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Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 CONFIDENTIAL CURRENT INTELLIGENCE WEEKLY SUMMARY COPY NO. 54 OCI NO.1683/59 16 April 1959 DOCUMENT NO. NO CHANGE IN CLASS. 0 C] DECLASSIFIED CLASS. CHANGED TO, IS NEXT REVIEW DATE: 4.-V- f-- AUTH: ,ill 70-2-2 DATES PA REMIEWER CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE RETURN TO ARCHIVES a I IC09S F IN EDIATE1Y AFTER US? CONFIDENTIAL State Department, DIA review(s) completed. Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 THIS MATERIAL CONTAINS INFC)RMATION 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-RDP79-00927A002200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Next 6 Page(s) In Document Denied Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 401.4 .91A.S.S.R.Rall, ON" -"We I CONFIDENTIAL CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 19,59 OF IMMEDIATE INTEREST EAST-WEST NEGOTIATIONS The USSR is continuing its display of moderation and re- straint, with the professed pur- pose of creating a favorable atmosphere for forthcoming ne- gotiations. In reply to Presi- dent. Eisenhower's Gettysburg speech, Khrushchev called on all powers to "display patience" and avoid any actions which could interfere with the solu- tion of the Berlin and German problems. Soviet propaganda has refrained from exploiting the incidents involving American transport aircraft in the Berlin air corridors. The Soviet lead- ers probably believe this exer- cise in restraint will soften Western positions in the forth- coming negotiations. Ambassador Thompson believes the USSR's principal objectives in forthcoming negotiations will be to achieve a result which will amount to Western acceptance of the East European status quo, symbolized by some sort of recog- nitio of East Germany, He sug- gests the USSR, in trying to accomplish this, will seek to inflict as much damage as pos- sible on Western prestige and unity. In Thompson's view, the USSR precipitated the Berlin crisis in order to overcome Western resistance to top-level conferences and to exert pres- sure on a very vulnerable West- ern position. He suggests that if the Soviet leaders succeed in obtaining Western acceptance of the status quo in Eastern Europe and East Germany, they may agree to a new Berlin ar- rangement which will provide the West with an "improved title" for remaining in West Berlin and with--!better,,defined; acc?es,;s '.rights The ambassador warns that failure to reach agreement on Berlin will lead, at a mimimum, to active Soviet probing and pressures on Allied, and eventual- ly West German, access to Berlin. Whi]!e Thompson does not believe Khrushchev is under any compels.. ling'domestic pressure to pro- duce a victory, he emphasizes that the Soviet premier is in '"deadly earnest" in "aiming a fatal blow at Western preten- sions to challenging the exist- ing boundaries of the Soviet empire." At the same time, the ambassador continues to be- lieve there will be a strong Soviet desire to avoid letting matters get out of hand. As for Soviet tactics at the foreign ministers' conference, Thompson suggests that the So- viet representative, after stating Moscow's established positions on a German peace treaty and Berlin, may put for- ward "fall-back" positions on individual articles of the So- viet draft treaty, the specifics of the free city plan, and the temporary or provisional exclu- sion of Czechoslovakia and Po- land from the conference. Mos- cow's essential "sticking point," however, will be over agreement to any Western proposals which do not give substantial de facto recognition to East Germany. Thompson feels the Soviet leaders believe Adenauer's deci- sion to seek the presidency has injected new elements of fluidity CONFIDENTIAL. PART I OF IMMEDIATE IXTER: sT -- , Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 of l Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 into the situation which will provide opportunities for So- viet exploitation of West Ger- man groups which may be willing to abandon the West's long- standing policy on reunifica". tion and "dicker" with the USSR and East Germany. A Soviet diplomat in Bonn told an American official that the USSR is very pleased by the announcement that Adenauer will retire from the chancellor- ship since it will make things easier for the Russians and more difficult for the Americans. He asserted that Adenauer was forced out of of- fice by the failure of his policies, as shown by Western disunity at the recent NATO meeting in Washington and by De Gaulle's public support for the Oder-Neisse border, and that his removal from real influence increases prospects for successful foreign min- isters' and summit confer- ences. East Germany The USSR appears to be continuing its preparations for the eventual withdrawal of its Kommandatura from East Berlin. East Germany also is taking steps to prepare for the eventual turnover of ac- cess control functions by the USSR. New and elaborate fa- cilities have been completed in :recent weeks at the Marienborn rail checkpoint for the use of East German personnel which will enable them to halt all trains moving in either direction, carry out a complete in- spection of all passengers and baggage, and reload them on other trains. This construc- tion suggests that the USSR and East Germany may plan to impose much stricter con- trols on passenger traffic between East and West Ger- many, particularly between West Germany and West Ber- lin. SECRET PART I OF IMMEDIATE INTEREST Page 2 of 12 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Nome ZZUXET 'CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 The importance of West Berlin as an escape hatch for East German opponents of Ul- bricht was graphically il- lustrated during the period 25 March to 7 April when more than 5,400 refugees asked asylum. This is the largest for a two-week peri- od" since: the close of the usual summer mass flights last September and greatly surpasses the number flee- ing during the comparable Easter periods in 1957 (3,825) and 1958 (4,960), although it is below that of 1953 and 1956, the two highest years. The in- crease during this period may indicate some growth in popular alarm evoked by recent declarations of the regime that it will intensify pressures for so- cialization. Western Views The British press has shown renewed concern over Western political leadership. It has emphasized that Secretary Dulles' resignation will further deflate the importance of the Geneva foreign ministers' meeting, and add to the significance of sum- mit talks where Prime Minister Macmillan may play a leading role in achieving a negotiated settlement. The Berlin corridor plane incidents have brought renewed expressions of con- cern lest the West be un- duly provocative, with La- bor's Daily Herald demand- ing that er can brass hats not be allowed to kill summit talks." French Foreign Ministry officials seem to feel that British "flexibility" on Berlin and , the German problem has be- come more dangerous now that Adenauer has decided to step down. They had viewed Adenauer's firmness as a valuable counter- balance to British "softness" and, following Adenauer's de- cision, urged the United States to join France in braking Brit- ish eagerness. Adenauer's renunciation of the chancellorship has not altered the West German Govern- ment's decision to reject reuni- fication and security proposals previously agreed upon. In pub- lic statements Adenauer, Foreign Minister Brentano, Defense Min- ister Strauss, and Economics Minister Erhard all emphasize that a German confederation in any form is unaccept- able. While expressing mod- erate optimism about the prospects ' for a success- ful. foreign ministers': Brentano spurns a SECRET PART I . OF IMMEDIATE INTEREST Pare .3 of 12 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959) confederation under any form or' behind "any mask." In public statements West German leaders have also con- tinued to attack any plans for military limitations or "freezes' not tied into political soluti ns. Strauss, for example, rejected a freeze on armaments in Central Europe as too limited in area and conceding to the USSR a de- cisive superiority in both con- ventional and modern weapons. Adenauer's comments on British- German differences in his 8 April speech reflected Bonn's continuing concern over the possibility that the West would agree to a counterproposal which would break the link between German unification and European security. In Western discussions, which began on 13 April in Lon- don, Bonn submitted a revision of its unification plan presented by Brentano on 1 April in Wash- ington. The new modifications, however, were limited to a re- phrasing with no major substan- tive changes. Foreign Ministry officials stated that the re- visions were worked out at the highest level in the Foreign and Defense Ministries and per- sonally approved by Adenauer. Bonn apparently intends to remain firm in its opposition to anything which could be inter- preted as a German confederation, to separating European security arrangements from political so- lutions, and to submitting a peace treaty draft to Moscow. In return for Western agreement to this position Bonn may ulti- mately concede increased contacts between the two Germanys, which could open the way for Western dealings with t Germany on Berlin access- West Berlin The general economic situ- ation in West Berlin continues to show signs of improvement. New orders for industry appear to be increasing, probably as a result of Bonn's new legislation extending insurance coverage to Berlin export customers and granting tax advantages to Berlin investors. American of- ficials feel there has been an improvement in morale, under- cut, however, by general un- easiness over the nature of Western proposals at the foreign ministers'meeting. Berlin lead- ers prefer the status quo, how- ever inadequate, to any new ar- rangement. SECRET 25X1 25X1 PART I OF IMMEDIATE INTEREST Page 4 of 12 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 Iraq The American Army attache in Baghdad has confirmed the ar- rest of the Iraqi Army's deputy chief of staff for operations, a non-Communist, and the appoint- ment in his place of a pro-Commu- nist officer who has been dire(,- tor of operations since last summer. The pro-Communist, Brig- adier Farid Dhia Mahmud, is be- lieved to have been responsible for the transfer of a number of antiregime officers to less im- portant positions. Another potential Communist gain is indicated by the con- tinued expansion of the Popular Resistance Force (PRF), which is.-estimated to have as many as 50,000 members. The Communists have "demanded" that this group be armed. Prime Minister Qasim ad- dressed the Iraqi Peace Parti- sans' major rally in Baghdad on 14 April, warning against "divi- sive and reactionary elements" and aligning himself with the "democratic forces" who embody the "main inclination" in Iraq. Although he also said there is room in'the country for "all parties of various inclinations if the objective of their lead- ers is to serve the country, freedom, and peace," this is the first time he has lent the prestige of a personal appear- ance to a clearly Communist- sponsored event of this magni- tude. Other opportunities for the Communists have been presented this week by the reorganization of the Ministry of Development into five new economic minis- tries, each handling a specific sector--oil, planning, industry, public works and housing, and agrarian reform. Rumors in Bagh- dad are strong that outright Communists are to be appointed to head at least some of the new ministries. The outstanding pro-Com- munists in the cabinet, Economics Minister Kubba, has reiterated that the government intends to honor its concession agreement with the Iraq Petroleum Company. However, the director general of oil affairs has stated that the government will grant no more concessions but will in- stead develop new oil resources itself, hiring foreign techni-' cians as needed. Soviet techni- cians, the first such group in the economic field to start ac- tual work in Iraq, have replaced Egyptians at the government-owned Daura refinery, and the American director there has been rele- gated to an advisory capacity. UAR-Soviet Relations Nasir is keeping up his propaganda attacks on the Iraqi regime, larding new accounts of alleged uprisings with stories which appear designed to excite the fears and mutual antipathies of Iraqi minority groups. UAR- controlled media also continue to attack Communism generally. Moscow, while irritated by Nasi:r's current line, continues to hope that relations will again improve. On 11 April TASS issued a statement denying the UAR press and '.'radio charge that the 850 Kurdish refugees who were returned to Iraq aboard the ship Gruziya were Soviet-armed or trained for guerrilla warfare in the USSR, The statement, which at- tributed such "fabrications" to Western news agencies rather SECRET PART I OF IMMEDIATE INTEnRST n.,_a 6 of 12 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 than Cairo sources, was broad- cast throughout the world and repeatedly to Arab listeners. Izvestia on 15 April strongly a ac a the Cairo press for originating reports that four more Soviet ships are trans- porting Kurds from the USSR to Iraq. Izvestia specified the four ships, cargoes and ports of destination, pointedly noting that two of the ships were car- rying industrial equipment and oil to the UAR. Moscow has also continued to criticize in general terms the UAR's "anti-Soviet campaign." Soviet Ambassador Kiselev, who departed his Cairo post for Moscow in early February and subsequently extended his ab- sence on grounds of illness, returned to Cairo on 14 April, and requested an interview with Nasir. Kiselev will probably attempt to persuade Nasir to halt his attacks on Qasim, Arab Com- munists, and the bloc. Arab Petroleum Congress The long-planned but often postponed First Arab Petroleum Congress was scheduled to begin on 17 April in Cairo with rep- resentatives from most Arab states and observers from Vene- zuela and Iran. Iraq, however, is conspicuously absent. In addition to government partici- pation, more than 35 oil com- panies will present papers and exhibits. No surprises are ex- pected from the congress', which is set around four major topics --technical and scientific, eco- nomic, legal, and political as- pects of the oil problem. Venezuela is sending an impressive delegation headed by Dr. Juan Pablo Perez Alfonzo, minister of mines and hydrocar- bons, and including representa- tives from the three major po- litical parties. The Venezuelan change of heart--the former min- ister of mines planned to send only a token delegation--re- flects the new government's deep concern over declining prices and world overproduction which are expected to make in- roads on Venezuelan oil revenues. The Arabs had been particularly anxious to have Venezuelan at- tendance, largely for symbolic reasons--the unilateral Vene- zuelan action changing the 50- 50 profit split to a 60-40 split in favor of the government is universally admired in Arab capitals. Non-Arab Iran, in a sharp reversal of its policy of non- association with the Cairo-domi- nated Arab League, made a last- minute decision on 11 April to send a token delegation. Here too, the change of heart prob- ably can be attributed to Tehran's alarm at-softening petroleum prices. Considerable behind-the- scenes activity on the question of stabilizing world oil prices and coordinating production al- most certainly will dominate the congress' discussion, and from it may well come eventually greater pressure on Western oil companies operating in the Mid- dle East. Jordan Jordanian Prime Minister Rifai has returned to Amman from his trip to the United States and Britain. He remains as determinedly convinced as ever that Nasir is the major threat to the Middle East, de- spite the growth of Communist influence in Iraq, and that Jordan's policy must be aimed first of all at harrying and blocking Nasir wherever possible. SECRET PART I OF IMMEDIATE INTEREST Page 7 of 12 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 Rifai also professes to be extremely pleased with his and King Husayn's reception in Wash- ington and London; Rifai still is seeking to convince the West that Jordan is a bastion of pro-Western influence which must be preserved at any cost. Meanwhile, however, Nasir seems to have lost little if any of his appeal to the Jordanian populace, and the Jordanian Gov- ernment's position remains as fundamentally insecure as ever. The shake-up in Israel's military high command, announced this week as the cabinet's re- sponse to the alarmist radio mobilization announcement on 1 April which caused near panic in Israel and provoked a Syrian countermobilization, reflects the government's deeper concern over alleged "irregularities in behavior and ethical conduct" in the Israeli armed forces. Prior to the removal from their posts on 14 April of two brig- adier generals--intelligence chief Harkabi and operations chief Zorea--Prime Minister Ben- Gurion presided in his dual capacity as minister of defense at a lengthy meeting including the general staff and nearly all former chdefs of staff. The subsequent transfer of the officers was publicly related only to the 1 April incident, with the generals accused of failing to clear the mobilization announcement with the chief of staff. The general staff, however, ap- parently also considered other recent instances in which mili- tary action reportedly was taken contrary to government wishes. During a parliamentary debate, Ben-Gurion referred to what he called the army's "mor- al defects," stating the ir- regularities indicated that there was an "educational prob- lem" within the army, particu- larly among commanding officers. The shake-up may be an ef- fort to re-establish discipline and reassert civilian authority over the military as well as an attempt to satisfy widespread criticism of the government. On 6 April, the governing coali- tion defeated four motions of no confidence connected with the mobilization incident. Premier Chou En-lai, in his speech welcoming the puppet Pan- chen Lama following his arrival in Peiping on 14 April to attend the National People's Congress, said that the Tibet revolt had been put down "in the main." Tibetan rebels, however, continue to hold areas of southeastern Tibet, and it seems likely that Chinese forces will have a long and tough fight to suppress hos- tile activity completely. SECRET PART I OF TMMEDTATE INTEREST Page 8 of 12 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET- CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 The Communists are clearly eager to maintain the fiction of Tibetan "autonomy," in their ef- fort; to neutralize sentiment in Tibet for independence and to undercut any representations Nehru might make to Peiping on behalf of Tibetans and the Dalai Lama. Peiping recently informed New Delhi that the 1951 autonomy agreement between China and Tibet would continue to be respected. As a result of the revolt the Chinese Communist dissolved the Tibetan local government, in violation of the 1951 agreement. The agreement provided that the Tibetans "have 'the right of 6IA i~TEP Rai 1 road Major road ..... ^^^ Minor road, or trail - - - - Road under construction STATUTE MILES 400 BSIIIAR 30390 Tanghsinng ~hag SECRET PART I OF IMMEDIATE INTEREST Page 9 of 12 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 Sino-Indian Relations Peiping's in- creasingly cautious statements and deal- ings with India since the Tibet revolt started last month are strong indica- tions that the Com- munists intend to prevent the strains in Sino-Indian rela- tions from worsening. Communist China has thus far avoided making a formal pro-Approach to the test concerning In- Hungarian-made dian Government state- ments critical of the Communist handling of People's Daily on 15 April Insisted that Sino-Indian re- lations will not be "allowed to be im- paired" Concerning eru s recen e - nial that Kalimpong was the "command center" for the revolt, however, People's Daily was im- plicitly critical and cautioned "our Indian friends" not to place too much trust in Kalimpong- based Tibetan leaders. Nehru's primary tactic of exerting pressure on Peiping to TSINGHAI-TIBET HIGHWAY-1956 Tang Pass (16,770 feet). The trucks are Csepels modified for use at high altitudes. Tanghsiung airfield (about 14,000 feet). grant genuine autonomy to Tibet continues to be reflected in his public statements. The prime minister on.13 April stated that the Chinese had not lived up to their assurances to New Delhi SECRET PART I OF IMMEDIATE INTEREST Page 10 of 12 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET 16 April 1959 that Tibet's autonomous status would be respected. On 14 April he said he could not "imagine any solution without the autonomy of Tibet;the Tibet- ans are not Chinese." Nehru ruled out the possibility of the Dalai Lama's return to Ti- bet under "present circum- stances." Chinese Logistical Problems Since the take-over in 1951, the Chinese Communists have built two major highways to Lhasa--a northerly route from Lanchou via Golmo, and a south- erly one from Chengtu via Chamdo. At present only the former route is completely operational. It is a 1,400-mile, limited, fair- weather road varying in width from 15 to 30 feet. Its sur- face is of gravel, crushed rock, or packed earth. Most rivers,:, and major streams are bridged, but considerable fording is still necessary over smaller streams. This highway is capable of supporting comfortably the 60,- 000 Chinese Communists troops now in Tibet. These troops re- quire an estimated 256 tons of supplies every day for the limit- ed type of action they are now called on to perform. The figure would increase sharply in the event of heavy fighting. If the road is reserved for ten hours of military traffic daily and if this traffic is limited to daylight and good weather, the road can handle 25 trucks each way per hour. This means that about 750 tons of military supplies could leave Lanchou every day for Lhasa, 14 days away. Almost half this tonnage, however, would be taken up with gasoline to keep the trucks moving, so that some 385 toms a day would actually arrive in Lhasa. Therefore the highway could support a total of 90,- 000 troops, 30,000 more than make up the present garrison. To reach this level of operation, the Chinese Commu- nists would have to assign a total of 7,000 trucks to the run, slightly over 5,000 of which would be on the road at any one time. This would not place an undue strain on the Chinese Communist truck park of around 180,000 civilian and, military trucks and could be sustained for more than three months without need for major repairs. SECRET PART I OF IMMEDIATE INTEREST Page 11 of 12 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 .. SECRET ........... 1 1%0 CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 Overland supply of more than 90,000 troops would re- quire that the Chengtu-Lhasa route be reopened. Peiping has experienced great diffi- culty in keeping this road on since it was finished in 1954. It has been closed to through traffic for many months now as the result of landslides and guerrilla activity; its re- opening would require both a military campaign and exten- sive reconstruction, which would probably take at least 30 to 60 days. Even then the road could carry only about half SECRET the traffic of the Lanchou-Lhasa road, an amount sufficient to sustain 45,000 additional troops. it is doubtful that the Chinese Communists have yet succeeded in reaching capacity logistic performance in this area. Supplies moved by highway can be supplemented by slow and costly pack trains or by an airlift. There is an airfield at Ta:nghsiung, some 100 miles north of Lhasa. It would be possible to provide moderate but very costly support by air- lift. PART I OF IMMEDIATE INTEREST Page 12 of 12 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 ........SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 USSR REPORTS FAVORABLE FIRST-QUARTER PLAN RESULTS First-quarter results pub- lished by the Central Statisti- cal Board of the USSR Council of Ministers show gross indus- trial production to have in- creased by 11 percent over the first quarter of last year a This compares with a 10-percent in- crease reported for 1958 and 11 percent for the first quarter of SECRET PART II NOTES AND COMMENTS Page 2 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET 16 April 1959 1958 over the first quarter of :.957. Since the Seven-Year Plan (la59-65) calls for an average annual increase 'in production of 8.6 percent, the plan is off to a good start. Significant increases were reported for pig iron, steel, rolled metal, coal, oil, and electricity. All sovnarkhozy fulfilled their quarterly plans. The increase in indiistrial out- put reflects a rise of about 3.5 percent in the industrial labor force and a 7-percent growth in man-year labor pro- ductivity. This growth com- pares with an average annual in- crease of 6.5 percent for the last three years. The 7-percent growth this year was achieved even though the workday was re- duced in several of the heavy industries. Soviet delegate Tsarapkin, at the Geneva nuclear test talks which resumed on 13 April after a three-week recess, in- dicated distress and alarm in his initial reaction to the new American proposal for a phased approach to a test ban, begin- ning with a cessation of at- mospheric and underwater tests. He said this proposal bears out the USSR's "worst apprehensions" concerning the outcome of the talks. At the end of the 13 April session, the Soviet dele- gate told reporters that the American proposal is not ac- ceptable and that all nuclear tests must be stopped. Soviet propaganda quickly charged that the proposal ignores the "demands of the world public for a permanent, unconditional cessation of tests." The results of the first quarter show that the recent re- placement of Kuzmin by Kosygin as Gosplan head was not because of any failure to keep production increases at a high rate. Since the economy is running quite satisfactorily, Kosygin can de- vote time to solving certain long-run problems, such as im- proving the process of making investment decisions and reduc- ing anomalies in Soviet prices. As for shortcomings, the report points out that the first- quarter plans for the production of chemical equipment, electric engines, tractor plows, self- 25X1 propelled grain combines, and trucks fell slightly short of fulfillment. (Prepared by ORR) Soviet propaganda had attacked Senator Gore's sug- gestion last winter for an Amer- ican unilateral cessation of at- mospheric tests, terming it evi- dence of American opposition to an over-all cessation agreement. Tsarapkin recalled during the 13 April session that the Amer- ican delegation had stated,when originally queried on the sena- tors proposal, that the United States continued to seek a com- prehensive agreement. On the eve of the resump- tion of the talks, the Soviet Foreign Ministry issued a lengthy statement summarizing Moscow's position since the conference began on 31 Oc- tobEx, The statement seeks to present the Soviet stand on the remaining points in controversy SECRET PART II NOTES AND COMMENTS Page 3 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 in a "reasonable" light con- trasting it with the Western position. It gives all credit for progress made thus far to Moscow and asserts that, in order to reach a solution, the United States and Britain must "show the same willingness to reach agreement as the USSR." The tone of the statement recalls two letters by Khru- shchev to groups of private citizens in the United States and India, published during the recess, in which the Soviet premier attacked alleged West- ern attempts to "obstruct" agreement. It charges that the Western proposals concerning the composition of the control commission and vote by majority are efforts "to foist on the Soviet Union unilateral deci- sions on questions affecting "vitally important interests of the Soviet Union's security." Ambassador Thompson be- lieves there is some chance Moscow will attempt to "sweeten the general atmosphere" before the forthcoming foreign minis- ters' conference by making "enough concessions at the atom test talks to produce agreement there." Thompson suggested that this would be intended to strengthen the hands of those Westerners who urge flexibility and advocate European security arrangements involving arms limitation and inspection schemes independent of progress toward settlement of European political questions. He be- lieves, however, 'that .any major new Soviet proposals on either nuclear'tests or broader dis- armament questions probably will be held back'for Khrushchev him- self to introduce at a summit meeting. To further the appearance of a conciliatory attitude on its part prior to negotiations on Berlin, the USSR gay plan to make further adjustments in its post-11-ion at the nuclear test talks on such issues as the :.staffing of control posts and L)ermanent inspection teams : Tsarapkin on 15 April modi- fied the Soviet position on the functions of "foreign specialist" members of control posts and con- tended that agreement on staff- ing would open the way for an over-all cessation of tests, thus obviating the need to dis- cuss the American plan for a partial agreement. While Moscow may introduce some formula designed to appear as a compromise on voting pro- cedure, it is unlikely that the Soviet leaders would accept any control and inspection arrange- ments which would preclude an effective Soviet veto over the activities of the control bodies. cured n by OST) FRENCH SENATORIAL ELECTIONS Local political deals rath- er than national issues will probably control the outcome of the French senatorial elections on 26 April. They are expected to produce an upper house some- what less dominated by rightists than the National Assembly cho- sen in the Gaullist landslide of last November. The new con- stitution strengthens the legis- lative role of the Senate, and De Gaulle may lean on it for support against the rightists in the assembly. No substantial shift in his policies is likely. The 255 senators in France proper will be chosen by some 108,000 "grand electors"--about three fifths of them represent- ing villages of under 2,500 popu- lation. The 34 senators from Algeria and the Sahara--two SECRET PART II NOTES AND COMMENTS Page 4 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 .SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 thirds of whom must be Moslem--will be elected later, prob- ably not before June. The government's austerity program and the Algerian issue will probably be sub- ordinated to local party arrangements only indirectly re- lated to the Gaullist upheaval of 1958. The Gaullist Union for the New Republic is expected to double its present 28 seats, an,d the Independents also to gain. The Radicals are expected to be the big losers; the Popular Republi-, the Socialists, and the Communists will probably remain relatively stable. The Fourth Re- public's upper house had a very limited legislative role and attracted or developed few outstanding polit- ical leaders. With a status almost equal to that of the assem- bly, the Fifth Repub- lic's Senate can be expected to play an increasingly signifi- cant role in develop- ing legislation and in policy formation. Ultimately it will probably join with the National Assembly in attempts to regain REPRESENTATION IN FRENCH SENATE Overseas Departments Overseas Territories Algeria From-h C ikz t.:vvi Living Abro;a. OUTGOING NEW 244 255 9 7 44?< 5 14 34 6 320 307 " hc~i.cicneo s reputlica are now rcoresenled in senate of French Gomr.munity OUTGOING FRENCH SENATE SOCIALIST 62 RADICAL 65 These were ./ vacancic_:;, includinq seats vacated by senafers ncr;ly cleclei is assembly and ;y me.abers of b(l)rc cabinet. some of the power shifted from Parliament to the executive by the new constitution. Four former senators in De bre's cabinet, including Justice Mit+A-,,,ter Michelet and Interior Min:: titer Berthoin, are again candidates. This may mean some cabinet shifts if they,are elected. Well-known politicians who lost their assembly seats in No- vember and are now running for the Senate include France's sec- ond-ranking Communist, Jacques DuclDs; Jeannette Vermeersch, wife of Communist party Secretary General Maurice Thorez; Radical. former Premier Edgar Faure; pre- war Radical Premier Edouard Da- ladier; the Popular Republican for,-4er parliamentary leader, Pierre Henri>_ Teitgen; nd Social- ist rninority leader Gaston Def- SECRET PART II NOTES AND COMMENTS Page 5 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET 16 April 1959 The Japanese elections on 23 and 30 April--for municipal and prefectural officials--will provide the first popular test between the ruling Liberal Demo- crats and the opposition So- cialists followigg the latters' shift to the extreme left and ,the identification of their par- ty generally with the Chinese Communist position on Asian questions. The outcome in sev- eral major metropolitan areas where the Socialists are par- ticularly strong could create a bandwagon psychology in fa- vor of one or the other party. This would then make itself felt in the upper-house elec- tions on 2 June and affect Prime Minister Kishi's tenure in of- fice, On 23 April there will be gubernatorial elections in 20 of Japan's 46 prefectures, mayor- al contests in 176 cities, and elections to the 46 prefectural assemblies as well as to munic- ipal assemblies in Osaka, Nagoya, Kyoto, Kobe, and Yokohomaa Elec- tions to the Tokyo municipal assembly will take place a week later, along with those for town and village mayors and city, town, and village assem- blies. Although national issues usually are of secondary im- portance in local contests, leaders of both the Liberal- Democratic and Socialist par- ties, recognizing the opportuni- ty to gauge public opinion be- fore drafting their strategies for the upper-house elections, are campaigning vigorously on major controversial issues on the national scene, Essentially, the conservatives are denouncing the Socialists for their recently adopted anti-US, pro-Peiping posture, while the Socialists are attacking the Kishi govern- ment on security arrangements and close cooperation with the United States, National attention is fo- cused primarily on the guberna- torial elections in the Tokyo and Osaka areas, and in Hokkaido, where close races are anticipat- ed. The Socialists are accept- ing Communist cooperation in both the Tokyo and Osaka con- tests. An LDP loss in either Tokyo or Osaka might have substantial- ly adverse repercussions for the party in the upper-house elec- tions. Although the LDP almost certainly will retain its'ma- jor.Lty in the upper house, any reduction in its majority prob- ably would lead LDP dissidents to renew their attacks on Kishi's leadership. Additionally, should a Socialist governor be elected for the Tokyo area, he probably would block attempts by the Japan Defense Agency to estab- lish a seriously needed guided missile testing center on Niijima IslaLnd, which lies within Tokyo's administrative jurisdiction. The Chinese Nationalists battalion to improve Chinmen de- have reinforced the counterbat- fenses further. The increased tery capability of the Chinmen firepower may alter the present Islands by the addition of 12 Nationalist policy of retaliat - ten-inch howitzers and are plan- ing only when the Chinese Commu- ning to redeploy a battalion of nists fire a total of 200 or 12 155-mm, howitzers and a tank more rounds of high-explosive shells in concentrated shelling. SECRET PART I I NOTES AND COMMENTS Pa_Pre 6 Of 17 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 In return for this equip- ment, the Nationalists have agreed to reduce the total forces on the Chinmens by 15,- 000 men. The Nationalists are anxious to play down reports of the reduction, rumors of which have reached the press, probably because they fear im- pairment of morale of the Chi- nese :mainlander element on Taiwan. Morale of the Chinmen gar- rison reportedly is good. Empha- sis is being placed on building protection for vehicles and plac- ing communication lines under- ground. Ammunition and ration stocks on the islands exceed a three-month level. On Taiwan, infantry divi- sions are being reorganized to give a better balance between infantry and artillery and to create an increased capacity for sustained combat. Three of the present 21 infantry divisions have already undergone this proc- ess and another four are sched- uled to complete it by December 1959. Since the 30,000-round bombardment of 7 January, Com- munist artillery fire against the offshore islands has been light and most of the shells used contained propaganda leaf- lets rather than explosives. The Communists continue to fire on odd days only and,occasional- ly, have withheld their fire for as much as four days. Both Communist and Nation- alist naval units continue to harass fishing vessels, and shore batteries from both sides fire on surface targets w' ^n- ever there is an opportunity. Peiping's present propa- ganda continues on a low key. It sticks to the shopworn theme that the Taiwan Strait problem is an internal affair which can be settled between the Communists and their Nationalist "compatriots" without American "interference." In the first few months of 1959 various sources have in- dicated that Communist China is not supplying rice in quantities desired by certain consumers in both the bloc and the free world. A slowing down of Chinese rice exports to Indonesia has been noted, and the US Embassy in Djakarta reports that Indonesian officials do not expect to re- ceive the total amount of rice contracted for 1959. Since China appears to have harvested a record rice crop in 1958 and is planning an even more successful crop this year, its current export failures ap- parently are a reflection of the transport shortages and other economic dislocations caused by the "leap forward." But as these problems are solved, Peiping is expected to increase rice ship- ments abroad only gradually in order to avoid being accused of SECRET PART II NOTES AND COMMENTS Page 7 0 7- ?! Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 disrupting the rice trade in traditional exporting countries where Peiping is seeking to ex- pand its influence. Recent trade data show that China almost doubled its rice sales outside the Soviet bloc last year--to an estimated 780,- 000 tons worth at least $75,000,- 000. However, this development was not accompanied by any sig- nificant disruption of the world rice market and was primarily the result of extraordinary sales of 100,000 tons to Paki Stan and entry into the Indone- sian market. Ceylon continued in 1958 to be the principal free world recipient of Chinese rice ex- ports, receiving a total last year of 300,000 tons, Other major Chinese rice sales last year included 140,000 tons to Hong Kong and 86,000 tons to Japan. In Malaya and Singapore, which usually buy some Chinese rice,sales dropped to almost nothing. Contracts to supply rice to the free world in 1959 and their implementation in the first quarter suggest that Pei- ping's sales this year are not likely to surpass those of 1958. Present contracts, plus deliv- eries carried over from last year, call for shipment of more than 300,000 tons to Indonesia-- a 100-percent increase over the actual volume achieved in 1958. Sales to Hong Kong will presum- ably remain about the same, but because of the trade impasse with Japan no purchases are ex- pected there. Sino-Ceylonese negotiations for a 1959 rice-rubber contract are still under way, with Ceylon reportedly seeking to buy as much as 300,000 tons again this year. After protracted discus- sions the Chinese have apparently agreed to a reduction in price, which will probably be based on that prevailing in the world mar- ket. Although the threat did not materialize in 1958--and probably will not in 1959-- the prospect of Communist China's exporting huge quantities of rice to the free world is still causing considerable alarm in rice-exporting countries of Southeast Asia. These nations can be expected to remain sensi- tive to Peiping's ability to wield its rice exports as a useful political weapon, (Pre-pared by ORR) POSSIBLE CABINET CHANGES 1N THE PHILLIPPINES President Garcia may short- ly be planning to replace Phil- ippine Secretary of Defense Jesus Vargas, possibly as part of a broad cabinet revamping aimed at strengthening the rul- ing Nacionalista party for the local and senatorial elections scheduled in November. SECRET PART II NOTES AND COMMENTS Pace 8 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 Vargas has been under strong criticism since late 1958 from some of Garcia's closest fol- lowers who have accused him of harboring presidential ambitions and of plotting a military coup against the administration. The campaign against Vargas has also taken the form of de- mands for the removal of mili- tary officers from all civilian roles in the government and for drastic cuts in military appropriations. The new con- stabulary chief, who was ap- pointed by Garcia in a command shake-up following the coup rumors, has been slowly replac- ing local commanders by men who are alleged to be more political- ly amenable to the President. According to Manila press re- ports, prospective cabinet changes were recently discussed between Garcia and party lead- ers. A broad cabinet reshuffle would enable Garcia to remove several key targets of the cor- ruption charges leveled at his administration by some members of his own party as well as b the opposition. President Sukarno will ap- pear on 22 April before Indo- nesia's Constituent. Assembly to propose a return to the 1945 constitution under which the war for independence was fought. } SUMATRA 30356 nD II.5 SOU(h Chien S'O FLO SECRET The readoption of this loosely worded document is part of his plan to increase executive powers and decrease those of parliament and the political parties. Bills are also being prepared to reduce 'ANc1NF ic,ANDS Manaclo 1A..TobolF M.kasm~. 130 TALAUD ISLANDS PART II NOTES AND COMMENTS Page 9 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 the number of parties and change the composition of parliament. Should serious difficulties develop, Sukarno and the army may dis- miss the assembly and proclaim the constitution by executive decree. The threat of such action might in itself be suf- ficient to persuade the parties to accept Sukarno's plans. The President will leave Indonesia on 23 April for a trip of ap- proximately two months to Europe and Latin America; presumably no decisive action would be taken against the assembly until his return, e present parlia- ments wi 1 remain until elec- tions in 1960, but its powers presumably will be curtailed in accordance with the 1945 constitution. The immediate effect of the proposed reor- ganization would be barely noticeable, however, since un- der the present "state of war" the army and President Sukarno have in fact held primary au- thority. Dissident activity continues in both Sumatra and North Cele- bes. Rebel rai agricultural es are becoming in ds on tates creasi foreign in Sumatra ngly se- vere, 25X1 25X1 east of Manado, North Celebes, the government has recouped losses suffered in a dissident offensive in March, but is still unable to dislodge the rebels from their base south- ARGENTINA MOVES AGAINST COMMUNIST AGITATION Argentina's action in de- claring personae .non gratae, one Rumanian and four Soviet diplo- mats was based not only on the cited evidence that they aided 3 April but also on ear ier So- viet bloc subversive activity. At present Argentina does not intend to break relations with the bloc or outlaw the Commu- nist party, but after Congress reconvenes on 1 May, President Frondizi will submit a bill re- questing wide powers to deal with Communism. By publicizing in the meantime the extent of Communist subversion, the gov- ernment apparently hopes to re- duce the widespread public fear of any repressive legislation. While Argentina was offended by the Soviet and Rumanian notes strongly protesting against its action of 7 and 8 April, it apparently does not intend to strain relations further by ousting the mission heads, but instead hopes they will be with SECRET 25X1 25X1 PART II NOTES AND COMMENTS Pave 10 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUM 16 April 1959 Regarding Soviet bloc com- plicity in the 3 April disturb- ances, however, Interior Minis- ter Vitolo informed the public that the government had "ir- refutable proof" not only of Communist responsibility for the serious attacks against people and property, but also that the Communists were obey- ing directions from abroad. He said his government reaffirms its intention to maintain rela- tions with all countries but will not permit anyone to inter- fere in Argentina's internal affairs. Local Communist strategy 25X1 is emphasizing attack on the US-backed austerity program andi the Frondizi government's policy of permitting foreign companies to participate by restricted contract in petroleum develop- ment--moves which other Latin American nations are watching closely as a solution to critical economic difficul- ties. Brazil, plagued with declin- ing coffee markets, is faced with the prospect of defaulting on international obligations by midyear,, but President Kubit- schek is increasingly reluctant to come to terms with the Inter- national Monetary Fund (IMF) on exchange reform measures as a condition for stand-by financial aid. Brazil is urgently seeking balance-of-payments loans from the IMF and the United States totaling about $306,000,000. Dollar availabilities stood at only $43,600,000 in the first week. of April and are likely to drop to almost nothing with- in A few months as coffee sales hit their seasonal low. Brazil's fixed payments obligations due in 1959 in convertible curren- cies amount to about $450,000- 000 over and above short-term commercial debts. While coffee sales have been near normal in the first quarter of 1959, the price has continued to decline and long-run prospects are poor. President Kubitschek has been quoted as saying that the exchange reforms required by the IMF'--designed to promote exports and restrict imports--are im- possible because of the cost-of- living increases he believes they would engender. In mid- March, with living costs sky- rocketing as a result of crop failures and reduced import sub- sidies for wheat and fuel, Kubit- schek decreed an emergency price freeze on public services and announced measures to increase the food supply in an apparent attempt to forestall planned hunger marches and demonstrations. Previous emergency measures, de- creed in November following riots in five state capitals, proved ineffective. Kubitschek has been,in- creasingly preoccupied with the SECRET PART II NOTES AND COMMENTS Page 11 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 effect of this unrest on his party's chances in the October 1960 presidential election, lie cannot stand for re-election, but he and his relatively mod- erate financial and political policies are already under elec- tioneering attack from both the right and the left, principally on the nationalist and cost-of- living grounds. A continued worseni ; of the financial sit- uation is almost certain to intensify the existing anti-US overtones of the campaign and create a 1a:=. z er. audience for charges by ~+ a President Gou- lart's leftist Labor party that foreign investors are "bleed- ing" the country. .. The government may attempt to focus attention on Communist involvement in some of the re- cent strikes. Kubitschek's chief military aide announced on 8 April that he had been given a document relating to the labor movement and written in Russian. The government ap- parently is attempting to place some of the blame for strikes on the Soviet bloc diplomats ex- pelled from neighboring Argen- tina on charges of intervening in labor affairs. REVISION OF WEST INDIAN BASE AGREEMENT SOUGHT Pressures are mounting for revision of the 1941 US-UK agreement whereby the United States obtained facilities in the Caribbean on a 99-year rent-free lease. Principal facilities involved are the naval station and experimental early-warning radar at Chagu- aramas, Trinidad, and guided missile tracking stations at Antigua and St. Lucia. Eric Williams, anti-American chief may force the federal govern- ment to support his request. Williams continues to want Chaguaramas for the federal capital and is dissatisfied with the US assurance that the military need for Chaguar- amas will be reconsidered about 1968. London argues that by re- vising the agreement now with British assistance, the United ,CAIGDS ISLANDS minister of Trini- 0 C ~^ d TURNS ISLANDS dad, recently pro- _21--.- to the West HF.ITI CAYMAN o'> ISLANDS Indies Federation JAMAICA that a conference be held by Trinidad, the federation govern- ment, the United States, and Britain. His political influ- ence--stemming from his control of the seeor , , largest fed- eral. unit at a time when the largest, Jamaica, is talk- ing of secession-- NICARAGUA c) COSTA CANAL RICA LONE ~'-.~ SECRET NI P AHT VIRGIN DOMINICRA ' ~`^~ ,REPUBLIC CD-ISLANDS ~ h,vls o?. Antigua St. L'hrist Mpher G?adaIo pP MMnlserrat ~ ?Dnmirica Q5Marlinique. Q;t. Lucia SL I/Incept. 9 Rarhados PART II NOTES AND COMMENTS Page 12' of 17 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 States will get better terms than by waiting until the fed- eration becomes independent, probably in about five years, and that the US base position will be more secure if the fed- eration subscribes to the leas- ing agreement. Britain now favors only minor revisions--regarding cus- toms exemptions and jurisdic- tion within base areas, for ex- amp-Le--but might also suggest that the US offer an annual rent to the federation. On the West Indian side, Williams is be- lieved to want, in addition, a promise to evacuate all bases by it specified date--presumably before the lease expires--and immediate return to the West Indies of all unused areas, such as the United States has already done in St. Lucia. There appears to be little ;opular feeling against the presence of US bases per se, but the British believe the trend is running against con- tinuing the 1941 agreement in its present form. This trend may be stepped up for internal political reasons dur- ing the federation's June con- ference on its policy toward revising the constitution. DEVELOPMENTS IN MOROCCO A new government crisis may be imminent in Morocco, where internal political dis- sension is acute and economic conditions continue to worsen. The government of Premier Ab- dullah Ibrahim, installed last December as a stopgap measure following a prolonged cabinet crisis, is under increasingly sharp attack by the Istiqlal party's right wing. Moreover, the factional fight within the Istiqlal party is erupting in- to violence more frequently. Neither the Istiglal right wing, led by the party's theore- tician, Allal el-Fassi, nor its left wing, which has at least the tacit support of the Ibra-. him government, is clearly as- cendant in the bitter struggle for control of the party ap- paratus. The El-Fassi press ap- pears to be dedicated to baring every weakness of the Ibrahim government and protests insist- ently against alleged repres- sion. The left-wing Istiqlal press--edited by party members who advocate a state-controlled economy, including the nation- alization of industry and re- sources--demands that "officials who have fallen behind the times" be weeded out of the adminis- trative structure. Only the occasional intervention of the King in support of Ibrahim or to restrain the left wing has :I.ept the situation from becom- ing worse. Several highly charged issues, such as the control of organized labor, may make an early showdown inescapable. The prestige of the El-Fassi fac- tion rests largely on its suc?m cess in attracting the rank and file of organized labor from the Moroccan Labor Union (UMT). The :Left wing, which cannot afford to lose the unions which form its major strength, is fighting El-Fassi's effort to gain official recognition for SECRET 25X1 25X1 PART II NOTES AND COMMENTS Page 13 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 his autonomous unions. The customary parade held on 1 May should provide a fairly dra- matic test of opposing claims to labor's support. Another issue--devaluation of the Moroccan franc to realign it with the French franc re- valued in December--could top- ple the government. The massive emigration of Jews from Rumania remains sus- pended despite statements by Rumanian officials that the exo- dus will be resumed at some future date. About 14,000 Jews have documents ready and await only permission to leave. Mean- while, Israel is experiencing difficulties in absorbing its recent immigrants. A total of 26,100 have arrived since last September, including 17,400 Rumanians. Estimates of the number of immigrants expected in Israel during 1959 had ranged as high as 150,000 before the Rumanian movement stopped. Considerable sentiment developed against pro- posed taxation to finance the immigration, as Israelis, already heavily taxed, began to question the government's ability to plan for both the needs of immigrants and the welfare of the rest of the state. The Knesset never- theless passed on 1 April the government's amended budget based on proposals for a com- pulsory "loan" and large in- creases in indirect taxes, and on 7 April the loan bill itself was passed. More than half the funds required to pay for immi- gration still are expected, how- ever, from Jewish communities abroad. Most of the new Rumanian immigrants are well educated. Engineers can be absorbed most readily, and although the medical profession is near- ly saturated, the Health, Min- istry plans to expand its re- search program and to broaden medical services in an attempt to utilize the new doctors. Many lawyers and other pro- WEL COME! Ben-Ourion : "I don't know how anybody is going to do it, but I know we shall absorb them all right." From Maariv fessionals, however, will have to change their voca- tions. These difficulties led the Rumanian Immigrants' Association to criticize the Jewish agency, which guides Is- rae:Li immigration, for its SECRET PART II NOTES AND COMMENTS Pii 14 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 alleged failure to adequately explain employment possibili- ties and the general situation regarding professional oppor- tunities in Israel. There has also been dissatisfaction among older immigrants, mainly those undereducated Jews of Asian and African origin, who still live in temporary housing,.while more permanent facilities are being provided for the Ruman- ians. Israel's economic and so- cial problems have caused many Israelis privately to welcome the halt in Rumanian immigra- tion while publicly supporting immigration in principle. Such ambivalence may also be shared by the government; however, it remains committed, even if it should desire the con- trary, to welcome immigration regardless of the difficul- ties involved. Israel exists as a Jewish national home in fulfillment of political Zion- ism, and the state's Law of Return gives every Jew, with the exception of those who are security or health threats, right to enter and settle there permanently, GREEK MUNICIPAL ELECTIONS The pro-Communist United Democratic Left (EDA) lost-some popular support and failed to gain an absolute majority in any key Greek city as a result of the elections on 5 April for councilmen. In Athens, Piraeus, Salonika, and other major cities, however, the total opposition vote was greater than that of the government-supported candi- dates. EDA is still the second largest party. The councilmen, who were elected on the basis of propor- tional representation, will be installed on 7 June and will elect the mayors from among themselves on 14 June. If na- tionalist councilmen can be united against EDA-sponsored candidates, the election of na- tionalist mayors in all key municipalities is assured. The slight drop in the vote for candidates sponsored by EDA, claimed by the government to be about 7 percent as compared with the 1958 parliamentary elections} is misleading and cannot be re- garded as indicating a definite popular trend away from the left. EDA did not enter the elections to demonstrate popu- lar strength but to gain re- spectability and discredit the government. It has been able to ensure the presence of EDA members on municipal councils and undoubtedly will be able to obtain a number of strategic municipal administrative posts. EDA leaders are worried, how- ever, that the political isola- tion in which they now find them- selves may seriously weaken their party's potential in future elections. Other opposition parties are realizing that co- operation with the extreme left is politically impractical. EDA's greatest failure was its inability to discredit the government of Prime Minister Karamanlis over the issues of Cyprus, American missile bases, and police violation of civil liberties. The party's attempt to.form an antigovernment front of all opposition parties failed completely. Only Sophocles Ven- ezelos, leader of one faction of the Liberal party, agreed to limited cooperation with EDA. As a result he was almost total- ly repudiated by liberal voters. SECRET PART II NOTES AND COMMENTS Page 15 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 The Karamanlis government is considerably heartened by the election returns, although it is worried by the political vacuum caused by the further shattering of the political center. Unless a new healthy political organization is soon formed reorganizing the center groups, as recently recommended by Karamanlis, there appears to be no alternative to gravita- tion to the two major political forces, the governing National Radical Union (ERE) and the United Democratic Left (EDA). The Greek Government ap- parently believes that if na- tional parliamentary elections were held now, EDA would probably not receive more than 17-18 per- cent: of the total popular vote, as compared with its approximate- ly 25 percent in 1958. The American Embassy notes, however, that there still remains in Greece a significant seg- ment of the electorate willing to back the treme left? CIVIL AVIATION AND THE EUROPEAN COMMON MARKET Closer cooperation in the field of civil aviation may be one of the more important com- mercial phases of the develop- ment of the European Common Market (EEC). During the past several months, representatives of the EEC countries' five ma- jor airlines--Air France, Sabena, ?ELM, Alitalia, and Lufthansa-- have held a number of meetings on the possibilities for joint operations. While no agreement has yet been reached, some progress has evidently been made, and a further meeting is scheduled to be held later this month in The Hague. The proposed collaboration would apparently involve the establishment of two new organi- zations--EUR000NTROL and EUROP- AIR. The former, with head- quarters in Luxembourg, would be concerned with the creation of a flight-information and air- traffic-control region covering the air space of the six EEC countries. EUROPAIR, a pool in which the five airlines would retain separate national identities but fly aircraft bearing a EUROPAIR designation, would attempt to coordinate flight schedules, pool aircraft for certain services, and make joint use of certain foreign landing rights. Passenger- handling facilities abroad might also be n-e_ _^d, and revenues and expenses of the pool be shared. The EUROCONTROL talks have been conducted by aeronautical officials and will presumably result in an intergovernmental convention. In view of the ex- tent of government control over all the airlines involved, of- ficial blessing of the EUROPAIR negotiations is also implied. Ultimate review of any agree- ment by the EEC Council also seems likely since civil avia- tion is a "reserved area" under the terms of the EEC treaty. Article 84 provides that, by unanimous decision of the coun- cil, the general rules respect- ing coordination and nondiscrimi- nation in land and waterway transportation may also be ap- plied to sea and air traffic. While the proposed pool is in keeping with the trend toward consolidation throughout the Common Market, its immediate motivation seems to be fear of foreign competition--particularly that of the United States and Britain. In general, 1958 was SECRET PA" ,T I I NOTES AND COMMENTS Page 16 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 .. SECRET. . CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 not a good year for most of the Continental companies, and they now seem convinced that the high cost of jets is facing them with the choice of pooling their resources or relinquish- ing the profitable internation- al routes to their rivals. EURCPAIR could be a formidable competitor both in bargaining for new equipment and in demand- ing the additional American land- ing rights the Europea have long sought to obtain. SECRET PART II NOTES AND COMMENTS Page 17 of 17 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 CONFIDENTIAL CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 PATTERNS AND PERSPECTIVES POLITICAL DEVELOPMENTS Recent political develop- ments in Britain's dependencies of Kenya and Uganda suggest that important changes leading toward increased African influence may be imminent in both territories. In Kenya, the white settler group which has long resisted African advancement appears to be fragmenting and a moderate faction led by Michael Blundell has expressed its willingness to support political and social reforms. In Uganda, African nationalist forces, which have been torn by dissension, appear to be coalescing under the aegis of a new movement. Britain may soon endorse a new basic policy in favor of the federal type of state demanded by powerful Afri- can political forces in Uganda. Kenya The political evolution of Kenya has been delayed since 1952 by the growing racial and political antagonism between the dominant white settler com- munity of 60,000 persons and the mass of the population-- 6,000,000 Africans and some 150,000 Asians and Arabs. Dur- ing the Mau Mau uprising from 1952 to 1955, the Africans' po- litical advance was halted; since then, the nationalists led by moderate Tom Mboya have faced a determined white settler group which has re- sisted every effort to in- crease African political in- fluence or to open up the valuable White Highlands agricultural area which is re- served for European occupancy. The African politicians have reacted by refusing to participate in their minority role in the government and have constantly demanded con- stitutional talks in order'to increase their political role. They declare that Kenya must be IN BRITISH EAST AFRICA developed as a democratic African state. Such a decla- ration would necessarily en- visage early African control of Kenya, a development stren- uously opposed by the white settlers, who have consider- able influence in London. The political impasse may have been broken on 1 April when 43 Kenyan legis- lators, including members of all of Kenya's racial groups but none of the 14 elected African members led by Tom Mboya, announced their will- ingness to open the White High- lands to African and Asian settlement and to consider non-European political advance. The following day, settler leader Michael Blundell resigned his position as minister of agri- culture in order to devote full attention to promoting these new policies. The group ap-, pears to have the support of most of the nonrural Europeans, a bare majority among white farmers, substantial but not majority support among the Asians, but only fringe back- ing from the Africans. The initial African na- tionalist reaction was critical. Mboya called the announcement "vague" and mere lip service to nonracialism. He warned against belated promises and called on Africans to be prepared to go to jail for their political goals and opposition to colo- nialism. In early April the 14 elected African members, along with four Asians, two Moslems, one Arab, and one European, formed a new movement--the Con- stituency Elected Members Organ- ization--demanding equal rights for all citizens. Its repre- sentatives are expected to lobby in London to influence a British CONFJ~D NF~TIAL PART III PATTERNS AND PERSPECTIVES ' paap 1 of 9 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 JGl.itb I - NOW CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 E T H 1 0 P I A Butembo. Lake F.dwai BELGIAN Lac Kit CONGO La Alter \ S Buganda oro i `Buso S~\Entebbe0" , nkole Lal&F Victoria ,r (BeIg.) -0 16 SU miura Albertville (Lake ? Rudolf SOMALIA (tty INDIAN OCEAN policy statement on Kenya which may be issued in the near future. Fear of violence may make some Africans sympathetic to Blundell's efforts, but general native support is unlikely with- out tangible evidences of a Euro- pean change of heart. Neverthe- less, London, which favors cau- tious African political evolu- tion, may now find an opportu- nity in Kenya to hold consti- tutional discussions leading toward African political and social advancement and concur- rent European concessions, thus avoiding violence on the part of either Europeans or Africans. Uganda Political change may also be imminent in the neighboring British protectorate of Uganda. Here, where there is no sizable white minority, racial strife has been avoided. However, African nationalists have not been able to surmount factional strife nor to resolve the sep- aratist demands of the dominant Buganda region, although both problems now may be on the way to resolution. Within the past few months a new nationalist force, the Uganda National Movement (UNM) has emerged and appears to be attracting increasing pub- lic support. It demands inde- pendence for Uganda in 1960, and has instituted a boycott of non- African shops and specific items such as beer and cigarettes. The boycott has had surprising suc- cess; European breweries are un- able to sell beer within a 40- mile radius of Kampala--the cen- ter of UNM organization. Non- African--usually Asian--mer- chants report an appreciable drop-in trade with a growing number of shutdowns of Asian shops;. Some Asians are contrib- uting funds to the UNM to get on the approved list. The government fears vio- lence at the large public meet- ings organized by the UNM, and has banned meetings of over 250 persons throughout much of SECRET PART III PATTERNS AND PERSPECTIVES Page 2 of .9 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 0F.A.rVU 1 CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 Buganda Province despite the danger of a critical African. reaction. African political forces may be further consolidated if a federal constitution proposed by the ruler of Toro Province receives the anticipated ap- proval of the other three power- ful local rulers of Uganda prov- inces. It calls for self-gov- ernment in 1961 and independence within the Commonwealth by the end of 1963 and for a constitu- tion establishing a privy coun- cil to act as a court of last appeal on legal and constitu- tional matters, a bicameral elected legislature, a govern- ment of the majority party, and a prime minister responsive to parliament. MONGOLIAN CLAIMS TO INTERNATIONAL STATUS Since World War II Mongo- lia has repeatedly claimed to be an independent, sovereign state with the right to have representation in various in- ternational bodies, particu- larly the United Nations. Al- though the country's foreign policy is completely subser- vient to the Soviet Union, Mongolia has established for- mal diplomatic relations with three nonbloc states and has informal trade contacts with several others. Sparsely pop- ulated, Mongolia is wedged between the two greatest pow- ers of the Communist world-- linking them, in fact, by the Trans-Mongolian Railroad. Despite the obvious grounds for friction--Russia and China have at various times in his- tory competed bitterly for su- premacy in Mongolia--today the two seem to be cooperating in Mongolia's development. Both the USSR and China have in the past annexed terri- tory which historically was part of Mongolia: the Soviet Union;, Buryat-Mongolia; and China;, Inner Mongolia. Pan- Mongolism does not seem to present much of a problem at present, primarily because both of the larger states have reduced the Mongolian elements in their territories to minor- ity status by settling large colonies of Great Russians and Han Chinese in the areas. The USSR has clearly been the para- mount influence in Ulan Bator since the Mongolian Communist revolution in 1921, but it has been withdrawing its advisers and experts since the early 1950s, and the Mongolians take great pride in the fact that their own countrymen now are trained to hold engineering positions and university pro- fessorships. Nationalism SECRET The reported agreement of Buganda's ruler to the proposed constitution suggests that the ruler, who long has beery a block to Uganda's independence because of his separatist demands, may now be willing to abandon his extreme regionalism. PART III PATTERNS AND PERSPECTIVES Page 3 of 9 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1959 25X1 25X1 25X1 25X1 a x TSagaan 04 1 ? Baatar Haan An +-+- Railroad35:gavg~ d~71aa Bai~r~ strong nationalistic spirit of the Mongolians, who number some- what over 1,000,000 persons. Emphasis on Mongol history,con- cern for purity of the race, pride in economic and educa- tional progress, resentment of Soviet influence, and a desire to increase contacts with, countries' outside' the bloc have all been cited as : evidence: . of Mongolia's growing nationalism. On 5 January 1946, following a pleb- iscite in which Mongolia opted for independence, Nationalist China extended recognition. Few Chinese work in Mon- golia in a professional capac- ity? although at least 10,000 contract laborers, with wages paid by China, are there on various con- struction projects, including road and civic improvements. There seems to be lit- tle antipathy toward the Chinese, and sev- eral Mongolians have expressed regret, in view of the short la- bor supply, that Chi- nese laborers do not choose to settle per- manently after expira- tion of their contracts. Resentment over Soviet influence ,how- ever, is voiced on several subjects. Con- tempt is expressed for Premier Tsedenbal's willingness to accede to the USSR''s demands, principally because his wife is Russian. Resentment is said to have flared into open revolt-- quickly put down--early in 1958 when the Soviet Union allegedly seized territory near Lake Hob- sogol rich in cobalt deposits. Foreign Minister Avarzid re- portedly protested this move officially and was consequently removed from office. The purge of the party po- litburo last month may have been SECRET PART III PATTERNS AND PERSPECTIVES Page 4 of 9 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 influenced by nationalistic factors; the leader of the purged faction,Dashin Damba, was installed as party first secretary during the height of the bloc's de-Stalinization campaign in a move to ensure "collective leadership." The timing of Damba's rise and fall from powers plus the charges of "polit,ical backwardness"recent- ly leveled at him, suggests that he belonged to the more liberal faction of the Mongolian party. Since 1921, Mongolia has been able to establish a na- tional educational system which has successfully raised the na- tional literacy rate from al- most zero to nearly 80 percent. Mongolian history and culture are emphasized in the schools, and, although the Russian lan- guage is taught in secondary schools, few persons ever learn to speak it fluently. Recently there has been a return to the old Mongol script in what ap- pears to be a deliberate move to invigorate the national cul- tural tradition. The regime has also begun the reconstruction of what was once the most important Bud- dhist monastery in Mongolia, Er- deni Tzn, which was destroyed by Soviet troops in 1937. It is being made into a shrine to Mongol culture rather than a center of Buddhist culture,how- ever, Lamaistic Buddhism J is dead for all practical pur- poses in Mongolia. Economic Development The legislature has just ratified the Three-Year Plan for economic development (1958- 60). The present version is more ambitious in some respects than earlier ones. Slow prog- ress has been made under past economic plans toward relieving the economy's extreme reliance on livestock raising., but the present aim is to continue this process.. Nevertheless, live- stock raising remains the corner- stone of the plan, which calls for a 7.2-percent increase in the total number of livestock by 1960--to a total then of 25,- 000,000 head. The plan also provides for increased attention to farming and industry. The area planted to crops is to be sharply in- creased, as is grain output. The gross value of industrial production is to increase by more than 50 percent over the three-year period. The 1960 target for petroleum output-- only 30,000 tons--confirms ear- lier indications that the field at Sayn Shanda has failed to live -up to earlier Mongolian and Soviet expectations. 'The country will be heavi- ly dependent on the assistance of its "fraternal" bloc partners for construction plans. While capital investments out of its own funds during the plan period will lbe larger than the amount spent during the previous ten years, over 30 percent--some $100(,-'000,000--of planned con- struction spending--will be ac- counted for by these sources, principally the Soviet Union and China, Since 1956, Communist China has extended about $65,000,000 in economic aid to Mongolia for use in the development of various small--scale industrial, agricul- tural,, and power projects. The Soviet Union has provided about $275,000,000 worth of economic aid since 1948; in addition, it has turned over without charge to Ulan Bator assets in former Soviet-Mongolian joint stock companies--most notably in petro- leum and metals--valued at $100,- 000,000, The Three-Year Plan aims to develop and consolidate the "so- cialized sector" of the economy. Some 96 percent of the agricul- tural and animal husbandry house- holds are already enrolled in co- operatives. In addition, the re- gime has recently begun a process of abolishing township-level gov- ernments and of merging the next higher level administration, SECRET PART III PATTERNS AND PERSPECTIVES Pave 5 of 9. Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 equivalent to a county, with the cooperatives. Under this system the administrative head of the county is also director of the cooperative. While this system has some of the trappings of China's commune system, it follows more closely the pat- tern of Bulgaria and North Korea. Looking ahead, the regime says that it is working on a five-year plan to cover the 1961-65 period. The plan, now in preliminary draft, is said to open "remarkable prospects" for the further development of production and the further im- provement of the standard of living. Foreign Policy The Mongolian People's Re- public has repeatedly ^laimed to be an independent, sovereign state with a right to represen- tation in international bodies, especially the United Nations. It came closest to securing a seat on the latter body in 1956 in a package deal which was finally killed by a Chinese Na- tionalist veto, Although Ulan Bator con- tinues to lobby for UN member- ship, it concentrates on at- tempting to join functional and specialized organizations such as the International Postal Un- ion and the World Meteorological Organization. In an attempt to bolster its qualifications for membership in the latter body, for example, Mongolia has re- cently publicized the completion of a new observatory. Despite the regime's persistent efforts, it has been rebuffed on almost all fronts. Ulan Bator has met with more success in establishing diplomatic relations. Prior to World War II Mongolia had formal relations only with the USSR? but, beginning in 1948, embassies were established in the European satellites and China. Then in 1955 Mongolia received de jure recognition from India and concluded 'an agreement to exchange diplomatic representatives; this was quick- ly followed by similar agree- ments with Burma and Indonesia. Although no countries have recognized the regime since 1956, it has been successful'in expand- ing its private trade with West- ern countries since that time- an Bator also sup- plies a large percenta, o' the world's cashmere wool through the 17SSR (Concurred TWO YEARS OF COMMUNIST RULE IN INDIA'S KERALA STATE The Communist government in India's Kerala State. seems well entrenched after two years in power, despite the decline in its popular support and grow- ing economic difficulties since mid-1958. The Communists formed their government in April 1957, after winning some 2,000,000 out of 5,800,000 votes and 47 percent of the state assembly seats in the general elections. Most of the Kerala electorate appeared satisfied with the min- istry's performance.during its' first year in office. The Com- munist party may even have in- creased its popular support. The government's accomplish- ments were limited, but its drive and apparent dedication con- trasted creditably with the in- effectual performance of previous SECRET PART III PATTERNS AND PERSPECTIVES Page 6 of 9 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 Congress and Social- ist party governments in the state. Kerala voters were prepared in any case to give the Communists at least a year to ful- fill their campaign promises. A series of developments be- ginning in the mid- dle of 1958, however, has cost the govern- .went some support. Political Setbacks Since mid-1958, agitation by opposi- tion elements on sev-- oral controversial issues has kept the Communists on the de- fensive. The first effective challenge to the regime came last July in the form of stu- dent demonstrations, which Chief Minister Namboodiripad's govern- ment was able to control only by resort to violent police ac- tion, The Communists' attempts to terrorize opposition politi- cal groups stimulated further agitation. These clashes were followed by a highly publicized strike of plantation labor which led the police to open fire, again on demonstrating .Workers,.. As a result of the recur-- ring incidents, oppositionsenti ment in the state rose sharply and national attention was focused on the problem of Kerala. The state government's strong- arm methods, which were not in step with the Communist party's current nonviolent, "peaceful" tactic, produced demands through- out India for -intervention by the national government to main- tain law and order. The dis- turbances subsided during the fall of 1958, but the question of 'insecurity" in Kerala for all non-Communists had been suc- cessfully developed by the op- position into a telling attack on the Communist government. Economic Problems The Kerala government's failure to make noticeable prog- ress in solving the state's ma- jor economic and social problems has weakened the Communists' position during the past six months even more than have po- litical difficulties. In the two most critical sectors of the Kerala economy, food production and employment, the Communists have shown themselves unable to keep pace with other states in raising agricultural yields and to attract the industry needed to relieve widespread unemploy- ment. A serious food shortage de- veloped toward the end of 1958 SECRET PART III PATTERNS AND PERSPECTIVES Page 7. of 9 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 itow SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 INDIA KERALA STATE ASSEMBLY CONGRESS PARTY 43 * 1NCLUDfS (DM1 UNIST SPEANER WO VOTES AS A Tl#-BRFAKFF,. ** APPOINTED n6MBE?. WO USUALLY ABSTAINS OR VOTES WITH OPPOSITION. which provided the basis for considerable agitation by so- cialist parties against the government. Kerala officials also were severely ,,cr tl.cized in 1958 for signing an agree- ment with national industrial interests to construct a rayon pulp factory under terms con- sidered detrimental to the in- terests of the working class. The net effect of these political and economic develop- ments has been to tarnish the Communist reputation to a con- siderable degree, but without threatening the downfall of the government. Factionalism has long weak- ened the Kerala branch of the party, but the Communists' suc- cess at the polls in 1957 in- spired a sense of unity and co- operation among the several cliques during the party's first year in office. By the fall of 1958, however, the trend of events in Kerala reportedly had led to questioning among party leaders whether it was politi- cally advisable for the party to remain in power while its position deteriorated. The wrangling over party tactics in Kerala has been re- flected in the party's national executive as well, where some leaders have felt obliged to INDE BEN DEN1 criticize publicly sev- eral actions of the Kerala government. Both national and in- ternational Communist party enthusiasm for the Kerala "experi- ment" has waned as the government's short- comings have reduced its usefulness as a Communist"showcase. Communist Advantages Despite the trend in recent months, sev- eral factors in the situation work to the Communists' advantage. During two years in power the party has taken full advantage of its position to strengthen itself both financial- ly and organizationally. The government's personnel policies within the administrative depart- ments have favored party members and sympathizers. Contracts have been [riven to individuals or con- cerns prepared to return a por- tion of profits to party coffers. Communist-directed cooperatives are f avored in the awarding of gov- ernment contracts. Cabinet offi- cials have interfered in the ad- ministration of justice in such a way as to give special protec- tion to Communists. The minimum wage in Kerala has been raised in a bid to ex- tend -the party's support among workers. Communist control of the state's extensive educational apparatus has been greatly fa- cilitated through the education bill, despite modifications en- forced by the central government. The party also appears to be making inroads in the career police service, strategically the most important arm of the government. By appointing one of the two in- spectors general of police to a special commission organized to draft a new police code "for the welfare state," the Communists apparently have left the field clear to his rival, who is re- puted to be a "party man." SECRET PART III PATTERNS AND PERSPECTIVES Page 8: of 9 Approved For Release 2007/10/23: CIA-RDP79-00927A002200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 )I1LI f I N%o CURRENT INTELLIGENCE WEEKLY SUMMARY 16 April 1959 In addition to tightening the party's control over state departments and services in Kerala, the Communists are plan- ning to reorganize local gov- ernment units so as to entrench themselves in village politi- cal bodies. Passage Of L.".,e agrarian reform bill in April should also strengthen the par- ty's position in rural areas. The Communists' greatest ass`.'- in Kerala is the party it- self. It remains, despite re- cent setbacks and some dissen- sion among the leadership, the strongest, best organized, and most disciplined political party in the state, with an ac- tive membership of about 60,000. The party apparently has ample funds with which to buy votes. Opposition Weakness The Communist party's strength contrasts strikingly with that of the leading anti- Communist groups. After two years of opposition, the Con- gress party in Kerala remains weak and demoralized. Lack of effective leader- ship is still the root problem. .Most of the party's once popu- lar leaders now are inactive, and those who remain are largely discredited. Congress politi- cians have not encouraged po- tential leaders among the young- er generation. Communal and regional cliques continue to dominate the party in Kerala, and this division nearly pre- vented the election of a new state party president recently. The Congress also still lacks the effective propaganda machinery and corps of full- time field workers which con- tribute so much to Communist strength. Congress leaders have never been able to evolve a united policy with which to oppose the Communist government. Some sections of the party call for immediate ouster of the Commu- nists through whatever means are available, and they complain about lack of support from the central government and party. Others argue that more time is needed to expose the emptiness of Communist promises and that the opposition is not yet pre- pared to provide a more effec- tive government. The primary problem of the opposition in general has been its inability to form the genu- inely united coalition needed to challenge the Communists' bare majority in the Kerala State assembly. Cooperation among the Congress, Praja So- cialist, and smaller parties is endorsed by nearly all leaders, but It has yet to be effected. Mutual recrimination continues to make difficult any electoral understandings in critical as- sembly by-elections and in 1959 village council elections. In recent months, however, evidence of growth toward a uni- fied approach has begun to be apparent in opposition circles. (Plans for mass agitation are hampered, how- ever, by lack of funds and organ- ization as well as by the Commu- nists' tactics of intimidation. Despite this progress toward a unified anti-Communist front, the opposition in Kerala does not appear capable of ousting the Communist regime in the near fu- ture. SECRET 25X1 25X1 PART III PATTERNS AND PERSPECTIVES Page 9 of 9 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2 - moo 41 few *000, 1 nA -In "mv , ula~ -fi~-qlrmv I Nt Approved For Release 2007/10/23: CIA-RDP79-00927AO02200060001-2