow of Chancellor Raab, Vice Chancellor Pittermann, and other high officials--recently rescheduled for July. The chancell,-r has publicly denied speculation that he intends to act as "messenger boy" between SECRET PART II NOTES AND COMMENTS Page 16 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET Achieving the main purpose of the July visit to Moscow--a possible reduction in repara- tions deliveries--has long been seen by Vienna as related to larger East-West developments. Many Austrian officials believe the agreement on the Austrian state treaty prepared the way for the last Geneva conference. They now feel that Moscow will ask Austria for no major conces- sions in return for a repara-. tions reduction, but will be content to demonstrate again-- at a time when another summit meeting is being discussed-- the value of friendly negotia- tions. In the meantime, Vienna is unlikely to risk offending the USSR on such minor issues as allowing international Com- munist meetings to convene in Vienna. packi plan appears, moreover, gagement proposals as the Ra- increasingly under challenge. The government-"s initial position that Austria should take no stand on such disen- Socialist party's foreign policy expert, State Secretary Bruno Kreisky, has declared his inter- est in the Rapacki plan as "a starting point" and has added suggestions for its geograph- ical extension and for inspec- tion procedures drawn from Vienna's postwar occupation ex- perience. None of these developments suggests any real change in Austria's pro-Western orienta- tion. Vienna is actively par- ticipating, for example, in the free trade area negotiations and has recently sounded out Soviet attitudes toward Austrian accession to the Common Market. The desire to show initiative in international affairs, how- ever, may make Vienna's foreign policy seem less predictable 25X1 than heretofore and,, on occasion, may unintentionally lend itself to Soviet purposes. Officials in London and Rome are increasingly concerned over the possible expansion of Egyptian influence in Somalia and the economic problems con- fronting this Italian trust territory scheduled for inde- pendence by 1960. The'?pro- Western Somali leaders already face a serious challenge from pro-Egyptian elements in par- liamentary elections to be held within the next few months. Somalia appears unable to solve its own serious adminis- trative and economic problems; subsidies from Rome=now cover its annual budgetary deficit of about $6,000,000. The phasing out of direct Italian adminis- tration and planned decreases in financial aid would provide an opportunity for increased Egyptian--and ultimately So- viet--influence in the terri- tory. At a meeting of British and Italian officials in Rome on 3-4 March, it was agreed that the Western nations must take the initiative to prevent de- terioration of the Somali sit- uation. Rome agreed, subject to parliamentary approval of SECRET PART II NOTES AND COMMENTS Page 17 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY funds, to continue the annual $2,000,000 banana subsidy and to shoulder an educational and technical assistance program costing about $1,000,000 an- nually`. This would account for half the estimated annual deficit. London, which has a strong interest in.Somalia because the trust territory adjoins Kenya and the British protectorate of Somaliland, claims that it does not have the financial UAR (EGYPT) MILES 24940 Khartoum C ~~ J ? Asmara CONGO (BEL.) UGANDA} KENYA gadisClO Entebbe Lak!. ' ,.._?.. resources to continue its an- nual assistance of about $6,- 000,000 to its own protectorate and give more than technical assistance to Somalia. Egyp- tian or Communist domination of Somalia, however, would threaten British overflight and aircraft refueling rights in the area, lead to the spread of subversion into the British protectorate, and threaten Lon- don's defense and economic in- terests there. might develop between Ethiopia and Somalia over their disputed The British also fear Somalia would be used as a cen ter for subversion against British .'interests' in East Africa and that further conflict boundary. In Mogadiscio, pro-Western, Somali leaders fear'that pro- Egyptian elements will take ad- vantage of forthcoming elections to increse their influence. These leaders had hoped to post- pone elections until late 1958 because of-the present internal party conflict over tribal mat- ters. The Italian administra- tion, however, intends to dis- solve parliament in May and to schedule elections for August, and reportedly plans to start a withdrawal of Italian per- sonnel if the elections go well. It contemplates that only a skeleton Italian staff will re- main in Somalia until-1960 . 25X1 25X1 CONSTITUTIONAL CRISIS THREATENS UGANDA A constitutional crisis of a British proposal fundamen- threatens Uganda, an East Afri- tal to orderly political ad- can protectorate of Britain, vancement in Uganda may lead because of separatist demands to a delay in London's plan to by officials of the key province develop the area into a single of Buganda and growing African - independent state -in a few years. agitation for faster political evolution. Rejection by the A British play, for direct Buganda legislature on 19 March election of 18 of the 33 African SECRET 1 M (FR )q n Ojib BRITISH (Addis Ababa SOMALILAND' 1.`ETH,I.OPIA PART II NOTES AND COMMENTS . Page 18 of 1:9 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET members in the Uganda legisla- ture of 62 members was rejected by the Buganda provincial leg- islature on 19 March. The Na- tionalists oppose non-African representation in the Uganda legislature because non-Afri- cans number only one percent of the population. They demand that all members be directly elected. In Buganda, where one third of Uganda's 5,000,000 persons live and the vast ma- jority of its economic develop- ment is located, the situation is especial- ly complicated by the personal ambitions of the powerful native king. He achieved considerable national- ist support when he was exiled by Britain in 1953 because of his opposition to British policies. London agreed to his return in 1955 after an agree- ment was reached specifying Buganda's cooperation in Ugan- da's political evo- lution and the king's new role as a constitutional monarch. Recently, the king, fearing that popular participation in the government--such as direct elections to the legislature-- would destroy much of his own power, has become increasingly uncooperative toward Britain and the Uganda administration. By cooperating with the nation- alists at this time, the king apparently hopes to thwart Brit- ish plans for Uganda. Working through his local chiefs, the king has helped to develop widespread opposition in Buganda to British policies by instigating protests, council resolutions, and finally the re- jection of the proposal by the Buganda legislature. One of Buganda's five representatives in the Uganda legislature re- signed in January, and the Bu- ganda Electoral College refused to name a successor. These Buganda actions con- front London with a serious po- tion, the result would probably spur Buganda separatism and en- danger London's policy of de- 25X1 veloping Uganda as a sin le in- dependent African state. litical situation. Britain can- not resolve the problem by forc- ing the resignation of the Buganda Council of Ministers. On the other hand, should Brit- ain ignore Buganda and consti- tute the Uganda legislature without provincial representa- SECRET PART II NOTES AND COMMENTS Page 17 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SST CONFIDENTIAL" CURRENT INTELLIGENCE WEEKLY SUMMARY SOVIET ATOMIC ENERGY ASSISTANCE PROGRAMS ABROAD The USSR is trying to es- tablish itself as the world leader in peaceful uses of atomic energy through an exten- sive program of atomic aid to Sino-Soviet bloc countries am- offers of assistance to free world countries, as well as through domestic development. The satellite nation _$.i -' = ceiving material and technical aid in exchange for raw materi- als, Most Soviet offers of assistance elsewhere have not been accepted. The only signif- icant aid to date outside the bloc has gone to Yugoslavia and Egypt, where research reactors and associated equipment are being installed. These Soviet offers have usually been made on a bilateral basis, although the USSR is showing increasing interest in working through in- ternational agencies. In January 1955, the USSR, in its first significant move toward atomic aid for the satel- lites, offered information, ma- terials, and equipment to sev- eral bloc countries to aid them in developing atomic energy for peaceful purposes. At a meet- ing in Moscow the following April, delegates from Communist China, Poland, Czechoslovakia, Rumania, and East Germany nego- tiated formal atomic aid agree- ments with the Soviet Union, Similar agreements with Hungary and Bulgaria were negotiated a. month later. One condition of the agreements is that the aid recipients supply the USSR with uranium ores. This aid program is slowly being carried out, Rumania, Czechoslovakia, and East Germany now have in operation 2,000- kilowatt research reactors re- ceived from the Soviet Union, and reactors will soon be oper- ating in Poland, Hungary, and Bulgaria. Installation of China's reactor--a seven-mega- watt, heavy-water type, consid- erably larger than the model supplied the European satellites --was scheduled for completion by the end of 1957; Peiping an- nounced on 7 March 1958 that the reactor and a 25-million- volt cyclotron are "basically complete." Moscow has expanded the aid program in some satellites from the research-reactor phase to promises to aid in the con- struction of nuclear power reac- tors. Hungary and Rumania have announced that the USSR will give such aid during 1960-61. Soviet and East German officials met in Moscow in July 1956 and shortly thereafter announced an agreement according to which the USSR would set up in East Germany an atomic power station of 100,000-kilowatt capacity; construction of this installa- tion is now under way. Radio- isotopes have been sent to all bloc countries. A bloc-wide research or- ganization called the Joint Nu- clear Research Institute, estab- lished in Moscow in mid-1956, is attended by a large number of scientists from all bloc countries. The USSR claims that during 1957, it trained 500 foreign specialists, most of whom presumably came from the bloc. The USSR provides nearly half the funds to sup- port the institute, and the rest is supplied by the satellites. Some satellite scientists, how- ever, have said they would rath- er have the money available at home for research of their own cb --)os ing . The Soviet Union in 1956 began extending offers of atomic CO~Ir1DCNTIAL PART III PATTERNS AND PERSPECTIVES Page 1 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET CURRENT INTELLIGENCE WEEKLY.SUMMARY SOVIET DISPLAYS AT SWEDISH FAIR, MAY 1956 aid to nations outside the bloc. In some cases, these have been little more than offhand prom- ises made, apparently for prop- aganda purposes, by traveling Soviet dignitaries. Moscow has, however, offered to supply Yugo- slavia and Egypt with research reactors, laboratory equipment, and technical training. The agreement between Yugo- slavia and the Soviet Union, signed in Belgrade on 28 Jan- uary 1956, provides for general cooperation and exchange of ex- perience in the field of atomic energy and for construction in Yugoslavia of a nuclear reactor with a thermal capacity of 6,500 to 10,000 kilowatts. The USSR is to give scientific and tech- nical aid in planning and con- structing the reactor, which reportedly should be completed this fall, and will provide necessary equipment and nuclear fuel at prevailing world market prices. The agreement with Egypt was concluded in February 1956 in the face of direct competi- tion with American firms. Mos- cow promised to assist in estab- lishing and equipping a nuclear physics laboratory in Cairo and in carrying out work in peace- ful uses of atomic energy, An atomic research center near Cairo will be provided with a 2,000-kilowatt research reac- SECRET tor, a 3,000,000-electron-volt cyclotron, and other apparatus. Egyptian scientists and spe- cialists are attempting nuclear research establishments in the Soviet Union. Soviet proposals of aid elsewhere in the free world have generally been tailored to the capabilities of the intended recipient. In some instances, the offers appear designed to ensure the continuing presence of Soviet technicians in the countries involved. However, the bulk of the offers consists of furnishing scholarships and/ or radioisotopes to underdevel- oped nations. As the capabili- ties of these countries increase, the USSR may offer to construct nuclear power stations. To date, few Soviet offers have been accepted by free world countries, largely because of a preference for American or pos- sibly future UN programs. In some countries, such as Burma and Indonesia, students selected over a, year ago to go to the Soviet Union are still awaiting final arrangements. In other countries, such as Iran, Thai- land, Greece, and Mexico, offers of scholarships in the USSR, most of them made in mid-1956, either have been rejected or have not been acted on for fear that acceptance would rule out any chance to obtain similar bids from the United States, PART III PATTERNS AND PERSPECTIVES Page 2 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET ;%__ CURRENT INTELLIGENCE WEEKLY SUMMARY The Soviet Union has not yet given any specific atomic aid to India, although an atomic reactor, auxiliary nuclear equipment, and necessary tech- nical assistance for installa- tion were offered during the Moscow Conference on Peaceful Uses of Atomic Energy in July 1955. Nehru, at the opening of an Indian-built reactor at Bombay in January 1957, stated that the Soviet offers would be followed up. On 27 February 1958 he said India is "studying" a Soviet proposal to train stu- dents from friendly, underde- veloped countries in the peace- ful uses of atomic energy. Soviet offers in the free world have not been limited to scientifically backward coun- tries. In early 1956, the USSR offered Norway ten kilograms of 2-percent-enriched uranium and 50 to 100 kilograms of zirconium and urged an expansion of sci- entific exchanges in the nu- clear field, including Norwegian participation in the work of the Joint Nuclear Research In- stitute. Since then, Moscow has offered more highly enriched uranium in amounts greater than ten kilograms; the Norwegians would be allowed to keep the plutonium derived from use of the uranium fuel. It is not known if the Norwegians have accepted this offer. A reactor was offered to Austria as a gift with the provision that Soviet operators remain indefinitely with the installation; this of- fer was refused. Japan, too, has been offered research reac- tors, fuel, and technical aid if formal agreements regarding technical interchange can be concluded. The USSR has, on several occasions, displayed an exhibit on peaceful uses of atomic en- ergy in free world countries, mainly in South and Southeast Asia, where its propaganda im- pact would be greatest. A per- manent Soviet exhibit is to be set up this year in Djakarta. International Organizations The most notable Soviet nu- clear cooperation efforts through international agencies have ap- peared in the International Atomic Energy Agency (IAEA), an outgrowth of President Eisen- hower's Atoms for Peace Plan inaugurated last August. The USSR, the first to ratify the IAEA statute, has pressed hard for appointment of Soviet na- tionals to top positions in the agency, and has succeeded in having one appointed deputy di- rector for training and informa- tion. A Polish national has been given a temporary appoint- ment as director for personnel. Moscow has suggested that the post of director general, now held by former Representative W. Sterling Cole of New York, be rotated among the leading powers. The USSR was unsuccess- ful in efforts to have invita- tions extended to the Moscow and East German Institutes of Nuclear Physics to attend the 1957 general conference of IAEA as observers, In addition to offering uranium to the agency, the USSR has offered scholarships for students--including 50 from un- der:ieve loped areas--and the So- viet Union has advanced train- ing for specialists in isotopes and other nuclear fields. At a meeting on 10 March 1958 of the IAEA Executive Board, the USSR recommended prompt estab- lishment of assistance programs for underdeveloped nations, par- ticularly in isotopes, training, and exchange. The USSR has also partici- pated actively in the atomic energy programs of UN special- ized agencies and has urged the formation of nuclear energy working groups under UN auspices, In October 1957 the Soviet dele- gate to UNESCO submitted a re- quest from the Soviet Youth Organization for UNESCO cooper- ation on a project for peaceful uses of atomic energy. Two SECRET PART III PATTERNS AND PERSPECTIVES Page 3 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY months later the Soviet dele- gate unsuccessfully proposed enlargement of that organiza- tions' atomic energy work. The USSR through UNESCO has offered Syria five scholarships for study of nuclear physics in the Soviet Union which have not yet been accepted. In May 1957, the USSR pro- posed the formation of an Atomic Energy Committee under the UN Economic Commission for Europe (ECE) to further the exchange of scientific and technical experience and joint develop- ment of nuclear energy for peaceful purposes. A decision was postponed until the 1958 session. An earlier Soviet proposal had called for the establishment of a European regional committee within the ECE to study the economic as- pects of peaceful uses, with scientific information exchange between the Joint Nuclear Re- search Institute in Moscow and the European Center for Nuclear Research located in Switzerland. At the February 1958 con- ference in Malaya of the Eco- nomic Commission for Asia and the Far East (ECAFE), Soviet delegates offered nuclear aid for that area and proposed crea- tion of a. standing committee to deal with peaceful uses of atomic energy. In April 1957 the USSR re- turned to the World Health Or- ganization (WHO) after an eight- year absence and now is seeking an active role in the agency, including election to the Ex- ecutive Board, WHO is interest- ed in negotiating an agreement with the International Atomic Energy Agency for joint re- search on the health aspects of radiation, 25X1 25X1 (Prepared by OSI) RECENT UNITED-FRONT TACTICS OF LATIN AMERICAN COMMUNIST PARTIES Latin American Communist parties have displayed consid- erable flexibility in applying their traditional united-front tactics to the large number of elections held since 1956, and they apparently are planning to exploit this device in this year's elections, particularly in Chile and Brazil. As em- ployed by Communists in Latin America, the united-front de- vice is often simply an elec- tion arrangement with one or more political groups. Targets for such Communist overtures include not only Socialist par- ties, as in Ecuador and Uruguay, but a variety of parties that are either left of center or nationalistic, as in Argentina, Brazil, Peru, Chile, and Gua- temala. In some instances, non-Communist groups may have initiated the bargaining for Communist support. The illegal status of most Communist parties in the hemi- sphere has not been a serious handicap to such political deals, although the Communist parties are usually not accept- ed as public partners in polit- ical groupings. There are a number of recent instances--in Brazil, Ecuador, Argentina, Costa Rica., and Peru--in which non-Communist parties have tac- itly accepted Communist elec- toral sup:,rt, but the nature of the quid pro quo, if any, has not been identified. SECRET PART III PATTERNS AND PERSPECTIVES Page 4 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 ,.Il...r SECRET ~...,., CURRENT INTELLIGENCE WEEKLY SUMMARY 27 March 1958 Communist objectives in seeking election agreements, covert or overt, vary consider- ably according to the immediate situation, but generally in- clude the following: to win greater prestige and respecta- bility for the party; to pro- mote a legal status for the party, if outlawed, or to fore- stall possible government ac- tion against the party, if legal; to infiltrate non-Commu- nist parties and the government; to gain an opportunity to run some Communist candidates on the slate of a legal party; and to further Soviet political and economic objectives in the hemisphere through association with influential and victorious political groups. Recent Latin American Com- munist activity probably reflects LATIN AMERICAN COMMUNIST PARTIES Legal Status and Estimated Strengths M 4,500 S 80,000 CUBA 4e ': M 8,000-12,000 c 75 nnn"_3n nnn C1~L GUATEMALA M 300 BR. HONDURAS HONDURAS M 500 55 0 NICARAGUA r' M 200 \__ S 1,000 PANAMA M 100 DOMINICAN REPUBLIC M None HAITI M Less than 100 Illegal status Estimated membership Estimated sympathizers In Bolivia, the party participated in the 1958 elections. In Mexico, the party does not meet minimum legal membership requirements to enter candidates in national elec - tions. 27 MARCH 1958 24936 BOLIVIA M 4,400 Z? ~? S 4,500 ) v VENEZUELA M 9,000 Cn1 OMB1A 1 S 18,000 BRAZIL M 60,000 S 100,000-200,000 M 5,000 S GUIANA S 10,000-20,~0 r PERU( 6,000 ~../( l??~ 40,000 1i M 500 1,000 SURINAM T. CHILE M 20,000 ? ARGENTINA S 504000 r M 80,000-90,000 S 140,000 SECRET f URUGUAY M 2,800-3,000 S 15,000 PART III PATTERNS AND `;?ERSPECTIVE S Page 5 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 -"- SECRET ..,W CURRENT INTELLIGENCE WEEKLY SUMMARY 27 March 1958 the increasing importance which the USSR has placed on the united-front tactic, as a parallel policy to peaceful co- existence, since the Soviet 20th party congress in early 1956. Stress on this policy has been evidenced in Khrushchev's speeches and also by the WFTU program of united action of all unions announced at its Octo- ber meeting in Leipzig, which was attended by a sizable Latin American representation. An effort is under way to improve coordination among Latin American Communist par- ties; it was probably inspired by the sessions of their repre- sentatives in Moscow last fall at the time of the 40th anni- versary celebration of the Oc- tober revolution. A discussion of political and labor ex- periences, including applica- tion of the united-front tactic, may be a principal item on the agendas of the scheduled congresses of Middle American party leaders at Mexico City this month and of all Latin American parties at Buenos Aires this summer. The major Communist success with the united front in Latin America in recent years has been in Venezuela, with Colombia and Chile at present offering favorable prospects. In cer- tain other countries, however, Communist efforts for electoral agreements have produced limited or transitory results, In Guatemala, for example, Commu- nist efforts to infiltrate the leftist Revolutionary party (PR), which won over 25 percent of the vote in the January presidential elections, have apparently been checked by an increasing awareness among PR leaders of the dangers of a Communist alliance. On the other hand, in ap- plying the united front to or- ganized labor, the Communists have chalked up considerable gains in Chile and most notably in Uruguay, where they control the larger of the two principal labor confederations and have penetrated or influenced some elements in almost all impor- tant sectors of labor. They have also had some success with labor "unity" in other countries such as Venezuela, Brazil, Ar- gentina, Guatemala, and Nicara- gua. Venezuela is the only Latin American country in which the Communist party (PCV) is par- ticipating in a political coali- tion of all parties. The Pa- triotic Front, organized clan- destinely in the summer of 1957 with Communist support and the participation of the three other major parties, played an important role in the overthrow of dictator Perez Jimenez in late January. The front now ap- pears to be the principal in- strumentality through which the interim governing junta will coordinate its policies with civilian elements during the scheduled 18-month transitional period before the restoration of constitutional government. By virtue of its member- ship in the front, the PCV has already gained considerably in prestige and may obtain legal status, which is seemingly favored by leaders of the other three parties in the front, Even now, however, Communist leaders who have returned from exile or have been released from prison are operating with- out legal restrictions. The front's program of political unity, which offers the Communists a wedge for penetration of local and central governments, is endorsed by all four parties and in the forth- coming elections may lead to an allotment of seats to each party in the Congress, state leg- islatures, and municipal coun- cils. If such an arrangement is agreed on, the PCV may be SECRET PART III PATTERNS AND PERSPECTIVES Page 6 of L1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET -.. CURRENT INTELLIGENCE WEEKLY SUMMARY expected to receive,a share of the seats, although probably the smallest among the four parties. Moreover, a program for a unified labor movement, also endorsed by all parties, appears to guarantee the Com- munists an overt association with non-Communist labor unions and organizers. The Colombian Communist party (PCC) is working on re- organization and rejuvenation in light of the legal status it has acquired through the blanket nullification of decrees pro- mulgated by the former dictator- ship. The PCC is believed to be the principal organizing force behind the People's Lib- eral Front (FLP)--a coalition of Communists and their sym- pathizers,. leftist Liberals, intellectuals, and guerrilla elements. This is the first Commu- nist attempt to apply the front tactic in Colombia since an abortive effort in 1951-52 and is probably one of the principal devices through which the PCC will attempt to participate in the government over the next 12 years, under the constitu- tional provision which estab- lished parity between the Lib- eral and Conservative parties during that period to the ex- clusion of all other parties. Chile The Chilean Communist par- ty (PCCh), one of the best or- ganized parties in Latin Ameri- ca although technically illegal, is actively campaigning for the left-wing Socialist presi- dential candidate, Salvador Allende, in the September elec- tions. Victory for Allende, whose chances are almost as good as those of any other can- didate in the race, would prob- ably mean that the PCCh would be legalized and its members permitted to vote openly and to participate in the government, as they did in 1946 when the par- ty backed the victorious presi- dential candidate. The PCCh's campaign activity is to a large extent carried out through the Popular Action Front, a Communist-promoted and -con- trolled coalition of leftist parties, and through the Com- munist-dominated Single Labor Central of Chile, Chile's only important labor confederation, The PCCh has been extremely suc- cessful in the promotion of front movements since 1938, when it played a key role in the forma- tion of the Popular Front, which elected three successive Radical presidents. Argentina The legal Argentine Commu- nist party (PCA) has generally been unsuccessful in its re- peated efforts to promote united fronts under various names since the early 1950's. After all major parties rejected whole- sale Communist overtures for a "national democratic front" in the presidential elections of 23 February, the PCA announced its support of Arturo Frondizi, victorious candidate of the In- transigent Radical party (UCRI). Frondizi tacitly accepted the Communist backing, but there has been no substantiation of accusations that he made a cov- ert agreement with the PCA. As a result of its public activities on behalf of the UCRI, the PCA has probably gained a measure of prestige. The par- ty hopes it can thereby counter- act pressure to disqualify it as a legal electoral group and capitalize on Frondizi's nation- alistic economic views to in- crease trade with the Soviet bloc and impede any rapproche- ment with the United States. On the other hand, the PCA seems to lack the necessary bargaining power to effect an alliance with any major political party, in spite of its reported sharp SECRET PART III PATTERNS AND PERSPECTIVES Page 7 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 SECRET CURRENT INTELLIGENCE -WEEKLY` SUMMARY increase in membership since early 1957. The illegal Brazilian Com- munist party (PCB) has tradi- tionally advocated a united front and officially recon- firmed this policy at its last national congress in 1954. Dur- ing the past year the Communists have increasingly stressed this view, although a top party of- ficial defected allegedly be- cause the party leadership had failed to emphasize this tactic adequately. Having had little past suc- cess--and with little prospect for success in the future--in establishing open alliances with other political factions, the PCB frequently makes covert gaining considerable prestige for a brief period after his inauguration. The PCB is now working actively in Sao Paulo to promote a united front for the October congressional and gubernatorial elections, and the party will probably make similar efforts in other parts of the country. COMMUNIST STRENGTH GROWING IN INDIAN LABOR MOVEMENT The influence of Communist- controlled labor unions in In- dia has been growing, while that of unions controlled by the Con- gress party has declined. In- creasing unemployment and ris- ing prices have contributed to this development, but the gov- ernment's ill-conceived labor policies have been the major factor. Unless these policies are revised in the near future, the Communists may become the dominant influence in the labor movement, particularly among government employees and among workers in the key heavy indus- tries being established under India's industrialization pro- gram. Indian labor unions, or- ganized and controlled by po- litical parties, have tended to place party objectives ahead of workers' welfare. The first national trade union federation, the All-India Trade Union Con- gress (AITUC), was organized soon after World War I chiefly to enlist the support of the working class in the struggle for independence. Although AITUC was not officially affil- iated with any political party, it was controlled largely by Congress party leaders until World War II, when the Commu- nists gained control following the: jailing of the Congress leaders who refused to support Britain's war effort. The Congress party leaders decided when India became inde- pendent in 1947 that the Com- munists were too well entrenched in AITUC to be removed quickly, SECRET election arrangements at the local level in an effort to gain support for legal status, respectability, and occasional- ly the right to run some Com- munists on the ballots of legal parties. In 1957, for example, the party collaborated with the governor of the state of Sao Paulo and supported the latter's unsuccessful candidate in the mayoralty race in the capital. In 1955 the Communists backed President Kubitschek's candidacy, PART III PATTERNS AND PERSPECTIVES Page 8 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927A001700030001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 .. _ . . : . _ _. _ SECRET. _ ~?"`~ CURRENT INTELLIGENCE WEEKLY ;SUMMARY 27 March 1958 so they established the Indian National Trade Union Congress (INTUC) with the few remaining Congress-controlled unions in AITUC. The socialist-controlled unions also left AITUC and formed the Hind Mazdoor Sabha (HMS). These moves were fol- lowed in 1949 by the establish- ment of the United Trade Union Congress (UTUC) by a group of Trotskyite and other extreme leftist parties. Within a few years INTUC was able to displace AITUC as the largest labor federation, partly because of the financial aid supplied by the Congress party and the favoritism shown it by the government, but even more because of the policy of violence adopted by the Commu- nist party soon after independ- ence, in line with the general Communist policy in Asia at that time. Most of the Commu- nist leaders were jailed and the workers realized that the Communists placed the welfare of the party above that of the workers. Despite the fact that the Communists ended their ter- rorist tactics by 1951 and their leaders were released from jail, they had so damaged themselves that they could make little head- way for several years. The government occasional- ly investigates the union's ex- aggerated claims of membership and issues official figures which are somewhat more accurate. The government's last release showed the following as of 31 March 1955: INTUC -- 931,968 AITUC -- 306,963 HMS --- 211,315 UTUC' --- 195, 242 Total--i,645,488 There are about a million workers in such fields as rail- ways, government, banks, and posts and telegraphs whose un- ions are not formally affiliated with any of the major federa- tions. While all federations have affiliated unions in various industries, their relative strengths vary from industry to industry. INTUC's strength is concentrated in cotton tex- tiles, leather tanning, plan- tations, and steel '.in the states of Bihar, Bombay,, Uttar Pradesh, and Assam. HMS's strength--chiefly among trans- port, government, chemical, and oil workers--is concentrated in Madras and eastern India. AITUC has its greatest strength in South India and West Bengal-- but is not the dominant union in any one industry. UTUC draws a large part of its strength from port workers in West Bengal and Kerala. Since the last official figures on membership were re- leased, the Congress-controlled unions have been losing ground to the Communists. Food prices have been rising since late 1955, wages have increased lit- tle, and unemployment has grown. Even if the Second Five-Year Plan (1956-61) is successfully carried out, it will provide work for only 8,000,000 of the 10, 000, 000 people who will enter the labor force during the plan period. INTUC Weaknesses INTUC's major difficulty stems from the nature of trade unionism in India, the relation- ship between the INTUC and the Congress party, and the govern- ment's labor policies. Many of the workers have only recently left their villages and have yet to adjust to urban life, much less to the idea of trade unionism. The workers have lit- tle bargaining power vis-a-vis their employers because of the large'number of "unemployed. They also are generally too un- educated to run their own unions. and too low on the caste scale to deal directly with employers, so the leaders must come from outside. SECRET PART III PATTERNS AND PERSPECTIVES Page 9 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET ~...,. CURRENT INTELLIGENCE WEEKLY SUMMARY Thus most labor leaders are intellectuals from the po- litical parties. Their ties with the workers are weak and they give only part of their time to unionism. The unions are often too poor to employ enough organizers and staff to serve the workers adequately, although the Communists appar- ently are making rapid strides in this respect and some of the other unions are raising dues and enlarging their staffs. INTUC's close tie with the Con- gress party has become a liabil- ity as the Congress has declined in popularity and the Communist unions have been stressing eco- nomic rather than political is- sues. In addition, INTUC has suffered because of the govern- ment's harsh labor policies. In order to reduce the loss of out- put through strikes, arbitration has been made compulsory and labor courts have been set up. The arbitration procedures and labor courts are extremely slow, however, and disputes often take several years before a final decision is rendered. The government's labor pol- icy toward its own employees has been highly paternalistic and authoritarian. Needing all the resources it can acquire to carry out the Second Five-Year Plan, it has been unwilling un- til faced with threatened' strikes even to consider grant- ing any significant wage raises as the cost of living has risen. The government usually appoints a commission which takes at least a year to examine the workers' claims, and then it often refuses to carry out the recommendations of the commis- sion. Such tactics have resulted in a continual decline in INTUC's strength among government em- ployee unions, for TNTUC has been obliged to support such policies despite their unpopu- larity with the workers. De- spite declining INTUC influence, the government has continued to favor INTUC unions, even to the point of dealing with INTUC un- ions when they represent fewer workers than other unions, thus increasing worker resentment. Growing Communist Threat As a result of such poli- cies, INTUC has been losing ground to AITUC except in South India, where, under energetic and somewhat independent lead- ership, INTUC has made noticea- ble progress during the past year. While AITUC is still far below INTUC in total strength, the combination of growing Com- munist strength and declining INTUC influence has given new impetus to the Communists' al- ready intense efforts to become the dominant labor organization in India. The greatest Communist threats appear to be among gov- ernment workers and in the state-owned heavy industrial complex that is developing in eastern India. Government em- ployees, particularly in the railway and post and telegraph unions, are reportedly bitter toward the government for push- ing through Parliament in 1957 a bill outlawing strikes which forced them to cancel a strike threat and accept a government offer to appoint a commission to look into their demands. This commission has done vir- tually nothing to date. An equally serious threat appears to be developing in the emerging state-owned heavy in- dustries. So far the govern- ment seems to have given little thought to the labor policies it will adopt when the new steel and heavy machinery factories begin operations. If it attempts to deal only with INTUC unions, it probably will face widespread worker resentment which the Com- munists would be ready to ex- ploit. If it outlaws trade un- ions in these plants--as it SECRET PART III PATTERNS AND PERSPECTIVES Page 10 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 SECRET already has at one large loco- motive factory ip West Bengal-- it probably will prevent the development of sound manage- ment-employee relations and increase Communist political' influence among the workers. Some members of the Indian Government are becoming aware that the government's labor policies are contributing to the rise of AITUC and the de- cline of INTUC. In addition, some of the younger INTUC lead- ers want. the organization to become more independent of the Congzess party and to merge with HMS so they can meet the growing Communist threat. The government and labor officials who hold these views are still in the minority, however, and they have been unable to win, high-level support. While Prime Minister Nehru is reportedly worried about the decline of INTUCIs influence, he still is concerned primarily with push- ing the Second Five-Year Plan to completion and is unlikely to adopt more liberal labor policies or allow INTUC greater freedom. Therefore, a contin- ued growth of Communist strength in the labor movement appears likely. SECRET PART III PATTERNS AND PERSPECTIVES Page 11 of 11 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 CURRENT INTELLIGENCE WEEKLY SUMMARY 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1 Approved For Release 2007/10/23: CIA-RDP79-00927AO01 700030001 -1