CURRENT INTELLIGENCE WEEKLY SUMMARY

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CIA-RDP79-00927A002000030001-7
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October 27, 1999
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SUMMARY
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Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 CONFIDENTIAL URRENT INTELLIGENCE WEEKLY SUMMARY COPY NO. 50 OCI NO, 5643/58 13 November 1958 / DATE : '^ 70_ AUTH NEXT REVIEW DATE: ^ DECLASSIFIED CLASS. CHANGED TOE DOCUMENT NO. NO CHANGE IN CLASS. ^ CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE State Dept. review completed ES EF RFrnnr., -- J nrl USE "`?~~rlf ~/ BOX ,~o -, 7 - ?:? 5 1 ~ 5 /-/ Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 THIS MATERIAL CONTAINS INFORMATION AFFECT- ING THE NATIONAL DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE ESPIONAGE LAWS, TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS- SION OR REVELATION OF WHICH IN ANY MANNER TO AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW. The Current Intelligence Weekly Summary has been prepared primarily for the internal use of the Central Intelligence Agency. It does not represent a complete coverage of all current situations. Comments and conclusions represent the immediate appraisal of the Office of Current Intelligence. Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 T 11 E W E E K I N B R I E F OF IMMEDIATE INTEREST USSR THREATENS WESTERN POSITION IN BERLIN . . . . . . Page Khrushchev's threat on 10 November to "revise" the international status of Berlin presages a period of mount- ing tension in Germany during which the USSR will proba- bly take steps to transfer to the East German regime So- viet authority in Berlin derived from quadripartite agree- ments. A new juridical basis for the presence of Soviet troops in East Germany would be established. These ac- tions would be designed to force the West to deal with the Ulbricht regime in order to maintain Western access to Berlin. Bonn has hinted it might consider severing relations with Moscow if the USR abrogate the four-power agreement on Berlin. MIDDLE EAST DEVELOPMENTS . . . . . . . . . . . . . . . . . Page King Husayn has used the plane incident to whip-up patriotic sentiment for himself. His propaganda may backfire if he presses charges against the UAR in the UN, however, since his plane did not in fact have clearance for its flight. In Iraq the roundup. of pro-UAR elements has continued. Israel remains alert to area developments, and new incidents may occur in perennial trouble spots along the Israeli-Syrian border and around the Mount Sco- pus area of Jerusalem. In the Sudan, the pro-Western government is still reported considering forceful action to curb opposition and subversion if it does not succeed in strengthening its-hand by parliamentary means. Area developments have apparently left Nasir depressed and frustrated. SOVIET POSITION IN GENEVA CONFERENCES . . . . . Page 6 Moscow continues after two weeks of negotiations at Geneva on-a nuclear test cessation, to maintain its basic insistence on an immediate, permanent, and unconditional agreement. A new Soviet suggestion--designed to appear as a concession to the West--proposes that an agreement on cessation should at least be drafted before discus- sion of a control system. Moscow apparently has no im- mediate intention of breaking off the talks. In the talks on measures to prevent surprise attack, chief So- viet delegate Kuznetsov has insisted that this subject is "organically linked" with broader disarmament issues. SECRET i THE WEEK IN BRIEF Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 CONFIDENTIAL CURRENT INTELLIGENCE WEEKLY SUMMARY PART I (continued) ARGENTINE POLITICAL CRISIS . . . . . . . . . . . . . . . Page 7 Argentine President Frondizi?s suspension of con- stitutional guarantees for 30 days on 10 November springs from his determination to push forward his oil policy and to crack down on Peronista and Communist agitation. His action, which was precipitated by the petroleum workers' strike demanding cancellation of government oil develop- ment contracts with American firms, increases his depend- ence on the armed forces. The military backed Frondizi during an abortive coup attempt on 12 November, which was apparently encouraged by the spreading labor unrest. 25X1 NOTES AND COMMENTS ALGERIA . . . . . . . . . . . .. Page 1 Premier de Gaulle's plan to work out a permanent Al- gerian settlement with the Algerian deputies to be elected to the French National Assembly on 30 November has'been undercut by the conspicuous absence of nationalist Moslem and liberal European candidates. The inability and unwill- ingness of "all political tendencies" to present themselves in the face of indirect French Army and settler opposition and of rebel intimidation may force De Gaulle to seek another mechanism for a settlement. 25X1 TAIWAN STRAIT SITUATION . . . . . . . . . . . . . . . . . Page 2 The Chinese Communists have outlined a massive propa- ganda campaign to rationalize Peiping's avoidance of hos- tilities with the United States in the Taiwan Strait area. A Nationalist official has stated that although no "deals" will be made with the Communists by those now in control, certain "fringe elements" might negotiate if by some "re- mote" event they were brought to power. The military pic- ture is one of outward relative calm, although Peiping continues to maintain strong forces in the strait area. POLITICAL CRISIS IN JAPAN . . . . . . . . . . . . . . . . Page 3 Japanese Prime Minister Kishi's prestige has been damaged and his control of the ruling Liberal-Democratic party possibly weakened by the parliamentary crisis aris- ing from attempts to railroad through the Diet a contro- versial bill to strengthen police powers, The Socialists are boycotting the Diet, parliamentary deliberations are CONFIDONTIAL Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 PART II (continued) at a standstill, and there is nationwide opposition to the government's tactics in seeking passage of the bill. PAKISTAN . . . . . . . . . . . . . . . . . . . . . . . . . Page 4 The military regime in Pakistan is giving priority to those reform measures which are likely to maintain the popular impression of rapid progress. Enthusiasm over the regime's "clean-up" campaign during the first month of martial law has begun to wane, and the govern- ment is under increasing pressure to demonstrate con- tinuing achievement. Political elements, especially in East Pakistan, are planning to resume limited ac- tivity. INDIAN PARLIAMENT FACES CONTROVERSIAL ISSUES . . . . . . . Page 5 25X1 The session of the Indian Parliament opening on 17 November is likely to be highlighted by discussions of controversial issues on which the Congress party is find- ing it increasingly difficult to defend itself. In addi- tion to such chronic problems as lagging food production, five-year-plan finances, and party rifts in several key states, government leaders may be challenged on three especially explosive questions--the situation in Commu- nist-governed Kerala State, the linguistic problem in Bombay State, and an old government financial scandal in- volving V. K. Krishna Menon. 25X1 ELECTIONS SCHEDULED IN NEPAL . . . . . . . . . . . . . . . Page 6 King Mahendra has set Nepal's first parliamentary elections in its history for 18 February 1959. Voting for a lower house of 109 members will extend over 45 days. The parliament is to operate under the terms of a new constitution presented on 2 November for the King's approval. If political agitation gets out of hand, how- ever, the King is likely to postpone the elections. There is also to be an upper house appointed by the King.F___1 25X1 RENEWED INFLATION IN SOUTH KOREA . . . . . . . . . . . . . Page 7 The progress of South Korea's financial stabiliza- tion program has been halted by a sudden increase of cur- rency in circulation, resulting in a 6.5-percent rise in the wholesale price index in September and October. In- creased bank credits and doubled wages for all govern- ment and, military personnel are primarily responsible, but poor fiscal operations and unrealistic budget plan- ning also are to blame. Further inflation is probable for the next few months at least. SECRET iii THE WEEK IN BRIEF Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY PART II (continued) SINO-SOVIET BLOC ECONOMIC OFFENSIVE IN INDONESIA . . . . . Page 8 Indonesia has accepted about $200,000,000 worth of Sino-Soviet bloc economic aid offers since late 1957. In addition the bloc has agreed to deliver by 1959 at least $170,000,000 worth of military equipment and has sent at least 270 economic technicians and about 170 military specialists to Indonesia. Indonesian trade with the bloc in 1958 probably will surpass the previous peak level of $74,000,000 attained in 1955, and significant contracts for future trade apparently are now being concluded. CATHOLICS IN NORTH VIETNAM . . . . . . . . . . . . . . . . Page Hanoi's efforts to acquire greater control over its outspoken Catholic minority have vacillated between con- ciliation and harshness, sometimes leading to armed clashes. The regime's recent expulsion of four of the 20 foreign priests in the country is a move to strengthen the state-sponsored church. OBSERVERS REFUTE PEIPING'S AGRICULTURAL CLAIMS . . . . . Page 10 Observations of recent visitors to China and Pei- ping's own policies with respect to food and cloth ra- tioning confirm earlier analyses that Communist China's statements about its "amazing" increases in agricultural production are exaggerated. Although good weather and a massive effort in the countryside undoubtedly brought about substantial increases in most agricultural products this year, most of the regime's claims seem out of touch with reality. THE YUGOSLAV DISPUTE WITH THE SINO-SOVIET BLOC . . Neither side in the dispute between Yugoslavia and the Sino-Soviet bloc appears willing to let mutual re- criminations subside. Speculation that a "truce" was on the horizon has not been borne out by events. Basic ideological divergencies outweigh those factors that could lead to an accommodation. . Page 11 . . . . . . . . . . . . . . . Page Additional reports now confirm a resurgence of anti- regime hostility in Rumania during the first six months of 1958, particularly on the part of peasants and indus- trial workers. This apparently prompted the Rumanian lead- ership to expand what was to have been a fairly routine crackdown on the party and government bureaucracy. SECRET iv Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 PART II (continued) USSR SEEKS TO INCREASE EXPORTS TO WESTERN EUROPE . . . . The USSR, which must augment its foreign-exchange earnings in order to acquire Western equipment with which to enlarge its chemical industry, is finding it increasingly difficult to expand exports to Western Eu- rope. The volume of trade among free world countries this year has been generally lower, but European coun- tries are reluctant to buy more from the USSR at the ex- pense of trade with traditional suppliers. COMMUNIST CLANDESTINE ACTIVITY IN WEST GERMANY . . Page 15 25X1 . Page 16 Bonn government officials are apprehensive over the inability of the federal police authorities to control Communist underground activities and have used two re- cent disclosures of Communist operations to illustrate the need for increased security measures for West Ger- many. While they constitute no immediate threat to the security of the Federal Republic, Communist activities, both espionage and propaganda operations, seem to be on 25X1 FINNISH CABINET UNDER POLITICAL ATTACK . . . . . . . . . . Page 17 Finland's two-month-old, five-party coalition gov- ernment, headed by veteran Social Democrat Karl August Fagerholm, is being attacked by the two opposition par- ties and is under pressure from the USSR. It is also strongly criticized from within by elements of the Agrar- ian party, who assert that their party is best able to maintain good relations with the USSR. Fagerholm's fall would probably bring in an Agrarian-led government which would be either a minority cabinet dependent on Communist parliamentary su port or a ma'orit overnment including the Communists. SECRET v THE WEEK IN BRIEF Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY PART II (continued) SPANISH SOCIALISTS INCLINING TOWARD JOINT ACTION WITH COMMUNISTS . . . . . . . . . . . . . . . . . . . . . . . Page 18 Spanish Socialist leaders in exile are under increas- ing pressure from their followers in Spain to permit col- laboration with the Communists in peaceful strikes and demonstrations in order to avoid losing the initiative to the Communists. With benefits of the 1956 wage boosts wiped out by steadily rising living costs, such joint ac- tion, particularly with Anarchist party participation, could lead to unprecedented worker agitation in the com- ing months. PATTERNS AND PERSPECTIVES PEIPING'S HARD-LINE FOREIGN POLICY . . . . . . . . . . . . Page 1 Behind Communist China's present foreign policy posture apparently is the belief that an atmosphere of tension at this time will induce peoples of non-Commu- nist countries to exert pressure on their governments in favor of a "wholesale" change in attitude toward recog- nition of the Peiping regime. The Communists are attempt- ing to exert both political and military pressure on the United States without clashing with American military forces in the Taiwan Strait area, they appear gratified by the trend of international opinion on the issue. They probably will try to keep their foreign policy sufficient- ly flexible so as not to alienate some of the sympathizers they won in the course of the Taiwan Strait crisis. THE FRENCH PARLIAMENTARY ELECTIONS . . . . . . . . . . . . Page The first National Assembly of the Fifth Republic will be elected on 23 and 30 November under new regula- tions laid down by Premier de Gaulle. The new voting SECRET vi THE WEEK IN BRIEF Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 PART III (continued) procedures will probably reduce Communist representa- tion, and De Gaulle's refusal to let his name be drawn into the campaign has upset rightist hopes for sweeping the country with a Gaullist "National'List." The impact of the elections will be drastically reduced, however, if, as the present trend suggests, the representatives elected in Algeria will not command sufficient respect among the Moslems to be able t negotiate a workable adjustment of the Algerian problem. NASIR AND THE COMMUNIST PARTIES IN THE UAR . . . . . . . . Page 8 Nasir this year has initiated legal and administra- tive measures to control the UAR4s Communist parties, which, although illegal, have retained a semiovert status, at least in the Syrian region. For the time being he is avoiding a direct police crackdown e same me, in extending is influence in the Arab states and North Africa, Nasir has accepted pol,tica1 support from local Communists and taken part in the activities of international Communist-front groups. WESTERN EUROPEAN ATTITUDES TOWARD THE UNITED NATIONS . . . Page 11 There is genuine concern among Western European pow- ers--particularly those with colonies--over the growing power of what they consider a politically immature voting majority in the UN General Assembly. Nevertheless West- ern Europeans generally see the United Nations as a perma- nent feature of international life, useful, among other things, for "educating" the lesser developed countries to their international 'responsibilities. Most Western European members would like to see the UN economic as- sistance programs broadened, believing that multilateral aid through the UN best offsets direct Soviet aid. SINO-SOVIET BLOC ACTIVITIES IN GREECE . . . . . . . . . . Page 14 SECRET vii THE WEEK TV RPIEF Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 CONE__ENT1AL Khrushchev's threats on 10 November to "revise" the inter- national status of Berlin pres- age a period of mounting ten- sion in Germany. During this period the USSR will probably take a series of steps to trans- fer to the East German regime Soviet authority in Berlin de- rived from quadripartite agree- ments. A new juridical basis for the presence of Soviet troops in East Germany would be established. Khrushchev declared that the Western powers, by violating the "Potsdam Agreement"--notably by sanctioning the remilitariza- tion of West Germany--had for- feited their right to remain in West Berlin, and he indicated that the USSR would hand over its remaining functions to East Germany. He further de- clared that any attack on East Germany would be considered an attack on the USSR itself. He gave no indication, however, of how or when the USSR planned to hand over its functions. Soviet Foreign Minister Gromyko on 11 November said this would not happen immediately but would not be long delayed. Further, a Soviet Foreign Ministry offi- cial informed American Ambas- sador Thompson that German prob- lems should be dealt with on a step-by-step basis. The Soviet actions would be designed to enhance East Ger- man sovereignty, thus urd_erlin- ing the Soviet contention that there are two Germanies and, by invoking the threat of a block- ade, to force the West to deal with the Ulbricht regime. A broader purpose may be to fur- ther increase world tension with a "western Quemoy" in order to strengthen bloc unity against the common enemy and to block West German attempts to estab- lish normal relations with the East European countries, par- ticularly Poland. Further, the WEST GERMANY- BERLIN COMMUNICATION ROUTES West German = Autobahn - Highway East German checkpoints: - Railroad checkpoints: Railroad A Railroad 0 Highway o M1LU ^ Highway move is designed to undercut forthcoming West German proposals regarding a four-power confer- ence on German reunification. Moscow's move at this time will strengthen the hand of the Ulbricht regime against popular unrest stemming from the sudden CONFIDENTIAL PART I OF IMMEDIATE INTEREST Page 1 of 8 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Greater Berlin olm o irkenwerder Hohen uendorf ~'~uB rally i)ulec change in over-all policy from a "hard line'.' to one of conces- sions to certain elements of the populace. As a result of concessions to physicians, in- dustrial workers were consider- ing work slowdowns to pres- sure the regime into improving their own conditions. Moreover, the flow of ref- ugees to the West, although somewhat reduced, has continued. During October, more than 19,000 East Germans, including many intellectuals and technicians, fled to the West, approximately 75 percent through West Berlin. A sealing off of West Berlin would thus greatly diminish ref- ugee losses. Autobahn Highway +- Railroad --~ Railroad (elevated) Subway In a press conference on 12 November, East German Premier Grotewohl, referring to the pos- sibility of a withdrawal of Soviet troops from Germany, stated that he understood Khru- shchev's speech raised such a possibility, "naturally" on the premise that the other powers took the same steps. This sug- gests that East German officials may depart for Moscow in the near future to negotiate a new agreement along these lines, perhaps after the forthcoming elections of 16 November Moscow might transfer its membership in the Berlin Air SECRET Page 2 of 8 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Safety Center to the East Ger- mans, thus confronting the West with a situation in which it would be required either to deal with East German officials or fly without guarantees of safety. However, the East Ger- mans are not now believed to be in a position to exert ef- fective control of flights in the corridor and they apparent- ly do not possess the trained personnel to take over all the Soviet positions at this time. West German officials be- lieve that Khrushchev's speech is aimed at testing the firmness of the Western resolve to re- main in Berlin and at exerting pressure on German public opin- ion to accept direct political talks with East Germany. French and British foreign affairs officials have strongly rejected any unilateral abrogation of the Potsdam Agreement, and the West German press chief on 12 November hinted that Bonn might consider severing its relations with Moscow if the USSR abro- gated the four-power status of Berlin. Increased harassment of West Berlin and Allied and West German access to it is now like- ly. Various measures to in- hibit traffic on the lifeline to Berlin could be taken by the USSR or East Germany, and the East Germans could move to seal off West Berlin by impos- ing border restrictions and halting municipal transport. Although West Berlin municipal officials report that there is no indication of public dis- quiet in the city, they feel that acceptance of East German control over highway access to Berlin would be an "intolerable situation." British officials in Berlin, however, warn of the danger of a "self-imposed" blockade if the Western powers refuse to accept East German control over access to Berlin. King Husayn has used the incident involving his plane to make effective propaganda arousing sympathy and indigna- tion among royalist elements. However, it does not appear that the incident has produced more than a temporary lift. It seems possible that if Husayn presses charges against the UAR in the United Nations, the re- sult may actually be damaging, since it has been confirmed that clearance for the King's flight was not received from the UAR and that Damascus is thus technically in the right in the matter. UN Secretary General Hammarskjold has strongly SECRET OF IMMEDIATE INTEREST Page 3 of 8 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY advised the Jordanian Govern- ment to let the matter drop; at the same time, he has suggested to Nasir that the UAR apologize to Husayn, despite the apparent correctness of its legal posi- tion. Husayn now plans to delay his trip for about two weeks. Prime Minister Rifai is urging him to postpone the trip until next spring. Rifai, who now fears he may be blamed for the blundering over the flight clearance, had earlier expressed a belief that Jordan's security situation would be sufficiently improved by mid-1959 that mar- tial law could be lifted then-- CYPRUS (U. K.) Latakii Baniya Tripol' LEBAN MEDITERRANEAN BEIRUT SEA ~~SiBo Haifa ISRAE Tel Aviv}Jaffa t Said CAIR Suez j SINAI Oil pipeline Railroad Main motor road U A N (EGYPT) SECRET OF IMMEDIATE INTEREST Page 4 of 8 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 although authoritarian govern- ment would continue. Iraq The roundup of pro-UAR ele- ments is continuing in Iraq. The Baath party, several of whose members have been arrested or dismissed from their jobs, reportedly has decided that its tactic of avoiding active op- position to the Qasim regime is not working out as planned, and has determined to be more active both in criticism of the gov- ernment's failure to live up to its early promises and in combating Communist- Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET organized street demonstrations. A clash between Baathist and Communist elements on 10 Novem- ber seems to have been the first product of the new Baathist line. Israel The Israelis have remained alert to developments; they ap- pear to be somewhat relieved that King Husayn's presence in Jordan may stabilize the situa- tion there temporarily. At the same time, however, they are pressing to extend their con- subversion and obstructive op- position tactics when Parlia- ment opens on 17 November. The desire of Khalil to take some kind of forceful action is known in Khartoum, and op- position elements are already accusing Western powers of sup- porting or inspiring such a move. The immediate danger which threatens the government on the opening of Parliament is an attack on its acceptance of American economic aid and of British military assistance. trol over portions of the Is- Should the opposition be suc- raeli-Syrian demilitarized zone cessful in obtaining a rejec- and are seeking to ship new tion of the British arms offer arms to their enclave on Mount Scopus, near Jerusalem. Both these issues are perennial sources of trouble, and the Mount Scopus problem in partic- ular could result in a long wrangle with Jordan. It was in connection with an incident near Scopus that a Canadian UN officer was killed earlier this year. The Israelis are not re- ported to have taken any large- scale measures in preparation for trouble, but their mobil- ization cadre appears to have been called up, and reserve vehicles are reported to have been on alert since 7 November. Members of Prime Minister Khalil's pro-Western government are still considering ways and or of the American aid program, ;new offers in both these fields are likely to be made when a Soviet delegation arrives in Khartoum on 20 November. Area developments, especial- ly the possibility of Israeli action against Jordan and the anti-UAR moves inside Iraq, ap- pear to have left Nasir at least temporarily depressed and frustrated. Nasir claims to be convinced that Communists will win out in Iraq, since other elements there are too weak, in his opinion. He continues to believe that the Western powers are constantly working against him in the area, and he is concerned by what he conceives to be further evidence of Western support for Israel. At the same time, Nasir has reiterated his belief that the means of curbing UAR-supported IUAR is not overly committed to SECRET OF IMMEDIATE INTEREST Page 5 of 8 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY the Soviet Union economical- ly, and he has given the impression to American ob- servers that a further UAR- Soviet deal of some kind may be upcoming. SOVIET POSITION IN GENEVA CONFERENCES Moscow continues, after two weeks of negotiations at Geneva on a nuclear test cessa- tion, to maintain its basic in- sistence on an immediate, per- manent, and unconditional agree- ment. A new Soviet suggestion-- designed to appear as a conces- sion to the West--proposes that an agreement on cessation should at least be drafted before dis- cussion of control system. This would be followed by the drafting of provisions "concern- ing the organization of the con- trol system," including the structure and functions of a control organ and system based on the report of the technical experts prepared last summer, and then by the listing of or- ganizational and other prepara- tory measures to be taken after signing. The agreement would then be signed. Thus, while ostensibly meeting the Western objection to the original Soviet agenda proposal, the new proposal would seem to require informal agree- ment on a draft on cessation of tests before discussion of con- trols. The Soviet delegation clearly indicated that Moscow envisaged an agreement which would include only a general directive for establishment of a control organ, details of which would be taken up in a separate agreement to be nego- tiated sometime in the future. Although the agenda pro- posal accomplishes little to- ward breaking the deadlock at the talks, its very issuance may indicate that Moscow is seeking a talking point on which to launch discussion of its own proposal for an unconditional test-cessation agreement. It also shows that the Kremlin probably has no immediate in- tention of breaking off the talks. The Soviet delegation was outwardly unruffled by the pub- lic announcement by the United States that Russia had continued testing after the 31 October opening session. Moscow both publicly and privately reiterated its 30 October official state- ment that it would continue tests as long as the West con- 25X1 tinued to "wreck agreement" for a permanent unconditional to ban. At the sixth session, So- viet representative Tsarapkin attacked Western attempts to SECRET PART I OF IMMEDIATE INTEREST Page 6 of 8 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET..., - .,. CURRENT INTELLIGENCE WEEKLY SUMMARY link "the subjective conditions" embodied in President Eisen- hower's 22 August statement with any test-cessation agreement. Tsarapkin warned that the Soviet delegation would never acquiesce to any conditional agreement. In the concurrent Geneva talks on measures to prevent surprise attack, chief Soviet delegate Kuznetsov has insisted that this subject is "organical- ly linked" with broader disarma- ment issues such as a ban on nu- clear weapons, liquidation of foreign bases, and reduction of conventional armaments and forces. Moscow, hoping to use this line to counter what it probably be- lieves will be attractive West- ern proposals, assigned First Deputy Foreign Minister Kuzne- system would provide a would- be aggressor with intelligence data of value in launching such an attack. The remarks of other bloc delegates at the third session support Soviet attempts to in- ject what are essentially polit- ical issues into the technical talks. The Czech delegate ex- pressed concern that the peoples of the world will be disap- pointed if the talks are limited to technical, "academic" ques- tions of weapons and inspection. He then linked technical prob- lems with policies of "certain great powers" which endanger the peace by such means as fly- ing aircraft laden with nuclear weapons. tsov, a diplomat of considerable ; The Albanian delegate tactical skill and experience, brought up the Rapacki demili- - to handle this difficult nego- ' tarization plan, describing it as tiating task, t being "urgent and realistic." At the second session, on 11 November, Kuznetsov insisted that an inspection system not combined with definite disarma- ment measures would promote rath- er than hinder the prospects of a surprise attack, since the Kuznetsov then deprecated West- ern insistence on separating technical discussions on sur- prise attack from political considerations as implying that the experts were so naive as to be unaware of the simple facts in this regard. Argentine President Fron- dizi's suspension of constitu- tional guarantees for 30 days on 11 November springs from his determination to push forward his oil policy and to crack down on Peronista and Communist agitation. His action, which was precipitated by the petro- leum workers' strike demanding cancellation of government oil development contracts with Amer- ican firms, increases his depend- ence on the armed forces. The military backed Frondizi during an abortive coup attempt on 12 November, which was apparently encouraged by the spreading labor unrest. Gomez' in- v v m n in the plot, as al- leged by some reports, is not clear, but both houses of SECRET Page 7 of 8 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 Congress were summoned on 13 November to consider impeach- ing him for refusing to name the plotters. For some weeks Gomez has urged a check on Peronista and Communist agita- tion, which Frondizi denounced in his 9 November warning to the strikers. Frondizi's charges that the strike was part of a sub- versive plan by Communists and Peronistas to create unrest and restore a dictatorship have some basis in fact. The petro- leum workers' association is headed by a Peronista and in- filtrated by Communists. While the oil workers' strike is es- sentially political, challeng- ing a key government policy, both Communists and Peronistas have been exploiting high liv- ing costs to gain support for their agitation. Recent Communist agitation has emphasized three major themes attacking the govern- ment. On the cost-of-living issue, propaganda has been sup- plemented with Communist ef- forts to organize neighborhood protest committees. Communists were active in promoting vio- lence and demonstrations pro- testing the Frondizi-sponsored law permitting private universi- ties. They have denounced as a sellout to "imperialism" the government petroleum contracts with Western firms--mostly US-- for more than $400,000,000 worth of goods and services and con- tinuing negotiations for double that amount. They say these are unnecessary in view of bloc offers. The Soviet offer of last July to supply $100,000,000 worth of petroleum equipment on credit was formalized in an agreement signed in Moscow on 27 October calling for payment over ten years at 2.5 percent. No specific purchases were men- tioned in the contract or have been confirmed by Argentine official sources. The Peronistas, who along with the Communists backed Fron- dizi's election last February, declared on 9 November a policy of open opposition to the administration. This will weaken Frondizi's influence among labor and increase his reliance on the armed forces to counter aggressive labor tactics. He seems still firmly in control of the situation, but labor unrest will probably continue. SECRET PART I OF IMMEDIATE INTEREST Page 8 of 8 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 CON IDENAL CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 Premier de Gaulle's plan to work out a permanent Algeri- an settlement with the Algerian deputies to be elected to the French National Assembly on 28 November has been undercut by the conspicuous absence of na- tionalist Moslem and liberal European candidates. The in- ability and unwillingness of "all political tendencies" to present themselves in the face of indirect French Army and settler opposition and of rebel intimidation may force De Gaulle to seek another mechanism for a settlement. The vast majority of both 129 Moslem and 68 European candidates on the 52 lists filed before the 9 November deadline profess support for the army and settler line of integration of Algeria with France. The be- lated entrance of five Social- ist lists, which comprise most of the "opposition," was appar- ently instigated by Socialist party leaders in Paris. Although the army ostensi- bly obeyed De Gaulle's order to get out of politics and en- sure free elections, the lib- eral ex-mayor of Algiers, Jacques Chevallier, has charged the army with rigging the elections. A high French civil official admits that the army generals acting as prefects "discour- aged," if not actually pro- hibited, candidates they did not favor. Ambassador Hoppenot, head of the commission supervising the elections, expressed "dis- appointment" to the American consul general on 8 November, stating that the Moslems were afraid of both the army and the Algerian National Liberation Front (FLN). Although he saw no hope of the kind of electoral competition De Gaulle envisaged, Hoppenot ruled out the possibil- ity of postponing the elections. A postponement, he explained, would be violently attacked by the Europeans and would force De Gaulle to explain that the action was necessary because of army and rebel pressure. De Gaulle, who reportedly was disturbed over the lack of "desirable" condidates, now may have to modify his plan of nego- tiating with duly elected Al- gerian representatives. Impend- ing municipal elections may pro- duce a better balanced Moslem representation, but these do not come until April. As an alternative the pre- mier may attempt new overtures to the FLN, but political consid- erations in France will force him to avoid any gesture imply- ing recognition of this body as chief spokesman for Algerian Moslems. Contacts reportedly continue with the FLN despite its rejection of De Gaulle's in- vitation to come to Paris to arrange a cease-fire. In any event, hopes for an early solu- tion for Algeria have dimmed considerably, and the election of "hand-picked" Algerian repre- sentatives in the French Nation- 25X1 al Assembly will almost certain- ly complicate a reasonable solu- tion. CONFIDENTIAL SH&W NOTES AND COMMENTS Page 1 of 19 -- Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 Speaking before the Chinese Communist party's central com- mittee propaganda department on 10 November, Premier and polit- buro member Chou En-lai outlined a massive propaganda campaign to rationalize Peiping's avoid- ance of hostilities with the United States in the Taiwan Strait area. Chou linked the "paper tiger" theme with an "ex- planation" of Peiping's position on the situation, citing a se- ries of events from World War II to the present to "prove" Mao's thesis that imperialist nations are really hollow shells which will inevitably collapse. The Chinese Communists are de- scribing the "paper tiger" the- ory as "our sharpest ideological weapon in the struggle against imperialism" and are stressing that the demise of the West is inevitable, although it may be some time in coming. In a recent con- versation with an American official, Chinese Nationalist Vice Foreign Minis- ter Chou Shu-kai said that if forced to choose between acceptance of "two Chinas" and a "deal" with the Chinese Communists, the in- dividuals now "con- stituting" the Na- tionalist Government would "of course choose the lesser of two evils--two Chi- nas. " Chou said, how- ever, that this ap- plied only to the present dominant ma- jority. He thought that some National- ist "fringe elements" might choose differ- ently, and that in the "remote" event of a coup d'etat or some other event bring- ing them to power, Nationalist China might conclude such a deal. Chou did not elaborate on the identity of the "fringe elements," and his remarks may have been intended to influence the United States away from adop- tion of a "two Chinas" policy. Peiping resumed its warn- ings to the United States for alleged violations of its 12- mile territorial waters. The "41st serious warning;' issued on 12 November, charged that on 11 November an American C-54 transport "intruded" over the Kwangtung Province coastal area and an F-86D jet fighter "in- truded" territorial air space in the Matsu area. This is the first warning since 22 October, when the 39th and 40th were is- sued. O Nationalist hold Selected railroad SECRET NOTES AND COMMENTS Page 2 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET No significant developments have been reflected in Communist military activity during the week. Artillery firing on "odd" days has been light and sporadic. The Nationalists on 11 November alleged that a Communist loud- speaker on Amoy had announced that "the cease-fire on even days is hereby abolished. Shell- ing is possible any day." There was no official comment from Peiping,and Communist guns were silent on 12 November. The Na- tionalists have withdrawn con- firmation of the loud-speaker broadcast, and the Taiwan Defense Command considers it highly un- likely that the broadcast ac- tually occurred as reported. Further examination of Chinese Communist and National- ist chemical warfare capabili- ties has revealed that the Na- tionalists do not have any capability for manufacturing toxic agents or any facility for filling CW shells. The US has not given the Nationalists any such munitions since World War II,and the Japanese did not leave any?toxic agents on Tai- wan when they left the island. The Chinese Communist Army has a small capability to employ CW toxic agents based on a lim- ited manufacturing capability. Despite continuing bad weather in the Taiwan Strait, the Chinese Nationalists de- livered approximately 10,300 tons of supplies to Chinmen between 1 and 10 November and are scheduling an additional 7,000 tons for delivery between 10 and 17 November. The Taiwan Defense Command comments that this is more than doubleE the normal tonnage required. Re- cent shipments have included heavy equipment, tanks, gun tubes, and heavy maintenance and construction items. " Japanese Prime Minister Kishi's prestige has been dam- aged and his control of the ruling Liberal-Democratic party possibly weakened by the par- liamentary crisis arising from attempts to railroad through the Diet a, controversial bill to strengthen police powers. The Socialists are boycotting the Diet and have stimulated nationwide opposition to the government's admittedly "ir- regular" tactics in seeking passage of the bill. Surprisingly strong Social- ist opposition, reinforced by nationwide labor walkouts and unusually vitriolic press de- nunciation of the government's handling of the bill, caught conservative leaders unaware. A subsequent move by the ruling party to extend the special Diet session by questionable means in order to permit the bill to remain under active consideration only increased criticism of the government. The Socialists are charg- ing that the bill would restore the prewar "police state" and realize that its passage would severely limit their ability to use mass demonstrations, labor walkouts, and extremist tactics to gain support for their parliamentary position. Conversely, failure of the bill would encourage greater use of such tactics and weaken the government's will and ability to use the powers it now has to curb leftist activities. Kishi, recognizing his vulnerability, has offered to compromise on some provisions of the bill and to delay its consideration until the regular SECRET PART II NOTES AND COMMENTS Page 3 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY session of the Diet in early December. Socialist leaders, on the other hand, have re- jected these offers and insisted that the bill be withdrawn com- pletely. Continued refusal by the Socialists to compromise or resume Diet proceedings, however, might result in loss of public sympathy for their position. Socialist leaders believe that if the bill can be defeated Kishi will be dealt a serious political blow, and that sim- ilar tactics can be used a- gainst negotiations with the US to revise the security treaty. Leaders within Kishi's own party, including former Prime Minister Ishibashi, are criticizing his handling of the bill and questioning his leader- ship. While there is no im- mediate danger of the govern- ment's fall, the extent to which the position of Kishi and the conservatives has been jeopard- ized may be revealed in the elections to the upper house and in a possible challenge to Kishi for the party president in the s rin of 1959. The military regime in Pak- istan under President Ayub is giving priority to those re- form measures which are likely to maintain the popular impres- sion of rapid progress made by the new administration to date. Initial enthusiasm over the re- gime's "clean-up" campaign dur- ing the first month of martial law has begun to wane, and the government is under increasing pressure to demonstrate further achievements. Meanwhile, polit- ical elements are planning covertly how they might resume some form of limited activity. Top civil administrators have conceded that the regime's lack of long-range objectives and effective planning is mak- ing it difficult to maintain the pace of the "revolution." Ayub is pressing a commission of experts to produce a program for immediate land reform, which he regards as the most urgent problem on the domestic front. The regime has brushed aside warnings that precipitate action might upset the economy and retard rather than increase food production. Members of the business community in Karachi are ex- pressing concern over the con- tinuing standstill in commercial activity. Businessmen, who were hit hard by the stringent mar- tial-law regulations and by price controls, have largely suspended operations until the financial outlook becomes clearer. Resultant shortages of commodities and a return to previous price levels have moderated the initially favor- able public reaction to the military administration. Signs of political activ- ity are beginning to reappear, although most politicians are continuing to lie low for fear of arrest. The Moslem League is likely to be the first of the now defunct parties to resume operation, since it is the only political organization which finds some acceptance SECRET PART II NOTES AND COMMENTS Page 4 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 among the armed services. In East Pakistan, where the mili- tary regime is likely to en- counter more opposition, Moslem League leaders have been meet- ing to chart out policies for the party to follow, possibly in cooperation with the new government. Leftist elements have been handicapped by the ar- rest of key leaders of the National Awami party and the underground Communist INDIAN PARLIAMENT FACES CONTROVERSIAL ISSUES The session of the Indian Parliament opening on 17 Novem- ber is likely to be highlighted by discussions of controversial questions on which the Congress party is finding it increasing- ly difficult to defend itself. In addition to such chronic problems as lagging food pro- duction, five-year-plan finances, and party rifts in several key states, government leaders may be challenged on three poten- tially explosive questions-- the situation in Communist-gov- erned Kerala State, the linguis- tic problem in Bombay State, and a government financial scandal involving V. K. Krishna Menon. An attempt in September by the non-Communist opposition to raise the question of maladmin- istration in Kerala was ruled out by the speaker. However, this maneuver, which reflected growing criticism of the Com- munist government's handling of civil disturbances in Kerala, caused a stir in Parliament and put the Communists on the de- fensive at the national level. Opposition sentiment remains strong as a result of continued strikes and repressive police action in Kerala. The opportu- nity to publicize Communist dif- ficulties during the coming par- liamentary session is almost certain to be exploited by anti- Communist elements. Agitation in Bombay State for a division of that region into separate linguistic states is again on the increase, rais- ing the possibility that Parlia- ment will be asked to reconsider the two-year-old legislation which, despite local resistance, established Bombay as a large unilingual state. Prime Minis- ter Nehru, taking note in Sep- tember of the increasing agita- tion and deploring the use of violent methods, implied that he would not oppose parliamen- tary action to amend the 1956 reorganization. Certain ele- ments in the Congress high com- mand are still firmly opposed to a division of the state, however, as indicated by the recent decision of the national executive to unite the separate party branches in Bombay--long organized along linguistic lines --into a single state-wide or- ganization. Efforts may also be re- newed during the coming parlia- mentary session to discuss re- ports that Krishna Menon, while serving as India's high commis- sioner in London in 1951, became involved in a much-publicized scandal over an Indian Govern- ment purchase of jeeps in 1951 SECRET NOTES AND COMMENTS Page 5 of 19 25X1 25X1 - Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 from a British firm. ELECTIONS SCHEDULED IN NEPAL Nepal is scheduled to con- duct its first experiment with a popularly elected government-- eight years after the revolu- tion of 1950-51 which was to bring democracy to the country. King Mahendra announced on 9 November that elections to the lower house of a new parliament would begin on 18 February 1959. These elections, for 107 of 109 seats, will extend over 45 days because of Nepal's rugged terrain and the shortage of trained personnel. Elections for,the additional two seats, from constituencies in remote western Ne- pal, will be held later. In 1951 a Nepa- lese revolutionary movement, with some Indian support, de- posed a family of hereditary prime min- isters which had ruled for a century. Since none of the po- litical parties was able to establish a stable government after the revolution, a series of provisional governments, at times quasi-parliamentary in form and sometimes involving direct rule by the King, have administered the country for the past eight years. On 1 February 1958, King Mahendra announced a firm five- point program leading to nation- al elections. This program has proceeded fairly smoothly in its mechanical aspects, and irre- sponsible political activity has been curbed. The elections will be held under a new constitution drafted by Nepalese and foreign experts. An upper house will be chosen by the King and his advisers. The prime minister and his cab- inet will be responsible to par- liament. The King presumably will retain ultimate power. He must pass on the constitution, which was presented to him on 2 November, prior to its pro- mulgation. At present, only the mod- erate socialist Nepali Congress party, led by former Home Min- ister B. P. Koirala, seems to have enough strength to win a SECRET NOTES AND COMMENTS Page 6 of 19 ,_ Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET parliamentary majority. Little is known about the following of the Communist party, but it is believed to be strong in some locations. K. I. Singh, former prime minister ousted by Mahen- dra in November 1957 and now leader of the United Democratic party, apparently has popular appeal outside Katmandu. Should political agitation in the next three months become the elections. irresponsible or appear to threaten the interests of the King, he is likely to postpone The progress of South Ko- rea's financial stabilization program has been halted by a sudden increase of currency in circulation, resulting in a 6.5- percent rise in the wholesale price index in September and October. Increased bank credits and doubled wages for all gov- ernment and military personnel are primarily responsible, but poor fiscal operations and un- realistic budget planning are also to blame. Inflation prob- ably will continue for the next few months at least. The stabilization program, implemented in mid-1957, suc- ceeded for the first time in ten years in rolling back prices, which had risen to more than 230 times their 1947 level. A controlled expansion of currency in circulation--generally ef- fective except for some overex- pansion in December 1957--to- gether with increased arrivals of American aid goods and a modest industrial build-up, con- tributed to the program's suc- cess. South Korean economic of- ficials attempted to limit cur- rency in circulation to $320,- 000,000 during 1958. By the end of September, however, this limit had been exceeded by $12,- 000,000, with traditional year- end expansion still to come. Planned increases in bank cred- its and crop loans, apparent overestimation by government officials of tax revenue, and a drop in aid goods strongly suggest that the deterioration will continue well into 1959. Minister of Finance Kim Hyon-.chol has stated that his government is determined to de- press prices by tightening con- trols on the money supply. The average wholesale price index for the last six months of 1958, however, is threatening to ex- ceed the level at which, accord- ing to a South Korean agree- ment with the United States in September 1955, the exchange rate must be revised. In late 1957, the South Korean Government was able to control the price level so as not to require a revision of the exchange rate. Conditions this year are far less favorable, and Minister Kim has not out- lined his specific intentions for monetary controls. One Korean press report states, however, that Seoul is about to seek a revision of the 1955 25X1 agreement to assure that the exchange rate is not altered the end of this year. SECRET Page 7 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY SINO-SOVIET BLOC ECONOMIC OFFENSIVE IN INDONESIA Since the Sino-Soviet bloc economic drive in Indonesia got under way seriously in late 1957, Djakarta has accepted about $200,000,000 worth of bloc economic aid offers and, in addition, the bloc has a- greed to deliver by 1959 at least $170,000,000 worth of military equipment. At least 270 bloc economic technicians are now in Indonesia, and about 170 military specialists are assembling bloc equipment and training Indonesians in its use. The bloc is also intensi- fying a trade drive in Indo- nesia. Reports indicate that Indonesian trade with the bloc in 1958 will surpass the pre- vious peak level of $74,000,000 in 1955. Reduced Indonesian economic activity this year will increase the importance of bloc trade. Bloc arms deliveries are continuing according to schedule. Materiel supplied thus far has consisted mainly of land arms and aircraft, but some naval equipment--motor torpedo boats and landing craft--may also have been delivered by Soviet merchant ships. In October four subchasers were turned over to the Indonesian Navy. The USSR has preferred to have other members of the bloc act as suppliers of these arms. Although Poland and Czechoslo- vakia extended military credits to Djakarta, some of the equip- ment purchased under these agree- ments has been of Soviet origin. Communist China for its part has facili- tated the delivery of aircraft to Indo- nesia by permitting overflights. The bloc already has signed $140,000,- 000 worth of contracts --65 percent of total bloc economic aid of- fered Indonesia--to supply a wide range of goods and assist- ance. Under these credits, Poland and the USSR are supplying 36 ships, China has shipped rice and tex- tiles, and East Ger- many and Czechslo- vakia are construct- ing a sugar factory and a tire plant. The USSR, re- sponsible for one half of total bloc economic aid, is making foreign exchange available and is conducting transport and geological surveys. Communist China continues to be Indonesia's major bloc trading partner, and this trade is expanding. Peiping is sup- plying rice for the first time-- about 20 percent of the 800,000 tons of rice being imported this year. By extending credits, SECRET Page 8 of 19 __ Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 Peiping also is assuring it- self of an important share of Indonesia's textile market. Bloc purchases are pri- marily limited to rubber, Indo- nesia's major export. During the first half of this year China and the USSR purchased 12 percent of Indonesia's rub- ber exports, compared with 7 percent in 1957. Communist China and Czechoslovakia alone reportedly have already agreed to buy at least 10 percent of Indonesia's estimated rubber exports in 1958. CATHOLICS IN NORTH VIETNAM The recent expulsion: of four of the 20 foreign Catholic priests in North Vietnam for acts "contrary to law and harm- ful to security" is the latest move in Hanoi's efforts to con- trol the country's Catholic minority. One of the four, a Canadian, has already arrived in Hong Kong after traveling through Communist China. The expulsions follow re- cent efforts by Hanoi to ac- commodate the Catholics. The state-sponsored "Committee of Patriotic and Peace-loving Catholics" permitted requiem masses and the tolling of bells following the death of Pope Pius XII, and on 30 October extended "greetings" to the new pontiff. This contrasts markedly with the policy of the Chinese Communists, who, except for charging American collusion in the papal elec- tion,, have remained silent on all recent Vatican develop- ments. North Vietnam, however, with a proportionately larger Catholic minority than China, may have wanted to avoid any action which might provoke op- position requiring harsh re- pression. The nearly 400,000 Cath- olics in North Vietnam appear to be among the most vocal critics of the regime and the most militant in their refusal to conform. There were major outbreaks in Nghe An Province between Catholics and govern- ment troops in 1956 and 1957, and some 2,000 Catholic you s clashed with police last March. Hanoi's policy has alter- nated between conciliation and harsh repression, and it has used both friendly gestures and warnings to discourage antiregime demonstrations. After the army's suppression of a three-day uprising in a Catholic area in November 1956, Hanoi reverted to a particular- ly conciliatory line. Pro-Com- munist Catholic leaders and newly formed lay groups were encouraged to hold special services for Catholic "comrades" killed in the war against the French. Cadres were directed to appoint Catholics to village agricultural executive commit- tees and to restore and repair churches "requisitioned" during the land-reform program. Six months later, however, Hanoi began denouncing individ- ual priests in the press, ac- cusing the church of "political activities prejudicial to the policy of the state and the laws of the country." Hanoi has sought to pro- mote a "reliable" Vietnamese clergy which could influence the Catholic laity to support the regime, and, in their ef- forts to promote the "Committee of Patriotic and Peace-loving SECRET PART II NOTES AND COMMENTS Page 9 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET Catholics," the Communists have allowed Catholics a certain amount of freedom. The regime now may feel that the time is ripe to weed out the political liabilities represented by the few remaining foreign priests and thereby to enhance the ef- fectiveness of the state-spon- sored church as a propa anda arm of the government. Observations of recent visitors to China and Peiping's own policies with respect to food and cloth rationing do not bear out Communist China's statements about its "amazing" increases in agricultural pro- duction. Although good weather and a massive effort in the countryside undoubtedly brought about substantial increases in most agricultural products this year, most of the regime's claims seem out of touch with reality. Peiping says this year's grain output will reach 350,- 000,000 tons, 90 percent more than last year and about equal to the combined output of North America, Australia, Africa, and Western Europe. Cotton produc- tion, Peiping says, will more than double last year's, thus enabling China to outstrip the United States in this field. In the past, Peiping's crop "estimates" have been high early in the year--although not as high as this year's claims-- and have been subsequently trimmed downward. This year, how- ever, the regime thus far shows no inclination to back down from early predictions, which in some cases are actually being in- COMMUNIST CHINA'S AGRICULTURAL PRODUCTION (MILLION METRIC TONS) 1956 PRODUCTION 1957 PRODUCTION 195! PUN Total grain 182.5 185.0 196.0 350.0 Peanuts 3.3 2.521 3.03 6.0 Rapeseed .92 .85 1.15 1.35 Soybeans 10.2 10.05 10.44 12.5 Cotton 1.44 1.64 1.75 3.5 Wheat 25.0 27.0 39.45 Rice 82.4 84.9 160.0 Tobacco .399 .251 .768 Sugar .870 .850 2.0 Potatoes 21.8 20.3 105.0 Draft animals 87.3 83.5 90.22 (MILLION HEAD) Hogs (MILLION HEAD) * Formulated before announcement of "giant leap forward" SECRET creased. Most of the claims seem to be based on generaliza- tions drawn from par- ticularly favorable experimental plots. The leaders in Pei- ping give the in- flated statistics the widest publicity. They may be counting on the new commune system, which will almost completely separate the farmer from the results of his labor, to obscure the great disparity between claims and what is actually pro- duced. NOTES AND COMMENTS Page 10 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 many of the Innovations in farm techniques being applied to small experimental plots are impractical and are designed mostly to dramatize potential productivity of the land. some of the techniques being pushed by the authorities lack scientific planning and may even have harm- ful effects on the soil in fu- ture years. It has become a sort of national game, to compete for the highest yield on experimen- tal plots which are then pro- jected as nationwide achieve- ments. THE YUGOSLAV DISPUTE WITH THE SINO-SOVIET BLOC There has been recent speculation that some restraint would materialize in the dis- pute between Yugoslavia and the Sino-Soviet blocs This feeling, generated largely by Tito?s apparently conciliatory remarks in mid-October and the subsequent arrival in Belgrade of a long-postponed delegation .SECRET PART II NOTES AND COMMENTS Page 11 of 19 The regime's failure sub- stantially to increase food and cloth rations supports the view that claims are grossly exag- gerated. Peiping has had to issue several directives calling for "shock" procurement drives to spur lagging procurement of agricultural goods--steps that scarcely would be necessary if granaries were bulging with surplus crops. output of grain and fiber equal to the combined pro- duction of the rest of Improved weather conditions, a tremendous effort in water conservancy work, and intensified farming practices this year un- doubtedly increased agricultural production substantially, but this no longer satisfies Pei- ping. Production goals set for next year, for example, if fulfilled, would make China's Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 of Soviet war veterans, has not been borne out. Yugoslav For- eign Secretary Koca Popovic declared on 29 October to Selwyn Lloyd in London that the present hostile Soviet attitude toward Yugoslavia would "last for a protracted period." Although the participants in the dispute continue to pay lip service to a desire to im- prove relations, none yet ap- pears willing to let the re- criminations subside. Basic ideological divergencies remain and outweigh those factors that could point to a modus vivendi. Soviet Premier Khrushchev, in a speech on 10 November, said he would strive to develop friendly relations with Yugosla- via "along the state line" and to continue trade when mutually advantageous. He added, how- ever, that the bloc would wage an "irreconcilable struggle" against Yugoslav "revisionism," and said be believed Yugoslavia's leaders were becoming enemies of the working class. Attacks of varying inten- sity against Belgrade's foreign policies continue, and public condemnation of Yugoslav "re- visionism" is again prominent in bloc propaganda. Most recently, the Yugoslavs have been sharply condemned in sev- eral speeches made by satellite leaders on the 41st anniversary of the Russian revolution. Yugoslav diplomats attending ceremonies in East Berlin, Sofia, and Tirana walked out in protest. The Yugoslavs have ap- parently managed to maintain some influence among the satel- lites. Furthermore, the Yugo- slav party's new monthly re- view, Socialism, first published in early October, made it clear that Belgrade had in no way modified the heretical concepts put forth at the Yugoslav party congress last April, which precipitated the present,dis- pute. Yugoslav party secretary Vukmanovic-Tempo, in an attack particularly on the Chinese, Bulgarian, and Albanian roles in the anti-Yugoslav campaign, on 9 October reaffirmed Bel- grade's belief that Yugoslav views on the "development of socialism" will triumph. Yugoslavia's voluminous contribution to the polemics shows that Belgrade has no in- tention of ignoring bloc chal- lenges to its position. The Rumanian-Czech party-state declaration of 22 October and an earlier East German - Bul- garian statement have been con- demned by the Yugoslavs as efforts to establish a pattern for attacking Yugoslavia. Bel- grade has linked these decla- rations with the Khrushchev- Mao communiqud of last August calling for the eradication of Yugoslav "revisionism." Albanian attacks on Yugo- slav minority policies have recently increased in intensity. Albanian Premier Shehu declared on 26 October that Tirana will attack the "bloody Tito regime" until'Albanians in Yugoslavia are granted the "same elementary rights as any other minority in a bourgeois state." The Yugoslavs have countered with accusations that the Albanians are threatening the peace, and Belgrade has sharply attacked them for harassing Yugoslav diplomats in Tirana. Grotewohl's recent attack on Yugoslav pol- icies and Belgrade's sharp re- joinder precipitated a marked deterioration in Yugoslav - East German relations. While these charges appear sufficient to warrant a break in diplomatic SECRET PART II NOTES AND COMMENTS Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY relations, apparently neither Yugoslavia nor the bloc de- sires such a development at this time. Abandoning its customary defensive attitude in the dis- pute, Yugoslavia has taken the initiative on two issues which could easily expand differences with the bloc. An article in the Yugoslav: press has welcomed the granting of the Nobel Prize to Boris Pasternak, who is de- scribed as one of the most "significant of living Soviet poets," and as having "great merits in preserving Russian epic traditions." This atti- tude reportedly has caused enough concern for Moscow to request Belgrade not to pub- lish Pasternak's book in Yugo- slavia. Belgrade also has attacked the Chinese Communists' commune drive, probably hoping to pro- mote its own system of communes in order to embarrass.Peiping. In contrast to the Yugoslav system, the Chinese drive is described by Belgrade's prop- 25X1 aganda media as "truly a terror exercised over the Chinese peas- antry. Additional reports now confirm a resurgence of anti- regime hostility in Rumania during the first six months of 1956, particularly among peas- ants and industrial workers. This apparently prompted the Rumanian leadership to expand, in late summer and early fall, what was to have been a routine crackdown on the party and government bureaucracy. peasants in the region of Brasov last June resisted the efforts of officials of the Ministry of Agriculture to col- lect wheat. When the officials called in the security police, the peasants burned the wheat and, in some cases, the har- vesting machinery. The wealth- ier peasants and others who had been members of prewar politi- cal parties, fearing retalia- tion, reportedly fled to the surrounding mountains. workers in Brasov agitated for increased salaries, improved working and living conditions, and an end to "Stakhanovite" production methods. Regional party and union officials, con- trary to usual practice, re- portedly went to the factory where the protests had origi- nated and organized meetings for the purpose of bringing the grievances to the atten- tion of regime officials in Bucharest. When police, presumably acting with the cognizance of the Ministry of Interior, ar- rested the organizers, the workers reportedly seized the factory buildings, demonstrated in the city square, and called on other workers in Brasov to support their demands. The local police, seriously under strength since many of their units had been sent to the countryside the previous month, were forced to release their prisoners, and security troops and militia from neighboring cities had to be called in to restore order. SECRET NOTES AND COMMENTS Page 13 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 SECRET Popular unrest in the in- dustrial and agricultural sec- tors has been a continuing prob- lem for the Rumanian regime, and,prior to June of this year, the regime has tended to follow a conciliatory line when faced with unrest or threats from workers or peasants, With the continuation of unrest during the first half of this year, however, the Rumanian regime abandoned its equivocal tactics and began cracking down. Thus, the campaign launched at the party plenum in June to re- duce corruption and bureaucratic overhead, and to overcome ideo- logical backsliding among party members and the intelligentsia; was expanded to embrace workers and other potentially dissident elements of the population. Pos- session of labor cards was made mandatory for purposes of employment, housing, and medical care, and it was decided on 13 August not to hold the long- scheduled congress of trade unions until after the regime's hand could be strengthened by a reorganization of the trade unions. More recently, it has created "factory courts" em- powered to impose fines and other punishments, including confiscation of property, for nonfulfillment of production quotas or negligence leading to the breakdown of machinery. SECRET PART II NOTES AND COMMENTS Page 14 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY The USSR, which must aug- ment its foreign-exchange earn- ings in order to expand its chemical industry with Western equipment, is finding it in- creasingly difficult to expand exports to Western Europe. The volume of trade among free-world countries this year has been generally lower, but smaller European countries are reluc- tant to buy more from the USSR at the expense of trade with traditional suppliers. Both Denmark and Italy have asked that Moscow settle its import surplus in convertible currency rather than in Soviet goods, and Belgium has stopped grant- ing credits under its payments agreement with the USSR, as they had become a means for financing a chronic import surplus by the USSR. Through polite threats, Moscow is increasingly promot- ing bilateral trade relations. Western Europe countries often are pressed either to switch imports to the USSR in order to reduce the trade credits they hold there or else to se- cure new Soviet orders. France, "encouraged" by recent heavy Soviet purchases of French equip- ment, now may purchase up to 215,000 tons of Soviet wheat. SECRET NOTES AND COMMENTS Page 15 of 19 _ Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET The USSR promotes itself as a reliable source of supply and a stable market for goods not influenced by cyclic economic movements. with Denmark and extended its previous protocol, 25X1 25X1 In its negotiations with the West European countries, the USSR states that while its purchases are expected to grow, it will import from individual countries only to the extent that the supplier buys from the Soviet Union. The USSR has stressed, for example, that Finland must either divert purchases from the West to the USSR in order to balance Mos- cow's import surplus with Fin- land, or else suffer a cut in Soviet purchases, an act which would affect the level of em- ployment in Finland. Helsinki, in order to maintain the level. of its sales to the USSR, agreed in September to buy Soviet fuels and metals worth $15,000,000 for stockpiling. The USSR in August ended inconclusive trade negotiations COMMUNIST CLANDESTINE ACTIVITY IN WEST GERMANY Bonn government officials have expressed increased appre- hension over the inability of the federal police authorities to combat underground Communist activities. Their concern has been aroused by the discovery of a serious case of espionage in the West German armed forces and the recent detection of extensive Communist propaganda activity in the industrialized Rhine-Ruhr area. The volume of Communist propaganda material has increased markedly since the beginning of the year, al- though the federal police es- timate that only about half the illegal literature has been confiscated. Since the West German Com- munist party (KPD) was banned in August 1956, Communist sub- versive-operations have been directed to a'greater degree from the East Zone and supported by,an estimated $720,000 to $960,000 a month. The volume of illegal pamphlets and period- icals is increasing each month. About 345 titles were seized in 1958, and 1,340,000 individual propaganda letters were confis- cated from couriers traveling from the East Zone during 1957. About 166 illegal factory news- papers are published in West Germany. The federal police have arrested 870 Communist agents for distributing illegal litera- ture between August 1956 and August 1958, and about 7,500 preliminary proceedings have SECRET PART II NOTES AND COMMENTS Page 16 of 19 vage its export trade with the USSR, however, Denmark--faced with agricultural surpluses in which the USSR has indicated an interest--is pressing pri- vate oil companies to accept Soviet petroleum. The USSR must increase its foreign-exchange earnings in order to expand its chemical industry with free-world equip- ment. This program, announced in May, has already resulted in contracts for more than $40,000,000 worth of Western plants. Soviet delegations visiting the United States have indicated an interest in pur- chasing up to $50,000,000 worth of machinery in the United 25X1 States alone, but they have hinted that financing might present a problem. Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY been started. In a case that has been called the most seri- ous example of Communist in- filtration in the West German armed forces, Lieutenant Com- mander Horst Ludwig and several other agents were recently ar- rested on the charge of spying for the USSR. In addition, 37 Communists have been seized for underground activities in the Rhine-Ruhr area in the largest police action against the KPD since the party was banned. Bonn government leaders have used this subversion as justification for increasing security measures. Defense Min- ister Strauss has called for the creation of a central gov- FINNISH CABINET UNDER POLITICAL ATTACK Finland's two-month-old, five-party coalition government, headed by the veteran Social Democrat Karl August Fagerhoim, is being attacked by the two opposition parties, and is un- der pressure from the USSR. It is also strongly criticized from within by elements in the Agrarian party, who assert that their party is best able to. maintain good relations with the USSR. The Communist- front Finnish People's Democratic League (SKDL), resentful of its exclusion from the government after the July parliamen- tary elections made it the largest party, has openly questioned the sincerity of the government's neutral- ity policy, while the Soviet press has criticized its.: "right. 1st" character. Fin- land's economic de- 80109 3 /90906 9 ernmeat agency for psychologi- cal defense, the purpose of which would be to control Com- munist infiltration in the armed forces as well as in po- litical and economic circles. Since the apprehension of the 37 Communists in the Ruhr, In- terior Minister Schroeder has called for increased security forces and has proposed a con- stitutional amendment which would give the Bonn government special powers to deal with na- tional emergencies, including subversive activities in West Germany and aggression from abroad. This proposal, however, has been attacked by the oppo- sition Social Democratic party as too sweeping' . pendence on the USSR and its high unemployment make the country particularly vulner- able to Soviet commercial pres- sure, and some officials are seriously disturbed that Mos- cow has ignored a second at- tempt by the Finns to start talks for a 1959 trade agree- ment. The Agrarian party's par- ticipation in the cabinet has not prevented the party from denouncing the government's FINNISH DIET JULY 1958 QUADRENNIAL ELECTIONS GOVERNMENT COALITION ,V, 0E CENTER CENTER SECRET PART II NOTES AND COMMENTS Page 17 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET domestic policy and criticizing its "ineptitude" in handling relations with the USSR. Both President Kekkonen and the rad- ical element within the Agrar- ian party are reportedly ac- tively seeking to replace the incumbent cabinet with one more acceptable to the USSR. Fagerholm's difficulties in keeping his government in power are increased by the feuds within the Social Demo- cratic party and Finland?s cen- tral trade union organization, the Confederation of Trade Unions (SAK). SAK is con- trolled by the dissident, anti- government Social Democrats, and in late October the "regu- lar" Social Democrats organized a rival trade union organiza- tion. Since the Communists comprise an estimated 40 to 45 percent of SAK's membership, further defections would en- able the Communists to play an increasingly decisive role. A meeting of the Social Democratic party council has been set for 29 November in one more effort to end the parallel quarrels. Prime Min- ister Fagerholm has recently conferred with the Social Demo- cratic opposition leaders and the chairman of SAK, presum- ably in an effort to re-estab- lish unity negotiations, and there are rumors that cabinet posts will be offered the dis- sident Social Democrats. In his effort to save his govern- ment, Fagerholm will also make special efforts to avoid of- fending the USSR. Agrarian efforts to un- seat Fagerholm, however, are likely to continue. His fall, ostensibly on domestic issues, would result in difficult and long-drawn-out negotiations. Unless new elections are called by the President, the most likely result would be an Agrarian-led government--either a minority cabinet dependent on Communist (SKDL) and opposition Social Democratic parliamentary support, or a majority government including those groups. SPANISH SOCIALISTS INCLINING TOWARD JOINT ACTION WITH COMMUNISTS Spanish Socialist leaders in exile in southern France are under increasing pressure from their followers in Spain to permit collaboration with the Communists in peaceful strikes and demonstrations in order to avoid losing the ini- tiative to the Communists. With benefits of the 1956 wage boost wiped out by steadily rising living costs, such joint action, particularly with An- archist party participation, could lead to unprecedented worker agitation in the coming months. Socialists in Spain be- lieve that the Spanish Commu- nist party has a big advantage over the clandestine Socialist and Anarchist parties and labor unions because of its foreign financial support and its clan- destine radio station, and be- cause the regime has given the Communists extensive publicity by assailing every popular dem- onstration as Communist insti- gated. They feel that Social- ist press criticism of the Com- munists only plays into the hands of Franco. The Toulouse congress of the Socialist party in exile last August refused to approve a request for collaboration with the Communists. The Amer- ican Embassy in Madrid never- theless expects a policy of SECRET NOTES AND COMMENTS Page 18 of 19 - Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY limited rapprochement because of the intensifying economic pressure on the workers. The cost of living in Madrid, for instance, has risen 39.6 per- cent in less than two years. Recent reports from the Ameri- can consul in Valencia reveal SECRET considerable sentiment among the Anarchists also for cooper- ation with the Communists. Collaboration by these three groups, even if limited in scope, could intensify worker protest action over the next six months. PART II NOTES AND COMMENTS Page 19 of 19 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 CONFIDENTIAL SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 PATTERNS AND PERSPECTIVES PEIPING'S HARD-LINE FOREIGN POLICY The Chinese Communists have adopted a new hard approach to advance their basic foreign pol- icy goals--international accept- ance, reduction of US influence on Western governments, and ero- sion of US authority in the Far East. They apparently expect that an atmosphere of tension at this time will induce peoples of non-Communist countries to exert pressure on their govern- ments in favor of a "wholesale" change in attitude toward recog- nition of the eight-year-old Peiping regime. In their current effort, however, the Chinese Communist leaders have not returned tc Stalin's policy of relegating all non-Communist countries-- including the "noncommitted"-- to the sphere of the capitalist, "enemy" camp. Peiping is highly selective in applying its hard tactics. Moderate tactics apparently now are considered to be useful only after a "struggle" and dead lock. On 8 August, a People's Daily editorial provided clear summation of this view of for- eign affairs when it stated: "Long historical experience has proved it is necessary to strug- gle resolutely against the im- perialist aggressive bloc in order to relax international ten- sions and safeguard world peace." The major factors in con- ditioning the Chinese Communist leaders to this hard-line policy probably were a real sense of irritation with the slow progress of their previous somewhat con- ciliatory policy, and the con- viction that the USSR has raised the bloc to a position of con- siderable strength, while the US has been subject to considera- ble criticism from its allies. Peiping tried the hard line in July 1957, when it blasted the Japanese Government for its re- quirement that Chinese Commu- nist delegates to a trade fair be fingerprinted; Tsingtao was then closed to Japanese shipping. The Japanese indicated willing- ness to reconsider the finger- print issue, Tsingtao was re- opened, and Peiping expressed its willingness to discuss re- patriation of Japanese nationals and expanded trade. Policy Toward US In opening its "struggle" with the US, Peiping apparently worked to prepare-a position from which it could exert both political and military pressure on the US without clashing with American military forces. Com- munist China's demand on 30 June for resumption of the Sino-Amer- ican ambassadorial talks sus- pended last December was designed to appear as an "ultimatum" and to create the impression that Peiping was leading from strength. When Premier Chou En -lai stated on 6 September that Peiping "is ready" for talks, the Chinese leaders were almost certainly convinced that as a result of their shelling of Chinmen and the accompanying trend of inter- national opinion, they were in a strong negotiating position vis-a-vis the US. Chou's willingness to men- tion the offshore islands as a separate issue from Taiwan was probably intended to be inter- preted as a negotiating position, in response to which the Commu- nists apparently expected US concessions. In the meantime they appeared gratified by in- ternational criticism of the US position. and were encouraged by signs of Nationalist pique with the US. The use of artillery for the "political struggle" provided CONFIDENTIAL SECRET PART III PATTERNS AND PERSPECTIVES Page 1 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY the Chinese Communist leaders with a "safe" means of probing US intentions regarding the de- fense of the offshore islands. They obviously did not desire a "big" war and when Peiping concluded that the US would de- fend the islands, the Chinese Communists began to modify their statements which had implied a direct military challenge to the US. In contrast to the People's Daily warning of 9 September g American convoy- ing would "result in armed'. clashes with China at any mo- ment," the present line carries no such threats; instead it maintains Communist China's will- ingness to negotiate "peaceful- ly" and insists that the US voluntarily recognize Peiping's 12-mile limit. In his cease-fire order of 6 October, Defense Minister Peng Te-huai did not threaten to force the US out of the Tai- wan Strait area and stated in relatively mild language that if American forces do not with- draw quickly, "they will always be on the defensive." Subse- quent orders by Peng, despite Peiping's improved military capa- bility in the strait area, also failed to specify direct retali- ation against US naval vessels, should convoying be resumed. This line indicates that the Chinese Communist leaders are sensitive to the destruc- tiveness of American nuclear weapons. Prior to and early in the Taiwan Strait crisis, the Chinese Communists tried to create the impression among Western governments--particular- ly the US--that China cannot be "pushed around" merely because it has no nuclear weapons. Lat- er, however, Mao Tse-tung him- self moderated Peiping's chal- lenge to the US, stating in late September that US atomic war threats have alienated more than 90 percent of the "people of the whole world." According to the People's Daily on 30 September, the peoples of the world must shoulder the task of "staying the hands of the US aggressors against China." The Chinese leaders, who are reported to have become ap- prehensive that the Nationalists might use US atomic weapons against the mainland, recognize that a nuclear attack on China would wreck Peiping's industrial- ization program. The Chinese Communist lead- ers are also aware that since they possess no effective deter- rent to prevent a nuclear at- tack on the mainland, success of their policy toward the US depends on Soviet support. A I People's Daily editorial of late September stated: "We know very well the destructive power of atomic weapons" and declared that any American nuclear at- tack on the mainland would re- suit in an attack on the US "by the same means." The passage on retaliation was attributed by the editorial to Khrushchev's 19 September letter to President Eisenhower, suggesting that Com- munist China does not possess nuclear weapons of its own. Mao Tse-tung, Liu Shao-chi, and Chou En-lai have twice in the past month publicly underscored the "powerful support" Mos- cow has provided in the Taiwan Strait situation--support which has been "very effective" in "forcing the aggressors to think hard about their fate." Whether Khrushchev was at all reluctant to be a partner in Mao's plan for using artil- lery to probe US intentions re- garding the offshore islands is a conjectural matter. In any case, top Soviet military lead- ers, including Marshal Malinov- sky, are reported to have been conducting military discussions with Chinese military leaders in Peiping at least eight days prior to Khrushchev's arrival there on 31 July. SECRET PART III PATTERNS AND PERSPECTIVES Page 2 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Policy Toward Yugoslavia Peiping's desire to "strug- gle" with Moscow's opponents as well as its own has made it a major protagonist of Khru- shchev's efforts to restore his control over and tighten dis- cipline in the Soviet bloc. In their effort against the Yugo- slavs, the Chinese have been moving with the USSR in avoid- ing a break while attacking Bel- grade's revisionism. The tone of their attack, however, had been sharper than that of any bloc party, and the snub last June of the departing Yugoslav ambassador suggests that they do not feel the need for retain- ing the same degree of flexi- bility in relations with Bel- grade that Khrushchev continues to seek for Moscow. It is not clear at just what point in mid-1957 Mao de- cided that his own pronounce- ments on intrabloc relations should be brought into line with the harder position then being taken by Khrushchev. In any case, by November 1957 Mao's attacks against revisionism were the sharpest of any made by bloc leaders and his statement that the Soviet Communist party, as well as the Soviet state, must lead the bloc was unique among bloc leaders. The fact that Tito and Go- mulka.were questioning the hegem- ony of Moscow was reason enough for Mao to lend his prestige in enforcing it. He was also anx- ious to put an end to misrepre- sentations of Chinese Communist statements by Yugoslavs and Poles, who tried to use Peiping as a counterweight to Soviet authority. The Chinese Communists' first important move against Belgrade was to send only an "observer" to the Yugoslav con- gress last April in line with the action of the USSR and most of the satellites; Albania com- pletely boycotted the congress. Their second major move was a sharp attack against Yugoslav revisionism in the 5 May edi- torial of the People's Daily. Belgrade's 9 May KomunisT-_ae- fense of the party's program interpreted the Chinese attack as a revival of the 1948 reso- lution which expelled Yugoslavia from the Cominform. This apparently was not Peiping's intention. The Chi- nese editorial took Khrushchev's line laid down at the July 1955 plenum in Moscow that while the Cominform resolution was basi- cally correct, the methods used in implementing it, and the 1949 Cominform resolution, were incorrect. Chinese Foreign Minister Chen Yi on 10 May took steps apparently designed to dispel the impression that Pei- ping's sharp condemnation of Belgrade was political warfare of the Cominform brand or that it would lead to a break in dip- lomatic relations between the two countries. At the same time he reserved China's right to criticize Yugoslavia on ideo- logical issues. A subsequent Chinese attack stated that crit- icism should be "political" as well as ideological and depicted Yugoslavia as sustained by US aid and following Washington's foreign policy. A similar pic- ture had been outlined by Khru- shchev earlier in April in terms which were less primitive than those used by the Chinese. Policy Toward US Allies Peiping is varying its new hard-line approach toward gov- ernments which "persist in their unfriendly attitude toward Chi- na." With some, it has virtual- ly broken contacts; others it, deliberately harasses. Japan is a prime example of a nation with which Peiping has broken sharply. Despite its tirade of personal abuse including charges of "war SECRET PART III PATTERNS AND PERSPECTIVES Page 3 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY criminal" directed against Ja- pan's Premier Kishi following his speech on -nonrecognition of Communist China last January, Peiping maintained the hope that an exchange of trade missions could be carried out which would be tantamount to de facto recog- nition. When Premier Kishi stated on 9 April that the Japa- nese Government could not guaran- tee the sanctity of the Chinese Communist flag should it be flown over the prospective mis- sions' headquarters, however, Peiping responded with a bombast of hostility culminating in com- plete rupture of-all trade re- lations. The Chinese demand for a "wholesale" change of attitude on the part of Kishi is coupled with a demand for a formal "apol- ogy"--a position which has hard- ened even previously sympathetic Japanese businessmen against Com- munist China. This approach has not influenced Moscow's rela- tions with Tokyo, and there is no evidence to suggest the Chi- nese Communists are pressing for a tougher Soviet line. The new look in relations with Western nations--partic- ularly with governments which have supported the US position on such issues as Taiwan and UN membership--has resulted in pro- grams of petty harassment. Such a program is now being conducted against the Dutch Embassy in Peiping, where the Chinese staff went "on strike" in protest against the firing of two coolies. The Dutch, who have been told they are expected to "apologize" for this action, are convinced that Peiping's sharp demand stems directly from Foreign Min- ister Lun's public support of Secretary Dulles' statement ab- juring the use of force in the Taiwan Strait situation. The British, too, have had ample opportunity to become in- ured to periodic "unpleasant- ness" in Peiping. Premier Chou En-lai had warned last February that "if Britain did not change its two-faced attitude toward China, Sino-British relations would inevitably be adversely affected." Peiping's pique with London's "two Chinas" dec- larations has not, however, led to any major strain in Sino- British relations. Latin American and Middle Eastern countries--the "colo- nial, underdeveloped" areas-- have been approached with mod- eration by Peiping, despite the Western orientation of some of these governments. Peiping is clearly convinced nationalism and anticolonial._ sentiment can be exploited to advantage, and it apparently hopes that declining Chinese Nationalist prestige will facilitate the establishment of diplomatic re- lations. However, Morocco's decision to establish formal relations with the Peiping re- gime, announced on 31 October, appears to have been facilitated primarily by Soviet efforts in Rabat. Policy Toward Neutrals "Peaceful coexistence" con- tinues to be the theme which underscores Peiping's relations with neutral Asian nations, which it hopes to make pro-Com- munist. It is clear that Com- munist China has not jettisoned coexistence as a guide to for- eign relations with regimes which indicate some degree of sympathy for Peiping. The Chinese Communist lead- ers' policy of treating Cam- bodian Premier Sihanouk with considerable deference was re- warded on 22 July when Sihanouk agreed to establish diplomatic relations with Peiping. Siha- nouk made his move despite strong fears among many influ- ential Cambodians that the step would intensify Communist sub- versive activity and jeopardize continuation of American aid. The sharp contrast in the Chi- nese Communist approach toward SECRET PART III PATTERNS AND PERSPECTIVES . Page 4 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 neutrals and toward the West was made evident by Premier Chou En-lai when he repeatedly stressed China's peaceful in- tentions toward Cambodia at a time when the Communist shell- ing of Chinmen was just begin- ning. Peiping's relations with such countries as India and Burma, however, have become cool. The Chinese Communist position is primarily condi- tioned by the attitude of these countries toward international Communism and domestic Commu- nists; Nehru has become more critical and Ne Win is openly antagonistic. The Chinese, who have allowed border issues with both countries to drag on, re- cently administered a minor diplomatic snub to Nehru during his recent visit to Bhutan via a Tibetan route. Continuing Indian and Burmese support on the Taiwan issue and on the So- viet bid for a UN seat for Com- munist China are factors which will prevent Peiping from adopt- ing an openly hostile attitude toward these governments. Prospects Peiping will probably try to keep its foreign policy suf- ficiently flexible so as not to alienate some of the sym- pathizers it won in the course of the Taiwan Strait crisis. For example, the Chinese lead- ers apparently believe that they have made gains among UN members, and that these gains might be prejudiced by press- ing too hard in the Taiwan Strait situation. slav campaign. role in the bloc's anti-Yugo- The Chinese Communists will undoubtedly continue a leading THE FRENCH PARLIAMENTARY ELECTIONS The first National Assembly of the Fifth Republic will be elected on 23 and 30 November under new regulations laid down by Premier de Gaulle, who hopes to secure a clear nonextremist majority with which he can re- build a strong republican France. The new assembly, like its pred- ecessor, is likely still to suf- fer from a multiplicity of par- ties, but under the new elec- toral system, Communist strength will probably be reduced and the new deputies of the right are likely to be more responsi- ble politically than the ex- treme rightists of the last legislature. New Electoral System The proportional represen- tation system which produced three badly fragmented assem- blies under the Fourth Republic has been replaced by the single- member district system charac- teristic of the Third Republic. A total of 546 seats, including 71 for Algeria and the Sahara, will be filled in November. Those overseas territories which, under the new constitution, choose to maintain their present status or become departments will be represented in the new assembly by their holdover deputies from the Fourth Republic SECRET PART III .PATTERNS AND PERSPECTIVES Page 5 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY until new elections are sched- uled. On the first ballot--on 23 November--for the 465 seats representing metropolitan France and the 10 allotted the over- seas departments (French Guiana, Guadeloupe, Martinique, and Reunion), candidates must re- ceive a majority of the votes cast in their districts to be elected. Practically all the districts are expected to have recourse to a run-off election the following week. The new electoral law pro- vision covering the 30 November run-offs disqualifies all first-round candi- dates who fail to receive 5 percent of the votes and for- bids the Third Re- public's abusive practice of introduc- ing new party-alli- ance compromise can- didates, but it will permit one candidate to withdraw in favor of another. A plural- ity will be sufficient to win in the second round. OUTGOING FRENCH NAT AL ASSEMBLY (METROPOLITAN FRANCE ONLY) COMMUNISTS 27% handful of districts with con- siderably less than this aver- age, and there is some varia- tion on the upper side in dense- ly populated regions. Redis- tricting has cut representation for rural southern and western France and increased that of the urban and expanding north and east. Gerrymandering has not been a problem, and De Gaulle is reported to have intervened personally to assure fair re- districting in the home areas of two of his bitterest non-Com- munist enemies--Radical Social- ist former Premier Pierre Mendes- France and left-wing Democratic EXTREME RIGHTISTS* 66 12 RADICAL SOCIALISTS 13% Elections for the 71 Algerian and Saharan seats will be confined to a single vote for multimember lists on 30 November, or, in some iso- lated areas, on 28 and 29 Novem- ber. The list system was re- tained in Algeria to secure rep- resentation for the Moslems, who are assured at least two thirds of the seats. European candidates, however, experienced great difficulty in persuading Moslems to present themselves as running mates. Metropolitan France has been electorally reapportioned on the basis of approximately :33,000 inhabitants per district, although a provision that no department will have fewer than two deputies has produced a Resistance Union leader Francois Mitterrand. Role of the Parties Candidates representing all the major parties have filed, although only the Communists and Socialists plan to run in all the districts. Most of the other parties are concentrating their efforts where they have a chance of winning. The Communists, Socialists, Popular Republicans, Radical Socialists, and Independents are still the major parties. Two new groups have appeared on the left of center--a pro-Gaul- list organization known as the Center for Republican Reform SECRET PART III PATTERNS AND PERSPECTIVES Page 6 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY (CRR) and an umbrella organiza- tion including fellow-traveling and non-Communist anti-Gaullist groups called the Union of Democratic Forces (UDF). On the right of center, two par- ties have Virtually disappeared --the former Gaullist Social Republican Group (GRS) and Poujade's Union for French Fra- ternity (UFF). In their place are two new rightist parties-- the Soustelle-inspired pro- Gaullist Union for a New Re- public (UNR) and the smaller Renovation and Fidelity group, which is apparently organized only in the Paris area. In general, elections con- ducted on the basis of a single- member constituency rather than on the list system emphasize local issues and personalities and tend to weaken party dis- cipline. Thus, the changed elec- toral system reduces the local influence of the highly cen- tralized parties--the Commu- nists, Socialists, and Popular Republicans--and favors the looser knit, more individualis- tic Radical Socialists and In- dependents. Parties with large numbers of popular mayors and departmental councilors, par- ticularly the Socialists and Independents, are expected to benefit. Political strongholds, such as those of the Popular Republicans on the eastern and western frontiers of the coun- try and of the Radical Social- ists in the southwest, will probably survive. The new law is expected to reduce the number of deputies from the Communist party, which, under proportional representa- tion, won numerous seats in de- partments where it was strong but lacked a majority. The as- sumption is that the non-Commu- nist parties will unite on the second ballot to block the elec- tion of a strong Communist con- tender, even though the Commu- nist party retains much of its former popular support. How- ever, while many Communist voters disobeyed party instruc- tions in the constitutional referendum, they may not do so in an election where the choice again involves traditional par- ties. De Gaulle's Position All the parties except the Communist and the Union of Democratic Forces claim to be pro-Gaullist, but Premier de Gaulle himself has refused to let his name be drawn into the campaign or to allow any members of his cabinet who are candi- dates to campaign outside their own districts. These limita- tions particularly affect In- formation Minister Jacques Soustelle, who had favored a system of voting by lists in large districts on a winner- take-all basis and who counted on sweeping the field with a Gaullist "National List" of rightist candidates in each district. Since De Gaulle's acces- sion to power, a new interest in politics has appeared among many former nonvoters. The heavy registration of new voters of all ages which preceded the September constitutional refer- endum is expected to carry over and produce a heavy turnout in the assembly elections. Soustel- le's Union for a New Republic and its allies expect to bene- fit from this phenomenon. Algeria and economic prob- lems are virtually the only is- sues on which party platforms differ to any degree. In gen- eral, the parties to the left of center favor a negotiated political settlement in Algeria and emphasize the need for greater economic benefits for all French citizens. The right- ist parties, on the other hand, call for reduced governmental intervention in economic affairs and repeat their demands for integration of Algeria with France. De Gaulle apparently hopes to secure a parliament SECRET PART III PATTERNS AND PERSPECTIVES Page 7 of 16 - ---- - Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 whose members will continue to represent traditional French rightist and leftist tendencies, but who will be amenable to the "arbitration" which he, as first president of the Fifth Republic, would exercise. The significance'of these elections will be greatly re- duced, however, if De Gaulle's plans for a relatively free campaign in Algeria do not suc- ceed. Because of the unwill- ingness of influential Moslems and liberal Europeans to run for election, the premier may be unable to achieve his hope of negotiating a meaningful settlement without the politi- cally dangerous necessity of recognizing the Algerian Lib- eration Front as spokesman for Algeria. Techniques With the Communists Although the Communist parties in the UAR are illegal, President Nasir tolerates their existence. His efforts are concentrated on limiting their strength and preventing them from establishing centers of power from which they could pose a serious threat. Nasir's aim is to ensure the impotence of the Communist parties in Egypt and Syria while he uses his "alliances" with Communist countries for international advantages. To further his Arab "lib- eration" movement and extend his influence throughout the Arab world and Africa, Nasir accepts propaganda backing from the Communist parties and takes part in the activities of such organizations as the Afro-Asian Solidarity Committee and its subgroups, in which bloc nation- als and individual local Com- munists play a major role. He appears confident that he can use the local parties in this way without the risk of increas- ing their influence inside the UAR itself. While Nasir has resorted to police action against the Communist party of Egypt sev- eral times in the past, he now seems to feel he can contain domestic Communism through ad- ministrative action. However, he has removed Communists from leading positions in the gov- ernment of the Egyptian region. Within the past few months Nasir has taken steps to strength- en his control over the labor 25X1 union movement and to safeguard it against Communist penetra- Neither the Communist party of Egypt nor the party in Syria 25X1 --which is structurally part of the Communist party of Syria and Lebanon--is an immediate threat to the regime. Of the two parties, the Syrian has the more dangerous potential. Communist Party in Syria With some 12,000 members, the Communist party in Syria-As proportionately, llarger than that in Egypt; it has a better leader in the' militant, SECRET 1.c T T_ .~ .r PATTERNS AND P E tSP[aC.TIVES Page 8 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY influential Khalid Bakdash; and it has shown a greater degree of unity and discipline. Prior to the formation of the United Arab Republic last February, party members had considerable success in penetrating the of- ficer corps of the Syrian Army, some departments of the govern- ment, and a number of labor unions. Concern over the extent of Communist penetration was a ma- jor factor in the decision of the top Syrian leadership to seek union with Egypt on Nasir's terms; it may even have prompted Nasir to speed up his own plans for union. After the establish- ment of the UAR, Colonel Abd al-Hamid Sarraj, former chief of the Syrian security forces and one of the most competent and forceful Syrian Army offi- cers, was named minister of the interior for the Syrian region. He is doing an effective job in displacing known Communists from influential positions and in keeping track of the activities of party leaders. Bakdash, who was deputy in the former Syrian parliament, returned to Damascus on 5 Octo- ber after eight months in the So- viet bloc. During his "voluntary exile," he reiterated his op- position to "antidemocr.^t:ic" measures taken by the UAR under the guise of Arab unity and to proposals to dissolve the Com- munist party. His return, un- doubtedly sanctioned by Moscow, may spur new efforts to step up Communist activity in Syria. A Kurd, he has a strong follow- ing among Damascus' Kurdish minority, and his return may bring increased Communist ef- forts to woo Middle Eastern Kurds. It is not yet clear what role he will play in the party, or if he will direct a line of all-out opposition to govern- mental policy. Egyptian Communist Party The Communist party in Egypt has an estimated member- ship of rougly 14,000. Its great- est success has been among stu- dents and intelligentsia. Pro- portionately, it has had more members among minority groups in the population than among the Egyptians themselves. It has always been divided into factions, merging from time to time and then splitting off into new ones. In late 1957 and early 1958, a series of mergers brought the party as close to organizational unity as it had been in years. Ideologically it has remained a strange as- sortment of Stalin-type Marxists, Khrushchevities, Tito-ists, SECRET PART III PATTERNS AND PERSPECTIVES Page 9 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Mao-ists, pan-Arab Communists, and Egyptians who give a mysti- cal twist of their own to the Marxist line. The Egyptian party is again rent with dissension. One wing of the party wants to take the safer_ course of continuing sup- port for most of Nasir's poli- cies; the other wants to break with united-front activity and launch a full-scale attack on his policies, focusing on eco- nomic and labor issues. One wing has accused the other of stealing its main clandestine printing press; defections and expulsions from the party lead- ership are taking place. Communist party leaders in both regions of the UAR have been dismayed by Nasir's present program for control of the la- bor union movement. They have had little success with the union movement since Nasir came to power in 1954, and they see an effective roadblock being erected against their attempts to gain control of precisely those mass organizations which should be susceptible to their influence and particularly use- ful as a lever for gaining pow- er. Two recent measures taken by Nasir reduce even further the opportunities for Communist control of labor. These apply to both the Egyptian and Syrian regions, although now they are being implemented only in Egypt. Enforcement in Syria presumably will wait until political prac- tices and institutions there are brought into closer line with those in Egypt. The first measure--a law which became effective on 3 SECRET April 1958--requires that all candidates for trade union boards be members of the Na- tional Union--Nasir's "single party" and main instrument of political control--in which Com- munists are prohibited member- ship. The law provides the legal justification for Nasir's labor czar, Major Tuaymah, to screen nominations for leader- ship posts in the union move- ment and to disqualify those who do not "fulfill all the con- ditions required of candidates." Nasir's second recent meas- ure is a sweeping program for reorganization of the labor movement under a new control apparatus which will reach down into the individual factories. It calls for the creation of labor committees and executive boards at the plant, district, area, and regional levels to supervise and control all union activity and to carry out the labor policies determined by the regime. Ostensibly the leaders of these boards and committees will represent all factory workers who are members of the National Union. Actual- ly, the leaders will be hand- picked or carefully screened by Tuaymah and other National Union executives. If Nasir's labor program is implemented in its present form,the UAR Government's con- trol of the union movement will be nearly as complete as is the Soviet Government's control over its unions. In effect, Nasir is borrowing from the Soviet Union a tested mechanism to use not only against all tendencies toward independent action by the unions, but also-- and especially--against expan- sion attempts of the local Com- munist parties themselves. PART III PATTERNS AND PERSPECTIVES Page 10 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY' WESTERN EUROPEAN ATTITUDES TOWARD THE UNITED NATIONS There is genuine concern among Western European powers --particularly those with colo- nies--over the growing power of what they consider an irrespon- sible and politically immature voting majority in the UN Gen- eral Assembly. Nevertheless, Western Europeans generally see the United Nations as a perma- nent feature of international life,, useful, among other things, for "educating" the lesser de- veloped countries to their in- ternational responsibilities. Most Western European members would like to see the UN eco- nomic assistance programs broad- ened, believing that multilat" eral aid through the UN best offsets direct Soviet aid. General Assembly's Power The gradual assumption by the General Assembly of juris- diction, at the expense of the Security Council, over issues involving international peace and security has created a di- lemma for the West, which is caught between the Soviet veto in the Security Council and the Asian-African majority in the General Assembly. Because the United States originated the 1950 "uniting for peace" reso- lution as a way around the USSR's abuse of the veto, some Western European countries tend to blame the US when their na- tional interests are affected by assembly consideration of such issues as Suez. The 1950 resolution, which empowered the General Assembly to act on questions involving interna- tional peace and security when the Security Council is para- lyzed by the veto, was consid- ered illegal by the USSR when it was invoked on the Hungarian question, but the USSR acqui- esced in its use during the Suez and the recent Lebanese and Jordanian crises. Since 1950, the Asian- African bloc in the UN has in- creased from 28 percent of to- tal membership to 35 percent. Even combined with the nine votes of the Soviet bloc, the Asian-Africans do not possess a majority, but their votes alone are sufficient to pre- vent assembly action in the many cases requiring a two- thirds majority. In addition, the practice among Asian-African countries of abstaining en masse on cer- tain East-West issues, such as disarmament, seriously harms the West's public propaganda position by cutting down the number of affirmative votes.. On 4 November, for example, the General Assembly approved the West's position on con- trolled nuclear-test suspen- sion with only 50 affirmative votes, compared with last year's MEMSERS OF UN SECURITY COUNCIL 1958-59 PERMANENT CHINA FRANCE SOVIET UNION UNITED KINGDOM UNITED STATES COLOMBIA ARGENTINA ASSUMES SEAT I JANUARY 1959 IRAQ TUNISIA ASSUMES SEAT 1 JANUARY 1959 SWEDEN ITALY ASSUMES SEAT 1 JANUARY 1959 vote of 57 in support of the West. The bulk of the'22'ab stentions this year came from the Asian-African bloc. On many issues which raise aspects of "colonialism" or involve huge outlays of money from the West for eco- nomic development programs, the Asian-Africans attract substantial support from the 20-member Latin American group.. This has been a prob- lem, particularly for the West SECRET PATTERNS AND PERSPECTIVES Page 11 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET European colonial powers--Bel- gium, Britain, France, Italy, the Netherlands, Portugal, and Spain. The great majority of colonial items considered by the UN are individually not ma- jor political problems, but stem from a mass of information voluntarily submitted by the metropolitan powers on the trust territories and the non- self-governing areas they ad- minister. In addition, the Asian-African bloc, supported CURRENT INTELLIGENCE WEEKLY.SLTXKARY 13 November 1958 by the Soviet and Latin Ameri- can blocs, has raised in the UN other colonial issues such as Cyprus, Algeria, and West New Guinea, to such an extent that some administering powers have even threatened to leave the organization. UN members generally agree that the charter looks toward the attainment of self-govern- ment by dependent areas, but there is sharp conflict between COMPOSITION OF UN GENERAL ASSEMBLY 11 MEM$ RS VOTING BLOCS WESTERN BY CONTRIBUTION TO BUDGET (1959-61) Afghanistan Australia Argentina Burma Austria Bolivia Cambodia Belgium Brazil Ceylon Canada Chile Ethiopia China Colombia Ghana Denmark Costa Rica India Finland Cuba Indonesia France Dominican Republic Iran Greece Ecuador Iraq Iceland El Salvador Japan Ireland Guatemala Jordan Italy Haiti Laos Luxembourg Honduras Lebanon Netherlands Mexico Liberia New Zealand Nicaragua Libya Norway Panama Malaya Portugal Paraguay Morocco Spain Peru Nepal Sweden Uruguay Pakistan Union of South Africa Venezuela Philippines United Kingdom Saudi Arabia United States Sudan Albania Thailand Belorussia Tunisia OTHER Turkey Israel Bulgaria Czechoslovakia United Arab Republic Yugoslavia Hungary Yemen Poland Rumania Soviet Union Ukraine SECRET the administering powers and others over the method and speed with which the charter's objectives are to be achieved. moreover, differences of opinion exist over which areas are to be considered non-self- governing, notably between Portugal and the anticolonials. The latter do not ac- cept Lisbon's view that its overseas territories are prov- inces of metropolitan Portugal and continue their attacks on Por- tugal in the UN. UN Economic Aid Despite the at- tendant imbalance in voting blocs, Western European members are convinced that admit- ting the newly emerg- ing nations of Africa to the UN is the only means of "educating" them to their respon- sibilities in the world community. How- ever, because such new members, for the most part, are not economically viable, their addition to the already large group. of underdeveloped member nations cre- ates more serious fi- nancial differences between the "haves" PART III PATTERNS AND PERSPECTIVES Page 12 of 16 -- Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 and the "have-nots" in the UN. Western European members constitute 18.5 percent of to- tal UN membership but contrib- ute 23.4 percent of the total UN budget. In addition, their support is vital to the various UN economic development and technical assistance programs, of which countries in Asia and Africa are the main recipients. Recent surveys reveal that Western Europeans generally would like to see the UN eco- nomic aid programs enlarged, despite the tendency of the "have-nots to bite the hand that feeds them," Western European govern- ments believe that multilateral SECRET aid programs through the UN are one of the best means of countering Soviet bilateral aid projects. They also be- lieve that UN programs would be better because they feel that American aid too often involves military commitments for the recipient. Despite the disadvantages they encounter in the UN, Western European members will continue to support the organization. Many of these countries are even now studying means of increas- ing the UN's effectiveness in peace and security opera- tions through establishment of a permanent stand -b peace force. PART III PATTERNS AND PERSPECTIVES Page 13 of 16 .` ___-Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY SINO-SOVIET BLOC ACTIVITIES IN GREECE 1. General Bloc Policy: The bloc is trying to induce a gradual drift in Greece toward closer economic ties with the Communist world and to reduceGreek bilateral and NATO ties with the West. Moscow would like to see on the periphery of the bloc a "positive neutralist" Greek Government that is anti-Western, intensely nationalist, and will- ing to entertain closer all- round relations with the bloc. 2. Local Communists and sympathizers recurrently warn of the dire consequences that could result from establishment of foreign rocket and missile bases on Greek territory. Soviet leaders continue to support the 1957 Rumanian proposal that Greece join with the southern satellites, Turkey, and Yugo- slavia in a heads-of-state con- ference pointing toward a re- gional nonaggression pact. In May, Khrushchev recommended the Rumanian plan, which had been rejected by Greece, and asserted that Greece "can and must take an important part in this noble cause." 3. Despite satellite pro- fessions of a desire for rap- prochement, long-standing prob- lems continue to aggravate re- lations. Bulgaria has adamant- ly refused to honor its war rep- arations debt to Greece, which amounts to $45,000,000 at 1938 exchange rates. Recent Rumanian actions in expelling Greek na- tionals were not well received by the press in Athens. 4. The USSR plays the ma- jor role in bloc efforts to draw Greece into closer relations. Among the satellites, Czechoslo- vakia has been most active in the economic field. Bulgaria's effectiveness is hampered by the tremendous antipathy felt by the Greeks for the Bulgars. 5. Diplomatic Activity: Greece has diplomatic rerillons with the USSR, Bulgaria, Rumania, Hungary, and Czechoslovakia, all of which maintain missions in Athens. The presence of an un- authorized but very active Bul- garian trade mission in Salonika aggravated the deteriorating Greek-Bulgarian relations during the last six months. In August, Athens again rejected Czechoslo- vakia's request for a consulate in Salonika in order not to set a precedent that would open northern Greece to bloc repre- sentation. A Greek Foreign Min- istry official stated in July that Greece was not now actively considering a resumption of re- lations with Albania. 6. Economic Activity: Eco- nomic relations continue to be confined mainly to trade, but Soviet spokesmen have often hinted, both openly and covert- ly, that aid would be forthcom- ing if Greece asked for it. 7. Greek trade with the bloc in the first four months of 1958 continued above the 1957 level of $54,600,000. Trade during the four months of 1958 totaled $22,;400,000 as compared with $19,300,000 in the similar period last year. Trade with the USSR, Athens' major bloc trading partner, accounted for 40 percent of Greece's bloc trade in 1957, and a three-year Greek-Soviet trade agreement signed in July calls for annual increases. Exchanges with the bloc amounted to only 7 percent of total Greek foreign trade in 1957, but the bloc supplied 17 percent of Greek POL imports. 8. The increase in Greek trade with the bloc results pri- marily from Greece's need to find outlets for its agricultural SECRET PART III ANNEX rage 14 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY $UMRy 13 November 1958 commodity surpluses. The USSR recently offered to barter crude oil for surplus tobacco in a spot exploitation designed to capitalize on an immediate Greek problem of selling large stocks of tobacco. 9. Prolonged Soviet civil air negotiations with Greece, an important step for any future expansion of bloc services to Egypt and the Near East, area now dormant. Rumania and Poland continue to fly into Athens on regular schedules tightly con- trolled by the Greek Government, which authorizes them only for periods of four to six weeks at a time. 10. Cultural and Propaganda Activities: The USSR is in the fooref ron of bloc cultural and propaganda efforts, and the So- viet Embassy was a focal point for widespread dissemination of printed propaganda until a recent Greek law banned such activity. Bulgaria, Czechoslovakia, and Communist China all receive propaganda support within Greece from bilateral friendship and cultural societies. 11. The level of delegation exchanges between Greece and the bloc continued to rise in the first half of 1958 and to- taled 61 as compared to 30 dur- ing a similar period in 1957. In September the Soviet ambas- sador renewed Moscow's invita- tion to Greek Premier Karamanlis to visit the USSR. Most dele- gation exchanges in 1958 have been cultural. The first Greek delegation to. visit Communist China was a parliamentary group in September. 12. The bloc's weekly Greek- language broadcast output amounts to 65-70 hours per week--14 of which are from Soviet transmit- ters. In March a quasi-clandes- tine program called the "Voice of Truth" began broadcastin 25 minutes daily is strongly anti-Greek Gov- ernment and anti-American, and the transmitter is operated on behalf of the illegal Greek Com- munist party. 13. Subversive Activity: The Communist Party o reece (KKE), which was declared illegal in 1947, has its headquarters in Bucharest, Rumania. Since 1949, it has sponsored a legal front party, the United Demo- cratic Left (EDA), representing the extreme left in Greek poli- tics. The KKE in Bucharest sup- 25X1 ports the illegal Communist or- ganization working within Gree The EDA, how- ever, has carefully kept itself apart from the KKE, which is popularly associated with bitter memories of the civil war. 14. In the May national elections, the EDA, running for the first time since 1952 as a single party rather than in a coalition, received 24.4 percent of the popular vote, thus gain- ing the second largest represen- tation in the Greek Parliament with 79 of the 300 deputies. This sharp increase over its previous polling of about 10 percent of the vote in 1952 ap- parently included a large pro- test vote against the policies of the government and center parties. EDA's strength is con- centrated in the large urban areas, particularly Athens, Piraeus, and Salonika, and in the tobacco-processing districts of Macedonia. 15. The EDA waged a moder- ate campaign in May and this, together with its advocacy of economic reforms, has given it a new respectability. The EDA may now be able to create the fiction of a "popular front" by splitting parliamentary mem- bership into several "independ- ent" parties, a process which appears to have actually started in September with the formation of a "Democratic Union" and of SECRET PART III ANNEX Page 15 of 16 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 13 November 1958 an agricultural movement from among its deputies. 16. Greek Communists are attempting to secure legaliza- tion of the party and an am- nesty for party members. In the longer run they want to cre- ate a strong nationwide party of workers, farmers, and middle- class elements. Communist cam- paigns in the last year have played heavily on latent Greek fears of involvement in a nu- clear war and have been largely devoted, with some success, to creating strong opposition to the establishment of American intermediate-range missile bases in Greece. The Communists have been aided by the continuing Cyprus controversy, which tends to alienate Greece from Turkey and Britain and to a lesser de- gree from the United States. They further appeal to the strong sense of Greek nationalism by denouncing extraterritorial rights granted to American serv- icemen and demanding abrogation of existing agreements granting base rights in Greece to the United States. 17. Communist labor policy has been to capture non-Commu- nist unions from within rather than setting up parallel organi- zations. The full potential of this policy has not been realized because of continued government security measures and the vig- orous anti-Communist opposition within the General Confederation of Greek Workers (GSEE), The Communists have succeeded, how- ever, in gaining the collabora- tion of the secretary general of the GSEE in a series of crit- ical union elections. In the 13th GSEE congress in October, 11 members of the newly elected 30-man executive council are known to be Communist collab- orators. 18. Greek Reaction to Com- munist Activities: Relations between Greece-and the bloc, ex- cept for Bulgaria and Albania, are normally coal but correct, in line with the pro-Western orientation of the present gov- ernment. Soviet support for Greece on the Cyprus issue, com- bined with Greecei' frustration at lack of support from its NATO allies, has led to a revival of Soviet prestige in Greece from the low point it reached at the end of the civil war in 1949. There has been a concomitant decline in Greek estimates of the danger:-from the Soviet bloc. The present government is will- ing to expand trade with the USSR but is rejecting Soviet ef- forts to increase relations in other fields. Since the May election, the Karamanlis gov- ernment, alarmed at gains in the extreme left,'is also ac- tively engaged in a campaign to harass and restrict the activi- ties of EDA and is reviewing socio-economic measures to re- duce the attraction of EDA cam- paign promises in future elec- tions. 19. The Outlook: The bloc will probably con inue to fol- low the main lines of its pres- ent policy toward Greece. It is unlikely that the bloc will succeed in inducing Greece to adopt a "neutral, independent" foreign policy in the near fu- ture. Greece's strong popular re- sentment on the Cyprus issue, however, and the resulting psy- chological disengagement with its allies, may cause a further gradual weakening of Greek ties with the West. The present gov- ernment is expected to continue to work with the West in coun- tering Soviet bloc diplomatic, economic, and cultural initia- tives. The Greek Government can be expected to continue its cam- paign of harassment against the EDA, 20. Soviet trade with Greece may continue to expand. Bloc willingness to buy commodity surpluses of major Greek products could make important segments of the Greek economy largely de- pendent on Soviet decisions, al- though it is unlikely that the over-all Greek economy will be- come substantially dependent on this trade. SECRET ANNEX Page 16 of 16 -- Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02000030001-7 Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7 CONFIDENTIAL CONFIDENTIAL Approved For Release 2007/10/23: CIA-RDP79-00927A002000030001-7