CURRENT INTELLIGENCE WEEKLY SUMMARY

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A002600050001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 46
• Document Creation Date: December 20, 2016
• Document Release Date: June 21, 2005
• Sequence Number: 1
• Publication Date: October 27, 1999
• Content Type: SUMMARY

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CONFIDENTIAL
!Q6Cn
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO.JEA #
OCI NO.0404/60
11 February 1960
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
CONFIDENTIAL
r. T
4-
I _ Go
C1 DECLASSIFIED
State Department review completed rN~ CLASS. CHANGED TO: TS
NEXT REVIEW DATE:
AUTH: HR 70-2
DATE: s91 REVIEWER:
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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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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
OF IMMEDIATE INTEREST
MOSCOW MEETING OF BLOC LEADERS . . . . . . . . . . . . . . Page 1
The recent Moscow meeting of bloc leaders provided
the occasion for a review of political strategy in prepara-
tion for the forthcoming East-West negotiations and an
official display of unity on the eve of Khrushchev's South
Asian tour. The bloc formally endorsed the basic Soviet
positions on the issues which Khrushchev has listed for
discussion at the summit. Hints of new moves were con-
tained in the communiqud and in the declaration issued
after the Warsaw Pact meeting. The private discussions
during and after the formal conferences probably dealt
primarily with the German problem, which was stressed in
the bloc's first joint commitment to sign a separate peace
treaty with East Germany if negotiations for a treaty with
both German states bog down. 25X1
COMMUNIST CHINA'S MISGIVINGS ON SOVIET DETENTE TACTICS . . Page 4
Peiping's continuing misgivings about Moscow's de-
tente tactics have again been expressed, this time by
the senior Chinese Communist observer at the Warsaw Pact
conference on 4 February. Alternate poliburo member
Kang Sheng described the United States as the "principal
enemy of world peace" whose "peace gestures" were merely
a disguise for "war preparations." Kang insisted on
China's right to participate in disarmament and "all
other" international agreements. Although Peiping has
strong reservations about the Soviet detente policy to-
ward the United States, the Chinese are in full agreement
with the USSR on the desirability of a conciliatory atti-
tude toward the Asian neutrals. 25X1
MIDDLE EAST HIGHLIGHTS . . . . . . . . . . . . . . . . Page 5
The Qasim regime in Iraq has blocked, at least tem-
porarily, the legalization of the orthodox Iraqi Communist
party, in favor of a Communist splinter group. Two non-
Communist parties also have been given leave to function.
UAR President Nasir plans to visit Syria again in another
demonstration of his concern for the problems of the UAR's
northern region. The Israeli-Syrian border meanwhile has
quieted. Dissensions within the Sudanese Government are
continuing, and acute disappointment has developed in
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11 February 1960
PART I (continued)
Khartoum over the failure so far to obtain a substantial
World Bank loan. Cabinet shifts in Libya apparently
presage still stronger pressure for more US aid, free
from controls on its expenditure. 25X1
DE GAULLE AND THE ALGERIAN PROBLEM . . . . . . . . . . . . Page 8
The recent cabinet shake-up has strengthened De
Gaulle's domestic position, but the crackdown'on iadivid-
ua1 officers, and the order on 10 February to dissolve,-soome
of the mil;i:tary ui its implicated .in .the Algiers insur-
rection will aggravate right-wing opposition and risk
further military insubordination. The scheduling of
regional elections in Algeria this spring will probably
be interpreted as another step toward self-determination,
with or without the FLN rebels. In Algiers, collapse of
the insurrection has left anti-Gaullist sentiment still nrV4
strong
nues we disposed toward m, but feels that the war
must continue until a "propitious moment" for negotiations
arrives. One senior FLN leader believes De Gaulle pri-
vately favors independence for Algeria, with the retention
of close economic and cultural ties with France.
NOTES AND COMMENTS
MIKOYAN IN CUBA . . . . . . . . . . . . . . . . . . . Page 1
Mikoyan's varied moves in Cuba, especially the large
new sugar purchase, seem designed to encourage the Cuban
Government's present attitude toward the United States.
The sugar sale, although below world prices, has reduced
Cuba's carry-over, improved its position on the world
market, and may be the first of a series of barter trans-
actions; the USSR has indicated it will increase sugar
imports during 1960. The Castro government is also en-
couraging other ties with the Communist bloc, but there
are some signs of concern even among Castro's supporters
over Cuba's rapid moves toward closer Soviet relations.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
PART II (continued)
USSR RELEASES ADDITIONAL 1959 CENSUS FIGURES . . . . . . . Page 3
Figures just released on the USSR's January 1959 pop-
ulation census, the first since 1939, show that the number
of people now in the working-age bracket (16-59) is some
2,000,000 less than had been thought. Of the total popu-
lation in this age group--125,600,000--a higher percentage
than previously estimated is apparently already working,
and the extent to which such elements as teenagers and
housewives can augment the labor force is correspondingly
smaller. Khrushchev's program to cut the armed forces
thus will be a major contribution to the planned expansion
of the labor force. That portion of the report-dealing
with education shows that the USSR is still considerably
behind the United States in the numbers of the adult pop-
ulation having an elementary education and having college
training.
USSR PROGRAM OF BENEFITS FOR RELEASED SERVICEMEN . .
Soviet officers and career enlisted men discharged
under the military manpower cuts announced by Khrushchev
at the mid-January Supreme Soviet meeting are to receive
a number of special benefits in the form of housing,
bonuses, and education. The Soviet "GI bill" of 27 Jan-
uary which calls for these benefits also requires local
officials to provide suitable jobs within one month for
all categories of released personnel. The promulgation
of this program indicates that the USSR intends to pro-
ceed as scheduled with its announced demobilization.
SATELLITES INTEGRATE POWER FACILITIES TO PREVENT
SHORTAGES . . . . . . . . . . . . . . . . . . . . . . . . Page 5
The European satellites continue to experience winter
power shortages which. sometimes shut down factories, and
they face more serious shortages of power over the long
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
PART II (continued)
run which could hamper economic growth. To prevent this,
an integrated Eastern European power network is being
build under the aegis of the Council for Mutual Economic 25X1
Assistance.
EAST GERMANS CONTINUE DRIVE FOR RECOGNITION . . . . . . . Page 6
East Germany and the Soviet Union have undertaken a
number of steps which, although of minor individual signif-
icance, cumulatively promise appreciable progress toward
acceptance by nonbloc countries of East German de facto
"sovereignty." Representatives of the Ulbricht regime are
increasing their nonbloc travel, and the USSR has renewed
efforts to induce the Western powers to accept travel doc-
umentation implying recognition of East Germany. 125X1
CONTINUED EXECUTIONS IN HUNGARY . . . . . . . . . . . . . Page 8
During the past year and particularly since October,
the Kadar regime in Hungary has been holding secret trials
or re-trials for alleged participants in the 1956 revolt,
including in some cases youths of 18 or less, some of whom
have been detained from one to three years. Unconfirmed
reports state there have been 150-200 executions, and
evidence suggests the toll may be even higher.
NORTH VIETNAM'S RELATIONS WITH MOSCOW AND PEIPING . . . . Page 9
The close association between the North Vietnamese
and Chinese Communist delegations at the recent Warsaw
Pact conference in Moscow, and the fact that neither
attended the earlier agricultural conference, suggest
North Vietnam's acceptance of Communist China's guidance
POLITICAL PROSPECTS IN BURMA . . . . . . . . . . . . . . . Page 10
U Nu's overwhelming electoral victory returns Burma
from military rule to the one-party dominance typical in
the country since independence. The opposition party of
Nu's former colleagues is expected to win only about 30 of
250 parliamentary seats Arid the Communist-dominated Nation-
al United Front an inconsequential handful. Nu promises
to continue General Ne Win's domestic and foreign policies.
Should he fail, the army, which has proved itself capable
of effective administration, may again take over.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
PART II (continued)
ROUND-TABLE CONFERENCE ON BELGIAN CONGO . . . ... . . . . Page 11
Congo nationalists and Belgian authorities have
reached tentative agreement on the structure of the inde-
pendent Congo state to be established on 30 June, but
they still differ on timing of the transfer of responsi-
bility for such functions as defense and foreign affairs.
Belgian authorities are plagued with threats of secession
from the Congo by European settler and African groups.
Soviet bloc representatives reportedly have already made
a number of offers of economic assistance to an independ-
MOROCCO . . . . . . . . . . . . . . . . . . . . . . . . . Page 12
Moroccan relations with the Middle East may become
somewhat closer as a result of King Mohamed V's recent
trip to the UAR, Saudi Arabia, Jordan, Kuwait, Iraq, and
Lebanon. The most notable incident of the tour was Iraqi
Premier Qasim's gift of three piston fighter-bombers.
Now back in Morocco, the King may move cautiously to re-
organize the Ibrahim government. 25X1
CYPRUS INDEPENDENCE FURTHER POSTPONED . . . . . . . . . . Page 13
Following a temporary breakdown of negotiations in
Nicosia between British and Cypriot leaders, London on 8
February announced indefinite postponement of independence
for Cyprus beyond the latest target date of 19 March.
The major stumbling block continues to be the size of the
two military bases to remain under British sovereignty
after independence. The Turkish Cypriot leader, Kuchuk,
however, on 11 February expressed renewed optimism for
an early settlement. 25X1
EFFECTS OF MACMILLAN'S AFRICAN TOUR . . . . . . . . . . Page 14
Prime Minister Macmillan's statements during his
African tour which ended on 5 February suggest he is
leaning toward greater consideration of the Africans'
aspirations. The prime minister of Southern Rhodesia
has already threatened to secede from the Federation of
Rhodesia and Nyasaland if London accords internal self-
rule to the Africans in Nyasaland and Northern Rhodesia.
Macmillan's endorsement of the Federation nevertheless
left Africans dissatisfied. His sharp criticism of
apartheid in South Africa. may strengthen sentiment within
the ruling Nationalist party there for withdrawal from
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
PART II (continued)
BRITAIN TO INCREASE DEFENSE SPENDING . . . . . . . . . . . Page 15
The annual British white paper on defense, due later
this month, is expected to upgrade the emphasis on con-
ventional forces to parity with nuclear weapons and to
call for increased defense expenditures of about 10 per-
cent over last year's $4.2 billion. It would appear that
priority is being given to modern equipment for mobile
forces which can be quickly dispatched to trouble spots.
in the Far East, Middle East, and Africa, rather than to
correcting deficiencies in Britain's NATO contribution.
UNITED NATIONS GENERAL ASSEMBLY PRESIDENTIAL CANDIDATES Page 16
Delay in reaching agreement on a Western candidate
for president of the 15th UN General Assembly has probably
enhanced the prospects for the election of Czech Deputy
Foreign Minister Jiri Nosek. By common consent, the pres-
idency is to go to a European this year, and Federick
Boland of Ireland now has emerged as the favored Western
figure. Nosek's early campaign, his personal popularity
at the UN, and the fact that Eastern Europe has never
held the presidency, however, are strong points favoring
his candidacy. Although the election will not take place
until 13 September, the Soviet bloc's drive to obtain the
office has created an unprecedented amount of politicking
25X1
at this early date.
F_ I
POLITICAL UNCERTAINTY IN THE BENELUX COUNTRIES .
. Page 17
The three moderately conservative Benelux governments,
all formed in the last year and a half during the general
trend to the right in Western Europe, face continuing par-
liamentary instability which makes it hard for them to
deal with politically delicate problems like defense. The
more progressive elements are growing restive and threaten-
ing to make common cause with the opposition Socialist
parties, which have been regaining their strength and
prestige. The Belgian and Dutch coalitions could collapse
at any time.
PATTERNS AND PERSPECTIVES
URUGUAY'S FIRST YEAR UNDER CONSERVATIVE RULE . . . . . . . Page 1
Uruguay during the past year has suffered economic
strains and social unrest. Most of these strains were
present to some degree last March when the conservative,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
PART III (continued)
agrarian-oriented National party took office after 90
years of rule by the Liberal, urban-oriented Colorado
party. The new government, trying to cope with the eco-
nomic decline, has initiated a program which it hopes will
correct Uruguay's critical trade imbalance. It hopes this
will place it in a better position to obtain US financial
assistance, which it is expected to request this spring.
Uruguay has been dependent to a greater degree than any
other Latin American country on Soviet bloc trade, which
in 1959 may have amounted to a fifth of its total trade.
ECONOMIC COOPERATION WITHIN THE SOVIET BLOC . .
necessary drains on the Soviet economy, promote political
and economic cohesion in the bloc, and support the bloc's
program of economic penetration of underdeveloped countries.
. Page 4
The Soviet bloc's Council for Mutual Economic Assist-
ance (CEMA), after almost a decade of comparative inactiv-
ity, has been exerting itself since early 1958 to promote
closer economic cooperation among the European satellites.
The impetus came largely from Khrushchev's sharp criticism
in April 1958 of CEMA's inadequacies as shown by the trends
toward duplication in satellite industrial development. The
USSR is pushing the current effort in order to reduce un-
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11 February 1960
OF IMMEDIATE INTEREST
The meeting of bloc lead-
ers on 4 February in Moscow
provided the occasion for a re-
view of political strategy in
preparation for the forthcoming
East-West negotiations and an
official display of unity on
the eve of Khrushchev's depar-
ture for a three-week tour of
South Asia beginning on 10 Feb-
ruary. The meeting formally
endorsed basic Soviet positions
on Khrushchev's agenda for the
summit--disarmament, Germany
and Berlin, nuclear test cessa-
tion, and general East-West re-
lations. Using these four is-
sues as a basic format, the
leaders stopped short of an-
nouncing any new moves such as
a redeployment of Soviet troops
from Eastern Europe or reduc-
tion of satellite armed forces.
Both the declaration is-
sued by the meeting and its
final communique contained in-
dications, however, that such
new moves are contemplated
prior to the disarmament talks
on 15 March and the summit meet-
ing in May. The declaration
stated that in "present condi-
tions there is no need Of big
armies and military bases on
foreign soil," and the com-
munique referred to "further
action aimed at strengthening
and developing a relaxation of
international tension."
The bloc conference was
probably the prelude for re-
newed activity on the question
of a belt of nuclear-free zones
in Europe. The declaration re-
ferred to such a scheme in con-
nection with the proposal for
a nonaggression pact between
NATO and the Warsaw Pact. A
conference of Scandinavian Com-
munist parties in Oslo on 30-31
January had "demanded that the
territory of the northern coun-
tries be proclaimed a zone free
of rocket and atomic weapons."
The establishment of a simi-
lar zone in the Balkan-Adriatic
area was stressed by Khrushchev
in his message to a conference
of Balkan and Adriatic youths
held in Bucharest just prior
to the Warsaw Pact meeting. It
is likely that in his talks with
Yugoslavia politburo member
Vukmanovic-Tempo, Khrushchev
sought active support from Bel-
grade on this proposal.
Further evidence of Soviet
presummit moves may be con-
tained in Khrushchev's speech,
which has not yet been pub-
lished.
Germany
The German question appar-
ently played a major role in
the private talks between Khru-
shchev and bloc leaders, as well
as in the formal deliberations.
According to the declaration,
the bloc representatives reaf-
firmed their determination to
"liquidate the remnants of World
War II" by signing a German peace
treaty. The declaration also
provided for the first time a
Joint bloc commitment to con-
clude a separate peace treaty
with East Germany if efforts to
sign a treaty with both German
states bog down.
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11 February 1960
A communique on private
discussions between Khrushchev
and East German leaders on 5
February said these talks cov-
ered "future efforts of the
USSR and East Germany with re-
spect to the earliest conclusion
of a peace treaty and regular
izing the abnormal situation in
West Berlin." The East German
delegation is reported to have
included legal experts from the
Foreign Ministry, which lends
.some substance to other reports
that the actual text of a sepa-
rate peace treaty may have been
gone over during the conference.
The heavy emphasis on peace
treaty discussions at the sum-
mit was also indicated in East
German party boss Ulbricht's
press interview on 7 February
before leaving Moscow, in which
he voiced expectations that the
summit conference,would "set up
a four-power commission to pre-
pare the text of the treaty."
In September 1958, East Ger-
many proposed a similar com-
mission restricted to peace
treaty negotiations, together
with simultaneous all-German
talks. Moscow subsequently
endorsed the East German move
in notes to the Western powers
and Bonn.
Khrushchev'again~stressed
the peace treaty issue when he
remarked at a reception on 8
February for Italian President
Gronchi that "one must acknowl-
edge the changes which occurred
after the Second World War,
settle them, sign a peace treaty
with Germany, and thus solve
the Berlin problem."
Moscow is probably also
seeking to gain support out-
side the bloc for a separate
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peace settlement. In his talk
with the West German ambassador
on 18 January, Khrushchev hinted
that the signatories of a sep-
arate treaty might not be lim-
ited to the bloc and mentioned
Yugoslavia in this connection.
Since this discussion came only
two days after Khrushchev's
conversations with Vukmanovic-
Tempo, the Soviet premier may
have raised this question with
him.
Khrushchev's Asian Trip
Khrushchev on 10 February
started his visit to'India,
Burma, Indonesia, and Afganistan.
The journey, arranged immedi-
ately after Moscow had obtained
a Western commitment to a sum-
mit conference, forms an im-
portant part of Khrushchev's
presummit. diplomacy. The
meeting of the bloc leaders
"at the summit" was probably in-
tended to parallel the Western
summit meeting last December
at the end of President Eisen-
hower's 11-nation trip. Khru-
shchev probably feels that his
tour is necessary to offset the
gains made by the President and
to strengthen his own position
at the East-West negotiations
by demonstrating some support
among neutralist countries for
the Soviet position.
Khrushchev will probably
point to the recent announce-
ment of a reduction in the armed
forces as evidence that the
USSR has already moved to im-
plement its proposals for gen-
eral disarmament. He is likely
to emphasize the benefits which
would flow from monetary sav-
ings achieved by universal dis-
armament.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
KHRUSHCHEV'S
TRAVELS
6HANISTAN
2 FEBA Rf
MR
4Ki5 r>
INDIA
11-16 FEBRUARY
In India, Khrushchev will
probably also concentrate on
the issue of a treaty for sus-
pension of nuclear tests, and take
pains to identify the Soviet
position with the 21 November
resolution,in the United Na-
tions calling for the nuclear
powers "to continue their
voluntary suspension of tests"
--a resolution sponsored by
India and other Afro-Asian
countries.
The Soviet premier will al-
so be seeking to refurbish the
tarnished Asian image of Com-
munism that has resulted from
Chinese pressure on India and
Indonesia.
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PART I OF IMMEDIATE INTEREST
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
COMMUNIST CHINA'S MISGIVINGS ON SOVIET DETENTE TACTICS
Peiping's continuing mis-
givings about Moscow's detente
tactics have again been expressed,-
this'. time, by the: senior Chi-
nese Communist observer at the
Warsaw Pact conference on 4 Feb-
ruary. Politburo alternate mem-
ber Kang Sheng underscored Pei-
ping's conviction that fulfill-
ment of Chinese objectives re
quires continued tension with
the United States and that an
improvement in US-Soviet rela-
tions correspondingly reduces
Moscow's support for these ob-
jectives. No bloc country ex-
cept China has broadcast the
speech, the sharpest Communist
condemnation of the United States
in recent months.
Kang's speech reflects Pei-
ping's belief that an atmosphere
of improved East-West relations
can only impede its effort 'to
reduce American influence in the
Far East, regain Taiwan, and
spur internal development with
the threat of "American war prep-
arations." In Stalinist tones,
the Chinese, who recently de.-
scribed Stalin as "an uncompro-
mising enemy of imperialism,"
sought to justify Peiping's ob-
jections to a detente by warn-
ing that the United States was
an implacable foe, bent on "dis-
membering the socialist camp."
Even American "peace gestures"
were only a disguise for "war
preparations," Kang charged.
This harsh attack contrasts with
Moscow's relatively moderate
propaganda.
Kang also indicated his
regime's apprehension lest the
progress of the "anticolonial
struggle" be retarded by less
obvious Soviet support during'
the period of detente. Peiping
views unrest in colonial or
underdeveloped areas as a valu-
able means of sapping "imperial-
ist" strength and probably pre-
fers a much more active encour-
agement to insurrection. In ad-
dition, the Chinese are eager to
increase prospects for eventual
recognition of their regime by
new governments through provi^
sion of strong public support
for any "anticolonial" revolu-
tionary movement.
It is clear from Kang's
speech and Peiping's recent ac-
tions that,where Asian neutrals
are concerned,the Chinese are
in full agreement with the USSR
on the desirability of a concili-
tory posture. Peiping has played
up its border agreement with Bur-
ma with an eye to the Sino-In-
dian border dispute.
Moreover, China, apparently
reconciled to its failure to
deter Djakarta from discrimina-
tory measures against Chinese
traders, has called off its prop-
aganda campaign against Indo-
nesia. Kang conceded the like-
lihood of a few more "ups and
downs" in relations with Djakarta
but offered the recently con-
cluded Sino-Indonesian citizen-
ship treaty as proof of China's
"sincerity" in abiding by the
five principles of peaceful co-
existence.
Bang repeated Peiping's
pro forma endorsement of Soviet
troop cuts, but his emphasis on
American "encirclement" suggests
that Communist China does not
intend to follow suit. Kang
also repeated Foreign Minister
Chen Yi's statement that no
disarmament agreement would
bind China unless its repre-
sentatives participated in the
negotiations and signed the
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11 February 1960
final agreement. Kang, however,
extended the matter of Chinese
participation to include "all
other" international agreements.
Peiping, aware that it will not
soon be included in negotiations,
-hopes to make clear that it
will not be represented by
Moscow and cannot be indefi-
nitely excluded from kajor 'in-
ternational meetings.
Iraq
Three Iraqi political par-
ties presumably have attained
legality this week. Following
the required 30-day waiting
period in which the Interior
Ministry can interpose objec-
tions to a party's application
for legal status, the socialis-
tic National Democratic party,
(NDP), the United Democratic
party of Kurdistan (UDPK), and
the splinter Communist faction
led by Daud Sayigh received im-
plicit recognition. Parties do
not attain full legal status un-
til their programs have been
published in the official ga-
zette.
The orthodox Communist
party, however, was turned down.,
probably on Qasim's orders, but
ostensibly because phraseology
in its application troubled the
authorities. The group immedi-
ately resubmitted its bid for
recognition, omitting from its
description of the party the
word "revolutionary," which now
is apparently pre-empted by
Qasim to describe his own re-
gime--and describing Marxism-
Leninism not as a "dogma" but
as a "scientific theory" guiding
the party. At the same time,the
party press has attacked Inte-
rior Minister Yahya for partial-
ity toward the Sayigh group,
which it claims is far less qual-
ified for recognition.
The orthodox Communists now
may have to wait an additional 30
days for the ministry to accept
or again reject them, and they
appear fearful that they may not
be recognized at all. Qasim by
this maneuver would seem to be
trying to aid the faction led by
Sayigh, who has a long record of
deviation from the party and
recently has been preaching an
"Arab nationalist" brand of Com-
munism closer to Qasim's apparent
view of what Iraqi Communism
should be.
Sayigh's splinter group,
despite the withdrawal of several
founding members, has called for
a "national front," and report-
,edly has reached an agreement
for cooperation with the UPDK.
However, the UPDK is said to be
willing to form an alliance with
any Communist group that attains
legal status.
If the orthodox Communists
eventually are denied a license,
they may attempt to take over
the Sayigh faction, which has
little organization or following.
In any cage, the Iraqi Communists
cannot yet be considered serf,
ously weakened.
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11 February 1960
Nasir has planned to make
a two-week visit to the UAR's
northern region, beginning this
week end, to take part in the
celebrations of the second anni-
versary of the Syrian-Egyptian
union on 21 February. Besides
giving the usual public pep,
talks, Nasir may announce the
formation of a new cabinet and
parliament, although he was re-
cently reported undecided on the
timing of such a move.
There is some doubt as to
whether Nasir will retain the
cumbersome system of one central
UAR. cabinet and two separate re-
gional cabinets. In any case,
he is expected to tailor his
appointments to suit the Syrians
as much as possible in order to
counteract their complaints of
Egyptian preponderance in the
government. The Syrians he names
will probably be largely repre-
sentative of the more conserva-
tive political elements, because
most Baathists and all Commu-
nists are now anathema to Nasir.
Nasir probably will also
use all his prestige and per-
suasiveness to back up the ef-
forts made by Vice President
Amir during the past four months
to stabilize and improve polit-
ical and economic conditions in
Syria. Although Amir appears to
have made some progress in gain-
ing Syrian confidence, Nasir
still faces difficulty in con-
vincing the many skeptical Syr-
ians his regime can overcome
the problems that have arisen
since union.' .
Israeli-Syrian Border
The crisis along the Isra-
eli-Syrian border has abated at
least temporarily, and the con-
troversy has become more of a
diplomatic battle, with'.the UN
Truce Supervision Organization
(UNTSO)-:trying to bring the two
parties together at a meeting of
the Israeli-Syrian Mixed Armi-
stice Commission. The UAR says
it is willing to discuss the
situation in the demilitarized
zone, but Israel has refused,
declaring the zone is an inte-
gral part of Israel and therefore
not subject to negotiation. The
UN and American position is that
sovereignty over the zone remains
in abeyance pending a final peace
settlement.
As of 8 February the UAR
had compromised its position
somewhat by refusing to facili-
tate an inspection by the UNTSO
of Syrian-held areas around the
demilitarized zone, while the Is-
raelis were permitting UN ob-
servers to inspect Israeli-held
parts of the zone and adjacent
areas in Israel.
The UN inspection on the
Israeli side indicated that Is-
rael apparently has moved '.a
large part of its forces out of
the border area. There are, more-
over, no signs of a military
build-up along Israel's Egyptian
frontier. The UAR has moved the
equivalent of two brigades into
Sinai, apparently as contingent
support to the troops--about 11,-
000--normally stationed on the
peninsula.
At Port Said, the unloading
of the cargo of Israeli origin
from the Inge Toft began on 9
February. A spokesman for the
Danish owners in Copenhagen said
the order to unload had been
given "out of consideration for
the crew and maintenance of the
ship," which has been detained
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
since May 1959. So far the Is-
raelis have reacted moderately
to the order, "more in resigna-
tion than in anger." The Greek-
owned Astypalea, whose charter
contract reportedly was renewed
on 6 February for two months,
remains interned at Port Said
with its cargo from Israel.
Arab League Meeting
The Arab League Council
convened in Cairo on 8 February
to discuss the many facets of
"the Palestine question" as well
as the situation in Algeria.
The presence of Gen. Ali Amir,
chief of staff of the UAR armed
forces, underlines the council's
concern with the Israeli border
fighting. Iraq and Tunisia are
boycotting the meeting because
of their differences with the
UAR.
Sudan
The Abboud military govern-
ment in the Sudan continues to
be plagued by dissension within
its highest body, the seven-man
Supreme Council of the Armed
Forces. Influential religious
and political leaders are reit-
erating their demands for a
planned transition to civiliap
government. So far, mutual
suspicion has nrevented con-
The government will soon
issue a law permitting the re-
sumption of labor union activity,
suspended in November 1958.
Workers will again be allowed to
form trade unions, but union fed-
erations, largely Communist con-
trolled in the past, will not be
permitted. Strikes and lockouts
will be legal, but when workers
and employers cannot reach agree-
ment, compulsory arbitration
procedures will be mandatory.
Having committed itself to
several major development proj-
ects,, the government is running
into difficulties trying to ob-
tain Western financial assist-
ance for all of them. Sudanese
officials had expected that the
agreement they reached with the
UAR on 8 November on sharing the
Nile waters would quickly lead
to a World Bank loan for much of
the cost of their $100,000,000
Roseires Dam project.. This im-
portant project would add a mini-
mum of 1,500,000 acres of irri-
gated land to the Sudan's pres-
ent irrigated area of some 2,800,-
000 acres.
The insistence by World Bank
officials on further detailed
study both of the project itself
and of the Sudan's general finan-
cial outlook has caused Sudanese
officials to believe the bank is
"stalling." The Sudanese for-
eign minister,` impressed by
recent big Soviet loans to
the UAR and Ethiopia, has
said that he intends to
carted action by the leaders of aYyrusacai wits U IL Lur A-Lu.
two key groups--the Ansar re-
ligious leaders and the Libya
National Unionist party (NUP). King Idriss made several minor
changes in the Libyan Council of
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 1%bruary Ilo80
Ministers on 6 February. \, He
appointed a Tripolitanian'affi-
cial with no experience in',:mili-
tary matters to replace Defense
Minister Ibrahim Ben Shabaan,
who has been at odds with the
army chief of staff. As a re-
ward for past services, he
named the former House of Dep-
uties president, who was de-
feated in the 17 January elec-
tions, to the vacant post of
minister of education. He
dropped the minister of health
from the cabinet, shifted the
minister of finance to that
post, and named as new finance
minister Muhammad Ben Uthman,
a Fezzanese businessman who is
a veteran of earlier Libyan
cabinets.
The King is,expected to
make further government changes
after there has been practical
experience with the political
temper of the new House of Dep-
uties. Its first meeting is
scheduled for 15 February.
Prime Minister Kubaar, whose
own position is temporarily
assured, will probably increase
his pressure for a modification
of the Wheelus Air Base agree-
ment to provide for substantial-
ly larger US payments of "rent"
--i.e., financial aid without
controls on its expenditure.
DE GAULLE AND THE ALGERIAN PROBLEM
The recent cabinet shake-
up has strengthened De Gaulle's
domestic position, but the order
on 10 February to dissolve some
of the military units impli-
cated in the Algiers insurrec-
tion and the crackdown on in-
dividual officers will aggra-
vate right-wing opposition and
risk further military insubor-
dination. The scheduling of
regional elections in Algeria
this spring will probably be
interpreted as another step
toward self-determination,
with or without the FLN rebels.
Apprehension by both
rightist civilians and mili-
tary over De Gaulle's Algerian
policy is likely to be fanned
still further by the new pol-
icy moves from Paris. De
Gaulle had previously indicated
that he plans extensive admin-
istrative and possibly ter-
ritorial chap es in Algeria,
and rumors-
-state
that he has eventual partition
along ethnic lines in mind.
The dismissal on 5 February
of Deputy Premier Soustelle and
Communications Minister Cornut-
Gentille.
(virtually
eliminates political pressure
on the Algerian issue from
within the cabinet. The
ministers who will be most
concerned with Algerian, affairs
and the armed forces are all
reliable "technicians" rather
than politicians.
Delegate General
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
in Algeria Delouvrier is ex-
pected to remain in office at
least another month, but may.
then be switched to Paris to
head a new "Ministry for Al-
geria."
Soustelle's announcement
following his ouster; that he
intends to continue working
for the cause of "French Al-
geria" indicates he will now
openly try to establish himself
as the rallying point for the
opposition to?De Gaulle's pol-
icy of self-determination.
Soustelle already has the sym-
pathy of the important Paris
daily L'Aurore, and he is prob-
ably counting on support with-
in the Union for the New Repub-
lic, many of whose deputies
sympathize with his views. Ad-
ditional parliamentary opposi-
tion to De Gaulle can be ex-
pected from the die-hard wing
of the Independent party, to
which such leaders as Duchet
and Francois-Valentin are bound,
and from the group of Algerian
settler deputies.
Although Paris has reas-
serted its authority over the
army in Algeria, numerous of-
ficers reportedly have inter-
preted De Gaulle's 29 January
address as in fact approving
the integration of Algeria with
France. De Gaulle's move to
dissolve the Fifth Bureaus--the
army's unit for "psychological
action"--may have been prompted
by recently published reports
that it was sending directives
to Algeria contrary to De
Gaulle's announced policy.
The impression of the Amer-
ican consul general in Algeria
that the "controversial" aspects
of the army's role in the re-
cent crisis may prove to be
localized among the parachute,
psychological action, security,
and intelligence forces in.Al-
giers appeared initially con-
firmed by reports concerning
specific disciplinary action
against officers of such units.
However, removal of three gen-
erals--Faure, Gribius, and
Mirambeau--from field commands
far from Algiers indicates
government awareness that the
plot which has been hatching
for months was more widespread.
De Gaulle's vigorous action
in the wake of the insurrection
has increased apprehension in
Algiers, where a large portion
of the European population is
linked with one or more of the
14 or so extremist groups now
under investigation. Rightist
activity has not altogether
ceased, as demonstrated by the
appearance of leaflets urging
leniency for the leaders of the
insurrection.
Anti-Gaullist sentiment in
Algiers is still strong, however.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
ll. February 1960
Many Europeans insist that the
revolt failed because the
French Army "let them down."
The consulate general reports
a widespread belief that the
only answer for the extremists
lies in the assassination of
De Gaulle. Although rightist
Europeans continue belligerent,
the collapse of the insurrec-
tion and the fear of possible
prosecution appear to have
shaken their morale, and to
have raised doubts as to their
ability to force De Gaulle to
modify his Algerian policies.
The Algerian rebels con-
tinue to favor cease-fire ne-
gotiations with De Gaulle on
the condition that he provide
various guarantees concerning
the implementation of his self-
determination program. They
show no signs of modifying
their insistence that any ne-
gotiations include discussion
of Algeria's political future.
One FLN official has described
rebel leaders as believing
that negotiations with France
are "necessary," but that the
war should continue until a
"propitious moment" arrives.
Rebel temporizing may be
based in part on the belief,
expressed by Vice Premier
Belkacem Krim, that De Gaulle
has a "private" as well as a
publicly expressed plan for an
Algerian settlement, with the
former based on Algeria's gain-
ing political independence but
retaining close economic and
social ties to France. Krim
observed that such a plan
might be acceptable to the
rebels, and that they were anx-
ious to talk to a personal em-
nissay ' from De Gaulle.
In a move to dramatize
their willingness to continue
the war, and to'identif y their
movement with pan-Arab national-
ism to the greatest possible
extent,the rebels have advised
Arab League nations of their
willingness to accept "volun-
teers" to fight with rebel
forces in Algeria. This
latest move may be regarded by
the rebels as a means of "in-
ternationalizing" the rebellion
without creating opportunities
for Communist penetration. While
rebel forces in Algeria have a
continuing need for military
technicians,their recent diff i-
culties have stemmed bore from
shortages of supplies than of
manpower.
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11 February 1960
Mikoyan's varied moves in
Cuba, especially his new large
sugar purchases, seem designed
to encourage the Cuban Govern-
ment's present attitude toward
the United States.
The Soviet purchase of
345,000 additional tons of sug-
ar, announced during Mikoyan's
inauguration of the Soviet ex-
hibition in Havana, has again
favorably affected Cuba's posi-
tion on the world market. The
sale, like others by the Castro
regime to Sino-Soviet bloc
countries, was made at a bar-
gain rate--at least 12 points
(hundredths of.' a cent per
pound) below the already low
world price. In a speech at
the exhibition,_Cuban Commerce
Minister Cepero cited these
bloc purchases as of great value
in helping Cuba sell its un-
usually large carry-over from
the 1959 crop.
The already apparent ad-
vantages of the sugar deal will
encourage Cuban officials to
favor bloc trade in their ef-
forts to reduce economic depend-
ence on the United States.
Cepero specifically welcomed
increased Soviet-Cuban trade.
Most previous sales to the USSR
have been for cash, but this may
be the first of a series of
barter deals. Mikoyan reported-
ly said on 8 February that the
USSR is interested in buying
more sugar if Cuba will buy
machinery and other products
from the USSR.
Mikoyan, in a boastful
speech at the exhibition, in-
directly encouraged Castro's
illegal land seizures. He said,
SECRET
PART II NOTES AND COMMENTS
NOTES AND COMMENTS
MIKOYAN IN CUBA
"The secret consists in the es-
tablishment of the rule of
workers and peasants, in the
liquidation of the exploitation
of man by man, in the confisca-
tion--without any compensation
--6f all means of production
and land, mineral resources,
and forests, and in transferring
all these riches to their real
owners--the people."
The Castro government is
also encouraging closer rela-
tions with other bloc countries.
An East German trade mission is 25X1
in Havana,
There are some signs of,
concern, even among Castro's
supporters, over Cuba's rapid
moves toward closer relations
with Moscow. Some are reported
to fear adverse reaction in the
rest of Latin America. Others
reportedly fear that Soviet in-
fluence is likely to destroy
the Cuban revolution--by direct
economic or political influence,
by strengthening the Cuban Com-
munist party's campaign to
capitalize on Castro's program,
or by provoking US 'ac-
tion.
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11 February 1960
The attempt by Catholic
students to replace a wreath
bearing the hammer and sickle
which Mikoyan had placed at
Cuban hero Jose Marti's statue
and the attack on them, report-
edly by Communist "goon squads,"
may have encouraged defiance of
Castro and reduced the impact
of the exhibition.
25;'"
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CURRENT INTELLIGENCE WEEKLY SV Y
11 February 1960
USSR RELEASES ADDITIONAL 1959 CENSUS FIGURES
Figures just released on
the USSR's January 1959 popu-
lation census, its first since
1939, show that the number of
people now in the working-age
bracket (16-59) is some 2,000,-
000 less than had been thought.
Of the total population in
this age group--125,600,000--
a higher percentage than pre-
viously estimated is apparent-
ly already working, and the ex-
tent to which such elements as
teenagers and housewives can
augment the labor force is cor-
respondingly smaller.
Furthermore, fewer people
apparently will be entering
working- and military-age groups
during the period of the Seven-
Year Plan (1959-65) than had
been estimated. Khrushchev's
program to cut the armed forces
thus will be a significant con-
tribution to the planned expan-
sion of the labor force.
Significant differences
between earlier American esti-
mates and the newly released
age breakdowns are concentrated
in two groups. The "16-to-19"
group--born during World War II
and now reaching military draft
age--had been overestimated and
the "60-and-over" category un-
derestimated. Birth rates for
persons 16 to 19 must have
fallen even more than the
originally estimated 50 percent.
Khrushchev's planned re-
duction of 1,200,000 men in the
armed forces is scheduled to
take place during 1960-61. These
are the years when the incre-
ments to the population in the
prime working ages--15 to 59--
will be smallest because of the
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11 February 1960
POPULATION OF THE USSR
15 JANUARY 1959
(M113ON I SONS)
AN GROW
USSR CENSUS DATA
ISTMATE (PER=)
0-9
46.4
46.1
0.6
10-15
17.1
17.9
4.7
16-19
14.7
16.0
8.8
20-59
110.9
111.7
0.7
60&OV1
19.7
17.1
13.2
TOTAL
208.8
208.8
0
low birth rates of World War II.
In 1961, for example, the in-
crease is less than 200,000,
and not all of these will be
available for work. In order
to meet the Seven-Year Plan goals,
about 1,700,000 workers must be
added to the state industrial
and agricultural labor force
during each of these years. Most
of the men to be released from
the services would be in their
early twenties and would presum-
ably be more productive than wom-
en, older people, and children.
The total population of
the USSR in January 1959 is
reported as 208,826,650--some
94,000,000 men and 114,800,000
women. Of this total, 100,000,-
000, or nearly 48 percent of the
population, live in urban areas,
as compared with about 32 per-
cent before World War II.
Reporting on Soviet educa-
tion, the USSR claimed that 58,-
700,000 persons had completed
at least seven-year elementary
education. Of these, 13,400,-
000 have had some
college training.
These figures indi-
cate considerable
progress in the USSR--
particularly since
1949, when seven-year
schooling was made
compulsory--but at
these two levels of
education, the USSR
is still far behind
the United States.
In March 1959,
about 98,100,000 Americans had
completed at least an eight-year
elementary education; this is
about 80 percent of the adult
population or twice the propor-
tion in the USSR. The number of
persons with some college train-
ing was about 18,500,000 in the
United States--or 15 percent of
the adult population, as compared
with 9 percent in the USSR.
The census report also in-
cludes data on the nationality
composition of the population.
The Russians, as in 1939, still
form more than one half of the
population, and the Slavs (Rus-
sians, Ukrainians, and Belorus-
sians) about three fourths. The
report also reflects the large
movement of Russians into some
of the minority republics, par-
ticularly into Kazakhstan, as
a result of the New Lands pro-
gram. Russians now make up 43
percent of the population there,
the Kazakhs only 30 percent.
USSR PROGRAM OF BENEFITS FOR RELEASED SERVICEMEN
Soviet officers and career
enlisted men discharged under
the military manpower cuts an-
nounced by Khrushchev at the mid-
January Supreme Soviet meeting
are to receive a number of spe-
cial benefits in the form of
housing, bonuses, and education.
The Soviet "GI bill" of 27 Janu-
ary which calls for these benefits
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CURRENT INTELLIGENCE WEEKLY SUHARY
11 February 1960
also requires local officials
to provide suitable jobs with-
in one month for all categories
of released personnel. The pro-
mulgation of this program indi-
cates that the USSR intends to
proceed with its announced de-
mobilization.
The major responsibility
for locating work for the dis-
chargees will fall to special
commissions originally set up
in connection with earlier de-
mobilizations. Veterans who
sign labor contracts will re-
ceive travel expenses and
bonuses of from 300 to 600
rubles; the largest amounts
will be paid to those who agree
to go to the north,the Urals,
the Far East, and Kazakhstan.
Housing is to be provided
for the officers and career en-
listed men within three months
after arrival at their places
of residence.. There is a pro-
vision, however, that they may
be housed with their parents
or families "regardless of the
sanitary norms violated"--thus
indicating that the servicemen
should not expect to receive
separate living accommodations.
Building materials and housing
loans of up to 7,000 rubles--
repayable over seven years--
are to be granted for home con-
struction,with preference given
to rural building, particularly
in the virgin lands
Officers are to be given
priority for admission to uni-
versities and technical schools
and are to :receive scholarships
of at least 400 rubles per month.
They are to be admitted without
entrance examinations and in ad-
dition to the regular planned
entoliment. Local authorities
are obliged to provide school-
ing for the children of both
officers and career enlisted
personnel who settle in their
areas. (Pre-
pared by ORR
SATELLITES INTEGRATE POWER FACILITIES TO PREVENT SHORTAGES
The European satellites
continue to experience winter
power shortages which sometimes
shut down factories, and they
face more serious shortages of
power over the long run which
could hamper economic growth.
To prevent this, an integrated
Eastern European power network
is being built under the aegis
of the bloc's Council for Mutual
Economic Assistance (CEMA).
A 220-kilovolt line bweteen
Skawina, Poland, and Liskovc,
Czechoslovakia, was scheduled
to be in use by the end of 1959,
and the power plant at Berzdorf,
East Germany, will be linked by
a 220-kilovolt line to TurasZow,
Poland, and to an unspecified
area in Czechoslovakia in 1960.
Another connection is to be
made in 1960 between Vyskov,
Czechoslovakia, and Zwonitz,
East Germany.
At least six large power
plants with an ultimate com-
bined capacity of 1,000 mega -
watts or more are under con-
struction or planned. Four of
them are in or near the exten-
sive brown-coal fields of
southeastern East Germany; two
are in the brown-coal fields of
southwestern Poland. In addi-
tion, Rumanian natural gas is
to supply the fuel for two 300-
megawatt steam power plants to
be delivered by Czechoslovakia
in return for electric power
from Rumania.
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YUGOSLAVIA
CURRENT INTELLIGENCE WEEKLY $pRy
11 February 1960
Although the
Communist bloc press
has suggested that
the satellites will
import large amounts
of electric power
from :he-USSR and
Western Europe, this
appears to be far in
the future. The trans-
mission lines and
transformer stations
necessary for a large-
scale movement of
power between the
satellites and the
USSR or Western Eu-
rope do not exist.
The development
of an integrated net-
work will help to
avert a potential
power shortage but
will not solve all
power problems. A
recent East German
press release admits
that uhiess new re-
sources of coal,gas,
oil, and water are de-
veloped, major short-
ages of electric pow-
er will occur by 1970.
J N. Vyskov
I T A L Y
According to a preliminary
estimate, however, as early as
1965 these countries may become
significant net importers of
energy if planned rates of in-
crease in industrial production
olsztvn
Area
USSR
Existing power line
Planned power line
are to be achieved. It is
possible that part of the pro-
posed large oil imports from
the USSR are intended for use
in generating electric power,
but even this will not solve
the problem entirely.
(Prepared by ORR)
Soviet authorities have re-
cently taken several steps to
point up East German sovereignty.
These steps, together with
moves by the East Germans, are
part of a cumulative series
designed to enhance the re-
gime's appearance of de facto
sovereignty.
Soviet authorities are at-
tempting to maneuver officials
of the three Western powers into
accepting for the first time
documentation referring to the
"German Democratic Republic"
(GDR). Moscow is seeking to
force Allied Military Liaison
Mission ('(MLM);:,personnel
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r-
EAST
GERMANY
Berzdo Vuroszow
7,.,,._ S
Ostrava Area X' ?
CZECHOSLOVAKIA ?- r _ Skawina
Lisko~ec \.., -..-
!' j Sokolnice
REPUBLIC OF
GERMANY
Bisamberg t
AUSTRIA
yclscnT.
'-,
SWITZ. .../ 1 .J
Varaz So?tor
din ~..
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11 February 1960
accredited to the commander in
chief of the Group of Soviet
Forces in Germany to use new
passes which have been regis-
tared with the GDR's Ministry of
Internal Affairs and are said
to give to MLM members "the
right to travel within the ter-
ritory of the DGR, except for
restricted areas."
Acceptance of the passes
would be used by the USSR and
East Germany as implicit recog-
nition of the Ulbricht regime.
As a result of American refusal
to use the documentation, op-
erations of the mission are
practically paralyzed.
Moscow has also entered
an implicit claim that East
Germany's sovereignty extends
to the Berlin air corridors.
Soviet officials in the Berlin
Air Safety Center on 3 February
issued a flight safety guarantee,
intended to cover a special
Scandinavian Airlines System
(SAS) flight to West Berlin's
Tempelhof airport, which con-
tained the phrase " ... taking into
account that permission has
been granted by governmental
authorities of the GDR for a
flight to Berlin-Tempelhof....
The three Western powers im-
mediately refused to accept
the guarantee, and the flight
was canceled.
they have some chance of making
gains toward de facto recogni-
tion following Nehru's public
statement of 3 December to the
effect that "up to now I can
only establish that no one
wishes German unity." However,
Nehru probably will make no
overt move prior to the summit
conference.
The East Germans have re-
cently had some success in
breaking down the reluctance of
nonbloc commercial lines to
land planes at Schoenefeld air-
port outside East Berlin. In
its first air agreement with a
nonbloc country, East Germany
has agreed with Yugoslavia to
inaugurate regular commercial
services next summer.
East German participation
in the Winter Olympics at Squaw
Valley is being used to enhance
the regime's prestige. A major
effort has been made to present
the East Germans as a separate
team, although they are committed
to participation in an all-
German team. This included the
charter of a special SAS plane
to carry players and officials
from Schoenefeld airfield to
Reno.
In the most recent effort
to enhance its status, East
Germany sent Foreign Trade Min-
ister, Heinrich Rau, a close as-
sociate of Ulbricht, to India
and Burma. This is the first
time Burma has permitted high-
level East German officials to
visit, and, although Premier
Ne Win did not receive Rau,
East German media are portray-
ing the visit as a major coup.
In India, Rau met Nehru,
in accordance with the latter's
custom of interviewing all
high-level visitors. The East
Germans appear to believe that
The regime has also made
gains in breaking down Western
opposition to travel of high
East German officials to West
European countries. Politburo
candidate member Alfred Kurella
and Neues Deutschland editor
Hermann en recently received
Italian visas for travel to Rome.
A number of medium-rank East
German officials have visited
Britain, and two now are in
London to promote East Germany's
bitter attacks on the West Ger-
man Government'as "fascist" and
"militarist."
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
CONTINUED EXECUTIONS IN HUNGARY
25X1
25X1
25X1
25X1
During the past year, and
particularly since October, the
Kadar regime in Hungary has
been holding secret trials or
retrials for alleged participants
in the 1956 revolt, including in
some cases youths of 18 or less,
some of whom have been detained
from one to three years. Al-
though it has been officially
denied, some youths have been
hanged; unconfirmed reports
state that there have been from
150 to 200 executions, and evi-
dence suggests that the toll
may be even higher.
The US Legation agrees
with other diplomatic missions
in Budapest, including the Yugo-
slavian, that extreme repressive
measures by the regime are con-
tinuing and probably have in-
creased in recent months.
Throughout early 1959 there
were sporadic and generally un-
confirmed reports of trials
and executions. At least two
of these, the so-called Ujpest
trial in March and another in-
volving 24 students in April,
were admitted by various regime
spokesmen, although denied by
such top leaders as party First
Secretary Janos Kadar. In De-
cember, however, the US Legation
learned
a ere a een
a s arp ncrease" in the num-
ber of executions at Budapest's
several prisons.
ersons arrested and then
re eased immediately after the
1956 revolt were being rearrest-
ed and, in some cases, hanged.
the mother of
one young man had been notified
of a number assigned to her
son's grave in Rakoskeresztur
cemetery, which adjoins Buda-
pest's central prison, The
mother discovered that her son
had been buried in a long,
common grave in a section usu-
ally reserved for paupers.
When she returned to the ceme-
tery two days later, she found
two more common graves.
The majority of the victims
appear to be youths--some of
whom were legal minors at the
time of their arrests. In these
cases, it appears that the re-
gime has detained the youths
until their eighteenth birthday,
at which time they have been
sentenced by a special tribunal
of the Supreme Court in Budapest.
The executions parallel
similar repressions in 1957
and 1958, although there is
little justification for such
measures in terms of internal
security.
The absence of publicity
suggests that the regime does
not wish to undercut its pro-
fessions of normalcy within Hun-
gary.
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CURRENT INTELLIGENCE WEEKLY SUIuBY
11 February 1960
NORTH VIETNAM'S RELATIONS WITH MOSCOW AND PEIPING
The close association be-
tween the North Vietnamese and
Chinese Communist delegations
at the recent Warsaw Pact con-
ference in Moscow, and the fact
that neither attended the ear-
lier agricultural conference,
suggest North Vietnam's accept-
snce of Communist China's guid-
ance on these occasions.
much in evidence in Hanoi and
make special efforts to be
friendly, even to those West-
ern representatives who are
largely ignored by the North
Vietnamese authorities. The
Soviet Embassy invited the en-
tire diplomatic corps, and many
Vietnamese, to a showing of a
Soviet film on Khrushchev's
visit to the United States,and
later arranged for showings in
theaters in Hanoi and principal
urban centers of North Vietnam.
A similar film was with-
drawn by the Chinese authorities
in Shanghai after two days, pre-
sumably because of the impres-
sion of US wealth and power con-
veyed-by the background scenes.
Hanoi's treatment of Sino-In-
dian relations. At first, the
Hanoi press published only Chi-
nese accounts of the situation.
Toward the end of last October,
however, Premier and Foreign
Minister Pham Van Dong assured
the Indian consul that Hanoi
papers would give equal prom-
inence to Indian views, and
this'promise has been general-
ly carried out.
situation might temporary and
that basic factors of race and
geography require continued ac-
commodation with China. The
chief of the French mission in
Hanoi comments that the his-
torical frictdon between Chi-
nese and Vietnamese is a
factor of diminishing im-
portance.
North Vietnam#s apparent
vacillation between the poli-
cies of Moscow and Peiping most
likely results from attention
to its own national interests,
rather than to coercion from
either bloc partner. In the
case of the Sino-Indian dis-
pute, for example, Hanoi would
be expected to placate India
as part of its efforts to main-
tain and enlarge its interna-
tional contacts. Internally,
however, the basic social and
economic situation confronting
the regime is similar in many
respects to that of China, so
that Chinese Communist guidance
is more readil acceptable in
this sphere.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
U Nu's overwhelming victory
in the general election of 6
February will return him to the
premiership with greater per-
sonal power than before. The
election marks the end of the
Anti-Fascist People's Freedom
League (AFPFL), which ruled Bur-
ma from independence in 1948 un-
til General Ne Win took over in 1958,
but returns Burma to the typical
domination of the political scene
by a single party. Nu's "Clean"
AFPFL party will become the
"Union" party in April. The only
effective alternative to Nu will
be the army.
The election reduced the
"Stable" AFPFL party to a maxi-
mum of 30 seats in parliament
and excluded both its leaders,
:Ba. Swe and Kyaw Nyein--formerly
Nu's closest associates; Nu
nevertheless hopes the party
will become the "loyal opposi-
tion." The Communist-dominated
National United Front--the major
opposition group in the past two
parliaments and, in 1958, the
makeweight in Nu's parliamentary
majority--has been reduced to an
inconsequential handful.
Nu's postelection state-
ments indicate that his personal
outlook did not change during
his 15 months out of office.
He is extreme in his praise of
General Ne Win, the outgoing
premier, and has announced that
he intends to-carry on the pro-
grams his predecessor inaugurated.
The only significant change
appears to be in the field of
foreign economic assistance;
although Nu intends to continue
the American grant projects for
Rangoon University and the
Rangoon-Mandalay highway, he
prefers loans to gifts. He
argues that grants undermine,
rather than build, good rela-
tions. As in the past, however,
he will apparently be prepared
to accept loans, regardless of
source, for projects he ap-
proves.
Nu's unchallengeable pre-
eminence in parliament should
make for stable and effective
government. The army regime
will turn the country over to
him in the best economic condi-
tion since independence, with
insurgency and crimes of violence
at an all-time low. However, Nu,
an idealist and a shrewd politi-
cian, is notoriously impatient
with administrative details and
in the past has been incapable of
policing the corruption or in-
efficiency of his colleagues.
Nevertheless, his recent forced
retirement and his awareness of
the prospect of continued army
surveillance may encourage him to
reform.
General Ne Win, whose na-
tional prestige is second only to
Nu, will remain as military com-
mander in chief and continue in
a position to.check on, or,even
take over, , the government.
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expressed the hope that some
arrangement can be made whereby
the internal security forces
will remain under Belgian con-
trol following independence.
CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
ROUND-TABLE CONFERENCE ON BELGIAN CONGO
Congo nationalists and Bel-
gian authorities have reached
tentative agreement on the
structure of the independent
Congo state to be established
on 30 June. Agreement has been
reached in committee on a bi-
cameral national parliament with
unicameral legislatures for each
of the congo's six provinces.
Elections to these bodies have
been scheduled for mid-May and
mid-June.
African suspicions that the
Belgians hoped to reserve to
themselves primary responsi-
bility for defense and fore.
affairs have been largely dis-
sipated by Brussels' formal
agreement to independence "with-
out any qualifications." The
Belgians, however, are still
concerned that tribal outbreaks
may occur once the restraining
Belgian authority is withdrawn.
Congo Minister de Schrijver has
Luke
Leopold
Edwa,d, y
\~ Lake
1~ Bukavu UANDA-
'~ URUNDI
BELGIAN CONGO J
Leopoldville
AN~GOL'A
Despite their success in
gaining the support of a major-
ity of the Congolese delegates
for their June independence time-
table, Belgian authorities con-
tinue to be confronted with sepa-
ratist threats from two sources.
In mineral-rich Katanga Prov-
ince, the prospect of an Afri-
can-dominated Congo has stimu-
lated secessionist sentiment
within Conakat--a European-domi-
nated political party associated
with. Belgian mining interests.
It is possible, however, that
such sentiment can be neutralized
by providing for a large degree
of local autonomy.
African separatist senti-
ment is concentrated in the
Abako, the dominant
political party in
Leopoldville Province,
whose leaders have
periodically demanded
a separate state in
the lower Congo region.
~~
'Abe't The preoccupation of
UGANDA Abako leaders with
factional infighting
has reduced their
voice at the round-
table talks, and it
remains to be seen
whether a majority of
rANGAANYIKA the party will accept
1~
oI
'u
9
~Loke
decisions reached at
41oke Mw..v
SECRET
Brussels. Belgian
authorities have re-
jected Abako demands
for the establishment
of a provisional Congo
government immediately
following the talks.
25X1
- 25X1
viet bloc representatives
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CURRENT INTELLIGENCE WEEKLY XVZNM
11 February 1960
have repeatedly approached the
Congolese delegates at Brussels
with offers of economic and
presumably political assistance.
One bloc representative re-
portedly offered to buy a large
amount of palm oil from Abako
cooperatives, and individual
Congolese delegates have made
side trips to the USSR, East
Germany, and Czechoslovakia
during the talks in Brussels.
Moroccan relations with
the Middle East may become some-
what closer as a result of King
Mohamed V's trip to the UAR,
Saudi Arabia, Jordan, Kuwait,
Iraq, and Lebonon. The King
probably was impressed by the
Arab leaders, and may have
been flattered by the enthusi-
astic reception he received
everywhere. He apparently felt
most at home in Lebanon, both
because French cultural influ-
ence remains strong there and
because of his younger son's
engagement to a Lebanese.
The most notable incident
of the month's tour was Iraqi
Premier Qasim's announcement,
apparently taking the King by
surprise, that Iraq was giving
Morocco three British-built
fighter-bombers. These piston
aircraft, when delivered, will
bring to 26 the airplanes of
the Royal Moroccan Army air
arm. Qasim probably sought
to outdo UAR President Nasir,
who gave Morocco two airplanes
last year during the crown
prince's visit to Cairo.
The King's visit to the
UAR, which coincided with the
Aswan High Dam ceremonies, was
in response to repeated invi-
tations from Nasir. At the
same time,. Mohamed insisted
on visiting other Arab countries,
particularly Iraq, in order to
avoid creating the impression
that Morocco had chosen sides
in intra-Arab squabbles.
If, as reported, he sought
to patch Nasir's quarrels with
Qasim and Tunisian President
Bourguiba, he probably was un-
successful, because Nasir is
not ready to make the conces-
sions required by the others.
The King is reported to have
received promises of support
from several Arab leaders for
Morocco's proposal to amend the
Arab League charter to permit
majority rather than unanimous
decisions.
Now that he is back in
Morocco, the King may move
cautiously to reorganize the
Ibrahim government before local
elections take place. These
are scheduled for May. He may
dismiss Prime Minister Ibrahim,
who aroused the King's antagon-
ism last fall by failing to
forestall the sharp criticism
of the palace by his leftist
supporters.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
CYPRUS INDEPENDENCE FURTHER POSTPONED
Following a temporary
breakdown of negotiations in
Nicosia between British and
Cypriot leaders, London on 8
February announced indefinite
postponement of independence
for Cyprus beyond the latest
target date of 19 March. This
is the second postponement of
independence. The first, which
extended the date from 19 Feb-
ruary, resulted from the fail-
ure of the mid-January confer-
ence in London.
The major stumbling block
continues to be the size of the
two military bases to remain
under British sovereignty after
independence. British offi-
cials, notably senior military
officers, have refused to con-
sider a further reduction in
the area London demands for
the bases--about 120 square
miles. Other questions, in-
cluding the difficult problems
involving the civil adminis-
tration within the base areas
and future financial aid to
Cyprus, have been largely re-
solved after substantial con-
cessions by Britain.
London said the latest
posponement had to be indef-
inite, rather than for another
month, because it now would be
impossible to obtain parlia-
mentary ratification of the
necessary final agreements be-
fore late spring.
Greek Cypriot leader Makar-
ios apparently hopes he can
extract further concessions
and believes time is on his
side. In this he is probably
relying on the increasing dif-
ficulties facing the British
colonial administration because
of the repeated postponement of
independence. These problems
involve both security and the
administration on Cyprus, inas-
much as many civil administrators
and members of the police force
have made plans to leave the is-
land. British military units
remaining on Cyprus have been
moved into the area of the bases
claimed by London,and any attempt
to move them back into other areas
could lead to severe repercussions.
Britain's action in breaking
off the Nicosia talks and uni-
laterally postponing.independence
was sharply criticized by both
Makarios and Turkish Cypriot
leader Kuchuk. Subsequently,
however, informal talks were re-
sumed, and on 11 February Kuchuk
expressed renewed optimism that
a compromise settlement was pos-
sible.
Makarios' popularity within
his community has reached a new
high, but his followers, for the
most part, have thus far reacted
almost apathetically to the post-
ponement of independence. The
Turkish community, however, has
shown more anxiety, and one of
its newspapers has expressed
apprehension over a possible
return of violence.
While the latest postpone-
ment will create new bitterness
on Cyprus, and possibly occa-
sional acts of violence, it is
unlikely to lead to widespread
unrest unless the British ap-
ply economic pressure for a set-
tlement, such as discharging
Cypriot laborers employed at the
British bases
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
Prime Minister Macmillan's
statements during his African
tour which ended on 5 February,
particularly his unexpectedly
sharp condemnation of apartheid
in South Africa, suggest he is
inclining toward greater con-
sideration for African aspira-
tions. Some new trends in
British policy are possible in
the coming months, particularly
regarding the Federation of
Rhodesia and Nyasaland, which
the Monckton advisory commission
is to visit beginning 15 Febru-
ary.
Macmillan's frame of mind
was most clearly revealed in
his 3 February speech in Cape
Town in which he affirmed that
he had been most impressed with
the strength of African nation-
al consciousness. Earlier he
had underlined his commitment
making African agreement a pre-
condition for transferring the
overwhelmingly African-populated
Nyasaland and Northern Rhodesia
from Colonial Office administra-
tion to control by the settler-
dominated Federation. Despite
this attempt to placate African
apprehensions over British pol-
icy, Macmillan's continued en-
dorsement of the Federation has
displeased the nationalists,
who reaffirmed their intention
to boycott the Monckton commis-
sion because it is not specifi-
cally authorized to recommend
the Federation's dissolution.
to give up its control of the
northern territories, are de-
manding that Southern Rhodesia
secede from the Federation.
Southern Rhodesian Prime Minister
Whitehead has threatened to re-
consider his government's com-
mitment to the Federation prin-
ciple if Africans in the northern
territories receive self-rule.
This openly challenges London's
stated policy for them. Al-
though Federal Prime Minister
Welensky remains committed to
the continuation of the Federa-
tion, in an open clash between
London. and Whitehead he might
more strongly advocate the white
settlers' cause.
Macmillan's criticism of
the Union of South Africa's
racialism and his firm statement
that British policy as a result
might have to "make difficulties"
for the Union have earned him
tremendous political credit in
London. His statements--which
have been acclaimed by the press
--challenge Labor's campaign to
make political gain by champion-
ing the Africans' cause.
His remarks have been viewed
in South Africa as a warning that
Britain may be even less inclined
to act as an apologist for the
Union in international forums.
Macmillan's disapprobation may
also strengthen sentiment within 25X1
the ruling Nationalist party for
the country's withdrawal from the
Cmmn
Rightist European settlers,
incensed by Britain's refusal
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CURRENT INTELLIGENCE WEEKLY 8 IT
11 FebraaXy ...19:#0
UNITED NATIONS GENERAL ASSEMBLY PRESIDENTIAL CANDIDATES
Delay in reaching agree-
ment on a Western candidate for
president of the 15th UN General
Assembly has probably enhanced
the prospects for the election
of Czech Deputy Foreign Minis-
ter Jiri Nosek, who announced
his candidacy in the fall of
1959. By common consent, the
presidency is to go to a Euro-
pean this year, and Frederick
Boland of Ireland now has emerged
as the favored Western figure.
Secretary General Hammarskjold
and other UN officials have in-
dicated a preference for an
Eastern European this year. Al-
though the election will not
take place until 13 September,
the Soviet bloc's drive to ob-
tain the office has created an
unprecedented amount of poli-
ticking at '.this, early
date.
delegate in the relatively few
years Ireland has been a member
of the United Nations. His
country's formal neutrality
might also increase his poten-
tial appeal among Asian-African
bloc members. Although most
Western European members were
agreed there was fo Italian
candidate of comparable UN
stature, Italy did not formally
withdraw until early February.
Nosek's early campaign and
popularity make him a formidable
opponent. He has been at the
UN since its early years, has
served as Czech ambassador to
India, and has been characterized
as "the most Western of the
Eastern delegates." He is gen-
erally regarded at the UN as a
competent and relatively im-
partial presiding officer, The
fact that Eastern Europe has
Chief Irish UN delegate
Boland came out unofficially
as a presidential candidate in
December 1959, but the possibil-
ity that Italy might submit a
candidate made the other West-
ern European UN members hesi-
tant to commit themselves to
Boland. Boland has a large
personal following at the
United Nations and has proved
himself a capable chairman and
never held the presidency--nor
the chairmanship of a major
political committee--will also
advance Nosek's prospects
among those UN members anxious
to emphasize the importance of
geographical rotation of major
UN elective offices and to make
some friendly gesture to the
USSR. High-rankipg officials
of the UN Secretariat, moreover,
believe that granting a high
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
elective office to the Soviet
bloc is a "matter of equity."
Some move may develop-to
support a satellite for the
chairmanship of the main (First)
Political Committee. Such a
move would appeal to Scandinavian
members are reportedl alread
committed N k
POLITICAL UNCERTAINTY IN THE BENELUX COUNTRIES
The three moderately right-
ist Benelux governments, all
formed in the last year and a
half during the general trend
to the right in Western Europe,
are gradually becoming weaker.
Their more progressive elements
are threatening to make common
cause with the opposition Social-
ist. parties,, which have been
regaining their strength and
prestige. The Belgian and Dutch
coalitions could collapse at any
time--a factor making it harder
for their leaders to deal with
politically delicate problems
like defense.
In Belgium, the "marriage
of convenience" between the So-
cial Christian (PSC) and Liberal
parties has limped from one in-
ternal crisis to another since
the government was formed in
November 1958. Although the
Congo problem tends to hold the
coalition partners together be-
cause of the opposition Socialist
party's reluctance to assume re-
sponsibility for its solution,
they have been far apart on such
matters as financial policy,
electoral reform, and the re-
distribution of parliamentary
seats. A further difficulty for
the coalition has been the move
of some Catholic trade union
members to join the Socialists
in protest against the govern-
ment's refusal to call a labor-
management conference on wage
and employment questions.
and some Latin American members
who might otherwise see opposi-
tion to Nosek as "a cold war
maneuver." Six Latin American
Similar difficulties over
economic policy have affected
the Netherlands' Catholic-Prot-
estant-Liberal coalition formed
in May 1959. The Labor party
opposition, supported by the
left-wing sector of the coali-
tion, has particularly opposed
Prime Minister de Quay's "free
wage" policy of permitting si-
multaneous price rises and off-
setting wage increases, and on
several occasions has extracted
concessions from him to avert a
political crisis. Growing labor
unrest and sporadic strikes have
further embarrassed the cabinet.
bors.
tary service and reduce defense
expenditures. Belgium reduced
obligatory service to 12 months
in 1959, and the defense minis-
ter has been directed to effect
further economies in the 1960
defense budget. In Luxembourg
the government is under consid-
erable pressure to reduce the
service term even below the
nine months to which it is at
present committed. The Nether-
lands Government, though a
stanch supporter of NATO, is
faced with increased public
criticism of its defense ef-
forts because of the lack of
comparable efforts by its neigh-
This situation has made it
difficult for the cabinets in
all three Benelux countries to
resist increasing popular pres-
sures to lower the term of mili-
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
PATTERNS AND PERSPECTIVES
During the past year, Uru- I the open, and the coming year
guay has suffered economic
strains and social unrest
marked by strikes, an increase
in th* cost of living, and a
serious trade imbalance. Most
of these stresses were present
to some degree in November
1958 when the voters terminated
over 90 years of Colorado party
rule and gave the mandate to
the conservative National party
(NP). The NP's policies since
taking office on 1 March 1959
have brought these stresses into
Venezuela
MONTEVIDEO
ARGENTINA-) P act
Mar del Plata
will probably see new strains
if the government holds to its
plan for drastically revamping
the country's highly subsidized
and semicontrolled economy.
Underlying the planned
changes is the NP's fundamen-
tal identification with agra-
rian interests, which form the
core of Uruguay's economy, as
opposed to the Colorado party's
traditional interest in urban
and industrial problems. The
Passo Fundo
c 0 c e a n
SECRET
new government plans
to seek extensive for-
eign aid to back an
economic stabilization
program but, like all
other modern Uruguayan
governments, is re-
luctant to permit
private foreign in-
vestment in any im-
portant area of the
economy.
National Party
Problems
The National
party, although it
won the elections on
a wave of popular dis-
content with the eco-
nomic situation, had
not developed a co-
herent program by the
time it took office
four months later.
The members of the
new government, headed
during its first year
by Martin Echegoyen,
were generally agreed
on the urgent need
for economic reform
but were hampered by
inexperience and di-
vided by factional
struggles over pa-
tronage. Their dif-
ficulties ? were
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WEEKLY SUMMARY
11 February 1960
compounded by the problems in-
herent in Uruguay's cumbersome
nine-man executive body--the
National Council of Government
--in which the opposition has
a third of the seats.
The internal party power
struggle, which claimed most
of the government's attention
during its first months in of-
fice, placed the NP's three
"Ruralist" councilors, headed
by Benito Nardone, in competi-
tion with the three "old-line"
members over patronage. A
third important faction, the
Blanco Democratic Union, has
almost half the NP's 51 seats
in the 99-man Chamber of Dep-
uties, but it is not represent-
ed on the executive council.
By midyear, disastrous
floods had caused shortages of
food and other essentials;
this, combined with a holdover
import austerity program, dou-
bled the previous rate of in-
flation and caused serious un-
employment in industries de-
pendent on imported goods.
Uruguayans, accustomed to a
high standard of living under
the Colorado party's welfare
state policies, reacted with
a wave of strikes and demon-
strations.
While attempting to relieve
the immediate pressure on the
business community and the wage
earner through stopgap subsi-
dies and credit facilities, the
government in July decided to
press for a complete reorien-
tation of the economy and the
elimination of chronic trade
deficits by freeing the ex-
change rate and channeling all
trade through the free market.
In December, after a bitter two-
month debate, congress author-
ized an exchange reform pro-
gram on a strict party-line
vote.
The program is hedged with
supposedly transitional taxes
and subsidies, but nevertheless
is expected to bring some imme-
diate benefits to producers of
raw wool and meat, Uruguay's
chief exports. Foreign exchange
earnings from wool and meat were
cut in half between 1953 and
1958, partly because politically
motivated subsidies deflected
production into less profitable
channels.
The program is also likely
to tighten the pinch on the
wage earner and the business
community and to prolong and
intensify the growing wave of
wage strikes.
While the NP is generally
sympathetic to the aspirations
of labor, it is determined to
mobilize the nation's resources
behind the rejuvenation of agri-
culture and has made it clear
it will fight "excessive" labor
demands. Both the army and the
navy have been used to break
strikes in recent months;,
half the Montevideo army garri-
son -.was,.- detailed to sanita-
tion duty , in 4inuary, r.eplicjng
striking-municipal employees.
The government is also
seeking ways to balance the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
budget and to control the na-
tional debt. The debt has more
than doubled since 1954, chiefly
as a result of inefficient
state-monopoly subsidies and
welfare-state activities, while
the per capita gross national
product has been stagnant or
has declined.
Benito Nardone, who will
assume the presidency for the
year beginning 1 March 1960,
is even more deeply committed
than President Echegoyen to re-
versing the policies of the
long-entrenched Colorado gov-
ernment and will probably face
severe challenges if he presses
his program rapidly. Nardone
has emphasized repeatedly that
he is counting on US financial
aid to back his policies.
The Colorado government
had turned increasingly to
trade with the Soviet bloc to
alleviate the country's eco-
nomic difficulties. NP lead-
ers, while deploring this
trend, have felt powerless to
reverse it as long as they
lack alternative markets.
U .UUAY
COST OF LIVING
(1953=100)
Uruguay's trade with the bloc
reached substantial proportions
in 1959; preliminary estimates
indicate it may have accounted
for as much as 20 percent of
the country's total trade, as
contrasted with 13 percent in
1958 and 5 percent or less in
earlier years. The bloc bought
over 40 percent of Uruguay's
1958-59 wool and supplied more
than a fourth of the country's
1959 oil require-
ments.
URUGUAY'S FOREIGN TRADE
MILLION DOLLARS IMPORTS EXPORTS
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The NP govern-
ment also is uneasy
about the activities
of the large Soviet
Legation staff in
Montevideo, espe-
cially in view of
the Argentine and
Mexican actions
last year expelling
bloc diplomats for
promoting labor agi-
tation. The govern-
ing council has sev-
eral times discussed
restricting the lega-
tion's activities but
has been unable to
agree on a course of
action. The local
Communist party, al-
though numerically
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
unimportant and previously lim-
ited politically by the much
greater appeal of the Colorado
party's welfare-state ideas,
controls the largest national
labor confederation and last
year mounted a new drive'for
"labor solidarity" against the
government's economic reform
program.
Relations With United States
US-Uruguayan relations
deteriorated seriously between
1953 and 1958, when the Colo-
rado government accused Wash-
ington of "intervening" in the
Uruguayan economy. Colorado
officials were especially bit-
ter about a countervailing duty
on wool tops--imposed in 1953
and removed in 1959--and about
US programs for disposing of
surplus .whea ,-.~iDurkiug:: thus:. period
Uruguay several times asked
Washington to "offer" loans,
and top officials were deeply
offended at the suggestion
that detailed proposals and
studies would be necessary.
The National party, al-
though consistently hostile to
the United States during its
years as an opposition party,
has abandoned this position
since attaining office. Like
the Colorado party, the new
government has been insistent
about its need for loans but
vague about supplying back-
ground information. The gov-
ernment plans to send a mission
to Washington in the spring of
1960 for further discussions
on the loan question
ECONOMIC COOPERATION WITHIN THE SOVIET BLOC
The Soviet bloc's Council
for Mutual Economic Assistance
(CEMA), after almost a decade
of comparative inactivity, has
been exerting itself since
early 1958 to promote closer
economic cooperation among the
European satellites. The im-
petus came largely from Khru-
shchev's sharp criticism in
April 1958 of CEMA's inade-
quacies, as shown by the trends
toward duplication in satellite
industrial development. The
USSR is pushing the current ef-
fort in order to reduce unneces-
sary drains on the Soviet econ-
omy, promote political and
economic cohesion in the bloc,
and support the bloc's program
of :economic jpenetration Of -un-
derdevelOped countries.
The USSR does not yet ap-
pear to be seeking to integrate
the entire bloc within the
framework of one master eco-
nomic plan--an ostensible pur-
pose of CEMA when it was cre-
ated in 1949 as the bloc
counterpart; to the West's Or-
ganization for European Eco-
nomic Cooperation--nor is there
any indication that full inte-
gration is likely or feasible
within the next few years.
Current efforts to improve
the coordination of economic
planning have the more limited
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
'd=TION OF CEMA
SECRETARIAT
(MOSCOW)
2,000 PERMANENT EMPLOYEES
CHEMICAL
INDUSTRY
(Berlin)
AGRICULTURE
(Sofia)
FERROUS
METALLURGY
(Moscow)
NONFERROUS
METALLURGY
(Budapest)
DEFENSE INDUSTRY
(Moscow)
MACHINE
(Pr
COMMISSIONS
COAL
(Warsaw)
FOOD & LIGHT
INDUSTRY
(Prague)
BUILDING
gue)
PETROLEUM & GAS
(Bucharest)
ELECTRIC POWER
(Moscow)
FOREIGN TRADE
(Moscow)
SAMPLE SUSCOMMISSION
Heavy Machinery
(Chm: E. Ger.)
General Machinery
(Chm: E. Ger.)
Machine Tools
(Chm: USSR)
Motor Vehicle, Tractor,
and Agricultural
Machinery
(Chm: Czech.)
ECONOMIC CCNSTRUCTION
PROBLEMS
(Moscow)
Electrotechnical
(Chm: Czech.)
Appliances and
Automatic Equipment
(Chm: E. Ger.)
Transportation
Machinery
(Chm: Hungary)
Radiotechnology
and means
of Communication
(Chm: Hungary)
Shipbuilding
(Chm: Poland)
Ball Bearings and
Standard Parts
(Chm: E. Ger.)
TRANSPORTATION
(Warsaw)
objective of ensuring continued
development of the industrial
and agricultural base of the
European satellites during the
period 1961-65. The program is
focused on the coordination of
the European satellites' eco-
nomic plans and the establish-
ment of an effective system of
industrial specialization with-
in the Soviet bloc.
CEMA will continue to use
bilateral and multilateral trade
agreements, joint industrial
projects, standardization of
designs and methods, and tech-
nical cooperation. The alloca-
tion of specific production
functions to the satellites
generally is still in the be-
ginning stages, but such spe-
cialization may ultimately
facilitate real gains in ef-
ficiency--particularly with
regard to construction and
technology do ne*i, indub:: -
tr-iAl' fields such,' as , petro-
chemicals.
Moscow is seeking more
formal legal status for CEMA
as part of the campaign for
"peaceful economic competition"
with the industrialized West,
to step up intrabloc economic
cooperation, and to increase
CEMA's prestige at a time when
West European economic coopera-
tion organizations are moving
ahead rapidly. At the CEMA
plenum in Sofia last December,
the members approved a "charter
and convention on legal capacity,
privileges, and immunities of
the council." These documents
may be designed to spellrout
the increased authority which
Khrushchev indicates the organ-
ization needs to implement its
ultimate goal--integration as
well as growth of the East
European economies.
CEMA's 14 specialized work-
ing commissions and their sub-
committees are meeting with in-
creasing frequency and are
instrumental in coordinating
the national economic plans for
1961-65. At CEMA plenums, spe-
cial emphasis is being placed
on those commissions dealing
with planning, production, and
trade in industrial fuels and
materials, machinery and equip-
ment, and transportation and
communications. The effect of
this emphasis, viewed largely
as long range, may be quite sig-
nificant by 1965. The satellites
remain reluctant to participate
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
fully in bloc specialization,
but they are displaying some
willingness to be guided by
bloc considerations where gains
are clearly in the national in-
terest as well.
CEMA activity has produced
some results, particularly in
trade. In 1959 intrabloc trade
appeared to be rising somewhat
faster than trade between East-
ern and Western Europe, a trend
which may be partly attributable
to.CEMA's efforts. Moreover,
agreements on specialization
in the production of machinery
and equipment are contributing
to the increasing importance of
these products in the intrabloc
trade of at least the
major European satel-
lites.
CEMA activities
in intrabloc trade
are designed primari-
ly to ensure the al-
location of key raw
materials, fuels, ma-
chinery, and equip-
ment to fulfill pro-
duction patterns for-
mulated in CEMA's in-
dustrial committees
and to lessen depend-
ence on the West by
meeting import re-
quirements from bloc-
wide production.
CEMA also seeks to enhance in-
trasatellite exchanges in or-
der to preclude unnecessary
drains on Soviet resources.
The organization seeks to pro-
mote greater multilateralism
in trade agreements, but bi-
lateral exchanges continue to
predominate in intrabloc trade.
CEMA's Commission for Foreign
Trade set up in 1957 a multi-
lateral clearing system thus
far limited in scope but which
may become a more important in-
fluence in the future.
The coordination of long-
term foreign trade plans has
entailed extensive discussions
on pricing policies to be fol-
lowed in intrabloc trade,
Prices in the bloc are arbitrar-
ily established; they are often
based on Western market prices,
without relation to production
costs. Now that CEMA is at-
tempting to rationalize and
improve the industrial struc-
ture of the bloc through in-
creased specialization, serious
attention is being given to the
problem of developing compara-
ble cost data and devising a
system of common prices.
Underdeveloped Countries
Cooperation between the
USSR and its European satellites
has increased significantly in
both the policy and operational
phases of the bloc's economic
offensive in the underdeveloped
countries. The Foreign Trade
EASTERN EUROPE'S TRADE WITHIN THE SHNt- SOVIET BLOC
(PERCENT OF FOREIGN TRADE)
1948
1958
IM
f
)
D
1 EST
A
ALBANIA
NA
95
95
BULGARIA
77
82
85
CZECHOSLOVAKIA
32
69
70
EAST GERMANY
45
73
75
HUNGARY
46
68
65
POLAND
41
56
54
RUMANIA
68
75
75
USSR
NA
73
66
11 FEBRUARY 1960
Commission prepares analyses of
exploitable opportunities based
on reports forwarded by bloc
trade organizations concerning
inquiries received and offers
made for factory equipment and
commodities. As a result, the
full bargaining power of the
bloc is frequently brought to
bear on the individual, compet-
ing, Western businessman in the
underdeveloped countries.
Cooperation within the bloc
has developed significantly with
regard to engineering and indus-
trial projects in the underde-
veloped countries. In the UAR,
for example, the USSR has sub-
contracted segments of Soviet
projects to individual satel-
lites or has had several
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
collaborators in complex proj-
ects. Moscow exercises over-
all control by encouraging the
satellites to initiate con-
tracts and execute projects of
interest to them. Long-term
payments by the underdeveloped
countries apparently are made
to the USSR, which settles with
the satellites in shorter
periods of time. This system
enables Moscow to increase the
impact of bloc economic activ-
ity while strengthening econ-
omies and promoting some degree
of specialization.
Coordinated Projects Under Way
The most colorful examples
of CEMA-sponsored efforts at
economic collaboration are bi-
lateral and multilateral de-
velopment projects. The most
highly publicized of these is
the joint pipeline project
which will connect the large
Ural-Volga oilfield with re-
PROPOSED SOVIET BLOC
OIL PIPELINE
Flock
POLAND *
I- wars..
apesrf
HUNGARY
RUMANIA
Bucharest
fineries in East Germany, Po-
land, Hungary, and Czecho-
slovakia. The whole system may
be in operation by 1963-64 and
will reduce transportation costs
and enable increased Soviet
crude oil deliveries to the
satellites.
Another highly publicized
multilateral satellite project
under the aegis of CEMA is the
construction in Rumania of
Europe's largest cellulose
plant. The first phase of this
project, which eventually will
produce 700,000 tons of cellu-
lose annually, is to be com-
pleted this year. Rumania has
a "half share" in the project,
and Czechoslovakia, East Ger-
many, and Poland are participat-
ing by supplying processing
equipment and technical aid.
The Electric Power Commis-
sion of CEMA is supervising
unification of bloc power sys-
tems,-thus assuring
Kuybyshev
'ASPIANIr/
SEA
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PART III PATTERNS AND PERSPECTIVES
a more rational ex-
ploitation of power
resources and an in-
creased exchange of
electric power.
Czechoslovakia
is to supply power
equipment to Rumania
on credit, to be paid
for by future deliv-
eries of Rumanian
power. Czechoslo-
vakia also is collab-
orating with Hungary
on the construction
of a Danube hydro-
electric project.
East Germany, Poland,
and Czechoslovakia
are participating
jointly in a large
thermal-power plant
to exploit the enor-
mous reserve of Polish
brown coal.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
11 February 1960
Basic Problems
The CEMA commissions have
a key role in efforts to pro-
mote economic coordination.
They and the national planning
agencies are faced initially
with the problem of comparing
such factors as natural re-
sources, production capacities,
labor productivity, and costs
of production to decide which
countries are best suited for
particular types of production.
Differences in domestic and
foreign trade prices and in
goods classification have kept
such comparisons to a min-
imum.
A leading Czech economist
engaged in CEMA activities
states that the difference in
pricing systems presents
"great difficulties." While
this problem is as yet unsolved,
much attention is focused on
the elimination of high-cost
industries that arose from the
earlier policy of relative na-
tional self-sufficiency with
its emphasis on generally small
output of a wide assortment of
products. There is deep reluc-
tance in Eastern Europe to
abandon output in these fields,
where a sizable stake has been
developed. Satellite officials
are unwilling to become depend-
ent on suppliers in another
country for common industrial
parts despite the clear econ-
omies to be gained from spe-
cialization and mass produc-
tion.
Another problem which com-
plicates CEMA objectives is the
satellites' fear that speciali-
zation will impose rigidity in
their industrial structure. The
less industrialized countries
are particularly concerned that
the integration program might
hold them to the role of mere
suppliers of foodstuffs and in-
dustrial raw materials.
Much of the progress
claimed by CEMA--except in trade,
where a major reorientation
toward the USSR has occurred--
is derived from the natural
growth of the satellite econo-
mies. For example, East Ger-
many, now specializing in pre-
cision instruments, has a long
history of superiority in this
field. To achieve further eco-
nomic rationalization of the
Soviet bloc, recommendations
for industrial expansion include
special attention to recently
developed industrial pursuits
such as plastics, synthetic
fibers, and chemicals, where
no satellite country yet has
a vested interest.
nical measures designed to im-
To further a desire for
closer collaboration, CEMA also
is emphasizing the standardiza-
tion of products and technolog-
ical exchanges within the sat-
tellites as a prelude to future
strict specialization of produc-
tion. CEMA is able to point to
satisfactory progress in induc- 25X1
ing the satellites to accept tech-
prove quantity of output.
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