CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
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• Document Creation Date: December 20, 2016
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• Publication Date: October 19, 1999
• Content Type: SUMMARY

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CONFIDENTIAL
9R`RET
CURRENT
COPY NO. 56
OCI NO. 2736/59
25 June 1959
INTELLIGENCE
WEEKLY
SUMMARY
DATE-' 34!!4ffREVIEWEf
AUTH; 70.
NEXT REVIEW DATE:
Q DECLASSIFIED
CLASS. CHANGED TO;
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NO CHANGE IN CLASS, U
CENTRAL INTELLIGENCE AGENCY
1 11 OFFICE OF CURRENT INTELLIGENCE
CONFIDENTIAL
State Department review completed
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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.
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CONFIDENTIAL
CURRENT INTELLIGENCE WEEKLY SUMMARY
OF IMMEDIATE INTEREST
REVOLUTIONARY ACTIVITY IN THE CARIBBEAN
Dominican Republic - Nicaragua
The long-brewing campaign
against Caribbean dictators has
reached the stage of military ac-
tion with at least three insur-
gent landings in the Dominican
Republic since 14 June and in-
dications of imminent new rebel
incursions into Nicaragua. Gen-
eral mobilization in the Domin-
ican Republic on 22 June indi-
cates that the internal threat
in that country has become a
source of concern to the regime.
in Nicaragua, the govern-
ment is alerted for an imminent
attack by Cuban-supported reb-
els who it believes are converg-
ing on the Honduran-Nicaraguan
border, and other rebel groups
in Costa Rica may be preparing
for a new incursion. Former
Costa Rican President Jose
Figueres informed the American
Embassy that the Nicaraguan
rebels in Costa Rica have reached
an agreement with Cuban Prime
Minister Fidel Castro under
which he will supply them with
weapons.
Although the initial rebel
effort in Nicaragua had failed
by mid-June and that 'in the Domin-
ican Republic may also appear
at first to founder, further
foreign-supported rebel incur-
sions can be expected. The
Cuban-backed rebel groups are
Communist infiltrated, and any
postrevolutionary governments
in either country would be like-
ly to become influenced by the
Communists.
Cuban-Venezuelan Support
While both the Cuban and
Venezuelan governments repeat-
edly deny giving material aid
to the Dominican and Nicaraguan
rebels, it is nevertheless clear
that such aid, particularly
Cuban, has been considerable.
Public opinion in both coun-
tries, as well as in most others
in the area, strongly favors
the rebels. The Cuban and Ven-"
ezue'_Lan governments have emphat-
ically stated they will oppose
any attempt by the Organization
of American States (OAS) to as-
sist the beleaguered governments.
Counteraction Against Cuba
High Dominican and Nicara-
guan officials, who doubt that
any appeal to the OAS would re-
sult in effective assistance,
have seriously considered mili-
tary action against hostile
governments. The Dominican
mobilization could mean prep-
arations for a counterattack
against Cuba. Such action,
which the Dominican foreign min-
ister said on 20 June would be-
come "imperative" in the event
of further rebel incursions,
would probably include the mount-
ing of an invasion of Cuba by
the Dominican-supported Cuban
exiles in the Dominican Repub-
lic. It might also involve ac-
tion by the "anti-Communist
foreign legion" formed in the
Dominican Republic early this
year and could include Dominican
air attacks on Cuban cities.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Revolutionary Activities in the Caribbean Area
^ Rebel landing
? Landing-rebels surrendered
f
ITISH
HONDURAS
rapidly
mounting oppos on o the Castro
regime. There have been bitter
denunciations of Castro's drastic
agrarian reform law by cattle-
men and others, and the first
wave of antigovernment terrorism
since the fall of Batista erupted
in mid-June. It is unlikely,
however, that a Dominican-sup-
ported invasion by Cuban exiles
could at this time topple the
Castro regime. Overt Dominican
action against Cuba would tend
to unite all Cubans behind
Castro.
Haiti
The weak and unpopular Du-
valier regime in Haiti is near
panic as it feels itself being
caught up in a squeeze between
the Cuban and Dominican govern-
ments.
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0 Rebel groups opposing the
Nicaraguan Government
After
Dominican officials warned the
Haitians to expect an imminent
landing by Dominican insurgents
planning to attack the Dominican
Republic via Haiti, Haitian of-
ficials frantically asked for
a US jaaval patrol to prevent
such a landing.
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CURREN'T' - INTELLIGENCE WEEKLY SUMMARY
25 June 1959
Having failed in the first
six weeks of the foreign minis-
ters' conference to induce the
'Western powers to consent to a
change in the status of Berlin
which would eliminate existing
Allied rights, the Soviet lead-
ers agreed to a three-week re-
cess presumably in the belief
that increasing public pressure
in the West for an accommodation
would erode Western unity and
that the talks will resume under
conditions more favorable to
the USSR. Moscow probably cal-
culates that it can extract fur-
ther Western concessions by pro-
longing the stalemate on the
crucial issue of'Allied rights
while maintaining the threat of
unilateral Soviet action to sign
a separate treaty and transfer
access controls to the East Ger-
mans.
Soviet moves in connection
with the Geneva recess, however,
suggest that the Kremlin leaders
intend to avoid any action which
would strengthen Western unity
and stiffen Western resistance
to Soviet inducements during the
recess. Moscow's present pos-
ture is designed to assure
the West that the door to a
negotiated settlement remains
open.
In their statements on 19
June, Khrushchev and Gromyko
carefully avoided categorically
rejecting the West's proposals
of 16 June which offered certain
concessions in return for a So-
viet guarantee of free and un-
restricted access to West Ber-
lin. Khrushchev failed to at-
tack these proposals in his
Kremlin speech on 19 June. He
also refrained from issuing any
threats of early unilateral So-
viet action on Berlin and stressed
the USSR's desire for a nego-
tiated settlement of the Berlin
and German problems and its
readiness to agree to a time
limit "acceptable to all" on an
"interim settlement" for Berlin.
While regretting that the con-
ference was not "running smooth-
ly," he said that, despite their
differences, the ministers' work
has already had a "definite pos-
itive value."
In the last private meet-
ing at Geneva before the recess,
Gromyko apparently made no men-
tion of the Western proposals.
Instead, he introduced two modi-
fications in his proposals on 9
and ]' .0 June for a one-year in-
terim Berlin settlement. He
stressed that the duration of
such an arrangement was not a
"basic problem of principle"
and suggested that the one-year
limit; could be extended to 1.8
months. If no agreements on
reunification and the principles
of a peace treaty were achieved
by the proposed all-German com-
mitte* by the end of this period,
Gromyko stated that the partici-
pants in the present conference
"could take up the question of
West Berlin once again."
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The initial Soviet proposals
had warned that the USSR would
sign a separate treaty with East
Germany if the Western powers
and West Germany prevented agree-
ment on a peace treaty with both
German states within one year.
These two modifications, how-
ever, did not alter the basic
terms of the proposed interim
agreement which would terminate
existing Allied rights in Ber-
lin based on postwar agreements.
Soviet propaganda is echo-
ing Khrushchev's optimism on
the prospects for agreement when
the talks resume, Izvestia de-
clared on 21 June that the "po-
sitions of the Soviet Union and
o.f the Western powers at the
Geneva conference have become
closer on many questions relat-
ing to the Berlin problem, and
now there is a good basis for
agreement," Moscow commenta-
tors, however, are attributing
the recess to the insistence of
the Western ministers despite
"positive" achievements in the
talks.
Summit.Prospects
Khrushchev expressed con-
fidence in his speech on 19 June
that the West, under pressure of
public opinion, will eventually
agree to a summit meeting re-
gardless of the outcome of the
foreign ministers' talks. He
contended that a summit confer-
ence would "become even more nec-
essary" if the ministers fail
to reach agreement and warned
against any Western attempt to
bring pressure on the Soviet
Union by linking a summit meet-
ing to progress at the ministers'
level.
The USSR, Khrushchev said,
is not prepared "to pay any
price for the sake of calling a
summit conference." Specifical-
ly, he said "it would be naive
to think that the Soviet Union,
at a, conference of ministers or
of heads of government, would
agree to put its signature to a
document that perpetuated the
occupation regime in West Berlin
and left Germany without a peace-
ful settlement for an unlimited
time,"
Nuclear Test Cessation Talks
Soviet tactics at the nu-
clear-test talks are aimed at
keeping this issue open during
the recess in the foreign minis-
ters' conference. After re-
peatedly stressing the need for
a more rapid pace, the chief
Soviet delegate claimed that the
Soviet proposal for a quota of
annual inspections as well as
those related to staffing of the
control posts offer the basis
for ,agreement` At the 100th
meeting on 22 June he urged
that the West not "complicate
matters" by raising additional
issues. He accused the UK del-
egation of inconsistency in its
position,on staffing,.claiming'.
London had earlier favored 14
or 15 host-country personnel at
each post but now was limiting
this number to 4 or 5.
Moscow is apparently at-
tempting to use the concurrent
experts' talks on detection of
high-altitude nuclear tests to
support its position that the
conclusions of the 1958 Geneva
Technical Report remain complete-
ly valid. Although the chief
Soviet delegate'to this technical
working group, in session since
22 June, has asked numerous
questions about new Western data
on high-altitude testing, he has
repeated several times that no
really new information has been
presented thus far? Moscow prob-
ably is concerned that any modi-
fications of the experts' report
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 June 1959
at these talks would weaken its
position in refusing to consider
recent American data on seismic
phenomena which are in basic
conflict with that part of the
1958 report dealing with under-
ground detection methods.
The Soviet delegation to
the working group has, never-
theless, endeavored to give the
impression of willingness to
discuss the high-altitude-tests
problem seriously, thereby sup-
porting Soviet tactics in the
plenary sessions.
Moscow probably believes
that increasing pressure in
Great Britain for a test-cessa-
tion agreement, in contrast
with obvious .:French adamance
against making this issue a sub-
ject for summit negotiations,
can be exploited to weaken West-
ern unity. The Soviet leaders
have probably calculated that
the recent shift in the British
Labor party's policy on the nu-
clear weapons issue may increase
pressure on the Macmillan gov-
ernment for a test-cessation
agreement.
A new Labor party statement
of 23 June, supported by the
powerful Trades Union Congress,
stipulated that Britain should
maintain its nuclear deterrent
but should work toward the crea-
tion of a nonnuclear "club" of
all nations except the United
States and the USSR. While the old
policy committed the Labor party
to a one-year unilateral test
ban, the new statement called
on the next Labor government to
suspend tests indefinitely while
honoring its NATO obligations
but to seek greater control over
American bases in Britain.
Western Reaction
The differing British,
French, and German attitudes
were clearly in evidence as the
foreign ministers' conference
recessed. In answering ques-
tions in Parliament on 23 June,
Prime Minister Macmillan remained
cautiously optimistic over the
prospects of East-West agreement.
He asserted that it would be a
mistake "to underrate the degree
of success" achieved in clarify-
ing positions:which in some re-
spects, he said, are nearer to-
gether. Having thus indicated
that his principal conditions
for holding a summit meeting
were already met, he expressed
his hope that the foreign min-
isters'talks, when resumed,
would lead to such a meeting.
On the same day, however,
French Foreign Minister Couve
de Murville told a television
audience that the East and West
remained as far apart as ever on
the over-all German question.
West German Chancellor
Adenauer offered a still sharp-
er view. He stated on 19 June
that the Geneva conference has':
been a Soviet success in that
a wedge was driven between the
Western powers. The chancellor
called for a Western summit meet-
ing, implying that at such a
meeting Macmillan should be per-
suaded to change his views on
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Western tactics. Adenauer's
strong statement may be partly
motivated by internal consid-
erations in view of his claim
that the tense international
situations prevented him~'from
retiring to the German pres-
idency, and partly from his
fears that at the next round
of negotiations the British
may press for further conces-
sions to gain a summit con-
ference.
Adenauer now may revive
his plan, previously raised
with Macmillan in March, to
demand a five-year moratorium
on changes in Berlin's status
in return for a four-power com-
mission with German advisers
to work out proposals for
German reunification by stages
and for a peace treaty. The
West German delegation at
Geneva was considering such a
plan.
Iraq
Initial press comment on
the conference recess has
tended to follow the govern-
ment's lead in each country;
with variations by political
leaning. French papers were
generally pessimistic over the
lack of progress. British pa-
pers accepted the adjournment
without alarm in the belief
that a summit conference is
still in prospect, but some
blamed Adenauer's intransi-
gence for the present stale-
mate-, Conservative party
sources have warned that if
the West refused to go to the
summit as a result of US in-
sistence on progress to justify
such a meeting, the Labor par-
ty could be expected to
capitalize on the public's dis-
appointment and win the gen-
eral election expected this
fall. (Con- 25X1
curred in by SI
EAST HIGHLIGHTS
There are additional signs
that Qasim is moving slowly and
cautiously to strengthen his con-
trol of the army and to reduce
the power of the Iraqi Communist
party. Following complaints by
army commanders of excessive
Communist influence, the com-
mander of an armored brigade
was arrested for openly encour-
aging Communist activities among
his men. Subsequently, in a
speech to army officers Qasim
warned that any army personnel
involved in politically partisan
activities would be "brought to
.account."
SECRET
The Communist press, which
has previously criticized the
government for "unnecessary"
restraints on the Communist
infiltrated Popular Resistance
Forces, now has lashed out
against army officers, claiming
that the army is being used
against the "interests of the
people." The Communist or-
gan accused the commander of the
army's First Division of pre-
venting bodies of Communist
"martyrs" killed in peasant riots
from being brought to Baghdad
for a big funeral. It attacked
a lower ranking officer for or-
dering a guard unit to deny ad-
mittance of a Communist "watch-
dog" committee to Radio Baghdad.
Communist domination of Baghdad
press and radio has been consid-
erably reduced during the past
few weeks, and the Communist
journals are presently engaged
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``'" SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
in a press battle with the organ
of the National Democratic party,
which is competing with the Com-
munists for control of the Iraqi
peasant organizations.
Soviet Ambassador Zaitsev
has left Baghdad for several
weeks of "medical treatment" in
Moscow. He will probably dis-
cuss with Soviet leaders the new
problems facing the Iraqi Commu-
nist party; the result may be a
suggestion to Iraqi Communist
leaders that they modify their
present tactics.
In spite of fancy advance
billing, Qasim's "revolutionary"
22 June announcement proved to
be no more than the signing of
an agreement with the British
for Iraqi withdrawal from the
sterling area. The matter has
been under consideration since
last fall, and Qasim announced
Iraq's decision to withdraw a
month ago. This action is of
minor economic significance but
the political reaction inside.
Iraq has been enthusiastic,
UN Secretary General Hammar-
skjold will visit Cairo on 30
June to attempt to arrange a
settlement of the dispute over
Israeli shipping through the
The 25X1
Israeli-c'artered Danish vessel
Inge Toft, still detained at
Port Said, was stopped after UN
Under Secretary General Bunche
had been told in Cairo there
would be a reluctant moderation
of restrictions against Israeli
canal shipping. The detention
followed Israeli publicity of
the Inge Toft's planned transit
25X1
of the canal despite earlier 25X1
Israeli cargo seizures by the
The Israeli Government now
is said to have imposed censor-
ship On any future announcement
of intended cargo shipments
through Suez.. This presumably
will prevent any advance notice
of the sailing of two ships of
foreign registry now loading in
Haifa which will attempt to tran-
sit the canal. If these are
stopped, the Israelis might re-
spond by interfering with UAR
shipping between Egypt and Syria
and Lebanon. In anticipation
of such a possibility, motor
torpedo boats are reported es-
corting UAR merchant ships on
trips between Alexandria and
Latakia, and ships of foreign
registry may soon be employed
on such voyages.
Main interest within the
UAR centers around the forthcom-
ing elections to the country's
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 June 10159
single political organization,
the National Union. Cairo an-
nounced this week that more than
120,000 candidates had applied
for election to the approximate-
ly 60,000 openings. Nasir has
decreed the abolition of the
"screening committee" originally
intended as a device for scruti-
nizing the qualifications of each
applicant and, consequently, the
election date has been shifted
from 15 to 8 July. The apparent
loosening of government controls
over candidates probably will
mean the election of more diverse
types as representatives on the
local level, but the regime still
has plenty of time for weeding
out "undesirables" as appoint-
ments to higher echelons are made
and before selection of members
to the new national assembly
scheduled to meet in November.
The Soviet plan for construc-
tion of the Aswan High Dam, which
the USSR has claimed would be
cheaper and faster, has been al-
most unanimously opposed by the
UAR's international consulting
board of experts. Cairo has not
yet announced its decision to
accept or reject the plan, al-
though a Soviet statement pub-
lished in Cairo to the effect
that the USSR would comply with
any plan the UAR approves sug-
gests. anticipation of UAR rejec-
tion,
The UAR has given no indi-
cation of easing its 6 June order
which closed the Syrian-Jordanian
border. The closure, which bars
Jordanian access to the all-
important truck route from Bei-
rut, has stepped up Jordanian
pleas for US assistance in con-
struction of the desert road
linking Amman with the Gulf of
Aqaba. The problem will be high
on the agenda for discussions by
Hammarskjold during his visit
to the area.
The public military courts-
martial of Brigadiers Shannan
and Abdullah, leaders of the
Sudan's abortive 22 March coup,
opened on 21 June as scheduled.
The testimony of the army offi-
cers who were the witnesses for
the prosecution appeared damn-
ing. In addition to Shannan
and Abdullah, it implicated
Major General Hamid, who is a
Supreme Council member, minister
of agriculture and irrigation,
and the strongest Ansar sect
adherent.in a ministerial post.
In Hamid's own testimony,
he admitted he had had a few
hours' advance knowledge of
dissident officer and troop
movements toward Khrartoum, but 25X1
said he had been unable to find
Prime Minister Abboud to tell 25X1
Sudanese Government has reported-
ly placed him under "rigorous
house arrest,"
It thus appears that Prime
Minister Abboud remains deter-
mined to continue strong dis-
ciplinary measures against the
rebellious officers. He is
concerned not only with demon-
strating to all army personnel
that his military government
runs the army, but also with
denying the coup perpetrators
the opportunity for another
try. In this respect, the
core of the dissident officers'
movement--Brigadier Shannan,
his junior officer brothers,
and their associates--would
constitute an immediate threat
if they went free. Mild
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 June 1959
disciplinary action against Brig-
adier Abdullah and Major Gener-
al Hamid would probably involve
much less danger,
Yemen
Yemeni Crown Prince Badr's
hold over local loyalties may
be growing more tenuous, and
members of the Imam's party--
including Badr's rival, Prince
Hasan--now in Rome apparently
intend to keep the ailing Ruler
there for some time in
the hope that Badr in the in-
terim will become completely dis-
credited,
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'CURREWT'TNTELLIGENCE WEEKLY SUMMARY
25 June 1959
PROBABLE EAST GERMAN REACTION TO PRESIDENTIAL ELECTION IN BERLIN
The East German regime,
despite earlier threatening
statements, will probably not
do anything to interfere seri-
ously with the West German presi-
dential election in Berlin on 1
July., nor are the Communists
likely to attempt to apply un-
usual pressure on the West dur-
ing the Geneva conference re-
cess.
The East Germans, however,
may attempt to intimidate dele-
gates bound for Berlin via sur-
face transport by such harass-
ments as prolonged border formal-
ities or detainment along the
road for traffic violations.
"worker" groups and troublemak-
ers may be used for protest
demonstrations and disturbances
in West Berlin.
During the past fer weeks
there have been several veiled
threats in the East German press
that the "provocation" of hold-
ing the election in West Berlin
would be met with a blockade.
In each case, however, the threats
were obscure enough that the
Communists were not publicly
.committed to follow through.
For example, propagandist Gerhard.
Eisler said on 6 June, "It was
not at all easy for me to per-
sualde these Berliners to re-
main patient, in view of this
new provocation."
The Communists are not like-
ly to take any action which
would actually prevent delegates
from reaching or leaving West
Berlin, for such action would
result in unfavorable publicity
at a time when the German Demo-
cratic Republic (GDR) is striv-
ing to establish itself in West-
ern eyes as a respectable coun-
try..
The GDR's most likely move
is an intense propaganda cam-
paign designed to show that hold-
ing the election in West Berlin
is illegal and particularly
provocative at a time when the
big--four powers are attempting
to find a solution to major
problems. The Communists also
will'. probably draw comparisons
between their reasonable posture
and West Germany's rearmament
policy. Such minor gains in
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CURRENT INTELLIGENCE WEEKLY SUMMARY
recognition as Foreign Minister
Bolz' appearance at Geneva and
qualified Western acceptance of
East German access controls will
be exploited in an attempt to
promote the GDR as a sovereign
state.
The East Germans will prob-
ably also carry out minor harass-
ments during the foreign minis-
ters' conference recess in order
to try to weaken the resolve of
individual Western countries to
stand firm on the Berlin issue,
SIGNIFICANT OIL FIELD DISCOVERED IN YUGOSLAVIA
Yugoslavia has recently
completed initial exploration of
an oil field in Croatia which
is one of the largest in Europe
outside the Soviet Union. The
field, located at Struzec in
Croatia, closely resembles geo-
logically the "great fields of
California and Venezuela,"
Exploratory work
on the field was be-
gun by the Germans
during World War II.
The Yugoslavs drilled
their first well in
the area in 1952 but
did not find oil.
Their second well,
sunk in 1956, did
YUGOSLAV CRUDE-OIL REQUIREMENTS
A separate peace treaty will
probably not be signed with the
Soviet Union during this period,
however, and major steps to
interfere with access--such as
turning over the controls to
the East Germans--are unlikely.
Some effort to restrict movement
across the West Berlin borders
may be made, however. Such ac-
tion has already been suggested
by reports that the number of
persons permitted to cross the
borders to work in the Western
sector will be reduced
raised by about 166 percent--suf-
ficient to make Yugoslavia self-
sufficient. A preliminary
estimate, which may be conserva-
tive, places the field's re-
serves at approximately 22,-
000,000 metric tons.
This discovery has important
implications for the Yugoslav
economy and deprives the Kremlin
of a. potentially powerful weap-
on in its dispute with Belgrade.
Yugoslavia used 1,000,000 metric
strike oil, however, 1946
and 19 other wells
have since been drilled. 1950
When in production, 1954
these wells will be
capable of producing 1955
at least 750, 000 metric
tons per year as com- 1956
pared with a total
1957 Yugoslav crude- 1957
oil production of 400 f- 1958
000 metric tons. Thus
production would be
129
M
(1000 METRIC TONS)
=PRODUCTION- - -,=IMPORTS
IMPORTS
483 740
581
875
600 11000--
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tons of crude oil in 1957, of
which 45 percent came from the
Soviet bloc. Recently the
satellites--as part of the bloc
campaign of economic harassment--
have refused to guarantee deliv-
ery of important items such as
crude oil and coking coal. This
April, for example, Rumania,
which supplied Yugoslavia with
70,000 metric tons in 1957, re-
fused to include crude oil in
its 1959 trade protocol with
Belgrade.
The new discovery holds out
the hope that Yugoslavia may be
POLAND CONTINUES TO SHOW INDEPENDENCE IN INTERNAL AFFAIRS
Although Poland apparently
still has Moscow's consent to
carry out its independent in-
ternal program in return for
full support of Soviet foreign
policy objectives, open criti-
cism of each other's cultural
policies has recently been voiced
by regime representatives. Fur-
thermore, Gomulka has recently
reiterated the unique Polish at-
titude toward collectivization.
Despite these divergencies, how-
ever, Khrushchev is apparently
satisfied with the stability
achieved in Poland and probably
does not wart to introduce
changes at this time which might
upset it.
Polls publications continue
to respond strongly to Soviet
criticism of developments in
Poland. A Polish literary
magazine criticized the third
and last volume of the Soviet
publication History of Poland
for its treatment of__fhe pre-
war history of the Polish Com-
munist party and for its "im-
poverished picture of society
and the nation and even of the
working class."
During the third USSR Writers'
Union congress, in May, the chief
Polish delegate reportedly gave
a speech strongly defending
freedom of expression for writers.
Moreover, the Polish exhibit at
the bloc-wide art exhibit in
Moscow in March drew heavy
critical fire from Soviet com-
mentators for its abstractions.
The USSR Writers'. Union paper
criticized Polish abstract art
as "exagge~xated, subjective...
rejecting ideology ...and funda-
mentally foreign to our social
outlook." Soviet criticism has
had no visible effect on Polish
artists, and the Polish regime
will probably not demand con-
formity with Soviet practice in
this ,area, even 'though it is
attempting to eliminate revision-
ist literature by various re-
strictions.
Another consistent departure
from accepted Soviet practice is
in the field of agriculture,
SECRET
able to eliminate a serious drain
on its foreign exchange. If the
field is exploited properly and
the wells produce at maximum ef-
ficiency, Yugoslavia by 1963 will
be second to Rumania in crude-
oil production in Europe. Ef-
fective development. could
lead to an export surplus
of crude oil and refined
petroleum products, which
in turn would serve as
an important source of
forei n exchan e
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CURRENT INTELLIGENCE WEEKLY SUMMARY
where Poland continues to sup-
port the private farmer. In
his speech to the second plenum
of the Polish Communist party
on 22 June, Gomulka did not
advocate any major policy changes
in agriculture. He shelved
collectivization as a "distant"
though "inevitable" project.
He did, however, call for a
more rapid development of the
agricultural sector in 1959-
1965 than was envisioned at
the third party congress in
March.
By heavy investments,
mechanization, greatly expanded
building, and credit plans, as
well as by greater party activ-
ity through the quasi-socialist
agricultural "circles," the
regime hopes to increase.pro-
duction and lay the basis
for establishing some lower
form of agricultural collectives.
Expansion of the agricul-
tural circles--a loose form of
cooperative--in the form envisioned
at the plenum will make the
farmer more dependent on the
regime. However, the announce-
merit of.this program just prior
to the harvest season--a.period
when the peasants are usually
not; subjected to pressures to
collectivize--suggest that
during the next few months the
party will not take any harsh
or coercive action,
(Concurred in-by-MR)
BAD WEATHER A BLOW TO COMMUNIST CHINA'S AGRICULTURAL PROSPECTS
Excessive rains have brought
bad floods in South China, and
wind, hail, and drought have
damaged crops in other parts of
the country. The rich, rice-
producing Pearl River delta in
Kwangtung is threatened by what
Peiping calls a "once-in-a-cen-
tury" flood, although no major
dike breaks have yet been re-
ported. The East River valley
in Kwangtung was swept by rec-
ord floods which also have hit
a number of areas of the neigh-
boring provinces of Kwangsi and
Fukien.
Millions of peasants have
been mobilized to raise and re-
inforce dikes. Military and
civilian aircraft as well as
naval and merchant vessels have
been pressed into service to
carry relief supplies and res-
cue those marooned by high wa-
ters.
the important winter wheat re-
gions of Central and North China.
Heavy rain damaged ripening win-
ter wheat in a wide belt from
Wuhan on the Yangtze River north-
ward through Honan Province to-
ward Peiping, and hail and rain
damaged wheat in Hopeh and Shan-
tung provinces. A drought has
persisted in Manchuria since
last fall, with only a slight
respite this spring.
It is still too early to
assess the damage done by bad
weather to crops and food sup-
plies. Late crops, which form
the; most important part of total
annual output, have not all been
planted. The problem of accu-
rate assessment is complicated
by the fact that the leadership
has good reason to overplay the
extent of this year's natural ca-
lamities as a hedge against fail-
ure to reach overly ambitious
targets.
Earlier in the month Pei-
ping complained of damage by
hail, rain, and windstorms in
A recent editorial in Peo-
ple's Daily reflected Peiping's
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CURRENT INTELLIGENCE WEEKLY S- 'RY
25 June 1959
REGION
yaf io_m M..er
KWEICHOW
.r KWANGSI
^^~~ CHUANG
2 A. R.
NTH
'IETNAM
cklLL,o
LIAONING
CHEKIANG\
EAST
CHINA
SEA
Up to 32",
11-20 June 1959
Up to 13", 1-10 June 1959
SZECHWAN ,?j
growing disenchantment with its
ultra-intensive farming practices
and warned that bumper harvests
might be followed by poorer
ones. People's Daily on 23 June
pointed to the Kwangtung flood
as evidence that China's flood
control is still very limited--
a complete reversal of the cocky
attitude which still prevailed
in Peiping when this year's ex-
cessive agricultural targets
were announced,
While Peiping may be maneu-
vering to prepare for a retreat
from the fantastic grain production
target of 525,000,000 tons, con-
siderable damage has been done
which will aggravate already
existing food shortages--es-
pecially in South China,
where the shortages have been
particularly severe, F 125X1
ORR),
(Prepared by 25X1
PEIPING DIVERSIFIES TACTICS TOWARD LATIN AMERICA
Peiping has recently been
conducting an intensified drive
to exploit anti-American senti-
ment in Latin America and es-
tablish strong contacts there.
The campaign has involved a
variety of tactics.
Spanish-language broadcasts
from Peiping have approximately
doubled since the visit of top
Latin American Communists to
China last March. The dominant
thence in these broadcasts has
been the. 'mounting struggle"
SECRET
COMMUNIST CHINA WEATHER
INNER
MONGOLIAN
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CURRENT INTELLIGENCE WEEKLY SUMMARY
against US imperialism." Pei-
ping, attempting to draw a
parallel between Latin American
unrest and China's emergence
from foreign domination, has
charged that the United States
has taken measures to stem re-
volt attempts against the re-
gimes of Nicaragua and the
Dominican Republic, and stressed
American objections to proposed
Cuban land reforms. Commentary
has stressed the Communist line
on land reform, "peaceful co-
existence," and freedom of or-
ganization for the working class.
A delegation of Chinese
"journalists," led by an individ-
ual from the propaganda depart-
ment of the Chinese Communist
party central committee, is
touring Latin America. In Chile
and Uruguay the group met legis-
lators and visited local news-
paper offices. Now in Brazil,
it reportedly will also visit
Cuba and Honduras.
in Uruguay the "journalists"
attempted to hire local reporters
for the official New China News
Agency (NCNA). The NCNA would
probably use these reporters to
guide it in preparing propaganda
broadcasts to Latin America.
NCNA's new office in Havana, ap-
parently its first in the area,
is said to be actively making
contact with local Communist and
government press agencies and
reportedly plans to set up a
In Italy's current strike
wave, the non-Communist unions
are being forced into unity of
action with the Communist-domi-
nated labor confederation,(CGIL),
largely as a result of manage-
ment's refusal to discuss wage
demands. Further labor unrest
is likely to encourage moves
Chinese newspaper to influence
the Cuban Chinese community,
the largest in Latin America.
In carrying out a program
of "people's diplomacy," Peiping
has been extending invitations
to diverse Latin American groups.
Top-level attention, including
an audience with Mao Tse-tung,
has been accorded the visit of
legislators from Peru and Colom-
bia.-These groups, the first Lat-
in. American parliamentary.dele-
gations to visit. China, are to
be followed by one from Bolivia.
Peiping is also playing host
to representatives of women's,
student, and Communist youth
organizations, trade-union dele-
gations, and former government
officials. No Latin American
country recognizes Peiping, and,
in talks with the visitors,
Chinese officials have discreet-
ly avoided any mention of diplo-
matic relations. Instead, their
comments have expressed hope
for the building of "warm
friendship."
However, Ernesto "Che"
Guevara--a high-ranking pro-
Communist military subordinate
of Cuban'.Prime Minister Castro--
reportedly plans to go to China
after his current visit to the
UAR, and Peiping may discuss
with him the possibility of
diplomatic relations,
against Premier Segni from pro-
labor and other elements in his
own Christian Democratic party
which are already resentful of
his dependence on the monarchists
and neo-fascists for parliamen-
tary support.
The Italian merchant marine
has been almost paralyzed by the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
seamen's strike, which began on
8 June with the support of the
Christian Democrat. - and Demo
cratic Socialist - oriented
labor organizations as well as
of the CGIL. Shipowners have
rejected demands for a 30-per-
cent increase in wages and
fringe benefits. The minister
of merchant marine has in ef-
fect sided with the shipowners
by announcing he will not ne-
gotiate with the seamen until
they return to work.
The bank clerks' walkout
is more than a week old, a na-
tionwide railroad strike is
threatened, and a 48-hour
strike by some one million
steelworkers and metalworkers
is scheduled for 26 June. A
previous strike by all the
metalworkers' unions on 4 and
5 May in protest against man-
agement's refusal to discuss
wage raises in negotiations for
a new national contract was
heavily supported in northern
Italy.
The aggressive leadership
and greater strength of the
CGIL have enabled it to seize
the initiative in strike ac-
tion. The less well-organized
free unions have been compelled
to follow suit, particularly
since the government's depend-
ence on the rightist parties
in parliament has largely dashed
labor's hopes for successful
mediation.
A spread of strike action
to other sectors of the econ-
omy and prolonged deadlocks in
negotiations would further
threaten Christian Democrat
party unity. On 18 June, ex-
Premier Scelba told the press
that he and 52 other parlia-
mentary deputies intend to mo-
bilize the rank and file of the
Christian Democrats to support
a call at the party's national
congress in October for a re-
ject.-Ion of the alliance with
the right and a return to a coa-
lition with the small center
parties,
DIEFENBAKER'S POLITICAL STANDING IN CANADA
For the first time since
he assumed office two years ago,
public opinion polls show a
marked decline in the popularity
of Canada's Prime Minister Die-
fenbaker, Although this is
probably due mainly to the eco-
nomic recession from which
Canada is only now recovering,
his government is also under
fire, even from his Conserva-
tive party, for its handling of
Canada's defense program. Criti-
cism centers on what is consid-.
ered an inept defense of the
decision to abandon the CF-105
interceptor program and substi-
tute instead the US Bomarc mis-
sile. The Liberal opposition
has apparently benefited from
its intensive needling of the
government on this issue, for
it showed unexpectedly large
gains in the 11 June provincial
elections in Ontario, a Conserv-
ative stronghold.
Diefenbaker is extremely
sensitive to any indications
that he is losing personal pres-
tige. In an effort to regain
public support, the prime min-
ister is believed planning a
major cabinet reshuffle when
the parliamentary session ends,
probably late next month. The
able young minister of trans-
port, George Hees, will prob-
ably be advanced to the impor-
tant Trade and Commerce Minis-
try, and as many as six other
members may be dropped from the
cabinet.
In his selections so far,
Diefenbaker's prime requisite
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SECRET
CURRENT INTELLIGENCE WEEKLY CRY
25 June 1959
has seemed to be personal loyal-
ty. The 4 June appointment of
his closest colleague, 63-year-
old Howard Green, as external
affairs minister, is a case in
point. Informed Canadian ob-
servers acknowledge Green's
capability in his previous posts
of minister of public works and
leader of the House of Commons
but fear that his lack of ex-
perience in international af-
fairs and his old-fashioned ap-
proach will cause many problems
for the government. Personal
loyalty, is also said to have
DISORDERS MAY OCCUR
Nationalist-inspired dis-
orders, possibly leading to
wholesale violence against some
20,000 whites, may break out
soon in Leopoldville in the Bel-
gian Congo. The native part of
the city, numbering some 350,-
000 persons, is reported tense
and awaiting a statement from
Belgium's Minister of the Congo
van Hemelrijek concerning
African political demands.
The Africans are led by
Joseph Kasavubu, who, accused
with the United States.
prevented Defense Minister
Pearkes from opposing the prime
minister's budget-minded concept
of Canadian defense despite
Pearkes' own uneasiness about
its inadequacy.
It is likely therefore,
that any new cabinet will still
be strongly dominated by Diefen-
baker with his preference for
"one-man government" and his con-
viction that he is the only leader
qualified.to.uphold Canada's na-
tional7interests, particularly in
its trade and defense relations
SOON IN BELGIAN CONGO
of playing a major role in the
violent riots last January, was
jailed and then released with-
out trial and taken to Belgium.
Kasavubu demands that a regional
"Republic of Central Kongo"--
to include only the southwestern
part of the Congo from Leopold-
ville to the ocean--be estab-
lished by 1 January 1960. His
plans call for the election of
a president in mid-December 1959,
with the election campaign to
begin next month. Brussels,
however, is unlikely to accept
any such program.
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Wool SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
Kasavubu's recent activi-
ties and anti-Belgian statements
suggest that despite extensive
efforts by reformist Minister
van Hemelrijck, Brussels has
failed to win the cooperation
of this prominent African leader
for a program of rapid but or-
derly political evolution.
Kasavubu has indicated a complete
lack of confidence in all Bel-
gian officials except Van Hemel-
rijck; he also believes the ter-
ritorial and municipal council
elections scheduled for November
will be rigged. His scheme for
a separate tribal republic is
incompatible with Belgium's
plans for a unified Congo state
and would probably be opposed
by most African leaders from
other parts of the Congo.
While Kasavubu represents
primarily a regional, tribal
movement--the ABAKO--other Con-
golese have also become critical
of Belgium's efforts to imple-
ment its policy statement of
last 13 January. This envisaged
Congolese independence at a
fairly early, but indeterminate,
date.
Van Hemelrijck has taken
definite steps in preparation
for the elections which empha-
size the necessity of rapid
"Arricanization" of the Congo
administration. He has appointed
a Congolese to the board of di-
rectors of Sabena Airlines, sug-
gested that Congolese university
graduates serve on the governor
general's staff,, and plans to pre-
sent draft decrees granting the
Congo freedom of the press, as-
sociation, and assembly. How-
ever, conservative elements in
Brussels have opposed these
moves, and the white settlers
in the eastern Congo have shown
their hostility based on fear
for their future in a Congolese
state.
25X1
NEW JAPANESE GOVERMENT
Prime Minister Kishi's in-
clusion in the new Japanese cab-
inet of factional leaders for-
merly opposed to him promises a
new alignment in the ruling con-
servative party, broadens sup-
port for Japan's policy of co-
operation with the United States,
and could have a stabilizing ef-
fect on the political scene.
The strengthened cabinet should
help Kishi achieve his immediate
aims of revising the US-Japanese
security treaty, developing a
ten-year economic program, and
changing the election districts
to favor the conservatives in
future elections.
Kishi has placed his close
supporters in the key posts of
foreign affairs, finance, justice,
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NUO, SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
Kasavubu's recent activi-
ties and anti-Belgian statements
suggest that despite extensive
efforts by reformist Minister
van Hemelrijck, Brussels has
failed to win the cooperation
of this prominent African leader
for a program of rapid but or-
derly political evolution.
Kasavubu has indicated a complete
lack of confidence in all Bel-
gian officials except Van Hemel-
rijck; he also believes the ter-
ritorial and municipal council
elections scheduled for November
will be rigged. His scheme for
a separate tribal republic is
incompatible with Belgium's
plans for a unified Congo state
and would probably be opposed
by most African leaders from
other parts of the Congo.
While Kasavubu represents
primarily a regional, tribal
movement--the ABAKO--other Con-
golese have also become critical
of Belgium's efforts to imple-
ment its policy statement of
last 13 January. This envisaged
Congolese independence at a
fairly early, but indeterminate,
date.
Van Hemelrijck has taken
definite steps in preparation
for the elections which empha-
size the necessity of rapid
"Atricanization" of the Congo
administration. He has appointed
a Congolese to the board of di-
rectors of Sabena Airlines, sug-
gested that Congolese university
graduates serve on the governor
general's staff,, and plans to pre-
sent draft decrees granting the
Congo freedom of the press, as-
sociation, and assembly. How-
ever, conservative elements in
Brussels have opposed these
moves, and the white settlers
in the eastern Congo have shown
their hostility based on fear
for their future in a Congolese
state.
25X1
Prime Minister Kishi's in-
clusion in the new Japanese cab-
inet of factional leaders for-
merly opposed to him promises a
new alignment in the ruling con-
servative party, broadens sup-
port for Japan's policy of co-
operation with the United States,
and could have a stabilizing ef-
fect on the political scene.
The strengthened cabinet should
help Kishi achieve his immediate
aims of revising the US-Japanese
security treaty, developing a
ten-year economic program, and
changing the election districts
to favor the conservatives in
future elections.
Kishi has placed his close
supporters in the key posts of
foreign affairs, finance, justice,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 June 1959
and agriculture and forestry.
While he has included influen-
tial factional leaders in the
cabinet and in party posts, they
will be in positions
limiting their oppor-
tunities to hamper
his policies. The ap-
pointments should al-
leviate somewhat but
not eliminate the
chronic factionalism
in the government and
ruling party which
has plagued Kishi.
Foreign Minister
Aiichiro Fufjiyama and
Finance Minister Ei-
saku Sato are the
only holdovers in the
cabinet, which will
face an all-out fight
with the Socialists
over consideration of
sound financial poli-
cies. Ikeda report-
edly acquiesced when
Kishi promised to
prepare him to be-
come prime minister
in about 18 months.
Kishi was unable
to satisfy all party
groups, and the refus-
al of Ichiro Kono, an
aspirant to the prime
ministership, to ac-
cept a party or cabi-
net post leaves him
as a,rallying point
for continued party
factionalism.
the security treaty at the Diet
session this fall.
Financial interests in Ja-
pan are generally pleased over
the inclusion of Hayato Ikeda,
a top leader of a previously
SECRET
anti-Kishi party faction, as the
minister of international trade
and industry. They view his ap-
pointment as a continuation of
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 June 195!)
INDONESIAN ECONOMIC DETERIORATION
Indonesia's problem of
racing inflation has been aggra-
vated by the country?s three-
week political paralysis result-
ing from the Constituent Assem-
bly's rejection of the 1945 con-
stitution on 2 June and the
army's subsequent ban on politi-
cal activity. The free-market
rate for the rupiah has declined
by one third in the past two
weeks, and an increasing number
of shopkeepers prefer to barter
products rather than to receive
rupiahs. The prices of essential
commodities continue to rise
while wages remain relatively
constant.
Nine government trading
firms have a monopoly on imports,
but have no capital and depend
on credit from banks and the
government. Most of these firms
are directed by army officers
whose commercial inexperience
slows and tangles the arrival of
essential imports. As the re-
sult of the shortage of raw ma-
terials, factories are working
at less than 50 percent of
capacity.
The chief pinch from the
deteriorating situation is felt
by city dwellers--laborers,
white-collar workers, and the
armed forces-=all groups which
are important Communist targets.
The economic crisis has not yet
affected the majority of the pop-
ulation, which is engaged in
subsistence agriculture and is
relatively uninvolved in the
monetary economy.
Swift and decisive action
is needed if permanent and
far-reaching economic and po-
litical damage Is to be avoided.
All political elements are
awaiting President Sukarno's
return to Djakarta on 29 June
from his two months' trip in
the hope he will break the im-
passe.
The Indonesian Army is ap-
parently preparing plans for
Sukarno's consideration on his
return. Army representatives
have consulted Sukarno during
his tour, and Army Chief of
Staff General Nasution has
called a meeting of regional
commanders stating that he
"deems it necessary to take
concrete action toward finan-
cial, economic, and Political
stability."
DALAI LAMA'S PRESS CONFERENCE
The Dalai Lama's press con-
ference on 20 June, ?particularly
his forthright condemnation of
Peiping and his proposals re-
garding the future of Tibet,
-could increase friction between
him and New Delhi. Apparently
aware of this possibility, the
Dalai Lama has stated that he
does not intend to stay indefi-
nitely in India or "embar-
rass the Indian Government."
He apparently will wait out
official Indian reaction for
about two'weeks and then request
a meeting with Prime Minister
Nehru.
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low 44W
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
JAMMU AND
KASFIII=R
?(ew DVhi
SINKANG UIGHUR
Area claimed by Tibet
YU.NNAN"?:
Some of the Dalai Lama's
answers to questions by press
reporters probably also disturbed
New Delhi. For example, his
statement that he considers him-
self head of a "government-in-
exile" could be taken as an in-
dication of his intentions to
conduct Tibet's affairs from
within India. Any such impres-
sion would be heightened by his
suggestion for the creation of a
"greater Tibet" which would enjoy
both'.internal and external free-
dom and be guaranteed the return
of the neighboring Chinese ter-
ritory of Amdo and Kham.
Peiping has thus far chosen
to ignore the Dalai Lama's state-
ment, but may feel compelled to
attack it after appraising its
impact in nonbloc capitals. The
Chinese delayed but eventually
responded to the Dalai Lama's
statement last April when they
would have preferred to remain
silent about him and his activi-
ties.
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Katmandu Gan tok.
Darjeeling
TSINGHAI
Golfo.' ,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Agitation against the Com-
munist government in India's
Kerala State continues unabated.
Political and communal opposi-
tion groups bent on ousting the
Communists are staging demonstra-
tions almost daily, and more
than 6,000 persons have been
arrested to date. However,
there have been no serious clashes
between the agitators and Com-
munist-directed police since
the incidents shortly after the
campaign opened on 12 June--in
which 12 persons were killed
and many injured. In addition
to student groups and labor
unions, the Moslem League and
two small socialist parties now
have endorsed the "direct action"
campaign led by the Congress and
Praja Socialist parties.
Despite the opposition
leaders' determination to press
the fight to the end, their cam-
paign may be weakened by inde-
cisiveness in the top ranks of
the Congress party's national
leadership. Prime Minister
Nehru, who earlier this month
reluctantly approved the agita-
tion on condition that it re-
main nonviolent, is increasing-
ly concerned by press criticism
that the Congress party in Kerala
is trying to force an elected
government out of office through
unconstitutional means. In ad-
dition to possible damage to
his party's position nationally,
Nehru probably fears that his
sanction of undemocratic tactics
in Kerala will make it difficult
IN KERALA
for New Delhi to counter use
of similar methods by Communist.
and.right-wing communal groups
in such other key- states as,
West Bengal, Andhra, Bombay,
and Madras.
Nehru visited Kerala from
22 to 24 June to assess the
situation personally. His con-
versations with Communist and
opposition leaders in the state
may lead to an attempted com-
promise between the warring
groups. Such a compromise would
bolster the Communist govern-
ment's position in Kerala tem-
porarily and renew its deter-
mination to stand firm.
Demonstrations against the
Communist government--perhaps
accompanied by more violence--
are likely to continue. The
possibility remains therefore
that New Delhi may eventually
feel compelled to step in and
impose direct rule in th tate.
The Pakistani military re-
gime, in dealing with its many
major problems, is maintaining
an atmosphere of progress large-
ly by making announcements of
forthcoming programs. Some
tangible progress, however, is
being made in land reform, refu-
gee resettlement, and dismissal
of corrupt government officials.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 June 1959
In mid-June, the military
regime made its first public
commitment on the timing of the
initial step toward a return to
constitutional government by
announcing that elections would
be held this fall for representa-
tive councils at the local level.
The first elections, for councils
in six districts, are scheduled
for 7 October, the anniversary
of last year's coup.
At the same time, plans were
announced for moving the national
capital from Karachi to northern
West Pakistan, where, the climate
is better. The relocation,prob-
ably some years off, would facil-
itate government contacts with
army headquarters at Rawalpindi.
The government, controlled pre-
dominantly by Punjabis and
Pathans, apparently expects
Pakistanis living outside the
Punjab and Pathan areas to dis-
approve of the shift. It has
announced plans for a secondary
national capital in East Pakistan,
apparently'in the hope of lessen-
ing Bengali resentment of the
Punjabis.
In addition, the regime
probably restored its reputation
for removing corrupt elements
from government posts when in
mid-June it dismissed 20 offi-
cials, forced the retirement of
75, and demoted 13 for corrup-
tion, inefficiency, or miscon-
duct, all in East Pakistan.
The people in East Pakistan had
become disillusioned by what
they considered premature army
withdrawal from the daily ad-
ministration at the local level.
They felt that the corrupt civil-
service officials Who ran the
government before the coup were
still doing so.
The National Bureau of Re-,
construction, which has the
avowed purpose of educating the
people on the responsibilities
of citizens, has acquired a
staff and will probably become
more active in the informational
field. One of its first acts
has been the seizure of the pro-
Communist Pakistan Times.
Some progress is also being
made on politically important
economic problems. Housing is
being built on the outskirts of
Karachi for refugees from India
and Kashmir who have been a
center of discontent since 1947.
An estimated 70,000 refugees
will be resettled by the end of
summer. The minister for ref-
ugee rehabilitation has secured
a new credit from West Germany
for $28,000,000, part of which
will be used for the resettle-
ment programs
The land-reform program
apparently remains on schedule.
Hearings are being held on the
acquisition by the government
of about 2,500,000 acres of
land from some 3,000 landlords.
About 1,250,000 acres are ex-
pected to be cultivable and are
scheduled for distribution to
100,000 tenant farmers by Octbber
1959.
All of these programs ex-
cept: refugee resettlement are
likely to provoke opposition
from specific interest groups.
The regime, therefore, will
probably press hard to produce
early benefits from its
plans in order to secure ad-
ditional popular support.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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CURRENT INTELLIGENCE WEEKLY SUMMARY
DE GAULLE'S FRANCE
De Gaulle seems confident
he has successfully established
a broad pattern for a renaissance
in France's political, economic,
and social structure, and he now
is intent on instilling in both
countrymen and allies his sense
of France's "mission." The Fifth
Republic is less authoritarian
than anticipated a year ago, na-
tional unity has coalesced un-
der his leadership, and France's
international prestige is widen-
ing. Nevertheless, De Gaulle
has still to solve the problems
of Algeria and of political sta-
bility after his departure, and
his insistence on big-power in-
ternational status is threaten-
ing the Western alli-
ance,
Having achieved
his initial long-range
objective of overhaul-
ing France's political
institutions, De Gaulle
now is concentrating
on developing a spirit
of national harmony
based in part on an
appreciation of French
history and in part on
a profound social ev-
olution he hopes to
achieve. He is en-
couraged in this hope
by the rapidity with
which financial sta-
bility has been re-
gained, and by the outlook for
further economic expansion.
In the series of tours he
is making to all parts of France,
he seems to be trying to revive
in his countrymen his ideal im-
age of France as the flower of
centuries of Western civiliza-
tion. He combines praise and
admonition in stressing re-
peatedly that "France cannot be
herself without being great."
With surprising vigor he has
developed a warm personal ap-
proach in his appeal for na-
tional unity, which he cites as
a basic necessity for a solu-
tion to France's most urgent
problems.
De Gaulle's Political Role
De Gaulle's desire to be
supreme arbiter of a democratic
but politically stable France
explains both his strategy and
tactics in the past year. He
has maneuvered carefully from
the beginning to avoid becom-
ing a "prisoner" of the con-
servative-military alliance
which precipitated his return
to power. He included in his
provisional government Social-
ists, Popular Republicans, and
Radicals identified with the
old "party system," and refused
to outlaw the French Communist
party.
The new consti-
tution is a compro-
mise between the
authoritarian pres-
idential regime De
Gaulle once advo-
cated and the Fourth
Republic system in
which the National
Assembly was supreme.
He had hopes that its
provisions for pres-
idential arbitration
between the govern-
ment and parliament
would be facilitated
by the election of an
assembly fairly evenly
balanced between left
and right. However,
by maintaining personal control
of key problems, he has made the
best of the situation resulting
from the election in November of
an overwhelmingly rightist-
oriented assembly.
He warned the new deputies,
under threat of dissolving the
assembly, against attempting to
undermine the reforms decreed
by his provisional government
and encouraged a "leftist Gaul-
list" group which suspects the
long--range aims of the dominant
bloc of Independents and members
of the Union for the New Repub-
lic.
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Economic Resurgence
In the bold economic re-
form program instituted largely
on the advice of Finance Minis-
ter Pinay, De Gaulle has shown
willingness to rely on profes-
sional guidance in areas where
he lacks technical competence.
The currency reform, trade lib-
eralization, and austerity pro-
grams now in effect are basi-
cally the financial stabiliza-
tion measures long recommended
by the International Monetary
Fund for sound economic growth.
Their success to date owes much
to the fundamental progress in
reconstruction and plant modern-
ization begun under the Fourth
Republic, but De Gaulle's au-
thority was essential to in-
duce vested interests to accept
an end to subsidies, protected
markets, and uneconomic public
services.
Despite curtailment of so-
cial benefits and the reduced
purchasing power which the aus-
terity program imposed on the
working class, labor showed
great self-restraint in de-
ferring claims for long overdue
wage increases. The govern-
ment's increasingly optimistic
statements on the improving
foreign exchange situation,
however, and the definite signs
of economic recovery from the
slight 1958 recession have en-
couraged labor demands. Some
wage adjustments may have to be
made in the nationalized indus-
tries this year rather than in
1960, as the government had
hoped. Working-class discon-
tent may also be alleviated by
plans to improve educational
opportunities for children of
low-income families, and by
greatly expanded housing con-
struction.
De Gaulle and Algeria
De Gaulle probably never
envisaged an early solution to
the Algerian problem. He has
concentrated primarily on calm-
ing the atmosphere of the 13
May 1958 coup, and avoided
specific commitments. Accept-
ing the need for army support
to carry out any policy in Al-
geria, he agrees with the army
that genuine political, eco-
nomic, and social equality
should be granted to the Moslems
and that the privileged position
of the European settlers is in-
compatible with this goal. The
army now seems ready to obey
De Gaulle in any showdown
with the settlers, who are
indignant over the failure
to adopt a policy of com-
plete integration of Algeria
with France.
De Gaulle has left open a
decision on the ultimate rela-
tionship between Algeria and
the metropole, on the grounds
that the eventual political
solution can come only from the
Algerians themselves through
universal suffrage. In the
meantime, he is pressing the
economic organization of Al-
geria which will permit France
"to forge indissoluble bonds"
with the area. He insists that
only a thorough social and eco-
nomic evolution will save Al-
geria for France. "If this
evolution fails, even pacifica-
tion is completed, Algeria will
be quickly lost to us. Papa's
Algeria is dead."
Recent French military
successes have encouraged the
view in Paris that the victory
demanded by the army is in
sight. The French Government
seemm34ncreasingly,inclined to
view the outcome of the war, now
in its fifth. year, as depending
on tl}e active support of France's
allies for French policy. While
De Gaulle waits for'.the rebels
to accept a"peace of. the brave,"
however, his time may be running
out on the clock of internation-
al opinion.
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In any event, De Gaulle
The difficulties for the
Western Alliance anticipated
when De Gaulle came to power
wants a tripartite US-UK-French
arrangement to plan Western global
political and military strategy.
He wants a veto power for France
have been gradually emerging in
on its allies' use of
nuclear
recent months. De Gaulle rec-
weapons and remains determined
ognizes the necessity of the
to achieve
a nuclear-weapons
Western military alliance, but
capability
for France.
he i
sists th
t th
ill
f
n
e w
o
a
a
nation to fight for its ideals
The nuclear-weapons question
will deteriorate if its national
is becoming
an increasingly sharp
sovereignty is in any way im-
paired. He argues, moreover,
that NATO no longer corresponds
geographically to strategic real-
ities, and that the defense of
Europe cannot be separated from
that of Africa and the Middle
East.
One aspect of his thinking
in this regard may be a desire
to see France as the keystone
of a Eurafrican community large
and strong enough' to stand up
to the United States or the USSR.
As its president, De Gaulle has
so far successfully pre-empted
the decision-making functions for
the French Community. He presum-
ably hopes its institutions and
working patterns will be well
established by the time African
representatives push their claims
for a more important role.
While De Gaulle has taken
the position that France would
honor existing commitments to the
six-nation European community,
the Debre government has not
hesitated to hamper the Coal-
Steel Community High Authority,
and the tendency has been to en-
courage bilateral rapprochements
with France's larger Continental
neighbors. The French-German re-
lationship is the most noteworthy
example, but stronger Italian and
Spanish ties seem to be envisaged
also. If the reunification of
Germany were likely, De Gaulle
might revise his views on French-
German cooperation. His public
recognition of the Oder-Neisse
line against Bonn's wishes appears
designed to conciliate Poland,
where he spent some time after
World World I and toward which
the French have traditionally
been friendly.
SECRET
irritant in France's relations
with, its allies as a struggle
develops within the French Gov-
ernatent over an early choice be-
tween modernization of the armed
forces, including an expanded nu-
clear-weapon program, and con-
tinuation of the Algerian war.
In any event Paris seems deter-
mined to test a nuclear weapon,
probably by early 1960, regard-
less, of any Big Three agreement
on a, test ban.
De Gaulle and the Bloc
Despite his current firm
position on Berlin, De Gaulle
views East-West relations in a
long-range perspective which pro-
vides for France an "independent
role" between East and West. He
remarked cryptically last summer
that "France is in the Western
world, to which we belong with-
out having to confine ourselves
to it." He regards Communism as
a transient phenomenon, and re-
cently advanced the idea that as
time passes the Soviet Union will
become increasingly "European-
ized" as it becomes subject to
pressure from Communist China.
In the meantime he believes that
the West must be very firm in op-
posing Soviet threats--as on Ber-
lin--but always ready to talk.
He is undoubtedly sincere
in his recent proposal for a joint
East-West undertaking to assist
underdeveloped areas of the world,
but he also appears to regard it
as a clever propaganda device to
embarrass the USSR. In spite of
American opposition to such a pro-
posal, he will probably continue
insisting on its inclusion in any
summit agenda as another means of
demonstrating French independence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
India's success in increas-
ing agricultural production sub-
stantially during the past eight
years. has permitted a signif-
icant rise in food consumption
despite a rapidly expanding
population. Nevertheless, the
caloric intake for most Indians
is still low and their diet un-
balanced. A rising population
growth rate and demands for
higher living standards make
necessary even more rapid prog-
ress. New Delhi apparently has
decided to give agriculture'top
priority during the Third Five-
GOA
(PORT);
SECRET
Year Plan (1961-66) in an effort
to raise crop production by an
additional 45 percent.
The Natural :Setting
India has the soil, water,
climate, and labor to enable it
to double or triple agricultural
production. Over half of the
country's 811,000,000 acres are
cultivable, and much of the land
is capable of supporting ahighly
productive agriculture. Since
the climate is tropical or sub-
tropical, crops can be grown
PAKISTAN
a
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CURRENT INTELLIGENCE WEEKLY SUMMARY
throughout the years Most of
the country has over 30 inches
of rainfall a year--as much as
the American midwesto Over 80
percent of the rain falls, how-
ever, in less than four months,
-during the monsoon period. Al-
though India has one of the larg-
est irrigation systems in the
world, it utilizes only a small
part of its rainfall potential.
Agricultural yields are
among the lowest per acre in
the world, largely because of
poor farming methods. Farming
practices and agricultural im-
plements, although gradually
improving,, are still generally
the same as a hundreds of years
ago,, Despite the extent of
irrigation, much of the ir-
rigated land is not properly
prepared to make best use of
the water supplied. Seeds are
still poor, and most animal
manure is dried and burned
as fuel rather than used as
of the land is cultivated in
such small units that efficient
production is. dif f icult.
25X6
25X6
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CURRENT INTELLIGENCE WEEKLY StTIMARY
Problems Since Independence
Production of food grains--
the most important crops--in the
present area of India declined
slightly from the early 1920s
to shortly after partition in
1947. Since the population in
the same area increased from
248,100,000 to 356,900,000 be-
tween 1921 and 1951, there was
a steady decline in per capita
food supplies.
Partition of the subcon-
tinent increased India's agri-
cultural problems. In addition
to losing a valuable wheat-pro-
ducing area in the Punjab, most
GOA<
(PORT)
CEYLONl~
SECRET
INDIA: ESTIMATED MIDYEAR POPULATION
(MILLIONS)
390 r 428--~
of the best cotton- and jute-
producing lands went to Paki-
stan, while nearly all the cot-
ton and jute mills remained in
India. Since relations between
the two countries made''it
1. BHUTAN `'
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CURRENT INTELLIGENCE WEEKLY SUMMARY
politically impossible for New
Delhi to rely heavily on im-
ports from Pakistan and, since
Karachi planned to construct
mills to process its own cotton
and jute, India had to increase
rapidly the output of food-
grains, jute, and cotton.
India made little progress
for several years, however, ex-
cept in the case of jute, large-
ly because of unfavorable mon-
soons. During the years immedi-
ately following partition, New
Delhi was forced to devote a ma-
jor part of its energies to re-
juvenating its war-worn trans-
portation system, dealing with
the refugee problem, and absorb-
ing the former princely states.
During the late 1940s and
early 1950s,per capita produc-
tion of food grains stood at less
than 13 ounces--1,300 calories--
daily. Production of other foods
raised this to nearly 1,700 cal-
ories daily--at least 25 percent
below what is considered desir-
able, compelling the government
to use its foreign exchange re-
sources for food imports. The
unusually poor crop year of 1950-
51, when famine was averted only
by a $180,000,000 wheat loan
from the United States, made gov-
ernment leaders realize that a
major attack on agricultural
problems could no longer be de-
layed.
First Five-Year Plan (1951-56)
The First Five-Year Plan
(1951-56) placed major emphasis
on agriculture, which received
about 34 percent of the govern-
ment's economic development ex-
penditures. Irrigation was
planned for an additional 8,500,-
000 acres of land, over a million
acres were to be reclaimed, ag-
ricultural research was to be
expanded, and a start was to be
made on expanding fertilizer
production and distributing bet-
ter seeds. In addition, the
Community Development Program
and the National Extension Serv-
ice were organized to end the
iso]Lation of 550,000 villages
and supply modern agricultural
knowledge to the peasants.
New Delhi estimated that
the program would increase the
output of food grains 14 percent
by 1955-56--from an average har-
vest before the plan of 54,900,-
000 metric tons to 62,600,000
metric tons. Production of other
crops was also to increase 14
percent. While irrigation and
community development programs
were not completely fulfilled,
the agricultural production tar-
gets were reached largely because
of the adoption of better farm-
ing practices.
Actual production of food
grains in 1955-56 reached 66,300,-
000 tons, and production during
the two previous years--when
there were particularly good mon-
soons--was even higher. Part
of the increase recorded during
this period probably resulted
from better statistical coverage,
particularly in the former prince-
ly states, and actual production
during the base year may have
been as high as 57-59,000,000
tons, Nevertheless, food-grain
production increased by the 14
percent scheduled and may have
risen even more.
Production of other crops
also rose by approximately the
14 percent scheduled. Of the
major crops, only jute fell sub-
stantially short of its target;
cotton and oilseeds exceeded
their goals and sugar cane fell
somewhat short.
Second Five-Year Plan (1956-61)
Encouraged by the results
of the first plan--which ended
the stagnation of agriculture
and enabled New Delhi to reduce
food-grain imports from 4,800,-
000 tons in 1951 to 767,000 tons
in 1955--government leaders decided
that while agriculture would
continue to receive substantial
funds, the emphasis in the Second
Five-Year Plan (1956-61) could
safely be shifted to industrial
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CURRENT INTELLIGENCE WEEKLY SUMMARY
development. Food-grain pro-
duction was scheduled to increase
by 15 percent from 66,300,000
tons in 1955-56 to 76,200,000
tons in 1960-61, and production
of other crops was to increase
by 22 percent.
Early in the plan period,
however, the government became
increasingly concerned over in-
flationary dangers and recog-
nized that the population was
increasing more rapidly than
previously estimated. They
raised the target for the pro-
duction of food grains by 1960-
61 to 81,800,000 tons--23 per-
cent more than .1955-56--without,
however, allocating more funds
to agriculture.
Production during the first
year of the plan rose substan-
tially, but a severe drought
reduced production to 63,000,000
tons in 1957-58. The fact that
the country was still so depend-
ent on the monsoon apparently
surprised many Indians, and
plans were made to devote more
attention to agricultural needs
during the remaining years of
the second plan. These efforts
combined with a better than
average monsoon during 1958-59
to raise output to 74,200,000
tons. Thus, India is likely to
exceed the original goals of
the second plan and may even
reach the revised'.target.
Production of jute and tea
surpassed the 1960-61 plan goals
in 1958-59. Production of oil-
seeds is ahead of schedule, but
output of cotton and sugar cane
--which approached 1960-61 tar-
get levels in the early years
of the second plan--declined
somewhat this year.
Third Five-Year Plan (1961-66)
During the past 18 months,
New Delhi has come to realize
that the increase of nearly 30
percent in crop production since
1950-51 represents. only a be-
ginning toward meeting the coun-
try's needs. New Delhi now
SECRET
PRWIIJUCTION OF LECTED
AGRICULTURAL PRODUCTS
^ FIRST PLAN GOAL \ SECOND PLAN GOAL
-LT -1
OILSEEDS*
J~11LiIii'~JI
1937.39 48 49 50 51 52 53 54
YRLY AVG
260
220
180-
80=
1-_
1000
900-
6 00 1.
1937.39 48 49 50 51 52 53 54 55 56 51 58 59
YRL" AVG
I I
1937.39 48 49 50 51 52 53
YRLY AVG
I
'
I
I
I
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4we SECRET lw~
CURRENT INTELLIGENCE WEEKLY SUMMARY
intends to give greater emphasis
to agriculture during the Third
Five-Year Plan (1961-66) in or-
der to more than double its rate
of growth. The targets for 1965-
66 now being discussed by the
Planning Commission include 111,-
800,000 metric tons of food
grains, 1,470,000 tons of cot-
ton, 1,155, 000 tons of jute, 91,-
440,000 tons of sugar cane, and
9,144,000 tons of oilseeds. In
addition, New Delhi hopes to
increase by 50 to 100 percent
the output of such items as eggs,
milk, and fish--products needed
to provide a more balanced diet.
Outlook
India's chances of achiev-
ing such ambitious levels of
production depend on two major
factors other than normal weather
conditions. The first, and least
difficult, is the allocation of
sufficient resources to agricul-
ture. A sharp increase in funds
and personnel devoted to agri-
cultural research, irrigation,
land reclamation and water man-
agement and to the production
of chemical fertilizers, agri-
cultural implements, and high-
quality seeds will be necessary.
Most of these costs will be rupee
rather than foreign exchange
costs, so it is within New Delhi's
capacity to make the resources
available. Since investment in
agriculture yields a higher re-
turn than that in any other""ac-
tivity, such an allocation of
resources would also tend to
maximize economic growth.
The second and more diffi-
cult task is to organize the
effort to aid agriculture in such
a manner that the resources al-
located actually help'-the peas-
ant increase his production.
Disseminating agricultural knowl-
edge, improved seeds, chemical
fertilizers, and consolidating
the numerous scattered plots
cultivated by most peasants--
which average about seven acres
--will require substantial im-
provement in agricultural admin-
istration, particularly at the
local level, in view of the ap-
proximately 50,000,000 farmers
involved.
Even if New Delhi is able
to make considerable progress in
carrying out these tasks, there
will. still remain the problem
of providing the incentives nec-
essary to induce the peasants
to make greater efforts. At
present the peasant must pay
from 25 to 75 percent on money
he borrows from local moneylend-
ers for seed, fertilizer, or
other similar needs. Then, be-
cause he has little storage space,
he must sell his crop to the
local trader at harvest time--
when prices are low. Faced with
this situation, he often sees
little reason to increase pro-
duction when he receives little
benefit from his efforts.
New Delhi has already de-
cided to try to establish agri-
cultural cooperatives throughout
the country in the next three
years to provide credit, seed,
fertilizer, and agricultural im-
plements at prices the peasants
can afford. In addition, the
government is considering the
establishment of agricultural
price supports to provide as-
sured prices to farmers who are
willing to raise production.
Such a program would also re-
quire the construction of small
storage warehouses throughout
the country within the reach of
the peasants.
Despite numerous indications
that the government will allocate
the necessary resources to agri-
culture, it probably will not be
able to organize the necessary
effort to carry out its programs
on schedule. The establishment
of agricultural cooperatives,
in particular, is likely to take
Oloser : to 'ten years than three,.
The use of chemical fertilizer,,
which has quadrupled since 1951,
teems unlikely . to increase ten-
fold by 1966 as proposed.
Despite' some shortfalls,
howeveir, India should, be
able to step' up the rate of
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 June 1959
growth of its agricultural pro-
duction, and it should be
able to produce nearly 100,-
000,000 tons of food grains
by 1965-66. Such an increase
would represent a growth of
production about twice as rap-
id as that of population, thus
making possible a slow but
steady improvement in the
diet of the Indian people.
THE SOVIET CONSTRUCTION INDUSTRY
The Soviet Seven-Year Plan
(1959-65) for the construction
industry calls for a volume of
construction and installation
work equal to nearly 90 percent
of that carried out in the USSR
since 1917. Greater mechaniza-
tion--a topic of the current
party central committee plenum
--and related increases in
labor productivity are vital to
fulfillment of the program.
While gains in these fields
have been impressive in the
last ten years, plans for com-
missioning facilities in heavy
industry were consistently
underfulfilled during the Fifth
Five-Year Plan (1951-55) and
in the following years. Con-
tinuing shortfalls in meeting
schedules have demonstrated
that planning officials still
impose tasks on the construc-
tion industry which exceed its
recently strengthened capabili-
ties. More realistic schedul-
ing of project completion dates
and increased efficiency are
necessary to avoid dispropor-:.
tions in the economy which
could jeopardize fulfillment
of major 1965 production goals
in other sectors of the economy.
Investment Patterns
Capital investment in the
construction and construction-
materials industries over the
next seven years is to amount
to 110-112 billion rubles--an
increase of about 80 percent
above the investment made dur-
ing 1,952-58, The annual plan
for 1.959 calls for 14.3 billion
rubles of capital investments
in the two industries, close to
the average annual investment
of 15.9 billion rubles required
to fulfill the Seven-Year Plan..
The pattern seems to have been
one of high percentage increases
prior to the Seven-Year Plan,
with the rates of increase fall-
ing off in the early years of
the plan, and a nearly constant
volume of investment in the
later.. years? A similar pat-
tern of investment growth ap-
parently is scheduled for the
cement industry.
In contrast to the nation-
al pattern of investment growth
in the construction and con-
struction materials. industries,
regional patterns evidently are
subject to a substantially dif-
ferent time sequence. Capital
investments for these indus-
tries in the Karaganda Economic
Region reportedly are "incor-
rectly distributed" under the
Seve:ri-Year Plan, with only 30
percent of the total allocated
for the first three years.
Moreover, Gosplan RSFSR reduced
the investment allocation for
development of the construction
industry in Krasnoyarsk Kray by
30 percent in 1959 compared with
1958, despite the complaint that
such investments should be ac-
celerated in the first years of
the plan in order to provide
the base for fulfillment of the
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ate SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
region's accelerated construc-
tion program.
Such complaints indicate
that sufficient provision is
not being made for the neces-
sary early development of the
construction base in at least
some of the eastern regions of
the USSR. Relatively heavy in-
vestment in the western areas,
where economic returns are
quicker, may once again be slow-
ing the program for rapid de-
velopment of the eastern areas,
Productivity -_Mechanization
During the Seven-Year Plan,
labor productivity in the con-
struction industry is to be in-
creased by 60-65 percent--16-17
percent by greater use of pre-
cast concrete compo-
nents, 21-23 percent
by improved technol-
ogy, and organization
of construction, and
23-25 percent by in-
creased mechaniza.;-
tion of construction.
Heavy restrictions on
use of structural
steel generally limit
the choice to con-
crete poured in place
or precast concrete
components. The lat-
ter saves on labor,
and by 1965 use of pre-
cast components is to
be expanded to about
200 cubic meters per
million rubles of con-
struction work, com-
pared with about 113
cubic meters in 1957.
Technology and
organization can be
improved by reducing
idle time of workers
and by organizing most
of them into teams of
carpenters, concrete
workers, bricklayers,
and plasterers. Im-
provement of the wage
structure in favor of
construction workers
in recent years should continue
to ease the problem of labor
turnover in construction and
thereby provide some gains in
productivity.
Major attention is to be
centered on the drive to in-
crease mechanization. Net an-
nual additions to construction
equipment from 1951 to 1957
averaged nearly 2,700 excavators,
3,000 bulldozers, and 4,300
mobile cranes. During the Seven-
Year Plan net annual additions
are to average about 3,700 ex-
cavators, more than 5,000 bull-
dozers, and about 3,000 mobile
cranes. The most glaring defi-
ciencies in basic equipment--
the absence of self-powered
scrapers and graders and a short-
age of small excavators--are to
SOVIET CONSTRUCTION EQUIPMENT PARK
(END-OF-YEAR DATA
Excavators
Scrapers
Bulldozers
Mobile Cranes
1950
5,870
3,000
3,000
5,642
1955
17,471
9,290
16, 100
28, 900
1958
30, 000
not available
28, 000
39, 000
1965
56, 000
not available
65,000
60,000
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1999 1909
z 171 BY INCREASED USE OF PRECAST CONCRETE
23% BY IMPROVED TECHNOLOGY S ORGANIZATION
2325% DY INCREASED MECHANIZATION
60.65% TOTAL INCREASE (ANNUAL OUTPUT)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 June 1959
be eased during the plan
period.
The USSR has succeeded in
recent years in substantially
raising the level of mechaniza-
tion in many construction oper-
ations, although the planned
levels have generally been un-
derfulfilled. One of the most
troublesome problems has been
the low level of mechanization
of loading and unloading work,
21 percent of which was still
performed entirely by hand in
1957. The Seven-Year Plan would
reduce such hand work to 8-10
percent ia.1965. Levels of
complete mechanization in other
operations are to be raised
considerably. In addition,
idle time of equipment is to be
reduced, and utilization of con-
struction equipment is to be
raised by 25-30 percent.
The plan for raising labor
productivity is considerably
more stringent when viewed in
conjunction with the planned re-
duction in the workday and work-
week. Labor productivity in
term, of hourly output must in-
crease 80-85 percent in order
to raise productivity in terms
of annual output by the planned
60-65 percent.
The regime plans to achieve
construction goals with approx-
imately the same number of
total workers and employees in
construction in 1965 as in 1958.
The number of workers directly
engaged in construction work is
to be increased by 10-12 per-
cent, however, compared with a
55-percent increase during the
1951-?57 period.
Successes and Shortcomings
Reflecting the consider-
able success in raising the
levels of mechanization and
labor productivity in recent
years, the construction industry
as a whole became a profitable
operation in 1955. Actual
construction costs have been
Ioivlld ISEY,LCIaP4C'ITY LN SElEC7ED HEAVY iND SST
CRUDE FINISHED
STfft TFEI
INEWN
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ELECTRIC POWER CHEMICAL
-IONS INDUSTRY
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CURRENT INTELLIGENCE WEEKLY SUMMARY
brought more into line with
planned costs in recent years,
although only slightly so for
housing construction. The ag-
gregate volumes of construc-
tion work planned for both 1957
and 1958 were overfulfilled.
Despite these favorable
indications of increased capa-
bilities on the part of the
construction industry, itself,
however, construction schedul-
ing remains a substantial prob-
lem. Plans for commissioning
additional facilities have been
underfulfilled year after year.
Underfulfillment occurred in
several important heavy indus-
tries in 1958. The 1958 plan
for new capacity in the cement
industry was under-
fulfilled by 40 per-
cent, the coal in-
dustry by 29 percent,
the chemical indus-
try by 67 percent,
and thermal electric
power industry by 23
percent. In the fer-
rous metallurgical
industry, pig iron ca-
pacity was overful-
filled; crude and
finished steel were
underfulfilled. The
plan for new capac-
ity in iron ore
mining was underful-
filled by about 9
percent, but this
was a substantial
improvement over the
30-percent shortfall
from the more ambi-
tious plan of the
previous year.
by the resources made available
has resulted in the practice
of dispersing investments among
too many projects and in pro-
longed periods of construction.
More efficient organization of
construction activity cannot
by itself solve this problem.
]Housing Program Impact
A sizable part of the short-
falls in meeting 1958 schedules
for new heavy-industry capacity
must have resulted from the pres-
sure put on construction re-
sources by the substantial over-
fulfillment of the housing con-
struction program that year.
Khrushchev's commitment to bet-
ter housing is causing mounting
- APPROXIMATE PLANS -
based on statements on
seven-year plan for housing
(1959-65)
pressure on available construc-
tion resources--pressure which
will continue at least through
1960 if present plans are main-
tained. Because of the lack of
realism in the planned cost re-
ductions in housing construc-
tion, if housing plans are to
be fulfilled, the volume of con-
struction in state housing as
a percent of the total volume
of state construction work in
the USSR will. have to be 32
percent in 1957, 35 percent in
1958, 38 percent in 1959,
The basic cause of short-
falls in meeting construction
schedules in past years is that
Soviet planning authorities
have consistently underestimated
the volume of capital investment
and of construction resources
required, and have given the
construction industry too low
a priority among the various
competitors for resources. The
planning of construction pro-
grams much larger than warranted
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25 July 1959
and as much as 42 percent in
1960.
The present housing pro-
gram is a keystone in the ef-
fort to improve the lot of the
consumer. The original Sixth
Five-Year Plan (1956-1960) for
state-built housing was subse-
quently reaffirmed in a special
housing decree in July 1957,
which also placed increased
emphasis on private housing.
This reaffirmation and exten-
sion took place despite the
fact that the Sixth Five-Year
Plan had to be dropped at
about this time. Under the
new Seven-Year Plan, housing
construction apparently is to
level off at the higher plateau
to be reached in 1960. Urban
housing will increase by an
average of 8 percent per year.
Even at such a high rate, how-
ever, the housing space per
capita will still be far below
the standards of advanced West-
ern countries in 1965.
Recent Measures
The party has issued sever-
al decrees recently to ease the
pressure on capital resources.
In October 1958 a decree was is-
sued to accomplish a drastic
cutback in construction of ad-
ministrative buildings, thea-
ters, clubs, and the like. There
had been some diversion of in-
vestments from heavy industrial
construction and housing into
less essential local needs; this
decree was expected to give the
central government greater con-
trol over the use of investment
funds.
A more recent decree abol-
ished the Agricultural Bank,
the Bank for Financing Communal
and Housing Construction, and
the communal banks, and merged
their functions with the State
Bank and the Industrial Bank
(the latter now being called
"Stroybank"--the All-Union Bank
for Financing Capital Invest-
ments). A third decree was
aimed, at placing greater empha-
sis on increasing output by
means of intensifying the use
of existing capacity and by ex--
panding existing enterprises
and less emphasis on more cost-
ly new construction.
Some temporary easing of
the pressure on construction re-
sources was achieved in 1958 by
concentrating investments on
the most important projects and
those nearing completion. Be-
cause of such measures, the
volume of unfinished construc-
tion (i.e., the volume of work
performed on projects not yet
in operation) grew by only 3
billion rubles in 1958, compared
with increases of about 10 bil--
lion rubles in 1956 and 1957.
Soviet planning authorities
have decried the growing volume
of unfinished construction but
have consistently overestimated
the extent to which the volume
of such construction could fea-
sibly be cut back and to which
this would ease the pressure on
construction resources. The.
past few years have shown that
construction schedules for heavy
industry and housing are more
likely to be met by allocating
a greater volume of construction
resources to these ends than
by cutting back the volume of
unfinished construction.
In general, the success of
the Seven-Year Plan for construc-
tion still depends--particularly
in 1959 and 1960--on the estab-
lishment of a better rela-
tionship between plans for the
volume of construction work,
schedules for completion of con-
struction projects, and the re-
sources which are to be made
available to the construction
industry. Pre-
pared by ORR
* * *
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