CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A001900080001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 45
• Document Creation Date: December 16, 2016
• Document Release Date: November 10, 2004
• Sequence Number: 1
• Publication Date: October 9, 1958
• Content Type: SUMMARY

Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
WEEKLY
SUMMARY
QiE!DENIlAL
CURRENT
INTELLIGENCE
OFFICE OF CURRENT INTELLIGENCE
25X1
CENTRAL INTELLIGENCE AGENCY
II
LCNFIDENTIAL
ES a RECORDS CENTER
25X1
COPY NO. 7 06
OCR NO. 4050/58
9 October 1958
ETER USE
1 >rSf
State Department review completed
Approved For Release 2005/04/22: CIA-RDP79-0092784 1 y 8 & ?j
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
l
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 UNAUTHORZFD PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent
the immediate appraisal of the Office of Current Intelligence.
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
' ipm `ET .
.CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
9 October 19,58
T H E W E E K I N B R I E F
TAIWAN STRAIT SITUATION . . . . . . . . . . . . . . . . . Page 1
The Chinese Communists clearly want to con-
tinue the Warsaw talks, through which they hope
to bring about an evacuation of the Chinmen and
Matsu islands, and there have been hints that
the cease-fire may be prolonged. The Communists
have strictly maintained their self-imposed cease-
fire sd:nce 5 October.
The Chinese Nationalists, while taking the
line that Peiping's cease-fire is a propaganda
move to divide the United States and Taiwan,
have refrained so far from provocative actions.
They are disturbed at suggestions that a with-
drawal from the offshore islands would be de-
sirable,
MIDDLE EAST DEVELOPMENTS . . . . . . . . . . . .
Militant Lebanese (:Chxiisltians -a:pparently,):? a .v-
Pressing.: President Shihab to replace the Karame
cabinet with a neutral military government. Riot-
ing and terrorism continue sporadically. Nasir has
reorganized. the UAR government structure to improve
his control of Syria, but he may face more local
Communist activity in the area following the re-
turn from the Soviet bloc of Syrian Communist
leader Bakdash and dissident Iraqi Kurdish chief-
tain Barzani, In Iraq, the political balance re-
mains uncertain, with ousted Deputy Prime Minister
Arif seeking to atoid leaving the country. The
ailing Imam of Yemen is again planning a trip to
Italy, while illness may hamper Saudi Crown Prince
Faysal in his reform program.
25X1
. Page 3
CONFIDENTIAL
25X1
Approved For Release Z/Q~ C~I4-F %I7~9j00927A001900080001-5
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET,
CURRENT INTELLIGENCE WEEKLY SUMMARY
? 9 October 1958
PART I (continued)
PRESIDENT MIRZA'S TAKE-OVER IN PAKISTAN . . . . . Page 5
With the support of the army, President Mirza
seized full control of the Pakistani Government on 7
October by abrogating the 1956 constitution, dismissing
the central and provincial governments,=and abolishing
all political parties. Mirza charged army commander
Ayub'with broad authority to administer the country under
martial law. While the initial reaction has been calm,
opposition may, develop later over Mirza's cancellation
of the first national elections, previously scheduled
for February. The Mirza-Ayub regime will maintain Paki-
stan's pro-Western orientation. 25X1
NOTES AND COMMENTS
FRENCH RIGHT ORGANIZES FOR ELECTIONS . . . . . . . . . . . Page 1
A new coalition of French rightist groups formed to
participate in National Assembly elections on 23 and 30
November will probably seek to identify itself as the
"national" party representing De Gaulle's aspirations.
The new electoral law is expected to drastically reduce
Communist representation in the next assembly.
25X1
BRITAIN'S CONSERVATIVE PARTY MEETING . . . . . . . . . . Page 2
Prime Minister Macmillan's Conservative party is
holding its annual conference from 8 to 11 October in
an atmosphere of mounting confidence that it will be
returned for a third consecutive term of office in Brit-
ain's general election expected next year. The Labor
opposition, aware that public opinion strongly endorses
Macmillan's fpreign policy, evidently plans to exploit
the moderate economic recession, and should this deepen,
it could reverse the political trend, as expressed in
public opinion polls, which now 'favors ':,the Conserva,tIves
THE COAL CRISIS IN THE EUROPEAN COAL-STEEL COMMUNITY . . . Page 2
Mounting stocks of unsold coal, which may reach
26,000,000 metric tons by the end of 1958, are leading
to strong pressure on the High Authority of the Coal-
Steel Community ;(CPC), to. grant,:fUr.tbev. relief to? the
complaining coal industries in Belgium and West Germany.
SECRET
ii
25X1
Approved For Releaseffl5ff ,:. A 7 -00927A001900080001-5
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
PART II (continued)
Some of the proposed measures, however, involve a de-
gree of protection which would probably create serious
problems for the CSC with the United States and GATT,
and among its member countries. 25X1
DISARMAMENT AND RELATED ISSUES--13TH UN GENERAL ASSEMBLY Page 4
The USSR's resumption of nuclear testing, coupled
with the release of the UN Scientific Committee's re-
port on the effects of radiation, will probably serve
to focus the General Assembly's discussion of disarma-
ment and related issues on the question of halting nu-
clear tests. Hammarskjold's 1 October memorandum on
disarmament was designed to ensure some measure of UN
control in the field. He hopes the assembly will en-
dorse a broad set of principles along the lines of his
memorandum. Such an endorsement, he believes, would.ef-
fectively sidetrack the USSR's specific bids for nuclear
test cessation and military budget cuts.
BONN CONSIDERS RELATIONS WITH EUROPEAN SATELLITES a . . . Page 5
West Germany probably will reach a decision with-
in three weeks on whether to take steps toward estab-
lishing relations with the European satellites. Chancel-
lor Adenauer has already indicated a change in Bonn's at-
titude on nonrecognition of the states--other than the
USSR--which maintain relations with East Germany by ex-
empting the satellites from this category. Bonn will
probably propose an exchange of economic missions with
consular rights as a first step toward full diplomatic
relations,.
FINNISH GOVERNMENT FACES SERIOUS ECONOMIC PROBLEMS . o o a Page 6
The Finnish coalition government of K. A. Fagerholm,
which ;took office on 29 August, faces a serious economic
situation in the country's growing unemployment, which
may reach 100,000 this winter ,out, of:.a..'to:tal labor ,,force of
some 2,000,000. The cabinet not only must provide in-
terim relief measures, which will strain the budget, but
must also stimulate an expansion of industry. Failure
to do so is likely to bring in a new coalition, which
would include the Communist-front Finnish People's Demo-
cratic League.
ADJUSTMENTS OF SOVIET SEVEN-YEAR PLAN CONTINUE a . . . . o Page 7
USSR Gosplan is working feverishly to complete the
draft Seven-Year Plan for release prior to the 21st par-
ty congress in January. A meeting of some 2,000 Gosplan
and sovnarkhoz officials was recently held in Moscow,
SECRET
iii
Approved For Rele 2 4/ P79-00927A001900080001-5
25X1
25X1
25X1
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
9 October 1958
PART II (continued)
apparently to consider problems connected with final
drafting of the plan. Recurrent changes in some of
the goals planned for 1965 have required extensive
readjustments in the draft, with the result that the
present state of the planning process is, according
to a Gosplan official "a continuous series of erasures
and re-entries,"
25X1
SOVIET OFFICIALS ATTEND BRUSSELS FAIR IN LARGE NUMBERS a , Page 8
The Brussels Fair has occasioned the largest influx
in recent years of Soviet officials into Western Europe.
The USSR apparently views the fair as an opportunity for
Soviet officials to see Western technological exhibits,
while at the same time offering them a much-coveted Eu-
ropean vacation, Several high-ranking members of the
party presidium have already toured the fair, and prepa-
rations are now apparently under way for the arrival of
Premier Khrushchevo In addition scores of regional par-
ty and government officials have quietly visited the
fair since its opening. 25X1
VOROSHILOV'S VISIT TO AFGHANISTAN o a o 0 0 0 , , . o , , Page 9
The recent visit of Soviet President Voroshilov to
Afghanistan was designed to counter Afghan expressions
of interest in Western economic overtures and signs of
Afghan rapprochement with Western-oriented Pakistan and
Iran. No new economic aid was officially announced, al-
though there have been rumors that a $30,000,000 aid of-
fer was made, An otherwise noncommittal joint communique
on 6 October professed that the views of both countries
on major international problems "are close and in many
ways identical."
India's steel expansion program--calling for an in-
crease in annual crude steel production from 1,700,000
metric tons in 1955 to more than 6,000,000 metric tons
in 1960--will be advanced about 10 October when a new
blast furnace of the privately owned Tata Iron and Steel
Company begins operations This unit, with a capacity of
2,000 tons per day, as well as other processing units
scheduled to go into production throughout the country
in the next few months, should ease India's steel short-
age, which has restricted industrial expansion during
recent years,
SECRET
iCvl/' 79~
Approved For Release THE/QK: IN--Rp BR7EF00927A001900080001-5
25X1
Page 10
25X1
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
9 October 1958
PART II (continued)
LAOTIAN POLITICAL SITUATION . . . . . . . . . . . . . . . . Page 11
A political crisis appears to be 'imminent in Laos
as a result of opposition to the government's 30 Sep-
tember monetary reform agreement with the United States.
A motion of no confidence may be raised against Prime
Minister Phoui after he presents the reform to the as-
sembly on 10 October. The government's parliamentary
base is so small that even three or four defections
might cause the cabinet to fall. A period of extreme
political instability would probably result, and there
are continuing reports that rightist elements backed
by the army might ultimately intervene to impose a gov-
ernment.
POSTCRISIS DEVELOPMENTS IN BURMA . . . . . . . . . . . .
Burmese Commander in Chief Ne Win is scheduled to
assume the premiership on 28 October for an announced
period of six months, but there are already sighs he
may remain in office longer. Additional information
tends to confirm the view that the army forced U Nu's
resignation on 26 September. However, both Ne Win and
U Nu, undoubtedly to maintain the impression that demo-
cratic processes are being followed, now assert that the
army merely collaborated in a voluntary transfer of pow-
er.
25X1
WESTERN COMPANIES AND TECHNICIANS PREPARE TO LEAVE.IRAQ Page 12
Labor problems and difficulties in dealing with the
new Iraqi regime are causing many Western companies to
prepare to leave the country as their present projects
are. completed. The resulting vacuum may encourage t.he,
UAR and the Soviet Union to seek a major role in Iraq's
development program. The insubordination of Iraqi labor-
ers has caused uneasiness on almost all large development
projects, and there may be serious labor unrest when con-
siderable numbers of Iraqis are dismissed as the many siza-
ble development projects instituted under the previous re-
gime near completion,
PROGRESS OF TURKEY'S STABILIZATION PROGRAM . . . . 0 0 , Page 13
Turkey appears to be trying to meet obligations
under the $ 359,000,000 economic stabilization program
announced on 3 August. Progress has been slow, how-
ever, and there is still political pressure to revert
to some aspects of the previous inflationary invest-
ment program.
SECRET
. Page 12
25X1
25X1
V
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
THE WEEK IN BRIEF
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
9 October 1958
PART II (continued)
GUINEA . . . . . . . . . . . . . . . . . . . . . . . . . . Page 14
Prompt recognition of the new state of Guinea by
the USSR, Communist China, and the UAR may give these na-
tions an advantage in influencing Guinea's orientation,
The major Western nations have withheld recognition in
deference to French requests that such action be delayed
until economic and political n292 tiations are completed
between Guinea and France, 25X1
NICARAGUAN-HONDURAN RELATIONS AGAIN STRAINED . . . . . . . Page 15
The infiltration into Nicaragua early this month
of a guerrilla band of perhaps 300 men from Honduras
has heightened friction between the two countries and
could lead to clashes between their armed forces. The
rebels, however, do not seriously threaten the Somoza
regime in Nicaragua. F_ _1
PEIPING CLAIMS RECORD ECONOMIC ACHIEVEMENTS . . . . . Page 16
The Chinese Communists claim that in the past year
their economy has progressed at a rate never before
achieved anywhere, presumably including the USSR. Nota-
ble advances have very likely been scored in the course
of this year's "giant leap forward," but particular pro-
duction claims now being made by Peiping's propagandists
seem exaggerated.
TRANSPORT TIE-UP HAMPERS CHINESE COMMUNIST ECONOMY . . . . Page 17
Peiping's intensified economic development has
placed an extremely heavy burden on China's transport
networks. Serious difficulties began several months
ago and grew worse during September. Peiping is de-
termined to push on with its economic speed-up, but
has so far been unable to provide effective remedies
for the transport snarl which, if it continues, will
seriously handicap accomplishment of the "leap-forward"
goals. 25X1
PATTERNS AND PERSPECTIVES
THE CHURCH-STATE CONFLICT IN POLAND . . . . . . . . . . . Page 1
Relations between the Catholic Church and the Com-
munist government of Poland have steadily deteriorated
since 1956 as a result of the Gomulka regime's fear of
SECRET
vi
Approved For ReleasaJJOIVO.4(22 - JCIAB-RRDP7 9-00927AO01900080001-5
25X1
25X1
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
PART III (continued)
the church's ability to extend its influence over
more and more areas of Polish society. The increas-
ingly harsh attacks on the church by regime offi-
cials and the press, and the police raid on the na-
tional religious shrine of Jasna Gora in July, are
symptomatic of the fundamental and inevitable con-
flict between an aggressive Communist state and mili-
tant Catholicism. The Communists, recognizing the
impossibility of eliminating the church and its in-
fluence, now seek to curtail church activities in
every possible way.
. Page 9
25X1
25X1
Recent student demonstrations in Argentina, Uruguay.,
and Panama reflect similar tactics and effective Commu-
nist influence in student organizations, but their con-
current timing would appear to be determined primarily
by national issues rather than by increased coordination
among Latin American Communists. Unusual violence marked
both the Uruguayan student protest over a university charter
and the bitter Argentine controversy over a law authorizing
the establishment of private universities. In Panama, stu-
dents are agitating for a limitation of the powers of the 25X1
security forces.
25X1
SECRET
vii
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
THE WEEK IN BRIEF
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
9 October 1958
In an effort to maintain
publicly its claim over all Chi-
nese territory, Peiping's offi-
cial statements have shown re-
newed sensitivity to "the US
plot" to create "two Chinas."
Premier Chou En-lai and Foreign
Minister Chen Yi have found oc-
casion to attack this concept,
and Peng Te-huai's cease-fire
order in part was designed to
underscore the "domestic" As-
pect of the dispute between
Peiping and Taipei.
Peng's 6 October cease-
fire order appears mainly to
be an attempt to probe American
intentions with regard to a
possible withdrawal of Nation-
alist troops from the offshore
islands. Peiping is presenting
the United States with a de
facto cease=fire and probably
looks for an American reaction
at Warsaw.
In addition, Peng's move
was probably intended as the
first step in a campaign to
disengage the United States from
any active military support of
the Chinese Nationalists in the
offshore islands area. The
continuation of American naval
convoying activity and night
air cover has confronted Pei-
ping with a military challenge
which it has been unwilling to
meet with direct action. Cessa-
tion of shelling on condition
that the United States discon-
tinue convoying provides a con-
venient way for the Chinese Com-
munists to withdraw from a
situation which might eventual-
ly prove damaging to their
prestige.
Peng's use of a formal and
polite Chinese-language style,
almost unprecedented in the
history of Peiping's exhortations
to Taipei, suggests that the
appeal for Communist-Nationalist
negotiations was intended to
reach a sympathetic audience,
particularly among middle-level
Nationalist officials. The Com-
munists probably hope to engender
feelings which would lead to
the formation of anti-Kuomintang
and anti-US groups, as Peiping
almost certainly does not ex-
pect a Nationalist agreement to
hold talks in the near future.
Moscow has apparently ini-
tiated widespread diplomatic
efforts to block early consid-
eration of the issue by the
United Nations. In demarches
to Austria and Ceylon on 8 Octo-
ber, Soviet diplomats requested 25X1
support for Soviet opposition
if the question were raised in
the UN;
Moscow and Peiping probably
prefer to postpone such debate
until they have had more time
to test American intentions in
the light of recent developments.
Peiping's Foreign Ministry
on 8 October issued its 24th
"serious warning," charging
that between 6 October and the
early morning of 7 October Amer-
ican warships and aircraft "in-
truded into China's territorial
waters and air space." The
warning noted, however, that
after 0600 hours on 7 October
there were no intrusions and
called this "worthy of notice"
as a response to conditions set
in Peiping's cease-fire order.
Later, a 25th warning complained
SECRET
25X1
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART I OF IMMEDIATE INTEREST Page 1 of 7
 Approved For Release 2005/04/22: CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
9 October 1958
of intrusions in the Matsu and
Pingtan areas.
Peiping recently has mod-
erated its anti-US propaganda.
Peng's cease-fire order has ap-
parently changed the focus in
the Chinese and Soviet press to
an emphasis on peaceful means
in contrast to a past emphasis
on the right of Communist China
to use force. During the 1
October National Day parade in
Peiping there were none of the
posters showing American troops
being pushed out of Taiwan which
had been prominent on Peiping
streets in recent weeks. The
slogan "American troops get
out of Taiwan" was seen only
once.
Khrushchev's statement of
5 October in reply to a TASS
query was widely broadcast by
Moscow and reported by Peiping
and was intended to
help pave the way for
the Chinese Communists
self-imposed cease-
fire. Replying to
President Eisenhower's
remarks on 1 October
that the public So-
viet commitment to aid
Peiping belies Commu-
nist claims that the
Taiwan Strait contro-
versy is an "internal
affair," Khrushchev
emphasized that the
dispute between the
Chinese Communists
and Nationalists is
clearly a "civil war."
Denying that the
USSR would participate
in such purely "civil
war," he explicitly
repeated the Soviet
position: "The
USSR will come to the
help of Communist
China if the latter
TATAN
EHRTAN
is attacked from without;
speaking more concretely, if
the United States attacks Chi-
na." Khrushchev's statement
also set forth for the first
time the Soviet position that
the scale of American "inter-
ference" to date has not con-
stituted a sufficient provo-
cation for the Soviet commit-
ment of support to Peiping to
go into effect.
Communist Military Activity
The Chinese Communists are
estimated to have expended
only a small fraction of their
total ammunition stockpile be-
tween 23 August and 6 October.
If firing were renewed at the
levels maintained prior to 6
October, it is believed that
the Communists have sufficient
ammunition to continue the bom-
bardment for another 15 months.
HINMC
SECRET
Wenchm[
_TAn`h.l
.. CHOUSHAN IS.
25X1
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART I OF IMMEDIATE INTEREST Page 2 of 7
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
9 October 1958
Furthermore, the total
amount of~ammunition fired to
date could be brought into the
Amoy area within four or five
days without disrupting existing
logistical facilities. The
volume of fire delivered thus
far is believed to have con-
sumed about one tenth of the
tube life of the artillery
pieces in the area. At this
rate of fire, Communist guns
could last another four months
if their tube life had been
half expended on 23 August, or
nine months if the pieces were
new. Communist artillery has
not fired on the Chinmens since
a little after midnight on 5
October.
Chinese Nationalist Reaction
The Chinese Nationalist
reaction to the Chinese Commu-
nist cease-fire appears to be
to refrain from provocative ac-
tions, Vhile `warning .that it is
a:propaganda maneuver designed
to divide the'United States and
Nationalist 'China. -+ '
On Chinmen Island, the
cease-fire was greeted by Na-
tionalist troops with relief
and cautious optimism. The Na-
tionalists are planning to take
advantage of the respite to pour
as many supplies as possible on-
to the island and to shuttlead-
ditional supplies to the badly
damaged islands of Tatan, .and
Erhtan.
Taiwanese Reaction
Numerous reports indicate
that Taiwanese leaders, includ-
ing Provincial Assembly members
and businessmen, are unsympa-
thetic toward the Nationalist
Government's goal of a return
to the mainland and believe
the holding of the offshore
islands is not worth Taiwanese
lives. A number of Taiwanese
families reportedly believe
the government is reporting
false casualty figures and,
by way of protest, they are
refusing to collect the death
bonus offered by the Minis-
try of National Defense.
The cease-fire probably
will rouse the hopes of the
native Taiwanese that the
present crisis can be re-
solved without further casual-
ties among the Taiwanese, who
constitute over half the gar-
risons on the offshore is-
lands. The Taiwanese support
the American commitment to
defend Taiwan, but the major-
ity would probably prefer
to see Chinmen evacuated
rather than to have mili-
tary action resumed.
Kuomintang secretary Chang
Li-sheng has stated that "if
criticism continues," then
all powers would be used, in-
cluding antipress laws and mar-
tial law, to suppress the Tai-
wanese until the present cri-
sis is over. A provincial
government official believes
that if there are large cas-
ualties or if the crisis does
not end soon, Taiwanese opin-
ion might become anti-Ameri-
can as well as anti-Kuomin-
tang.
MIDDLE EAST DEVELOPMENTS
Militant Christian elegy -
ments in Lebanon have kept up
their terrorist tactics in an
effort to compel a change in the
Karame cabinet to a less obvi-
ously rebel-dominated government.
25X1
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART I OF IMMEDIATE INTEREST Page 3 of 7
 Approved For Release 2005/04/22 : CIA-RDP79-00927A001900080001-5
SECRET
UAR
President Nasir's long-
heralded reorganization of the
UAR government structure was
begun this week. The changes
affect Syria rather than Egypt,
and Syrian regional Vice Presi-
dent Asali is the only prominent
figure dropped so far. Syrian
Baathist leader Hawrani and
former Egyptian Revolutionary
Command Council member Baghdadi,
both of whom have been at odds
with Nasir, were retained in the
government as vice presidents
with cabinet portfolios; their
roles may be merely nominal,
however.
It seems doubtful that
the changes in themselves will
produce the more dynamic, united
administration in Syria which
Nasir wants, especially since
he is inclined to move less
boldly in domestic political
matters than in foreign affairs.
Nasir also complained
privately last week, possibly
for the benefit of an American
audience, about the extent of
Communist activity in the Middle
East, especially in Iraq. His
concern may well be increased
by the return to Damascus on 5
October of Syrian Communist par-
ty leader Khalid Bakdash, who
has been in the Soviet bloc
since he left Syria early this
year following the formation of
the UAR. Bakdash's return to
Syria almost coincided with the
arrival in Baghdad f`MAlla Mustafa
Barzani, dissident Kurdish leader
who has spent the last 12 years
in exile in the Soviet Union,,
Although both UAR and Iraqi
government officials probably
have reservations about Barzani's
return, he comes with their out-
ward blessing, having spent
three days in Cairo and having
had an interview with Nasir be-
fore flying to Baghdad on 6
October in response to the
standing public invitation of
the Iraqi regime.
Iraq
Iraqi Prime Minister Qasim
has moved to ,mother any opposition
which might group aroun(l former Dep-
uty Prime Minister.Ailf", It ti11
is not. clear who will evontual l.y
bebnefit froni Arif's downfall. The
cabinet shifts which followed his
original demotion appear to have
strengthend relatively conserva-
tive army elements, but thQ Coni-
munists remain the best organ-
ized, civilian 'grouping
There are continuing re-
ports that Jordan's King Husayn
may wish to remove Prime Minis-
ter Rifai, partly as preparation
for the installation of a more
"popular" government as the Brit-
ish troops depart. A parlia-
mentary attack on Rifai on 7
October may be the opening move
to get rid of him. Husayn is
also proceeding with his person-
al plans for a vacation in Eu-
rope early next month. UAR-spon-
sored clandestine radiobroadcasts
SECRET
PART I Approved For ReleaseOJ,0W &V&AW-F gg7.aQ, 7A001900080001Age 4 of 7
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
9 October 1958
are i. sti ll :attacking the King in
violent terms, although West
Jordan, the hotbed of pro-Nasir
sentiment, has been quiet.
Yemen
The ailing Imam of Yemen
has become increasingly detached
from public affairs, with a con-
sequent deterioration in ef-
fective government, and his
ability to control Soviet in-
fluence in Yemen appears con-
tinuously more doubtful. He has
renewed plans to seek medical
treatment in Italy and his de-
parture may be imminent, al-
though he is prone to delay at
the last minute. Recognizing
that his absence could provoke
political instability in Yemen,
the Imam has taken the precau-
tion of sending his brother,
Prince Hasan, back to New York
to head the Yemeni UN delegation.
Since Yemen's northern patrician
tribes, which by tradition elect
each new Imam, are believed to
favor Hasan over Crown Prince
Badr, Hasan's presence in Ye-
men during the Imam's absence
could have invited an uprising
against Badr.
Even the absence of Prince
Hasan is unlikely to free the
incompetent and increasingly
unpopular Badr from difficul-
ties. The Italian charge in
Taiz believes that Badr's posi-
tion has been maintained only
by the presence of the Imam and
that, if the Imam travels abroad,
popular dissatisfaction will
erupt in revolt against the re-
gime. Badr, who is seemingly
indifferent to the deteriora-
tion within the government, ap-
pears interested primarily in
increasing the influence of the
USSR and the UAR in the country.
in the belief that support, by
these powers will ensure his
succession. Badr's confidence
in holding power In his father's
absence is presumably based on
the belief that his control over
the army's modern Soviet bloc
weapons will permit him to in-
timidate or crush any opposition
by ill-armed tribesmen.
After long delay the ex-
ecutive council of the United
Arab States (UAS) has been
formed, and its first meeting
was held in Cairo in early Sep-
tember. According to press re-
ports, the council, which will
sit permanently in Cairo, vis-
ited Yemen at the end of Sep-
tember. The Aden press reports
that the Egyptian yacht Hurriya
has arrived in Yemen to carry
the Imam to Italy.
Mecca radio's announcement
that Crown Prince Faysal has
been ill draws attention again
to his health as a factor in
the balance of power in Saudi
Arabia. Prolonged illness might
delay the implementation of
Faysal's badly needed reforms,
which might at least tempo-
rarily strengthen the more
conservative forces in the
royal family led by King
Saud.
25X1
PRESIDENT MIRZA'S TAKE-OVER IN PAKISTAN
Pakistani President Mir-
za's seizure of full power on
7 October with army support was
the culmination of a bitter
struggle between Mirza and Paki-
stan's leading politicians over
the past three years. In an
unqualified resort to dicta-
torial rule, the 59-year-old
former civil servant abrogated
the 1956 constitution, dismissed
the central and provincial gov-
ernments, and abolished all po-
litical parties. He named army
commander in chief Mohammed
Ayub Khan! as administrator of
martial law throughout the coun-
try. The initial reaction to
the Mirza-Ayub coup has been
calm and in many quarters
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART I OF IMMEDIATE INTEREST Page 5 of 7
 Approved For Release 2005/04122d -. DP79-00927A001900080001-5
CURRENT INTELLIGENCE WEEKLY SUMMARY
favorable. Those groups which
in the past have been Mirza's
primary source of support--such
as the civil service and busi-
ness community--have welcomed
the take-over as a respite from
the chronic instability under
governments led by the poliT.
ticians. The man in the street
apparently hopes that the change
will improve his lot. No re-
action has yet been reported
from East Pakistan, where op-
position to rule by the West
Pakistan'- controlled civil'"
and military services is more
likely to develop.
The groups most affected
by Mirza's action, such as po-
litical leaders and journalists,
are either remaining silent or
reacting with great caution.
These and other sections of
the intelligentsia are likely
to develop opposition--to the
extent possible--to the impo-
sition of a dictatorial regime
at a time when it seemed Paki-
stan's
first
national elections
would
finally
be held in Feb-
ruary.
Mirza
immediately can-
celed
the elections and appar-
ently
will try to implement
his long-standing objective of
framing a new constitution with
a much strengthened executive.
Mirza and Ayub both de-
nounced the politicians as be-
ing solely responsible for Paki-
stan's troubles. Mirza appar-
ently intends to form a nonpo-
litical "advisory council" to
assist in governing the coun-
try. He may find it difficult,
however, to recruit the top-
level "advisers" he will need
to cope with Pakistan's seri-
ous economic and social prob-
lems.
General Ayub announced on
8 October that in administering
the country he would rely to
the greatest extent practicable
on regular civilian agencies
of the government in order to
permit the army to concentrate
on its normal duties. Govern-
ment offices are likely to be
run more efficiently, but Ayub
probably will find it difficult
to banish corruption from gov-
ernment, since it is nearly
as prevalent among civil serv-
ants as politicians.
SECRET
PART I Approved For ReleW 21
I-MMED 10510 ~,i;EGIfP 9S(}Q927A0019000800$age 6 of 7
 Approved For Release 2005104 & PP79-00927A001900080001-5
SEH
CURRENT INTELLIGENCE WEEKLY SUMMARY
Both Mirza and Ayub are
committed to Pakistan's pres-
ent pro-Western foreign policy.
They will maintain Pakistan's
ties with the United States
and with the regional members
of the Baghdad Pact.
The two leaders probably
will continue to work together
in the immediate future in the
interest of stabilizing the
internal situation. However,
conflicting ambitions and po-
litical pressures could even-
tually lead to friction between
them and attempts to undermine
each e 's osition. 25X1
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART I QF IMMEDIATE INTEREST Page 7 of 7
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
A new coalition of French
rightist groups formed to par-
ticipate in National Assembly
elections on 23 and 30 November
will probably seek to identify
itself as the "national" party
representing De Gaulle's aspi-
rations. The new electoral
law, which is aimed at dras-
tically reducing Communist rep-
resentation in the next assem-
bly, could normally be expected
to work to the advantage of the
center, but the threat of a
strong right may foster leftist
alliances with the Communists
at the expense of the middle-
of-the-road parties.
The mainspring of the new
"Union for the New Republic"
is Information Minister Jacques
Soustelle. Other nationali$-
tic "authentic Gaullists" on
its directing committee are
Minister of Justice Michel
Debre, former Defense Minister
Jacques Chaban-Delmas, Social
Republican party (GRS) Secre-
tary General Roger Frey, and
Leon Delbecque, who played a
key part in organizing the 13
May Algiers coup.
The new group hopes to
unify the electoral potential
of the numerous rightist politi-
cal and quasi-political organ-
izations formed. since De;~
Gaulle's investiture and of
the remnants of De Gaulle's
old Rally of the French Peo-
ple. These organizations in-
clude many former Resistance
elements, and veterans' and
reserve officers' groups which
had previously disparaged the
"party system" as the ruination
of France. The new coalition
claims About, 280,000 "mili-
tants," a group comparable to
the active core of the French
Communist party (PCF). Most
groups in the coalition have
ties with the extremist mili-
tary and settler groups in
Algeria. Army leaders in
Algeria allegedly plan to
back a "cartel of national
parties" favoring complete in-
tegration of Algeria with France.
The orientation of former
Premier Georges Bidault's new
Christian Democratic Movement
and Roger Duchet's nationalist
wing of the Independent party
is substantially similar to
Soustelle's on Algeria and
other key issues. Electoral
cooperation by these forces
could assure an overwhelmingly
rightist assembly at the expense
of the center parties as well
as of the extreme left.
The new law, which provides
for single-member constituencies
in which a majority vote is re-
quired on the first ballot, but
only a plurality if a runoff
election is needed, tends to
favor the center. In view of
De Gaulle's promise that two
thirds of the deputies elected
from Algeria must be Moslems,
a special system may be devised
for that area.
There is some chance that
non-Communist leftist groups
might be disturbed by Soustelle's
coalition to the extent of form-
ing alliances with the Commu-
nists. In any event, the
struggle between the right and
the center might permit the PCF
to elect more deputies than the
30 now considered likely. 25X1
Soustelle is estimating that the
Communists could be reduced to
15-20 seats.
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART II NOTES AND COMMENTS Page 1 of 18
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMAR`'
The annual conference of
the British Conservative party
is being held from 8 to 11 Oc-
tober amid mounting confidence
that, for the first time, the
party can win a third consecutive
term of office at the general
elections which probably will
be held next year. The elec-
tions must be held by'May 1960
at the latest. The recent sharp
rise in the government's popu-
larity cast gloom over the pre-
ceding conferences of the Labor
and Liberal parties. The Labor
leadership strove hard to pre-
sent at least a facade of party
unity, while the Liberals made
a rather unsuccessful attempt
to demonstrate vote-catching
policies distinct from either
major party.
Public opinion surveys il-
lustrate the changed political
situation. The most recent Gal-
lup poll gives the Conservatives
a half-point lead over the La-
borites. A year ago the Labor
party had an 18.5-point lead,
the widest margin ever recorded.
Prime Minister Macmillan
appears to be the major factor
in the government's improved
popularity. His adroit han-
dling of the Middle Eastern and
summit-conference issues last
summer and the government's
success in stabilizing living
costs--previously the major
grievance of middle-class Con-
servative supporters--are
widely acknowledged.
Labor and Liberal party
leaders are well aware that
public opinion strongly endorses
Macmillan's foreign policy. Lit-
tle support has developed, for
instance, for Liberal and left-
wing Labor demands for a uni-
lateral British ban on the manu-
facture of nuclear weapons. At
a meeting with the prime minis-
ter on 25 September, top-level
trade unionists acquiesced in
the government's decision to
refrain from public criticism
of American policy in the Tai-
wan Strait crisis.
There are indications that
Labor leaders believe their
chances of recovering popularity
rest in an attack on the govern-
ment's economic policy. They
charge that too severe anti-in-
flationary measures threaten
heavy unemployment and a stag-
nant level of production. Unem-
ployment, although now only 2.2
percent of the labor force, is
near a postwar high, and govern-
ment officials privately admit
concern about the lack of ex-
pansion in the economy. The
government plans to end the
ceiling on public capital in-
vestment later this month. Mac-
millan presumably hopes that
measures such as this, plus the
British economy's response to
the American economic recovery,
will deprive Labor of the re-
cession issue in what probably
will be the last parliamentary
session before the general elec-
tions.
25X1
Mounting stocks of unsold
coal in Western Europe are con-
fronting the European Coal-Steel
Community (CSC) with one of the
most difficult problems the
organization has faced since
it came into being in 1952. The
Belgian and West German govern-
ments in particular are under
strong pressure from industrial
circles to "do something" about
the situation, and these gov-
ernments, in turn, are pressing
for action from the CSC. Some
SECRET
PART I I Approved For Releas%?O 5 A4A%: ~&Wg7?00927A00190008009i5ge 2 of 18
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
of the measures either taken
or contemplated are highly pro-
tective in character, however,
and seem likely to involve the
High Authority in difficulties
with the United States and GATT,
and among the member govern-
ments in the CSC.
The relatively sudden de-
velopment of this surplus--ex-
pected to reach 23,000,000 to
26,000,000 metric tons by the
end of this year--is generally
blamed on the unusual increase
in European imports of American
coal during the past few years.
These Imports were contracted
for on the basis of the chronic
European energy shortage, ex-
pected to continue for years
to come, and the presupposed
indefinite continuation of boom
economic conditions.
While the long-term esti-
mate is still valid, the level-
ing off of economic activity
since mid-1957 has contributed
to a serious glut on the coal
market--already aggravated by
increased industrial utiliza-
tion of petroleum, supply and
price inflexibility in the Eu-
ropean mining industry, and
competition in shipping which
tends to make freight rates on
American coal very low.
Faced with the prospect
of serious unemployment in the
mines and other domestic pres-
sures, Belgium and West Germany
have already imposed restric-
tions on imports of American
coal and sought "mutual assist-
ance" from the High Authority
to preclude such coal from en-
tering their markets via other
CSC members. Some price reduc-
tions on domestic coal have al-
so been made, and the Germans
are trying to negotiate long-
term supply contracts with users
in return for rebates. If these
measures are not sufficient,
EUROPEAN COAL- STEEL COMMUNITY
COAL PRODUCTION AND IMPORTS OF US COAL
(MILLION METRIC TONS)
IMPORTS FROM US PRODUCTION
SECRET
STOCKS AT PITHEADS
(MILLION METRIC TONS)
1957
* ESTIMATED
** ESTIMATED BEFORE RECENT RESTRICTIONS
WERE INSTITUTED
25X1
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART II NOTES AND COMMENTS Page 3 of 18
 Approved For Release 2005/04/ &f P79-00927A001900080001-5
demands may be pressed for CSC
financing of stockpiles, more
stringent curbs on imports of
American coal, the adoption of
a common import policy by the
CSC, and even the declaration
of a "manifest crisis" and the
allocation of production.
Such proposals, which will
be taken up at a meeting on 13
October, pose difficult alterna-
tives to the CSC Council and
High Authority. Some would in-
volve a degree of intervention
in the coal market-which the
High Authority has always sought
to avoid, but failure to act
would open the way for further
governmental intervention and
a gradual weakening of CSC au-
thority. At the same time, the
High Authority is well aware
of the long-term dependence of
Europe on American coal, of the
financial support the CSC has
received from the United States,
and of the probability that
patently protective measures
would be a boon to critics of
the European Common Market.
25X1
Soviet resumption of nu-
clear testing, plus the release
of the UN Scientific Committee's
report on the effects of radia-
tion, will probably serve to
focus General Assembly discus-
sion of disarmament and related
issues on the question of halt-
ing nuclear tests. UN Secre-
tary General Hammarskjold's 1
October public memorandum on
disarmament was designed to en-
sure that the UN maintain some
measure of control in the field.
By gaining assembly endorsement
of a broad set of principles,
the USSR's specific bids for
nuclear test cessation and mil-
itary budget cuts could be side-
tracked.
Many UN members who are
actively interested in progress
on disarmament have apparently
been encouraged by the success
of the midsummer technical talks
on control of nuclear testing,
by the forthcoming 31 October
Geneva negotiations on cessa-
tion of nuclear tests, and by
the coming November talks on
prevention of surprise attack.
Hammarskjold's memorandum
capitalizes on this feeling and
may pave the way for a resolu-
tion endorsing technical talks
outside the UN but recognizing
the UN's fundamental concern
with disarmament, particularly
in any "follow-up action" on
control. The secretary general
believes this type of resolu-
tion would also deter countries
like India from attempting to
have the assembly tell the
technical negotiating parties
"what to do." Britain, Canada,
and France are generally in ac-
cord with Hammarskjold's ideas,
although Paris will raise ob-
jections to any phraseology
which dissociates test cessa-
tion from control of nuclear
production. The West is en-
countering difficulty in getting
cosponsors for its draft reso-
lution because no positive
statement on cessation of nu-
clear tests is incorporated.
When the assembly discusses
the UN Scientific Committee's
radiation report, the Soviet
bloc, India, and the UAR are
expected to claim that the
scientific data compiled by the
committee justifies assembly
action to halt nuclear weapons
testing. India is circulating
SECRET
PART I I Approved For Releasit&9 10wi~ : 6 ?-00927A0019000800$la-ie 4 of 18
 Approved For Release 2005/04/ MA-Gm
P79-00927AO01900080001-5
a draft resolution calling for
such cessation. Because of the
scientific make-up of the com-
mittee and the general desire
of UN members to keep such com-
mittees out of political con-
troversies, this assembly is
likely to limit itself to a com-
mendation of the committee's
report and call for continued
study and research in the field
of radiation.
al Geophysical-Year.
During assembly discussion
of the US-initiated question of
outer-space use, the USSR will
attempt to have the assembly ban
the use of cosmic space for mil-
itary purposes. UN members have
already expressed considerable
support for a committee to de-
velop an international coopera-
tion program in the field of
peaceful use of outer space along
the lines set by the Internation-
25X1
BONN CONSIDERS RELATIONS WITH EUROPEAN SATELLITES
In a press interview on 3
October, West German Chancellor
Adenauer indicated that the
question of establishing diplo-
matic relations with the Eastern
European satellites is under
consideration. A final decision
will be made after the cabinet
reviews a Foreign Ministry study
of the question, probably with-
in three weeks. A similar study
has also been undertaken by the
Bundestag Foreign Affairs Com-
mittee. Adenauer plans to ex-
plore the matter with the Soviet
ambassador before making any of-
ficial overtures to individual
satellite countries.
Bonn has previously been
interested in improving rela-
tions with Warsaw and Prague,
but Adenauer now intends to
treat the satellites as a group.
The West German press states
that Bonn representatives have
already held informal talks with
Polish, Czech, and Rumanian of-
ficials in Berlin. Foreign Min-
istry officials feel that an ap-
proach to Poland alone might
arouse Moscow's suspicions and
lead to Soviet pressure on Go-
mulka's government. Bonn prob-
ably will propose economic mis-
sions with consular rights as
a first step toward full diplo-
matic relations.
Bonn's policy of diplomat-
ically boycotting any state--
other than the USSR--recogniz-
ing East Germany has been one
of the principal hindrances to
the "active Eastern policy" de-
manded by the opposition parties
and supported by some Foreign
Ministry officials. Adenauer
indicated, however, that this
policy may be completely re-
versed. He drew a distinction
between the satellites, which
had no choice in recognizing
East Germany, and other states
recognizing East Germany of
their own volition. Bonn would
still consider the latter an
"unfriendly act."
Warsaw's insistence on the
permanence of the Oder-Neisse
boundary remains an obstacle to
full diplomatic relations with
Poland. It is not politically
possible for Bonn even to imply
recognition of Poland's claim
to the areas east of the Oder-
Neisse, since there are over
8,000,000 expellees from these
territories in West Germany.
The Social Democratic party,
which has pushed for eventual
diplomatic relations with Poland,
has rejected any recognition of
the Oder-Neisse line,
25X1
SECRET
PART I I Approved For Releasik80: E 5R00927A0019000800~age 5 of 18
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
9 October 1958
FINNISH GOVERNMENT FACES SERIOUS ECONOMIC PROBLEMS
The Finnish coalition gov-
ernment of K. A. Fagerholm, which
took office on 29 August, faces
a serious economic situation in
the country's growing unemploy-
ment, which may reach 100,000
this winter out of a total labor
force of some 2,000,000. The
cabinet not only must provide
interim relief measures, which
will strain the budget, but
must also stimulate an expansion
of industry. Failure to do so
is likely to bring in a new
coalition, which would probably
include the Communist-front
Finnish People's Democratic
League (SKDL).
Finland is seek-
ing a $30,000,000 loan
from the IBRD and
$20,000,000 from the
United States. These
funds would be used
chiefly to develop
the hydroelectric sys-
tem and woodpulp and
paper industries.
During President Kek-
konen'e visit last
May, the USSR offered
economic assistance
worth $100,000,000 to
$125,000,000 in rubles.
The Fagerholm govern-
ment is reluctant to
accept any significant
FINNISH
between the two countries. Un-
der the 1955-60 trade agreement,
Finland's annual export surplus
was to be settled each year by
triangular trade arrangements
with the satellites and by a
Soviet cash payment in converti-
ble currencies. The USSR dur-
ing 1958 sought to eliminate
these payments and to bring its
trade with Finland into closer
balance. Nevertheless, at the
end of August,Finland had an
export surplus of some $42,000,-
000. Although the Finns have
adopted remedial measures, such
as plans to stockpile petroleum
products and metals, a balance
TRADE WITH SINO-SOVIET BLOC
SATELLITES
& CHINA
assistance from Moscow,
but if no other assistance is
available, domestic pressure to
accept Soviet aid will increase.
Any successor government, partic-
ularly one including the SKDL,
would be almost certain to ac-
cept the Soviet offers of aid.
President Kekkonen has appointed
a delegation to negotiate a So-
viet loan, but no date has yet
been set by Moscow.
If Finland decides to ac-
cept any appreciable Soviet
economic assistance, it will'
distort the already seriously
unbalanced financial relations
of about;$25,000,000 is ex-
pected at the year's end.
Trade negotiations with
the USSR for 1959 are scheduled
to start later this month. If
Finland purchases additional So-
viet goods, it will' cause a drop
in imports from and discourage
exports to the West. On the
other hand, the balancing of
Soviet-Finnish trade by a
decrease in Soviet purchases from
Finland would depress the Finnish
economy still further and
aggravate the unemployment sit-
uation.
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
NOTES AND COMMENTS Page 6 of 18
(MILLION DOLLARS)
IMPORTS
I
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
25X1
FINNISH TRADE WITH THE SINO-SOVIET BLOC
AS A PERCENTAGE OF TOTAL TRADE 1953-1958
1958
JAN-JULY
9 OCTOBER 1958
exert political pres-
sure on Finland. There
is some apprehension
among Finnish officials
that the USSR will uti-
lize the situation to
emphasize Soviet dis-
pleasure with the
"rightist" character of
the Fagerholm govern-
ment, which includes
the regular Social
Democrats, whose pro-
Western leadership is
disliked by the USSR,
and, for the first
time since the war,
the conservative Na-
tional Coalition party.
The forthcoming trade
negotiations also provide an
opportunity for the USSR to
Concurred in by
ORR)
25X1
ADJUSTMENTS OF SOVIE'D SEVEN-YEAR PLAN CONTINUE
USSR Gosplan is working
feverishly to complete the
draft Seven-Year Plan for re-
lease prior to the 21st party
congress, opening on 27 January.
A meeting of some 2,000 Gos-
plan and sovnarkhoz officials
was recently held in Moscow,
apparently to consider problems
connected with final drafting
of the plan. Recurrent changes
in some of the goals planned
for 1965 have required exten-
sive readjustments in the draft,
with the result that the pres-
ent state of the planning proc-
ess~ is, according to a Gosplan
official, "a continuous series
of erasures and re-entries."
The same official stated
that the "control figures" for
the plan will be published some
two months before the party
congress. These presumably
will provide the basis for the
expected "theses" which Khru-
shchev has stated will be up
for discussion prior to adop-
tion of the plan. The delay
in finishing the plan, original-
ly scheduled to be completed
on 1 July, almost certainly
accounts for the fact that the
trade union congress, which was
to meet to discuss, it at the
end of October, has been post-
poned.
A few more goals have re-
cently come to light. A goal
of 303,000,000 tons of raw iron
ore has been set for 1965.
This Ls higher than the conserva-
tive goal for 1972 set by Khru-
shchev last November.
In the case of agriculture,
however, the new grain target
is an admission that the earli-
er one was unrealistic. The
grain goal of 180,000,000 tons
originally planned for 1960 has
apparently been put off to 1965.
A newly announced meat goal for
1965 of 22,000,000-24,000,000
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART II NOTES AND COMMENTS Page 7 of 18
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
tons represents an increase over.
the 1960-1962 goal of approxi-
matley the amount necessary to
accommodate the growing popula-
tion and is consistent with the
USSR's aim of matching the
United States in per capita meat
production. Since the 1960-62
goal is unrealistic, Soviet
propaganda will presumably em-
phasize the goal for 1965,which
has the advantage of being fur-
ther in the future, thus post-
poning the day of reckoning.
The regime may be hoping
that this convenient overlook-
ing of Khrushchev's previous
promises will be at least par-
tially compensated for by this
year's anticipated bumper har-
vest. In April, Khrushchev
for the first time qualified
his promise to catch up with
the US in livestock products
by making it contingent on
solution of the fodder problem.
Prepared by 25X1
ORR)
SOVIET OFFICIALS ATTEND BRUSSELS FAIR IN LARGE'NUMBERS
The Brussels Fair has oc-
casioned the largest influx in
recent years of Soviet officials
into Western Europe. The USSR
apparently views the fair as
an opportunity for Soviet offi-
cials to see recent Western
technological exhibits, while
at the same time offering them
a much-coveted European vaca-
tion. Several high-ranking
members of the party presidium
have already toured the fair,
and preparations are now appar-
ently under way for the arrival
of Nikita Khrushchev. In addi-
tion, scores of regional party
and government officials have
quietly visited the fair since
its opening.
Full members of the party
presidium who have made the
trip since July include Anastas
Mikoyan, Nikolay Shvernik, Ye-
katerina Furtseva, Kliment Voro-
shilov, Frol Kozlov, and most
recently Mikhail Suslov. Other
officials such as the USSR min-
isters of health, foreign trade,
and higher.education have also
visited Brussels. With the ex-
ception of President Voroshilov,
who went in his official capac-
ity, all Soviet officials have
toured the fair as private citi-
zens--more to see than be seen.
In some cases their presence
was unpublicized and virtually
unnoticed, and a number of these
officials, including Suslov and
Mikoyan, were accompanied by
members of their families.
The selection of officials
to attend the fair has appar-
ently been handled systemati-
cally with a view to gaining
maximum exploitation of the fair
through wide regional and pro-
fessional representation.
Numerous scientists, art-
ists, and professional workers
connected with organizations
in Moscow were also given the
opportunity to make the trip.
Encouragement of attendance
at the fair has involved the
risk of exposing thousands of
Soviet citizens to Western in-
fluence, but those selected to
go are primarily members of the
Soviet party and government
elite--men who, although cer-
tainly curious about the West,
are by 'virtue 'of 'their
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART II NOTES AND COMMENTS Page 8 of 18
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMRY
9 October 1958
privileged position less sus-
ceptible to Western influence
than other segments of the pop-
ulation. Furthermore, Soviet
visitors were carefully shep-
herded in large groups and given
little opportunity for independ-
25X1
on Soviet tourists.[ I
ent sightseeing. The impres-
siveness of the Soviet exhi^bi-
tion,particularly from a tech-
nological point of view, could
also be counted on to offset
somewhat the impact European
standards of living might have
VOROSHILOV?S VISIT TO AFGHANISTAN
.Soviet .President Voro-
shilov's six-day state visit
to Afghanistan was concluded on
6 October with the publication
of a joint communique which
noted achievements in the field
of Soviet-Afghan economic and
technical cooperation and pro-
fessed that the views of both
countries on major internation-
al problems "are close and in
many ways identical. In addi-
tion to Voroshilov, the Soviet
delegation included N. A. Mu-
khitdinov,; a party, secretary and
presidium member and a leading
spokesman on Soviet-Moslem af-
fairs; Deputy Foreign Minister
N. P. Firyubin; A. P. Pavlov,
head of the Middle Eastern
countries division of the So-
viet Foreign Ministry; and im-
portant cultural and economic
figures.
The visit was made osten-
sibly to repay that of Afghan
King Zahir Shah to the USSR in
duly 1957. The composition of
the delegation, however, sug-
gests that Moscow, concerned
about recent Afghan interest in
Western economic overtures and
signs of Afghan rapprochement
with Western-oriented Pakistan
and Iran, sought a reaffirma-
tion of Afghan "neutrality."
Soviet officials in Kabul
showed concern over Afghan re-
ceptivity to Pakistani and
Iranian approaches for a loose
"Aryan Union," and possibly a
regional pact including Turkey.
Although there is no evidence
of Soviet pressure, on 3 October
a spokesman for the Afghan For-
eign Ministry reaffirmed earlier
statements that there is "no
question" of Afghanistan join-
ing such a federation and re-
affirmed Kabul's policy of
neutrality and. nonalignment.
The visit resulted in wide-
spread publicity within Afghan-
istan on the theme of Soviet-
Afghan friendship-, and the So-
viet press and radio featured
Soviet-Afghan relations as a
concrete example of successful
cooperation between countries
with different political and
social systems. Voroshilov made
the usual protocol and tourist
calls, and witnessed tactical
exercises . conddcted by the :Afghan
Army with..8?viet'equipment.
No new economic agreement
was officially announced, al-
though Kabul is alleged to have
received an offer from Voroshi-
lov of a $30,000,000 loan, at
least part of which would prob-
ably finance an Afghan civil air
development program offered by
the USSR in August. This program,
which provides for modern air-
craft,, the construction of addi-
tional airports, and the train-
ing of Afghan personnel, is es-
pecially favorable to Kabul be-
cause no Afghan contributions
are required.
SECRET
25X1
PART I I Approved For Release 2T0 s 04A/22 : LOAM-hRDNTs-00927A0019000800Page 9 of 18
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT'INTELLIGENCE WEEKLY SUMMARY
INDIA'S STEEL EXPANSION PROGRAM
India's ;steel expansion
program--calling for an in-
crease in annual crude steel
production from 1,700,000
metric tons in 1955 to over
6,000,000 metric tons in 1960--
will be advanced about 10
October when a blast furnace
built by the Kaiser interests
for the privately owned Tata
Iron and Steel Company begins
operation at Jamshedpur. This
new furnace, with a capacity
of 2,000 tons per day, as
well as other processing units
scheduled to go into produc-
tion throughout the country
in the next few months, should
ease India's ._ t.ee,1 shortage,
which has restricted industrial
expansion during recent years.
The expansion program
calls for the two privately
owned mills at Jamshedpur and
Burnpur to increase their
NNDIMA
PRAT :SH
COMMUNIST
CHINA
UNITED
KINGDOM
=1955
6.2 E 1960 PRODUCTION GOALS
25X1
output from 1,500,000 to
3,000,000 tons annually by
1959. The major part of the
program, however, consists of
the construction at Rourkela,
Bhilai, and Durgapur of three
new government-owned steel
mills with aid from West Ger-
many, the USSR, and Britain.
Each of these mills is to have
a capacity of 1,000,000 tons
? Now Steel Hill
o Steel Mill Being Expanded
A Planned Steel Mill
SECRET
of crude steel, with
basic facilities
necessary to expand
production to 2,500,- 25X1
000 tons. The final
cost of these mills
and their auxiliary
facilities probably
will be about $1.4
billion.
The two private
mills and the British
mill are carrying out
their expansion pro-
grams approximately
on schedule. The
West German and
Soviet mills are at
least six months be-
hind schedule--and
indications are that
the production target
of over 6,000,000
tons will not be
reached before 1961.
Although no goal
for steel expansion
during '.the Third
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART II NOTES AND COMMENTS Page 10 of 18
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
Five-Year Plan (1961-66) has
been officially announced,
many Indian leaders hope to
construct at least one addition-
al mill at Bokaro, Bihar State,
and expand the others enough to
raise production to 15,000,000
tons in 1966. The USSR appar-
ently has offered to construct
out.
the new mill, although India
is also seeking offers from the
West. While New Delhi may
be able to construct the new
mill, the country's financial
difficulties and shortage of
experienced personnel make it
unlikely that the entire ambi-
tious program can be carried
LAOTIAN POLITICAL SITUATION
A political crisis appears
to be imminent in Laos as a re-
sult of opposition to the gov-
ernment's 30 September monetary
reform agreement with the United
States. While the reform itself
if basically unpopular, assembly
deputies are also angry at Prime
Minister Phoui Sananikone for
not consulting with them prior
to signing the accord. In addi-
tion, Phoui's efforts to keep
the new kip-dollar exchange
rate secret until after the
scheduled adjournment of the
assembly on 11 October were
thwarted by leaks almost immedi-
ately. The assembly subsequent-
ly voted unanimously to remain
in session until the end of
October.
Phoui has been forced to
modify his timetable and plans
to present the issue to the
assembly on 10 October. His
prospects for surviving this
test are not good, especially
since bitterness against Phoui's
tactics is running strong in
his own party, the recently
formed Rally of the Lao People
(RLP).
Ex-Premier Souvanna Phouma
and National Assembly President
Pheng Phongsavan apparently are
fanning opposition to Phoui in
hopes of succeeding him. Sou-
vanna's frequent meetings dur-
ing the last week of September
with the chief of the Commu-
nist-dominated Neo Lao Hak Zat
party, Souphannouvong, and with
the leader of the leftist San-
tiphab party suggest-that he
is maneuvering to form a gov-
ernment of national union.
Although Phoui's position
is precarious, he retains some
leverage. He has the strong
public backing of the crown
prince, the somewhat unexpected
cooperation of Deputy Premier
Katay, and the support of the
army and the reformist Commit-
tee for the Defense of the Na-
tional Interest (CDNI).
Phoui's overthrow would
probably create extreme insta-
bility, and the prospect for
a rightist coup backed by the
army would be greatly increased.
In a 20 October conversation
with an American official, Lao-
tian Army Chief of Staff Ouane
strongly intimated that the
army would impose a gov-
ernment "after the Phoui
government falls."
25X1
SECRET
I I Approved For ReleaseMWN4 % J$00927AO0190008009-5ge 11 of 18
25X1
25X1
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SEC T
CURRENT-INTELLIGENCE WEEKLY SUMMARY
25X1
POSTCRISIS DEVELOPMENTS IN BURMA
Burmese Commander in Chief
Ne Win is scheduled to assume
the premiership on 28 October
for an announced period of six
months, but'there are already
signs that he may remain in of-
fice much longer. According
to an army spokesman, the army
will need one to two years to
prepare for elections.
Additional information
tends to confirm the view that
the army forced U Nu.'s resigna-
tion on 26 September. However,
both Ne Win and U Nu, undoubt-
edly to maintain the impression
that democratic processes are
being followed, now assert that
the army merely collaborated in
a voluntary transfer of power.
Ne Win's projected ascend-
ancy to the premiership on 28
October will undoubtedly under-
mine Nu's faction of the Anti-
Fascist People's Freedom League
(AFPFL) in any national election.
The self-sacrificing tone of
Nu's surrender, however, will
probably increase his own per-
sonal popularity. It may be
that the viciousness of the at-
tack on Nu's government by his
AFPFL rivals, former Deputy Pre-
miers Ba Swe and Kyaw Nyein, as
they announced support for Gen-
eral Ne Win, came in recognition
25X1
of the astuteness of Nu's re-
treat. So far there have been
no overtures reported for rec-
onciliation among the feudin
leaders.
WESTERN COMPANIES AND TECHNICIANS PREPARE TO LEAVE IRAQ
Large numbers of Western
companies are leaving Iraq or
planning to do so when they com-
plete present contracts. In
some cases companies are break-
ing their contracts, citing la-
bor problems and difficulties
in dealing with the new govern-
ment as the principal reasons
for their action.
25X1
There may be serious labor
unrest when considerable numbers
of Iraqis are dismissed as the
many large development projects
instituted under the previous
regime near completion. The
former management of the Devel-
opment Board attempted to sched-
ule projects so that surplus la-
bor would be absorbed continually
SECRET
~E~iT
Approved For Release E?AMME~TY-00927A0019000800(''F,*e 12 of 18
N T0 041 P:
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
in new projects. Since the rev-
olution in July, however, busi-
ness has been stagnant and no
significant new contracts have
been assigned.
With the present govern-
ment seeking some spectacular
new project designed to capture
the public's imagination, the
problem of surplus labor has
received little consideration.
A number of French technicians
at the nearly completed Doka.n Dam
are threatening to resign, fear-
ing trouble with Iraqi laborers
when the long-planned reduction-
in-force begins. About 800
Iraqis are being dismissed now,
and another 1,200 are scheduled
for release in the near future.
The insubordination of
Iraqi laborers has caused un-
easiness on almost all large
development projects. Germans,
Englishmen, Americans, Swedes,
and other foreign technicians
reportedly are becoming jittery
and are prepared to break their
contracts in order to get
out. In virtually all cases,
Iraqi army commanders have
sided with local labor against
the foreigners.
Members of the British
staff of the Iraq Petroleum
Company are quietly seeking oth-
er employment and a number have
already quit. Representatives
of American employees at the
Dura oil refinery owned by the
Iraqi Government recently de-
manded increased compensation,
thus assuring their earliest
replacement. Responsible offi-
cials of some large foreign
corporations in Iraq are recom-
mending to their head offices
that they pull up stakes and
leave the country.
The vacuum being created
by the departure of large
numbers of Western companies
and their technicians may en-
courage Baghdad to.ask Cairo
and Moscow to seek a ma-
jor role in Iraq's development
program.
Turkey appears to be try-
ing to meet its obligations un-
derth.e $359,000,000 economic
stabilization program announced
on 3 August. Progress has been
slow, however, as a result of
the inefficiency of the Turkish
bureaucracy as well as unfamil-
iarity with economic practices
required by the West as the
price for financial support.
There is 'still,. nonetheless,
political pressure to continue
a rapid and consequently infla-
tionary economic development
program which, in the coming
months, may lead to departures
from the deflationary course
now being charted for the sta-
bilization program.
25X1
Since the Menderes admin-
istration came to power in 1950,
economic development has been
substantial but purchased at
the price of serious monetary
instability. The administra-
tion's insistence on proceeding
with development at a much fast-
er rate than warranted by avail-
able resources resulted in a
serious imbalance throughout
the economy.
The Menderes government
refused to recognize the need
for restrictive measures until
late last year, by which time
it had become apparent that a
solution to Turkey's problems
was beyond. the country's own
SECRET
PART 11 Approved For ReleasgN04A4: r2R''*00927A00190008000l lie 13 of 18
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
resources. As a result of an
on-the-spot examination of the
Turkish economy in June 1958
by experts from the Interna-
tional Monetary Fund and the
OEEC and the promise of West-
ern aid, Ankara agreed to adopt
a comprehensive economic sta-
bilization program.
In return for substantial
multilateral help from its
Western partners, the Menderes
government has adopted a pro-
gram designed to (a) eliminate
inflationary pressures; (b) en-
sure a rapid increase of goods
and services in the domestic
economy; (c) establish an in-
vestment program designed to
strengthen the balance-of-pay-
ments position; and (d) ration-
alize foreign trade.
To enable the Turks to
carry out this program, the
United States, the IMF, and OEEC
and EPU members have agreed to
extend credits and aid totaling
$359,000,000. Of this total,
the United States will provide
$234,000,000, the OEEC and EPU
members $100,000,000, and the
IMF $25,000,000.
Turkey's major trading
partners are also conferring on
the problem of rescheduling An-
kara's staggering foreign debt.
While progress is being made
in arriving at a repayment
schedule consistent with Tur-
key's ability to pay, a final
determination is not expected
for a few weeks.
In the month immediately
following announcement of the
stabilization program, economic
activity in Turkey came to a
virtual standstill. In Septem-
ber, however, the pace of imple-
mentation quickened somewhat.
Among its liberalizing measures,
the government announced global
import quotas and abolished
some import duties.
A capable administrator,
Sebati Ataman, has been appoint-
ed to head the new Ministry of
Coordination set up to oversee
implementation of the stabili-
zation program.
On balance, prospects for
a successful stabilization pro-
gram are relatively bright.
The government will be hampered,
however, by a lack of trained
personnel and may find it
difficult to resist political
pressures for a return to some
aspects of the previous infla-
tionary investment program.
F__ I
Recognition of the new
African state of Guinea by the
USSR, Communist China, the UAR,
and several African countries
may play a significant role in
deciding its future orientation,
particularly in view of the
refusal of any major Western na-
tion to accord early recognition
against French wishes.
Guinea's legislature pro-
claimed the state's independ-
ence on 2 October following an
announcement by the French
representative at Conakry--
25X1
SECRET
PART II Approved For Relea-V ?/0 : 0 7@-00927AO019000800pl-ie 14 of 18
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
who appears to have gone beyond
his instructions--that Guinea
acquired de facto independ-
ence at midnight on 30 Septem-
ber. Meanwhile, the French are
refusing to transmit messages
from Western states to the gov-
ernment of Guinea.
The lack of dip-
lomatic action by the
West may play into
the hands of non-
Western states. Gha-
na, which accorded
aifthowever' h*s, pride and readi-
ness to take offense may prompt
him to request Communist econom-
ic assistance.
Guinea's independence is
already disturbing colonial
the -`first #:recogni- ' ~ MPU RITANIA
tion, iemmov?Ag 'to esp.
tablish.partitnlarly
close relations with
Guinea. Accra . in-
tends soon:. to ex-
change ='diplomatic
representatives with
Conakry, and a good-
will ; miss on- .. from
Ghana is now iii Guin-
ea ; to 'discuss ? ~eco-
nomic cooperation and
technical and finan-
cial assistance. Gha-
na also plans to
sponsor Guinea in the United
Nations.
The UAR and the USSR quick-
ly followed Ghana in granting
recognition, and Moscow indi-
cated its desire to exchange
diplomatic representatives. If
this exchange is effected, the
USSR would gain its first rep-
resentation in West Africa.
Guinea's premier, Sekou Toure,
has Marxist sympathies, although
his educational, political, and
labor ,..experiences. appear to
have made him aware of the dan-
gers of close association with
Communism. If' .'.he,._ is denied
Western assistance for economic
LIBERIA' COAST
JAbidjan
Fort Lam
W ESTJ FRICA / ,J
~
1 FRENCH
f
S ? J NIGE I n C I I /cEOUATORI
,tKICA
4 z BELGIAN
/ CONGO
~~~
Brazzaville
25X1
authorities in adjacent ter-
ritories. Portuguese officials
are reported "literally trem-
bling" at the possible threat
to the political stability
of Portuguese Guinea, particu-
larly ,with the expected rap-
id departure of French-troops,
as requested by Sekou Toure.
Governor Dorman of the Brit-
ish protectorate of Sierra
Leone is troubled over the fu-
ture threat of Guinea-insti-
gated border incidents in
an area which recently has
witnessed rioting and anti-
government disturbances 25X1
aragua early this month of a
guerrilla band of perhaps 800
men from Honduras has height-
ened friction between the two
olashes between their armed.
forces, The rebels, however,
do not :seriously threaten the
SomoZa.regime in Nicaragua.
SECRET
%CAMEROUN GI-5 ARI%_
o'}
RIO-"
MUNL..
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART II NOTES AND COMMENTS Page 15 of 18
 Approved For Release 2005/04/2 d 1 P79-00927A001900080001-5
CURRENT INTELLIGENCE WEEKLY SUMMARY
Nicaraguan officials have
been aware for almost a year of
revolutionary preparations by
small groups of Nicaraguan ex-
iles just across the Honduran
border. Repeated Nicaraguan
requests for Honduran action
against the exiles have seldom
brought results, however, and
Nicaraguan officials are con-
vinced that the rebels are be-
ing covertly assisted by Hondu-
7K oounaary oy the armtrai
award of the King of Spain, 1906.
ran civil authorities. At any
rate, the strong anti-Somoza
feeling of the Honduran public
has permitted the rebels to
prepare for action in a sympa-
thetic environment.
disputed border is located near
the scene of present guerrilla
activities. The Nicaraguan
Government has considered calling
in the OAS again to deal with
the present problem, but has
apparently decided to try nego-
tiations with Honduras first.
The mixed Nicaraguan-Honduran
military commission, inspired
by the OAS in 1957, met on 5
October ' and was-:to proceed im-
mediately to the bor-
der to investigate
the situation.
E Area of de facto Nicaraguan
control since 1937
Area in dispute
X Guerrilla activity
The friction between the
two governments is further ag-
gravated by the century-old
border dispute which caused
hostilities last year. Follow-
ing the intervention of the
Organization of American States
(OAS), the case was referred to
the International Court of Jus-
tice, where it is now being
adjudicated. Part of the
The guerrilla
band is under the
command of "General"
Ramon Raudales, a
long-term follower
of the anti-American
Sandino, who led the
guerrilla campaign
against the US marines
25 years ago. Accord-
ing to President
Somoza, there are only
some 15 Nicaraguan
exiles in the band;
the remainder are
Honduran and Cuban mercenaries.
Raudales evidently expects to
carry on guerrilla operations
in the wild border area until
he wins enough support from
sympathizers throughout the
country to oust the Somoza re-
gime. He is likely to be dis-
appointed, however, since anti-
government feeling is not high
in most parts of Nicaragua and
the armed forces are believed
loyal and capable of suppress-
ing .the '.guerrillas. A Nic-
araguan infantry company
was sent to the border area
on 2 October.
25X1
PEIPING CLAIMS RECORD ECONOMIC ACHIEVEMENTS
In the year since its last
1 October celebrations, Peiping
claims that the nation's econ-
omy has progressed at a rate
never before achieved either
at home or "anywhere abroad,"
presumably including the USSR.
The regime states that al-
though late crops have yet to
be harvested, the equivalent
of last :year,' s. 185, 000, 000 tons
of food grains has already been
gathered, and that the final
1958 total will almost double
last year's figure.
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART II NOTES AND COMMENTS Page 16 of 18
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
Peiping boasts that China's
wheat and cotton crops this
year will top American figures.
While Peiping's early crop es-
timates usually are inflated,
this year's claims appear high-
ly exaggerated. Plans for the
state purchase of grain call
for the same amount to"be pro-
cured as last year, and most
of the claimed increase in out-
put is to remain in rural areas.
There is as yet, however, no
definite evidence that rations
have been improved either in
rural or urban areas.
In industry, the Chinese
Communists say that the total
value of production during the
first three quarters of the
year was 57.1 percent greater
than in the corresponding peri-
od last year; for the third
quarter alone, it was twice
that of the third quarter of
1957. Priority is being given
the iron and steel industry,
and Peiping asserts that on 29
September the nation's daily
output of steel reached a rec-
ord 58,220 tons. The regime
hop :s to sustain this level of
production, which was made pos-
sible only by a tremendous ex-
penditure of labor, during the
entire month of October. It
is likely that a substantial
portion of the steel being
turned out at this rate is of
low quality, limiting its use-
fulness.
These victories are claimed
at a time when the leadership
has been forcing through a major
social change in China's rural
areas. The mass movement to
establish people's communes,
Peiping reports, by the end of
September had enrolled more
than 90 percent of the nation's
farm households. This surpasses
both in scope and speed the in-
tensive drive of late 1955 to
set up agricultural cooperatives,
and it is suspected that many
of the communes are still large-
ly paper organizations.
Communist China has almost
certainly scored notable econom-
ic advances in the course of
this year's "giant leap 'for-
ward," but at a huge cost in
waste and inefficiency. More-
over, the figures claimed by
Peiping very likely go far be-
yond the realities of China's
economic situation. In many
cases the regime's economic prop-
agandists appear to be general-
izing for the entire country
on the basis of some particu-
larly favorable local achieve-
ments. The compilation and re-
lease of such figures at this
time accords with the officially
expressed view that statistical
work should faithfully serve
the leap-forward drive. They
accurately reflect the continued 25X1
insistence of the party leader-
ship on driving the economy ahead
at breakneck speed.
(Prepared by ORR) 25X1
TRANSPORT TIE-VP HAMPERS' CHINESE COMMUNIST ECONOMY
Peiping's "giant leap for-
ward" in economic development
has placed an extremely heavy
burden on China's transport
networks. Serious.-difficulties
began several months ago and
grew worse during September.
Peiping is determined to push
on with its economic speed-up,
but has so far been unable to
provide effective remedies for
the transport snarl which, if
it continues, will seriously
handicap accomplishment of the
"leap-forward" goals. It is
doubtful that these difficulties
have seriously interfered 'with
the movement of the materiel
necessary to maintain pressure
on the offshore islands.
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART II NOTES AND COMMENTS Page 17 of 18
 Approved For Release 2005/0%2dIA DP79-00927AO01900080001-5
CURRENT INTELLIGENCE WEEKLY SUMMARY
9 October 1958
Congestion at all major
ports along the China coast
lunusual
shortages of manual labor at
the docks, and ships have en-
countered long delays before
being worked. Similar congestion
has been noted on the inland
waterways of the country.
Congestion is also evident
on the nation's railroads and
very probably in motor trans-
portation as well. The rail
lines have been laboring under
immense tasks, and yard capaci-
ty has not been up to the in-
creased demands. Peiping has
said the freight-loading plan
for September came to only a
little over 70 percent of the
nation's needs.
The authorities launched
a mass movement to send all
available workers to railway
stations to help handle-'freight.
As a result, from 28 to 30 Sep-
tember, car loadings were 40,-
984 a day, and now railway
workers are being asked to load
an average of 35,000 to 45,000
SECRET
freight cars a day during the
last quarter. Achievement of
this level of car loadings would
require that actual turn-around
time--the average time between
loadings of a given car-- be
cut from an estimated four days
as of the end of 1957 to around
two days, a task which seems
impossible. In spite of these
difficulties, Peiping has es-
timated that railroad freight
traffic in 1958 may exceed 380,-
000,000 tons, an increase of
more than 100,000,000 tons
above 1957 performance.
The inadequate performance
in China's transportation serv-
ices has already resulted in A
local shortages of fuel and raw
materials, and the regime's
remedies have to date been only
partially effective. Peiping
has tried, for example, to im-
prove efficiency by encouraging
closer coordination between
highway, railway, and waterway
services. This has not yet had
a noticeable effect in solving
the present problems. Peiping's
prospects for improving the
situation in the near future
do not appear good.
(Prepared by ORR)
25X1
PART I I Approved For Rele 5/ 2 A- DP79-00927A001900080001-5
C NTS Page 18 of 18
 Approved For Release 2005/04/22 : CIA-RDP79-00927A001900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
9 October 1958
PATTERNS AND PERSPECTIVES
THE CHURCH-STATE CONFLICT IN POLAND
Relations between the
Catholic Church and the Com-
munist government of Poland
have deteriorated steadily
since 1956 as a result of the
Gomulka regime's fear of the
church's ability to extend its
influence over more and more
areas of Polish society. The
increasingly harsh attacks on
the church by regime officials
and the press, and the police
raid in July on the Jasna Gora
monastery--the holiest shrine
of Polish Catholicism--are symp-
tomatic of the fundamental and
inevitable conflict between an
aggressive Communist state and
militant Catholicism.
Cardinal Wyszynski, Pri-
mate of Poland, and party First
Secretary Wladyslaw Gomulka are
the leading protagonists. The
cardinal is a Roman Catholic,
but also a loyal Pole; Gomulka
is a Communist, but he feels
that Poland has a destiny that
should not be dictated by the
USSR. Pressures from the Soviet
Union and the Communist bloc
have forced the cardinal and
the Communist to cooperate in
an effort to avert open conflict
and the resultant weakness which
would invite a reimposition of
full control by Moscow.
For a thousand years the
church, in addition to being a
spiritual force, has played a
major political, sociological,
and economic role in Poland.
The Communists recognize the
impossibility of eliminating
the church and its influence,
and the regime's current pol-
icy appears to be aimed at cur-
tailing church activities in
every possible way short of
provoking open warfare with the
religious community.
Church-State Agreement
The church-state agree-
ment signed in December' 1956,
shortly after Gomulka's return
to power, represents an attempt
to work out a modus vivendi
during a period of crisis. This
truce was motivated largely by
a mutual concern that the Soviet
Union might use the unstable
situation following the "Polish
October" as an excuse for forci-
ble intervention in Polish in-
ternal affairs. As a result
the moderating influence of the
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927A001900080001-5
PART III PATTERNS AND PERSPECTIVES Page 1 of 11
 Approved For Release 2005/04/22 : CIA-RDP79-00927A001900080001-5
SECRET
church swung to Gomulka's
aid during the perilous
period in late 1956 and early
1957 while he was attempting
to consolidate his position.
Yet neither Wyszynski nor Go-
mulka had any illusions as to
the true state of affairs or
believed a long-term peace be-
tween Catholicism and Commu-
nism was possible. Gomulka re-
portedly admitted that his pact
with the church was "a step
backward," but one which was
necessary.
The state actually made
more concessions in 1956 than
did the church, perhaps be-
cause it needed support more
and Gomulka realized the peo-
ple would follow the church's
lead. Following the signing of
the agreement, many priests
were released from prison, the
tempo of the vicious antichurch
attacks slackened, and non-
compulsory religious instruc-
tion was reinstated in state
schools. The agreement reaf-
firmed the state's right to ap-
prove church appointments, with
the proviso that the appointee
must be a Polish citizen, take
an oath of allegiance to Poland,
and be subject to removal from
office on conviction of a civil
crime.
Gomulka's church policy
won him considerable support
from the Catholics, who saw
it as a move toward redress-
ing at least part of the injus-
tices suffered at the hands of
the Communists during the Sta-
linist period. This apparently
moderate policy proved to be
Gomulka's greatest single po-
litical asset--a fact that was
demonstrated during the elec-
tions of January 1957 when the
cardinal threw his support to
Gomulka. By this action the
cardinal showed his conviction
that a weakening of the Gomulka
regime at that time would have
been detrimental to both the
church and Poland.
Uneasy Truce
Although the two antago-
nists outwardly continue to
observe the 1956 agreement, by
1957, a continuous, relatively
behind-the-scenes struggle for
advantage was causing much fric-
tion. The church stood firm
on positions it considered to
Celebration of the millennium of the Catholic
Church in Poland.
Degree of church independence in filling
ecclesiastical posts.
Church influence in mass youth organizations.
Control over charitable organizations.
Censorship of religious publications and
restrictions on distribution.
Administration of cemeteries and determina-
tion of burial rights.
Divergence between state law and church
doctrine on such matters as divorce,
birth control, abortion, and property
rights.
,Education of priests--number of institutions
and students permitted.
Restitution of church property expropriated
by the state.
Open state support for associations of
atheists and freethinkers.
Regime support for the "PAX" organisation,
which has a monopoly of the sale of
religious articles.
Control of the Catholic University at Lublin.
Restitution of sacred objects to the church.
Travel abroad by church leaders and priests.
Construction and repair of churches, the avail-
ability of state funds, and the freedom of
the church to collect funds for this purpose.
25X1
SECRET
PART I i4pproved For Relea PWf/ 2 1$tI ~bqWA001900080001P5age 2 of 11
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
be dictated by requirements of
faith, and the regime began to
challenge the church in matters
where the latter could be called
intolerant or "medieval." The
government vigorously charged
that the church militantly dis-
criminated against other de-
nominations, and especially
against nonbelievers.
Such actions, the regime
charged, were aimed at creat-
ing discord in Poland. Stress-
ing its own determination to
abide by-the agreement and the
concessions it had made, the
government called on the church
to show the same tolerance to
other groups and their beliefs
which it demanded the regime ex-
hibit toward the church.
In early 1958 disturbances
arising from the refusal of
local priests to bury nonbe-
lievers--especially Communists--
in Catholic cemeteries received
widespread publicity. The press
seized on isolated examples of
excessive religious zeal and
gave them national prominence,
charging the clergy with incit-
ing the people to violence and
fostering forces hostile to
socialism. The real problem
in many areas, however, was the
realization that the priest and
not the local Communist func-
tionary constituted the de facto
locus of power, not only in mat-
ters of religion but in polit-
ical, economic, and social
spheres as well.
Recognizing the implica-
tions of such a situation, the
government maintained that the
continued coexistence of church
and state depended on the pre-
cise delineation between their
spheres of activity and a mutual
observance of the dividing line.
The church was accused--appar-
ently rightly so--of attempting
to extend the scope of its ac-
tivities beyond the purely re-
ligious and ecclesiastical into
.secular affairs, a challenge
which the government could not
tolerate.
In the most drastic move
against the church since Gomul-
ka's return to power, the po-
lice in late July carried out
a raid on the Jasna Gora mon-
astery, near Czestochowa,
Poland's most revered national
and religious shrine. The po-
lice confiscated much printed
material and equipment on the
grounds that the church was
deliberately withholding printed
material from the censors.
On 29 July the government
publicly charged the church with
distributing subversive and
antistate publications printed
on a secret press at Jasna Gora,
and accused "certain church cir-
cles" with systematic violation
of the church-state agreement.
A group of fanatical young
priests had in fact apparently
produced inflammatory publica-
tions without the cardinal's
knowledge or consent.
While it was widely re-
ported that the Jasna Gora raid
was the result of Soviet pres-
sure on Gomulka to crack down
on the church, it appears more
likely that it was motivated
by internal power considerations
and a genuine concern over the
growth and consolidation of
church authority. Gomulka him-
self--his own position in the
party being none too strong--
probably felt it necessary to
take action to reassure the
lower level functionaries,
whose power was slipping away,
by adopting a harsher attitude.
Although the raid on Jasna
Gora created widespread indig-
nation throughout Poland and
a tense situation developed, the
fact that there was no serious
disorder is largely attributable
to the cardinal's calming in-
fluence. On 2 August the re-
gime issued a statement that
the church authorities would
issue directives on the neces-
sity for strict compliance
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART III PATTERNS AND PERSPECTIVES Page 3 of 11
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
with the laws and regulations
concerning mimeographed publi-
cations and for all duplicating
machines to be moved to prem-
ises outside consecrated
grounds.
The church is believed to
have made these concessions to
the regime because it was in
fact in an untenable legal po-
sition and, furthermore, did not
want to force a break with Go-
mulka which would only strength-
en the doctrinaire group with-
in the Communist party which
had been demanding stringent
abridgement of church rights.
In a heated debate in high
party circles on church-state
relations which reportedly
took place early in August, a
small majority led by Gomulka
narrowly defeated a hard-line
group seeking to curtail re-
ligious privileges sharply.
Religion in the Schools
Even as the furor over the
Jasna Gora affair subsided, the
approach of the school year
threatened to bring another
crisis. The government and the
church had agreed in 1956 on re-
ligious instruction in the pub-
lic schools for those children
whose parents expressed a de-
sire for such instruction. Re-
ligious instruction was to be
given by teachers appointed
by the state and agreed to by
church authorities. Teachers
were to be paid by the state,
and curricula and texts were
to be agreed on by church and
educational authorities. Com-
plete freedom either to at-
tend or not to attend religious
classes was to be observed by
both sides.
The state, however, soon
began to charge the church and,
its members with intolerance
and discrimination against in-
dividuals who did not attend
religious classes.
In August 1958 government
officials indicated they would
impose certain restrictions on
religious teaching. Religious
instruction henceforth would
be given only during the first
or last hour of the school day
in order not to break into the
regular curriculum and to per-
mit the nonattendance of those
children whose parents did not
wish them to participate. The
regime also refused to permit
monks and nuns to teach, on
the grounds that they did not
possess the necessary pedagog-
ical qualifications, insisted
that crucifixes and other re-
ligious symbols be removed
from classrooms, and demanded
that opening prayers at school
sessions cease.
Underneath all the ver-
biage, charges, and counter-
charges, the basic point at
issue was who should shape the
minds of Polish youth. The
state appears willing to per-
mit the older people to con-
tinue religious observances,
since it has little hope of
winning them from their faith,
but it balks at permitting re-
ligious influences to permeate
the educational system. The
regime apparently believes that
if it can minimize the church's
influence in the schools, it
can wean younger Poles away
from Catholicism in the future
and convert them to Communism.
The church holds much the
same views on the subject and
is determined not to relinquish
its present rather favorable
position; its determination is
strengthened by the realiza-
tion that its hold on the youth
has indeed been weakened during
the decade of Communist rule in
Poland.
Gomulka himself publicly
entered the fray on 24 Septem-
ber in a moderate but firm
speech at the National Confer-
ence on Education in Warsaw.
In his first public discussion
of the strained relations be-
tween the church and govern-
ment since the police raid on
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART III PATTERNS AND PERSPECTIVES Page 4 of 11
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
Jasna Cora, Gomulka emphasized
his determination to observe to
the letter the 1956 agreement
with the church and warned that
he expected the church to do
likewise.
Although he reiterated
that the regime seeks no war
with the church, Gomulka charged
it with working "overtly and
secretly" to undermine the
state's authority and plainly
served notice that he would not
permit the church's authority
to grow. Gomulka exhorted the
clergy to obey the scriptural
injunction to "render unto
Ceasar the things which.are
Caesar's and unto God the things
which are God's." Gomulka's
speech clearly revealed his
fear that the clergy's hold on
the majority of the population
represents a challenge to the
regime's authority.
Prospects
While the present cold
war between the Roman Catholic
hierarchy in Poland and the
government probably will con-
tinue, with the constant jockey-
ing for position leading to
occasional flare-ups, an all-
out struggle seems unlikely.
Both the cardinal and Gomulka
recognize that their fundamental
differences are in fact irrecon-
cilable, but both men also real-
ize that for Poland's good, and
indeed for their own. best in-
terests, a tota.1 break must be
avoided.
The church is certainly
the most powerful institution
in Poland today, despite the
government's control over coer-
cive power. Confident of the
church's position, Cardinal
Wyszynski has proclaimed a nine-
year commemoration, 1958-1966,
of the thousand years of Catho-
licism in Poland, with the aim
of rejuvenating the moral and
religious fervor of the Polish
people.
His plan to dedicate the
people of a Communist state to
the Catholic Church cuts square-
ly across the regime's aim of
promulgating atheism and ul-
timately destroying Christianity
in Poland, and is certain to
bring on clashes between
ecclesiastical and government
authorities. The Catholic
leadership, however, probably
hopes to prevent a worsening of
relations to such a degree as
to disrupt the present truce.
25X1
SECRET
25X1
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART III PATTERNS AND PERSPECTIVES Page 5 of 11
 25X1 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
Next 2 Page(s) In Document Exempt
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
 Approved For Release 2005/04/22 : CIA-RDP79-00927A001900080001-5
SECRET
New student demonstrations
in Argentina, Uruguay, and Pan-
ama reflect similar tactics
and effective Communist influ-
ence in student organizations,
but their concurrent timing
would appear to be deter-
mined primarily by national
issues rather than by recent
Latin American Communist steps
toward increased coordination.
Unusual violence marked both
the Uruguayan student protest
over a university charter and
the bitter Argentine controver-
sy over a law permitting the
establishment of private uni-
versities. In Panama, student
agitation seeks to weaken the
security forces.
Latin American student or-
ganizations have traditionally
involved themselves deeply in
national politics and demanded
a voice in university adminis-
tration and policy. Even the
politically immature secondary
students are organized and ac-
tively participate in rioting.
This political tradition has
given added impetus to local
Communist party efforts to pene-
trate youth groups as well as
to the Sino-Soviet bloc's ef-
forts to expand its exchange
program.
Communists are in a posi-
tion to exert substantial in-
fluence on the policies of most
major student organizations in
South America, notably'in Ar-
gentina, Bolivia, Brazil, Chile,
Ecuador, Peru, Uruguay, and
Venezuela. To the north, Com-
munists have extensive influ-
ence in student and educational
circles in Mexico, El Salvador,
and Guatemala. Through concen-
trated activity and exploita-
tion of national themes, Com-
munists have frequently been
able to wield influence dis-
proportionate to their small
numbers. Secondary students
have seem a particularly sus-
ceptible target.
In Venezuela, where Commu-
nists dominate the leadership
of the principal university
student organizations, students
have not only been active in
political demonstrations but
also have been organized into
paramilitary units. Some of
these are armed and can be rap-
idly mobilized, as in the demon-
strations against Vice Presi-
dent Nixon last May and those
in support of the governing
junta in July.and September.
Students are believed one of
the most difficult pressure
groups for the Venezuelan Gov-
ernment to handle, and they
constitute a potential source
of instability and unrest, de-
spite their support of the care-
taker junta thus far.
Government difficulties
in controlling student demon-
strations are complicated not
only by the weight of tradition
but also by popular revulsion
to strong suppression, which
is associated with dictator-
ships. This problem is a par-
ticular worry to Argentine au-
thorities, who are faced with
continued student defiance.
Agitation in Argentina
Strong student opposition
to a law passed by Congress on
30 September authorizing the
establishment of private uni-
versities has resulted in re-
peated clashes between rival
student groups and with the po-
lice wielding tear gas. Stu-
dents caused extensive damage,
overturning streetcars and hurl-
ing stones at and in the vicin-
ity of the congressional build-
ing. Agitation occurred at all
of the state universities and
in some high schools.
The minister of interior
declared on 4 October that the
disturbances went beyond the
educational field and were
plainly political moves designed
to create an atmosphere of un-
rest. He also warned that the
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927A00.1900080001-5
PART III PATTERNS AND PERSPECTIVES Page 9 of 11
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
government would close any uni-
versity where students contin-
ued to agitate. Earlier the
police chief charged that Com-
munists had been active,in ex-
ploiting the issue to promote
antigovernment student agita-
tion throughout the country.
President Frondizi's In-
transigent Radical party (UCRI),
which controls both houses of
Congress, was split on the is-
sue. Frondizi, in accordance
with a pre-election promise,
endorsed the establishment of
private universities, a step
previously decreed by the pro-
visional government, mainly in
response to Catholic wishes.
Opponents of private universi-
ties were trying to change this
decree law, which broke the
traditional state monopoly over
higher education and prompted
protests when it was announced.
UCRI deputies were freed
from party discipline to vote
individually, probably to mini-
mize appearances of friction
within the administration. The
law resulted from a Senate com-
promise bill, which authorized
private universities but pro-
vided that graduates would have
to take state examinations to
qualify for a professional li-
cense.
Since the law in no way
affects the operation of state
universities, protests boil
down to a demand for state con-
trol. By contrast, within the
state universities themselves,
the students continue to demand
an increased voice within the
administration.
The Argentine University
Federation, reportedly dominated
by Communist leadership but con-
taining most of the students who
support UCRI, ratified on 4 Oc-
tober a decision for students to
seize all universities to pro-
test the law. It has also or-
dered a boycott of classes un-
til 11 October and reportedly
is planning to join a strike
scheduled for 10 October by
pro-Peronista labor leaders,
who hope to promote a general
strike protesting high living
costs. To counter this and
other possible demonstrations,
Frondizi has ordered a ban on
all public functions in Buenos
Aires for one month.
Uruguayan Agitation
Uruguayan students on 1
and 2 October staged the most
violent demonstration witnessed
in Montevideo in some years,
ostensibly to protest changes
in a university charter proposed
by a congressional committee.
The charter had been drafted
by the university and approved
by the student federation, which
is Communist infiltrated. Po-
lice efforts to break up the
rioting with tear gas and water
brought demands for the resigna-
tion of the interior minister
and police chief. Some 120
students were arrested briefly
and another 200 barricaded them-
selves in the university.
The federation is a left-
ist, anti-US organization in-
filtrated by Communists. it
frequently promotes the Commu-
nist line, but sometimes assumes
a "third position" stand with
such declarations as a condemna-
tion of suppression in Hungary.
Agitation in Panama
The current student strikes
in Panama are directed primarily
at forcing legislation to cur-
tail the power of the National
Guard, Panama's only armed force.
Action to coincide with the con-
vening of the National Assembly
on 1 October had been predicted
since the serious student riots
of last May. The most effective
leaders have their strength
among the secondary-school
students, who.favor violent ac-
tion, while university student
leaders have rejected violence.
Both groups support the general
strike called for by the secre-
tary general of the student
SECRET
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
PART III PATTERNS AND PERSPECTIVES Page 10 of 11
 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
federation, who is closely al-
lied with the Communists active
in the student movement I
Communists are fighting
to regain control of important
student unions they once domi-
nated and are probably taking
advantage of current popular
resentment against the corrupt
and brutal guard to increase
their influence. The students
are the traditional focus of
nationalist sentiment, and their
proposals that Panama receive
50 percent of all canal tolls
and fly its flag in the Canal
Zone have received wide support
in recent months.
While the concurrent stu-
dent agitation in Argentina,
Uruguay, and Panama reflects
similar tactics--exploitation
of nationalist issues, an in-
ordinate amount of violence,
and a call for labor support--
there is no evidence of advance
coordination by either Commu-
nists or non-Communists. The
main issues are being pressed
by both Communists and non-Com- 25X1
Recent plans for increased 25X1
coordination among Latin Amer-
ican Communist parties have been
reported, and a few steps have
already been taken. The Argen-
tine Communist party, now the
largest in Latin America, has
recently been more active in
this regard. It has offered
to assist the Uruguayan Commu-
nist Youth Federation and in
July admitted at least a dozen
other Latin American Communists
to its six-month school for
leaders.
25X1
SECRET
PART I l Ipproved For Rele jhjRWy4/A~ CA ffV j8 Z7_400190008000~age 11 of 11
 25X1 Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5
 Approved For Release 2005/04/22 IIA-RRDP79-00927AO01900080001-5
CONFIDENTIAL
co NTIAL
Approved For Release 2005/04/22 : CIA-RDP79-00927AO01900080001-5