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Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 7E COPY NO. x OCR NO. 1672/60 14 April 1960 CURRENT INTELLIGENCE WEEKLY SUMMARY DOCUMENT NO. NO CHANGE IN CLASS. I I DECLASSIFIED CLASS. CHANGED TO: TS S NEXT REVIEWDA7 E: < f AUTFl: i DATF~~~ REVIEWER: 25X1 CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE x State Department review completed Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 THIS MATERIAL CONTAINS INFORMATION AFFECT- ING THE NATIONAL DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE ESPIONAGE LAWS, TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS- SION OR REVELATION OF WHICH IN ANY MANNER TO AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW. The Current Intelligence Weekly Summary has been prepared primarily for the internal use of the Central Intelligence Agency. It does not represent a complete coverage of all current situations. Comments and conclusions represent the immediate appraisal of the Office of Current Intelligence. Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Next 6 Page(s) In Document Denied Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14' April 1960 During Prime Minister Ver- woerd's recuperation from the 9 April attack on his life,the South African Government is being led by Minister of Lands Paul Sauer, a member of the relatively moderate wing of the ruling Nationalist party. Sauer and other government spokesmen have indicated that Verwoerd's policies will be continued. In fact, the Na- tionalist drive for total ra- cial separation may be inten- sified in an effort to reduce South Africa's overwhelming dependence on African labor. Police raids and arrests in African areas are continuing. With the outlawing of the two main African nationalist organizations--the African Na- tional-Congress and the Pan-Af- ricanist Congress --and'_the ar- rest of most of their leaders, Africans have lost most bf their ability to organize effective protests. The continuing crisis may have aggravated the splits with- in the European population. Al- though the English community, represented in Parliament by the United party, has supported the government's efforts to sup- press the Africans, United par- ty leaders have called for an investigation of the causes of the disturbances once the ten- sion abates. Moreover, the English population, which domi- nates South African industry and wishes to retain a large urban African labor pool, will SECRET PART i Or IMMEDIATE INTEREST Paae 1 of 7 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET 14 April 1960 probably increase its opposi- tion to the Afrikaners if the latter follow through with their apparent aim of intensi- fying the implementation of apartheid. Afrikahe' l" } di etrii st ;'b f ,the English community may be height- ened +by the fact that Verwoerd's CUBA The Castro regime con- tinues to expand relations with the bloc. It seems to be preparing its first exchange of ambassadors with a Sino- Soviet bloc country--Czecho- slovakia. On 7 April, the secretary general of the Cuban Communist party, in Prague en route to Moscow, told Czech newsmen that he hoped "the Cuban ambassador would soon arrive in Prague on the basis of an agreement to establish diplomatic relations." Czecho- slovakia was the first Commu- nist country to establish per- would-be assassin is of English descent. In addition, Afri- kaners are no longer united among themselves; influential Nationalists in the Cape Town area have recently begun to criticize fundamental aspects of their. party's policies, South Africa's representa- tion at the London conference of Commonwealth prime ministers in May has not been determined. Sauer or some other senior cab- inet members may attend in place of Verwoerd; otherwise, South Africa will be represented only by External Affairs Minister. Eric Louw a Nationalist ex- tremist Even if a more moderate representative should accompany Louw, the out- look is for growing tension be- tween South Africa and the other members of the Com- monwealth. manent trade representation with the. Castro regime, and there _ have been increasing cultural, tilitary, and economic contacts but no formal trade agreement like those with the USSR, East Germany, and Poland. Polish officials have in- sisted that on'y sport and ag- ricultural planes and heli- copters will be sold to Cuba under a trade and payments agreement signed recently in Havana by the Polish deputy minister of commerce. SECRET i 25X1 PART I OF IMMEDIATE INTEREST Page 2 of 7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET NOOK CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 Exchanges of visits by cultural, labor, and agricul- tural missions between Cuba and the Soviet Union and Com- munist China are increasingly reported, and Castro plans to establish diplomatic relations with these regimes and other Communist countries. However, there is no evidence that the USSR has yet taken action on the expressed agreement of Mikoyan and Castro in February to resume diplomatic relations "at a convenient time." Mos- cow may wish to assess reac- tion to the Czech move and to wait until after the summit conference in May. antigovernment guerrilla bands cou provide the nucleus for an eventually much larger and more serious challenge to Castro's position. The growing number of defec- tions from the regime has caused widespread comment in other Latin American countries adverse to the Castro regime. The Cuban air attache in Mexico defected on 11 April, declaring his conviction that Castro has betrayed the Cuban revolution. He said the only road now open for him is again to take up arms, this time to fight Castro. The resignation on 7 April of the Cuban ambassador to UN of- fices in Geneva, Andres Vargas Gomez, is perhaps even more significant, since he is widely respected and capable and is representative of professional and business elements who have become thoroughly disillusioned with Castro.. In its plans for the "hun- gry nations" conference in Ha- vana in September, Cuba now seems resigned to accept unofficial delegations to an obviously non- governmental conference. This is indicated by the recent Cuban in- vitation to ten Honduran students and pro-Castro members of the Hon- duran congress. The conference will thus be a far cry from Cas- tro's original plan for a meeting of ,official delegations headed by prominent personages, but his con- trol of the conference is assured and extensive propaganda exploita- tion can be expected. EAST-WEST RELATIONS As the Western foreign min- isters began meeting in Wash- ington, Moscow reverted to its standard propaganda line that influential circles in:the West still oppose negotiating with the USSR and that this continues to divide the alliance. Moscow seized on Secretary Herter's 4 April speech to contrast West- ern skepticism over the prospects for agreement at the summit with Khrushchev's public expres- sion of optimism following his talks with De Gaulle. The Soviet press criti- cized the speech as a demon- stration of how the "weight of the past" still drags US policy along the "inglorious cold-war road." Izvestia on 9 April SECRET PART I OF IMMEDIATE INTEREST Page 3 of 7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April claimed that Herter used the "threadbare" thesis of the threat of aggression from the East to urge Western European countries, particularly Bonn, to "arm and rearm." Moscow also used the speech as "evidence" of divisions with- in the West. Izvestia said Herter's defense of the "new" West Germany as a stabilizing factor in Europe was shown to be "elementary hypocrisy" by a London Times report that in his talks with Macmillan the secretary did not deny Germany could become a danger to Europe. Pravda claimed that the speech clashed with Premier Debre's statement on the same day calling for a speedy solution of disarmament problems, and was generally at odds with the tone set at Camp David and at Rambouillet, where Khrushchev and De Gaulle met. As part of the general propaganda build-up to place the West on the defensive be- fore the summit conference on 16 May, Moscow has intensified its efforts to discredit the Adenauer government with a series of critical notes, an- nouncements. and press con- ferences Adenauer still favors a pre-summit plebiscite in West Berlin, but the West Berlin city council agreed to hold the plebiscite if requested by both the Bonn government and the Allies. Consequently, Adenauer apparently decided to reserve the plebiscite idea for possible use at a later date. Disarmament The bloc delegates at the Geneva disarmament conference have stepped up pressure to commit the West to a set of general principles which could be referred to the summit for endorsement. Following formal rejection of each other's plans, Soviet delegate Zorin suggested that this line of debate be abandoned in favor of returning to the United Nations resolu- tion as the commonly agreed point of departure. He intro- duced a slightly refurbished version of the Soviet proposal, under the heading "Fundamental Principles of Complete and Gen- eral Disarmament." He stressed that the discussions had re- vealed certain points of mutual agreement which should be re- corded before proceeding to draft 'specific :measures for.. a treaty. The bloc delegates prompt- ly moved to establish this docu- ment as the basis for further debate by. inviting the Western powers to offer amendments and suggestions. Zorin argued that areas for possible agree- ment were larger than the West admitted and cited the preamble, measures constituting complete disarmament, and the concepts of stages and effective controls contained in his list of prin- ciples. These tactics, plus the Soviet agreement to a long re- cess in the conference from SECRET PART I OF IMMEDIATE INTEREST Page 4 of 7 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY - 14 April 1960 29 April until 7 June, reflect Moscow's apparent belief that the West will make no basic. shift in its disarmament posi- tion prior to the summit con- ference. The bloc delegates hope to obtain some agreed gen- eral statement, even though limited perhaps only to a treaty preamble which restates in effect the UN resolution. Test Ban Talks A member of the Soviet delegation to the test-ban talks has privately told a US official in Geneva that his delegation has forwarded to Moscow its recommendations.on the Eisen- hower-Macmillan statement of 29 March which called for uni- lateral pledges not to test small underground nuclear weap- ons. He added that it will take "some time" before a de- cision is reached. In contrast to his usual approach to any new Western move at the talks, the Soviet delegate has refrained from attacking the Western proposal. He has instead confined him- self to posing questions about the duration and nature of the proposed moratorium and on the details of the research and de- velopment program, and to re- stating the Soviet position that any moratorium obligation should be incorporated in the"; test-cessation treaty and that the moratorium and research program should be conterminous. This cautious approach reflects Khrushdhev's apparent desire to have the main elements of a test-ban' treaty ready for decision at the May summit meeting. In discussing the is- sues to be taken up by the, heads of government, Soviet spokesmen continue to point to a test-ban treaty as of- fering the best possibility for agreement. (Concurred in by E:=- (Concurred EAST HIGHLIGHTS Iraq 1 The Iraqi scene this past week has been dominated. by the visit of Soviet First Deputy Premier Mikoyan, who arrived on 8 April. He has talked with Qasim several times, but no of- ficial pronouncements have been made. Mikoyan is being given the usual tour--the hanging gardens of Babylon, model vil- lages, and the US-built Daura oil refinery near Baghdad. He is scheduled to hold a press conference before returning to Moscow on 16 April. Mikoyan has been greeted by large crowds, and the Com- munist press has marked the visit,_by praising Soviet eco- nomic assistance. One nation- alist paper, however, published an "open letter to Comrade Miko- yan" declaring that the "im- perialists" could not have de- famed "your reputation one tenth as much" as the Iraqi Communists have. Soviet pub- licity has been confined large- ly to accounts of Mikoyan's statements of friendship for the Iraqi people and to descrip- tions of his activities. There have been no signif- icant clashes or disturbances during the visit. However, Qasim chose the day before SECRET PART I OF IMMEDIATE INTEREST Page 5 of 7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY ,.1 April 1960 Mikoyan's arrival to chastise the leftist-run Iraqi press association and the Communist press for creating divisive influences in the country. His comments were particularly aimed at articles criticizing the government. On 10 April the president of the Baghdad Military Court struck out at the Communist press for describing 66 indi- viduals being tried as "honest fighters," stating, "No one can dall.these accused honest." Those referred to are Commu- nists who set up a "workers' court" and executed 17 anti- Communists after the Mosul re- volt in March 1959. A recent issue of Ittihad al-Shaab, the Communist mouthpiece, was de- voted entirely to charges that the regime has shown partial- ity toward anti-Communist par- ties, has closed down Commu- nist-dominated unions and im- prisoned their leaders, and has failed to license peasant associations. At the same time, three previously sup- pressed nationalist papers have been allowed to resume publication. The proceedings of pro- Communist Col. Mahdawi's Peo- ple's Court now are being edit- ed' before being broadcast by Baghdad radio and television. Libya On 11 April a minority bloc in the Libyan Chamber of Deputies launched virulent at- tacks on the operation of Wheel- us Air Base, on the "lack of re- spect shown by Americans for Libyan sovereignty and honor,", and on American "indifference" to Libya's economic needs. One of the group's spokesmen de- manded that the chamber take matters into its own hands and "annul this evil American treaty." While the Libyan Government still controls the majority of the chamber's membership, the strength of this opposition bloc was considerably increased in last January's elections. Earlier meetings of the newly elected membership were organi- zational; this is the first chance the minority group has had to use parliamentary debate to air its anti-American views. As "rent" for continued American use of the air base, the prime minister and other leading governmental officials are insisting on a substantial level of American aid and a commitment of funds for several years which would be completely at the disposal of the Libyan Government. The government's handling of the minority par- liamentary group on this issue will depend largely on the spe- cific size and nature of pend- ing new American aid proposals. Arab League The Arab League Political Affairs Committee, which two SECRET PART I OF IMMEDIATE INTEREST Page Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 weeks ago found the hotly dis- puted Palestinian "state" ques- tion too delicate to handle, (see Part III, page 6), tried to tackle another controversial matter in Cairo last week. This was the UAR-sponsored proposal for an Arab boycott of French goods and the freezing of French assets in Arab states in protest against nuclear testsa in the Sahara. In mid-March, Cairo quietly stopped issuing further import permits for French goods, Disagreement in the ,Arab League committee showed that few, if any, of the other Arab governments intend to follow the UAR's lead, and Cairo prob- ably is not pressing the issue. A Lebanese official publicly announced ':that his country would "refuse to abide by any Arab League recommendation for the boycott of France." While there has been a strong adverse reaction in"all the Arab states to the French nuclear tests, economic rela- tions with France are important to many of them. Their goTern- ments prefer to express their opposition in. ways which db not entail disruption of trade or possible financial loss. Thus, most of the Arab states will probably continue to concen- trate on protesting through propaganda, public demonstra- tions, and diplomatic notes. Working with the. African states, they will also sustain their pressure in the United Nations for a special General Assembly session on the issue. Turkey-USSR Ankara and Moscow issued simultaneous announcements on 12 April that Premier Menderes would visit Moscow in July and Premier Khrushchev would make a return visit to Turkey at a later date. The USSR since early 1960 had been pressing for such an exchange, but offi- cials in Ankara were reluctant to agree to the visits, fear- ing their,',,effect on some of Turkey's allies--particularly Iran. The Turks apparently ac- quiesced to keep pace with some of their NATO allies in current efforts to improve East-West relations. Greece have already indicated fear that the announcement will cause internal difficulties for the Karamanlis government, which has consistently rejected simi- lar Soviet overtures. Iran, .whose relations with the USSR have been severely strained during the past year, will also be under increased pressure to improve relations with Moscow. SECRET PART I OF IMMEDIATE INTEREST Page 7 of 7 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 NOTES AND COMMENTS Fighting in Algeria may soon intensify, especially in the Tunisian border area. The rebels have indicated their desire to step up military op- erations as a means of improv- ing their international stand- ing. The build-up by both sides near the Tunisian border increases the possibility of French incursions into Tuni- sian territory in pursuit of rebel units. French Defense Minister Messmer reported to the Senate Defense Committee on 6 April his concern over Tunisian "com- plicity" in allowing the in- stallation of rebel training camps "within binocular range" of the Algerian frontier. He added that French military forces are not authorized to remedy this situation "for the time being." Meanwhile, French Army headquarters in Algeria has declared the end of the eight- month campaign in the Kabylia Mountains, in which the French claim to have inflicted 5,000 rebel casualties, and announced the imminent transfer of the seasoned Tenth Paratroop Divi- sion, probably to the Tunisian border. French military authori- ties state that they expect a rebel attack in force at an early date, and the press is giving anticipatory play to the "right of pursuit." The French have crossed the Tuni- sian border occasionally in the past, and the bombing of Sakiet-Sidi-Youssef in Febru- rary 1958 resulted in a formal Tunisian complaint to the UN Security, Council. The rebels, who held a council of war in Tripoli from 4 to 6 April, plan to step up both military and political activity. Spokesmen of the provisional government have hinted that newly arrived arms will permit the launching of a spring offensive. The rebels, reportedly disappointed at Khrushchev's failure to plead their cause.with De Gaulle, may send a delegation to`Communist China to obtain arms and to demonstrate their willingness to accept aid from any friend- ly source. The rebels' moves to gain international accept- ance as belligerents have in- cluded "ratification" of the Geneva convention at the Trip- oli meeting, as well as efforts to inaugurate a "foreign legion," presumably made up of Arab volunteers, for Algeria. Premier Debra's visit to Algeria from 11 to 13 April concentrated on preparations for the 29 May cantonal elections which his government, in spite of the skepticism of of most political groups in France, apparently hopes will bring forward a new group of Moslems with whom Paris can discuss Algeria's future. While his public statements dealt mostly with problems related to economic and social progress, he said in a 12 April broadcast that a vote favoring independence in any referendum following ;paeificition would be disastrous and would lead to partition of the area. The rebels have said they will boycott the French-sponsored elections in Algeria, and prob- ably plan a campaign of terror- ism to inhibit Moslem partici- pation. SECRET PART II NOTES AND COMMENTS Paae 1 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 ECONOMIC CONFERENCE A Belgian-Congolese eco- nomic conference will open in Brussels on 25 April against a backdrop of growing alarm in Belgium over the Conga's eco- nomic future after it becomes independent on 30 June. The conference is thus likely to be much concerned with imme- diate financial problems, but Belgium still hopes that it will also settle such impor- tant questions as the Congo's future ties with the Common Market, the formation of a Belgo-Congolese Development Corporation, future relations between the Congolese and Bel- gian central banks, and various other financial and budgetary management problems. The most immediate problem confronting the Belgians is the serious flight of capital from the Congo since the independence accord was reached. Capital outflow in 1959 exceeded the 1958 level by $130,000,000, reflecting the persistent fear of disturbances and possible expropriation. The capital repatriation in January 1960 was $20,000,000 above last year's monthly average. Although ex- change controls have recently been initiated, the Congo cen- tral bank's reserves have been seriously depleted, and there are apparently insufficient funds to meet treasury require- ments between now and 30 June. The longer term problem, and probably the more important one, is the lack of financing for essential public investments. At a meeting with American Em- bassy officials in Brussels on 5 April, Congo Minister de Schrijver and his economic counselor estimated the 1960 requirement at $120,000,000 to $135,000,000. This sum is ON THE BELGIAN CONGO over and above minor sources Brussels still hopes to tap and the $54,000,000 contribution Belgium will make to the Congo budget this year. Brussels says it has unsuc- cessfully sought Belgian-guaran- teed loans for this purpose from various European countries, as well as the European Common Mar- ket's investment bank, and now sees no alternative to American aid. Without immediate and sub- stantial foreign aid, Belgian officials predict there will be "economic and political turmoil," economic stagnation, and aggrava- tion of the already serious un- employment problem, and a conse- quent loss of Belgian--and West- ern--prestige. The Belgians seem to have been slow to appreciate the eco- nomic implications of the Congo's independence and are probably ill prepared to cope with them. The $1,000,000 technical assist- ance program Belgium intends to offer, for example, seems small. Also illustrative of overoptimism is the hope expressed by Belgian officials that the Congolese will agree to permit Belgian nationals to continue to handle the budget, the banking system, and the gov- ernment controller's office. Some Congolese appreciate the extent to which they are still dependent on Belgium, but they will be alert to any at- tempt by Brussels to retrieve at the economic conference what it gave up at the political talks in January. One powerful Congo- lese leader has indicated that in his view the conference should concentrate on such matters as the present financial crisis and Belgian budgetar assistance to the new state. SECRET PART II NOTES AND COMMENTS Page 2 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 SOMALI AGITATION FOR INDEPENDENCE Agitation by Somali nation- alists for early independence and political unification has increased tension in the Horn of Africa, particularly between Ethiopia and the Somalilands. Local legislatures in the pro- tectorate of British Somaliland and in the Italian-administered trust territory of Somalia re- cently passed resolutions di- rected toward unifying the two territories by 1 July, when the trust territory is to achieve independence. To guide its protectorate toward independence within two or three years, London has re- formed the territory-wide legis- lative council so that elected members are in the majority. Elections were held last Feb- ruary, and London appointed four Somalis to ministerial positions in the seven-member executive council. The nationalist lead- ers, however, at the opening ses- sion of the legislature in Har- geisa, introduced a motion on 6 April calling for independence and unity with neighboring Somalia by 1 July. SECRET PART II NOTES AND COMMENTS Page 3 of 3S Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET N CURRENT INTELLIGENCE WEEKLY BURY 14 April 1960 Protectorate nationalists, taking advantage of an apparent change in the position of the trust territory government in favor of Somali unity, have by- passed official channels in London and Rome and have ar- ranged a meeting of representa- tives of the two Somali terri- tories in Mogadiscio--Somalia's capital--to discuss a unifica- tion agreement. Somalia's legislature, ap- parently anticipating the res- olution made at Hargeisa, re- quested the Italian administra- tor to advise the UN of the "unanimous desire of all Somali people to be united under the same flag" and to permit them to "freely express" their "own wish to be united" in an early UN-conducted plebiscite. While Walter Ulbricht's all-out campaign to convert East Ger- many rapidly into a "social- ist" stronghold has sharply in- creased refugee flights to the West. The number was some 13,- 400 in March, compared with less than 10,000 per month in January and February. During the week ending 12 April, more than 2,391 refugees fled to West Berlin alone--598 more than during the compara- ble week in 1959. Of the March total, al- most 11 percent were farmers--compared with a normal figure of about 5 percent; craftsmen, intellec- tuals, and "middle class" persons. are also fleeing in greater numbers. The increased flow is this action may indicate that Mogadiscio now intends to sup- port actively a pro-union atti- tude, the Somalia Government probably continues to favor a loose association with the pro- tectorate. Such an association would preserve the dominant po- sition of the governing tribal group in Somalia. Addis Ababa, concerne ?; that the nomadic Somalis who predominate in Ethiopia's south- eastern Ogaden Province might be attracted to an enlarged So- mali state, has sought to im- prove its relations with and control over these nomads. In addition, Addis Ababa has claimed that Britain and Italy inspired the Hargeisa and Mogadiscio mo- tions, accusing them of fomenting of Africa. "neo-imperialism" in the Horn likely to continue in com- ing weeks. The regime has announced that all but one of East Ger- many's 14 districts--Karl-Marx- Stadt--show -have been fully col- lectivized, meaning that more than 90 percent of East Ger- many's agricultural land is now REFUGEES ESCAPING TO WEST BERLIN FIRST QUARTER 1960 30 DEC -5 JAN 131AJAN 29 JAN -2 FEB 10-16 FIB 24 FEB-IMAR 1015 MAR 23 29 MAR 6 12 JAN 2026 IAN 3-9 FEB 17 23 FEB 2.9 MAR 16-22 MAR 30 MAR -5 APR SECRET PART II NOTES AND COMMENTS Pave 4 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 - -40011, SECRET *MW 14 April 1960 under direct supervision of the state. Most of the newly col- lectivized farms are still loosely organized, but the re- gime will probably attempt to consolidate control after the harvest. This in turn is like- ly to provoke further resistance and flights to the West. The regime will continue pressure for complete collec- tivization in the remaining dis- trict in the hope of being able to announce, prior to the sum- mit conference, that East Ger- many is fully collectivized. At the same time, great efforts have been made to halt the flights by tightening security precau- tions on the frontier and a- round Berlin. Proceedings at the eighth SED central committee plenum, held from 30 March to 2 April, reveal that the regime is at- tempting to counter serious manpower shortages and low morale on farms by ordering thousands of youths to the countryside. The State Plan- ning Commission has ordered conversion of certain factories to manufacture farm machinery essential for the newly formed collectives. More funds are to be provided for collectives, which are usually costly opera- tions. This reallocation of funds reportedly will be at the expense of badly needed hous- ing and consumer goods for the general populace. Such meas- ures suggest that the collecti- vization campaign went at a faster pace than originally planned. The socialization campaign --called the "great leap for- ward"--is being extended to the "middle class." The economic importance of the small shop- keepers, who in August still accounted for approximately 25 percent of East Germany's re- tail trade, may be such that the regime will deal somewhat more.cautiously with them than with independent peasants. CHOU EN-LAPS TRIP THROUGH ASIA Communist China's Premier Chou En-lai, accompanied by Foreign Minister Chen Yi and a party of 20, has left Peiping for a tour of South and South- east Asia. His major effort will be directed toward attain- ing some agreement with Indian Prime Minister Nehru concerning the countries' boundary dispute. Extension of his journey to in- clude Nepal, Burma, and Cambodia is intended to dramatize Pei- ping's renewed emphasis on friendship with its neighbors and to repair some of the damage to Communist China's prestige .resulting from the Sino-Indian border issue and Peiping's sup- pression of the Tibetan revolt. SECRET PART II NOTES AND COMMENTS Page 5 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 %Now SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 Since Chou's 1956. trip through this same area, no top- level Chinese delegation has toured Asia. Peiping may feel that, in addition to demonstrat- ing its professed allegiance to the "Bandung spirit," there is a need to follow up the re- cent high-level Soviet visits. The delegations from Moscow maintained a neutral attitude M O N G O L I A For the past several months, the Chinese have used propaganda and diplomatic "leaks" to por- tray themselves as anxious for a quick and equitable settle- ment with India. This seems intended to provide Chou with a maneuverability denied Nehru, who must constantly reassure the Indian public that he is not appeasing Peiping. toward China's disputes with India and Indonesia and gave Peiping virtually no support for its pose of "reasonable- ness." In Rangoon, Chou pre- sumably hopes to exchange rat- ifications of the Sino-Burmese boundary agreement and the treaty of friendship and nonag- gression concluded in January. The Chinese will portray Chou's visit there as evidence of friendship and mutual accord on outstanding issues--a time- ly display intended to make it more difficult for Nehru to adopt an uncompromising posi- tion in his talks with Chou: IT. CN 1'q. NE - -_- ar_ To take the initiative and set a tone of Chinese flexi- bility, Chou, although realiz- ing that public pressure would probably prevent Nehru's early acceptance, may offer the out- right exchange of disputed areas in Assam for those in Ladakh. Chou probably will seek to gain agreement in prin- ciple to the Chinese contentions that the border is not and never has been delimited and that the occupation of territory is a key point in determining final ownership. Chou is expected to press for a mutual military withdrawal from present frontier positions SECRET PART II NOTES AND COMMENTS Page 6 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 :.s SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 but may,as a, conciliatory ges' ture, offer to pull Chinese troops further back from Pei- ping's version of the Lddakh border than he has before. He is certain to push for a joint border commission to keep ne- gotiations alive. In Nepal, Chou, who is re- paying Prime Minister Koirala,'s recent visit to China, probably will attempt to include a clause in a friendship treaty to pro- hibit new military alignments. This would be aimed directly at undercutting India's influ- ence in Nepal, for Katmandu has a mutual defense understand- ing with New Delhi but no formal agreement as yet. Koirala, who signed border and economic aid agreements in Peiping, apparent- ly is ready to conclude a rou- tine friendship and nonaggres- sion pact but probably will re- sist any clause barring Nepal from entering into military defense agreements with other countries. King Suramarit's death. In Phnom Penh, Chou will try to capitalize on Cambodia's strained relations with Thai- Chou is scheduled to ar- rive in Cambodia in early May, but his trip may be postponed for a short time because of PEIPING NATIONAL PEOPLE'S CONGRESS CLOSES The annual meeting of Communist China's National People's Congress, which ended on 10 April, was highlighted by the announcement of a new drive for the formation of com- munes in cities. Speeches during the lat- ter days of the congress pro- vide some details on the form of the new urban communes. They are to be organized on one of three basic patterns: around large-scale state enterprises such as factories or mines, around small "neighborhood" enterprises, or around govern- ment organizations and schools. Urban communes in the Manchurian industrial city of Harbin were reported to have an average of nearly 160,000 members, while those in Shenyang (Mukden) average about 30,000 members. One speaker noted that 20,000,- 000 urban residents had-already been organized into communes, largely in the provinces of Honan,Hopei, and Heilungchiang. Both People's Daily and speakers awe congress have described the formation of urban communes as a step-by- step process. The amount of propaganda attention devoted to the movement,however,suggests SECRET 25X1 25X1 PART II NOTES AND COMMENTS Page 7 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 that it will develop into a ma- jor, high-pressure campaign. The social and political im- plications of the urban commune program are likely to be of more immediate significance than the economic effects, and Peiping presumably hopes it will result in a higher degree of regimentation and control in the cities. Premier Chou En-lai's speech at the closing session of the congress on internation- al relations and foreign policy. added nothing to Peiping's pres- ent lines. He gave only routine support to Soviet policies, and his attacks against the United States contrasted sharply with Moscow's relatively moderate tone. He recently told the Indian ambassador that once Sino-American issues were "set- tled," Soviet and Chinese at- titudes would be "identical." Chou had originally been scheduled to present a,"govern- ment work report," but this was dropped from the congress' agenda just before the opening session. In the light of other indications that the opening may have been delayed for sev- eral days, this suggests that lines to be taken at the con- gress were not formulated in detail until the last minute. Mao Tse-tung attended the opening and closing sessions of the congress, as did Vice Premier Chen Yun, whose inac- tivity for almost a year has given rise to speculation that he was out of favor. Chen, described by a Western corre- 25X1 spondent as "lean and haggard," was listed in his usual place as senior vice premier. CHINA'S LONG-RANGE AGRICULTURAL PROGRAM China's National People's Congress, which ended on 10 April, endorsed a long-range "Program for Agricultural Development (1956-67)" but called for ef- forts to complete it two to three years ahead of schedule. This program, announced in early 1956 and revised in the fall of 1957, is a loosely drawn outline of measures to improve agriculture. It lacks specific provisions for its realization, but is said nev- ertheless to have provided the "impetus" for many of the suc- cesses achieved in agriculture in the past few years. In discussing the program before the congress, party agri- cultural spokesman Tan Chen-lin attempted to show that in the "leap forward" of the past two years, certain objectives had already been surpassed and others realized to a large ex- tent. He claimed that the yields called for by 1967 have already been achieved on one fourth of China's grain acreage and on more than 40 percent of total cotton acreage. The country's hog popula- tion and average per capita farm income last year reached levels which the program had set for 1962. Some two thirds of the program's target for irrigated acreage has already been met, Tan said, but he cautioned that completion of a reservoir does not automatically confer irriga- tion benefits on nearby acreage --as Peiping's statisticians have sometimes implied. SECRET PART II NOTES AND COMMENTS Page 8 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 Good progress was also re- ported by Tan toward the pro- gram's goals of extending the area sown to improved seed strains, planting more high- yield crops (like corn), rais- ing the multiple-cropping in- dex, bringing new areas under cultivation, and initiating greater research in agronomy. Mechanization and moderniza- tion are proceeding more rapid- ly than had been envisaged in the original program. Tan revealed, however, that the situation in agriculture is not completely optimistic. Grain yields set for 1967, one of the few specific targets set forth in the program, im- ply the production of 360,000,- 000-375,000,000 tons. This would mean an average annual increase of about 7 percent over the 1957 harvest--the last crop before the "leap forward." While this is a more conserva- tive figure than the claimed increase of 21 percent per year between 1957-1959, it is still an unrealistic goal. The rel- ative modesty of the 1967 goal, together with Tan's emphasis on the "arduous" task ahead, suggests that even Peiping may regard some earlier "leap for- ward" claims as exaggerated. Tan takes note of the vast changes which have taken place in the Chinese countryside since the program was first made pub- lic in early 1956. The regime has shifted rapidly from lower level cooperatives through col- lective farms to the present communes. Tan intimates that future changes will be worked out with- in the commune framework. He says the,promised move from the present system of ownership mainly at the production-brigade level to ownership mainly at the commune level will require several "conditions"--average income of commune members must reach 150-200 yuan (as against 85 yuan last year), "poor" brigades must reach the income levels of advanced ones, and mechanization must reach "cer- tain proportions"--all of which indicate that complete rural 25X1 "communization" will not be real- CHINESE COMMUNIST MILITARY ASSISTANCE TO INDONESIA Commu- nist China prove e e Indo- nesian armed forces with about $21,000,000 in arms and mili-' tary equipment during late 1958 and early 1959. All this materiel except four small landing craft was delivered between September 1958 and May 1958. Approximately half the arms were supplied to the air force, and the remainder was about equally divided be- tween the army and the navy. Much of the materiel was of US origin--presumably cap- tured in North Korea or from the Chinese Nationalists. Some Soviet- and Chinese Communist - produced arms were also in- cluded. The Indonesian .,'Air Force, in addition to receiv- ing MIG-17 jet fighters, also acquired obsblete twin-engine TU-2 light bombers and LA-11 fighters of World War II vin- tage. The navy procured sev- eral types of US-produced land- ing craft and one landing ship. SECRET PART II NOTES AND COMMENTS Page 9 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 w' SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 The army's purchases consisted largely of small arms, ammu- nition, and communications equipment, mostly of US origin. Although an In- donesian military purchasing mission, on its way home from the Soviet Union, visited Communist China in July 1959 and presumably submitted additional arms re- quests to Peiping, ap- parently no contracts were concluded at that time. Subsequent arms talks, reportedly scheduled for August 1959, either were not held or were in- conclusive. Shortly thereafter, the dis- pute over Djakarta's ban on alien traders led to a serious de- terioration of Sino- Indonesian relations, which would seem to preclude any addit a n a l Ch .nese .Co unist - mili- tary assistance for the time being, Chinese efforts during the-past.two years to get an economic aid program under way in Indonesia also apparently foundered during the dispute over Djakarta's ban on alien traders. A $30,000,000 credit offered An mid-1959 for in- dustrial development reported- ly has been refused by Indo- nesia. This offer may be re- vived later, but it is unlike- ly that Peiping will renew its efforts to establish an aid program until Sino-Indonesian relations have improved. The only economic assistance thus far provided by Communist China consists of textile and rice deliveries in 1958-59 under a credit arrangement amount- ing to about $11,200.000 SECRET PART II NOTES AND COMMENTS Page 10 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 POLITICAL MANEUVERING IN INDONESIA Reports of maneuvering and attitude presumably is influenced plotting by politicians and by its appraisal of Sukarno's military elements in Indonesia power position, lack of unity have continued unabated since in the army itself, and the im- President Sukarno's appointment probability that anti-Sukarno of a controversial new Parlia- forces would retain their cohe- ment on 27 March and his de- sion under stress. parture on 1 April for a two- month global tour. Some of Sukarno himself appears to these reports arise in part have been influenced by the pro- rts of the recently eff f longed spate of rumors; at least rom o formed Democratic League, a some of them are believed to hav e coalition led by the large Mos- been deliberately planted and lem Masjumi party, to prevent stimulated by elements opposing the installation of the new the army and favoring the Com- ent in June rli P munists. When he left Indonesia . am a on 1 April, Sukarno stated pub- The league's efforts thus licly at the airport, "I hope far appear unsuccessful. The that when I return I will merely although lending quiet army have to resume the leadership of , is awaiting evi- encouragement a government that will have been , dence of the organization's functioning without any inter- strength before making any de- ruption in the next two months." cisive move to support it. The second largest Moslem party, Since Sukarno's departure, the Nahdatul Ulama, is nearly a presidential decree has been split over the parliamentary announced removing the leftist issue, but appears more likely pro-Sukarno air force from the to support Sukarno than the Department of Defense and pro- league. viding a separate cabinet port- folio for the air force chief of There are also rumors that staff. The effect will be a fur- the army, assisted by non- ther reduction in the army's po- Communist political groups, will litical power. Minor inroads stage a coup. The army leader- on army power, apparently ship, however, gives little made largely at Sukarno's indication that it plans to instigation, have been in attempt a takeover during Su- progress since late 1959. karno's absence. The army's IMPENDING ELECTIONS IN LAOS The elections for Laos' 59-member National Assembly on 24 April will be of consider- able importance in terms both of the quality and political affiliations of the non-Commu:-+- nist m, jority expected to gain office and of the impact of the voting on future Communist plans for Laos. Should candidates of the Communist-front Neo Lao Hak Sat (NLRS) and allied groups do well, and should divisive tendencies among anti-Communist elements reappear, the Commu- nists will probably make another attempt to play the parliamentary game in Laos. To the extent, however, that these Communist hopes are unfulfilled, increasing SECRET PART II NOTES AND COMMENTS Page 11 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET 14 April 1960 reliance may be placed on the underground Pathet Lao insur- gent movement as the main means for gaining control of the country. The government has been fairly successful in inducing the principal anti-Communist political groupings--former Premier Phoui's Rally of the Lao People (RLP) and the. Com- mittee for Defense of National Interests (CDNI) --to limit the number of rival anti-Communist candidates seeking election. Government-approved'candidates will be running unopposed or opposed only by other RLP or CDNI candidates in 30 of the 59 electoral districts. By means of a highly re- strictive electoral ordinance and other administrative strat- agems, the government was able to limit the number of candi- dates from the NLHS and the fellow-traveling Santiphab party to nine each. Sympathiz- ers among the "independents" bring the total number of Com- munist and Communist-associated candidates to an estimated 25. There are indications that the government may take further steps to ensure that only a bare minimum of Communist can- didates are elected. The American Embassy in Vientiane believes that, with- out rigging by the government, the NLHS and allied candidates could win from 5 to 15 seats. The embassy expects the RLP to win more seats than the CDNI- sponsored candidates,but feels the two groups may be so close in size as to render the in- vestiture of a new premier dif- ficult when the new assembly convenes on 10 May. The Communists may foresee a real possibility of a split in the anti-Communist ranks in the new assembly, which would give the leftist bloc much greater scope fbr manuever. This c#lculation is probably an important factor behind the Communists' seeming willing- ness to permit the elections to be held in relative peace. Their propaganda has warned, however, that if the "American interventionists" and their "lackeys"--the CDNI--prevent NLHS and other "progressive" candidates from winning, the elections will be null and void in their view, and there will .be a recrudescence of guerrilla warfare by the Pathet Lao. Late reports indicate the NLHS and the Santiphab may with- draw at least some of their candidates in protest against alleged government strong'-arm tactics in connec- tion with the elections.F____1 The appointment on 11 portfolios were reallocated April of Food Minister Lt. Gen. within the cabinet in early Azam Khan as governor of East January, Ayub until now has Pakistan and the addition of not changed its original per- the former governors of East sonnel, apparently partly to and West Pakistan to the Ayub maintain the appearance of sta- cabinet are the first changes bility lacking under previous in membership in the Pakistani regimes. cabinet since the army take- over in October 1958. Although It is not yet clear whether Azam can retain his status as SECRET PART II NOTES AND COMMENTS Page 12 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 the number-two man in the Paki- stani Government and as Ayub's designated successor. The new governor may view his assign- ment to a post 1,200 miles away from the central government and army headquarters, both of which are located in Rawalpindi, as a demotion, since it removes him from the center of power. There has been speculation, however, that Ayub ha^ under consideration giving Azam a special title--"vice president" has been mentioned--to confirm him in his number-two position. Azam's departure may en- courage the other members to jockey for positions of greater influence, with Minister of Interior Sheikh taking a promi- nent part in the maneuvering. Sheikh has been frequently mentioned in rumors circulated by opponents of the regime as eager to increase his own power, even at the expense of Ayub. At the same time, the announced changes will probably lead regime opponents, particu- larly the ousted politicians and their followers, to claim that the Ayub government is unstable. Azam has a reputation for getting things done, and his assignment may be intended to demonstrate that the central government views economic prog- ress in East Pakistan as a priority objective. He will probably try to bring about early economic improvement, but, as a West Pakistani and an out- sider, he may offend provincial sensitivities in his drive for greater efficiency and harder work. Many East Pakistanis will probably find cause for com- plaint in the appointment of a West Pakistani as governor and are unlikely to be mollified by the appointment of East Paki- stan's former governor to the central cabinet. President Ayub has appointed the Khan of Kalabagh, a prominent Pushtoon who has been serving as chairman of the Pakistan In- dustrial Development Corpora- tion, as the new governor of West Pakistan. He probably hopes this move will strengthen Pakistan's position in its propaganda war with Afghan- istan over the Pushtoonistan dispute. CEYLON'S ECONOMIC DIFFICULTIES Prospects for any early improvement in Ceylon's deteri- orating economic situation have been dimmed by the failure of any party to win a majority in the national elections in March. The island's economic decline under Prime Minister Bandara- naike during the last three and one half- years was accelerated in the series of political crises which began in mid-1959 and culminated in. the dissolu- tion of Parliament last December. The tenuous backing of Dudley Senanayake's new minority gov- ernment and the probability that instability will continue, at least until new elections can be held,make it appear likely that the economic decline will continue throughout 1960. Chief among Ceylon's eco- nomic ills is a record trade deficit of $52,710,000 during 1959. Before 1957, there was usually an annual surplus. The increased volume and higher costs of imported consumer goods SECRET PART IT NOTES AND COMMENTS Page 13 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 were primarily responsible for the deficit, as prices for ma- jor exports were favorable and total export earnings for 1959 increased over 1958. The balance-of-payments position has deteriorated con- siderably since 1958, and the deficit last year was $47,250,- 000. External assets fell during 1959 from $185,000,000 to $145,000,000, enough to pay for about four months of im- ports. This small reserve ca- pacity points up the island's vulnerability to flood, drought, or unfavorable shifts in ex- ternal trade patterns. The government's cash op- erating deficit of $86,730,000 for the past fiscal year, Octo- ber 1958-September 1959, is an increase of more than 100 per- cent over the 1957 deficit. The high rate of government expenditures has contributed to expanding the money supply, which rose sharply during the last quarter of 1959, keeping prices high and maintaining the demand for imports. The difficulties of fi- nancing the deficit and lower- ing the cost of living have increased considerably. The total of treasury bills out" standing reached its legal limit in mid-January, and the government recently announced that it would cost $18,000,000 to reduce the subsidized price of rice, which other major parties promised during the election campaign. The government has a few favorable factors on its side. Production of major export crops was satisfactory in 1959, Colombo has contracted for suf- ficient food imports to cover 1960 requirements, and the ab- sence of disruptive strikes since mid-1959 has resulted in improved operations at Colombo port, Ceylon's major gateway to the outside world. Such advantages are heav- ily outweighed by adverse po- litical factors, however. Even if the Senanayake govern- ment survives its first par- liamentary vote on 22 April, its minority status will severe- ly curtail its power to im- plement proposed economic re- forms. US INVESTMENT UNDER POLITICAL ATTACK IN PERU American investments in Peru, which have risen sharply in recent years because of favorable Peruvian laws and relatively stable political and economic conditions, are being attacked with increasing fre- quency in the Peruvian Congress and press. Peru is still a model in South America of suc- cessful application of conserv- ative financial principles. The administration of conserva- tive President Manuel Prado ap- pears too weak to control indi- vidual leaders who exploit na- tionalist sentiment for their own advantage. As a consequence, the climate for foreign invest- ment is deteriorating and may in time be reflected in worsen- ing US-Peruvian relations. Within the last nine months, congressional and press criti- cism directed against two US SECRET PART TT NOTES AND COMMENTS Page 14 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 oil companies has been unusually bitter. The International Pe- troleum Company, a Standard Oil subsidiary and Peru's largest producer, faces possible an- nulment of rights to its oil properties, a threat which rightist and Communist figures have exploited politically. A new financial group, backed by a politically powerful cousin of President Prado, is appar- ently using the possibility of nationalist agitation to break into International Petroleum's distribution monopoly. Another US petroleum company was de- nounced in Congress and the press late last year for "vio- lating" Peru's national sover eignty--a charge also frequent- ly levied against Standard's subsidiary. The US-owned copper com- pany at Toquepala, whose newly inaugurated mine largely ac- counts for Peru's expected 27- percent increase in export revenues for 1960, is strongly criticized by the government- linked APRA, Peru's only major party, because it discourages unionization. A further cause of US-Peruvian friction is a projected shipping decree now being urged by the navy minis- ter--who is said to have a local U DIRECT INVESTMENTS 655 505 shipping interest--which would require 50 percent of all com- mercial cargoes to be carried in Peruvian vessels. A serious new anti-Ameri- can outburst is threatened over proposed US congressional con- sideration of increased tariffs on lead and zinc--products which in 1958 brought in 12 percent of Peru's export proceeds. Sim- ilar discussions in 1957 and 1958 caused anti-US attacks in Peru's Senate which were described as the most bit- ter in 30 years. F_ I EUROPE'S TRADE CONFLICT Although conciliatory statements from Bonn and De Gaulle's recent visit to London have somewhat relaxed the ten- sion, no generally acceptable solution is in sight for the basic issues dividing. Europe's trade blocs--the European Eco- nomic Community (EEC) and the European Free Trade Association (EFTA). A late March meeting, the first all-European trade talks in more than a year, pro- duced merely another investigat- ing committee--whose findings are likely to be used by each side to justify its own posi- tion. Further talks are not sched- uled until late May, by which time the issue may have been decided--if, as'still seems likely, the EEC's governing council decides on 10 May to accept EEC President Hallstein's plan to speed up the estab- lishment of the Common Mar- ket. SECRET PART II NOTES AND COMMENTS Page 15 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 Much of the re- cent rancor--as evi- denced by the uproar over Prime Minister Macmillan's alleged ttack on the EEC during his Washing- ton visit--is attrib- utable:,,, to the full- er realization of the decisive importance of the Hallstein plan. The EFTA was set up in the belief that, by matching the internal tariff reductions of the EEC and persuading it to reciprocate, no trade preferences --within Europe-- would arise, This effort to achieve a European free trad- ing area--by a round- about t,way--could suc- ceed, however, only if the EEC agreed to postpone indefinitely the effective imple- mentation of its com- mon external tariff and thereby to forego the objective of creating a full cus- toms union. In the eyes of Hallstein and his col- leagues, such a sacrifice of basic principle would be European Free Trade Association (Outer Seven European Economic Community Common Market fatal to the Common Market, and they have offered their speed- up plan in part to precipitate a decision while economic and political circumstances are still favorable. However, even an initial step by the EEC to- ward application of its common tariffs would be a major tacti- cal defeat for the EFTA, and might result in equally serious long-term consequences. Should the possibility of an "easy" association with the EEC seem to be foreclosed, some of the "reluctant" members of the EFTA whose trading interests are primarily with the EEC might feel they have no alternative but direct affiliation with the Common Market. Many in the EEC are ob- viously still sensitive to the charge they are opening up a permanent rift in Europe. Nev- ertheless, since it was first announced on 3 March, the Hall- stein thesis has attracted in- creased support. The EEC's SECRET NOTES AND COMMENTS Page 16 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 SECRET . CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 European Parliamentary Assembly, which represents a rough cross- section of Continental parlia- mentary opinion, almost unani- mously endorsed the plan on 31 March. President Gronchi's invi- tation to Amintore Fanfani to form a cabinet reveals Gronchi's determination to push for a center-left government as the solution to the long-standing dilemma of the Christian Demo- crats (CD). Such a move to the left risks alienating con- servative ecclesiastical and economic interests within or allied with the party. Fer- nando Tambroni's effort to form an all-CD cabinet col- lapsed because the party's left wing, mindful of the general leftward trend of the electo-v, rate, refused to accept rightist support. Although an attempt to form a center-left government under Antonio Segni during the early stages of the crisis was blocked by conservative forces, there is a good chance that the sec- ?ond attempt under Fanfani will succeed. The revolt within the Christian Democratic party against participation in a gov- ernment dependent on the votes of the neo-Fascists, as would have been the case with the Tambroni government, provided a rough gauge of the strength of anti-rightist feeling with- in the party. The present crisis has lasted much longer than any previous postwar Italian crisis, and there have been rumors of a possible coup attempt followed by a general strike initiated by the left. Fearx~that .ItajS,!s in- ternational status may be dam- aged by the absence of a SECRET PART II NOTES AND COMMENTS Page 17 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 government with a clear man- date is one of the principal spurs to a solution, however provisional. Regardless of the crisis, Antonio Segni, foreign minister by virtue of his inclusion in the Tambroni cabinet, will take part in the Washington pre-summit confer- ence. In the event Fanfani does not ob- tain parliamentary approval, Gronchi will probably favor installing a strict- ly caretaker one- party government rather than experi- menting with a cen- ter-right formula. The Liberals--who precipitated the cCi - sis in the first place by refus- ing to go on supporting the Segni government without being repre- sented in the cabinet--presuma- bly would demand inclusion in a coalition government. This is a conceivable solution but not a likely the face of oppo- sition from the Christian Demo- cratic left. ITALIAN PARLIAMENT i-COMMUNITY MOVEMENT UNITED MOVEMENT OF SOCIALIST INITIATIVE- 5 (MUIS) SECRET PART II NOTES AND COMMENTS Page 18 of 18 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMARY 14 April 1960 PART III PATTERNS AND PERSPECTIVES STATUS OF THE SINO-SOVIET BLOC'S ECONOMIC DRIVE The Sino-Soviet bloc last year added $1 billion to the total amount of aid it has ex- tended to free world countries. Moscow hopes by this program to foster a permanently ex- panded relationship with un- derdeveloped countries through a sustained growth in trade. However, the bilateral trading practices of the bloc, the pri- orities of intrabloc trade, BLOC `AID EXTENDED JO THE FREE WORLD (Million, US Dollars) Total ab eat.nded ICELAND , Economic 3,175 n LJ Military 780 consisted largely of military assistance, now is principally oriented toward providing cred- its for economic development. Almost no new military aid was included in the $1.04 billion in bloc credits and grants ex- tended in 1959, and the more than $550,000,000 extended dur- ing the first quarter of 1960 was entirely for economic pur- poses. Moscow's blatantly political motivation, and the Soviet Un- ion's greater need for Western industrial products are seri- ous limitations to such growth. The Aid Program The bloc's foreign aid program, which originally Moscow has extended 75 per- cent of the $3.9 billion in aid provided thus far by the bloc and in 1959 and early 1960 ac- counted for 90 percent of bloc aid. The role of the European satellites, however, has not diminished. The USSR frequently turns to Eastern Europe to com- plete specific projects called SECRET PART TIi PATTERNS AND PERSPECTIVES Page 1 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUIMARY 14 April 1960 SINO-SOVIET BLOC AID TO FREE WORLD MILLION DOLLARS 50 EAST GERMANY 12 RUMANIA 108 POLAND CZECHOSLOVAKIA ECONOMIC AID MILITARY AID* * AS A RESULT OF DISCOUNTS AND DOWN PAYMENTS, BLOC DELIVERIES OF MILITARY AID UNDER THIS PROGRAM NOW TOTAL $1.2 BILLION 00408 A for under the Soviet aid agree- ments, and a substantial share of other such projects is sub- contracted to Eastern Europe. Peiping's program in the free world--totaling $162,000,000-- does not appear to be ittegrated witbJ. Lthat.. #of :: the rest of the bloc. About one third of all credits extended under the bloc aid program have been utilized. Most of the $780,000,000 in mil- itary aid agreements has been implemented, and economic as- siStancw deliveries amount to about $550,000,000. Construc- tion of India's Bhilai steel mill and a variety of projects and other economic assistance in Yugoslavia and Afghanistan account for most of the economic aid thus far delivered. The relatively slow pace with which bloc economic credits have been utilized has resulted from a lack of domestic funds to meet local costs of construction, poor planning by local officials, and in some cases the unavail- ability on short notice of par- ticular bloc goods. The operation of the pro- gram has gone far toward elim- inating the optimism initially engendered in recipient countries by bloc aid agreements. The UAR, which recently accepted more Soviet aid and is renegotiating the Soviet-Syrian agreement, at the same time is critical of some lags in Soviet deliveries and the unsuitability of certain equipment provided. The eco- nomic stagnation in Iraq has led Baghdad to seek new Western assistance and to cast asper- sions on the Soviet program by dismissing the pro-Communist economic planning chief who ne- gotiated the aid agreement with Moscow. Iraq, like other under- developed countries, mistakenly expected Soviet aid to have a more immediate economic impact but is expected to continue to seek such assistance. The early psychological impact--favorable both to Mos- cow and recipient governments-- has been out of proportion to the size of the aid and is grad- ually being reduced as aid recip- ients find the bloc suppliers as realistic and hardheaded as FOREIGN ASSISTANCE TO UNDERDEVELOPED COUNTRIES 1954-1959 BILLION DOLLARS ? EXTENDED C] DELIVERED TOTALS 36.2 . SING. SOVIET BLOC 3.4 SECRET FREE WORLD PRIVATE ,INVESTMENT FREE WORLD GOVERNMENTS PART III PATTERNS AND PERSPECTIVES Page 2 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUIEY 14 April 1960 their Western counterparts. Nevertheless, bloc assistance is still welcome, and many of- ficials of underdeveloped coun- tries which need more aid than can be obtained from Western sources continue to see advan- tages of doing business with the bloc. They cite the low interest charges, the provi- sions for repayment in surplus commodities rather than cash, and the ease of negotiating credit agreements. The superiority of the bloc program in some respects, however, is largely ephemeral. While bloc interest rates are usually well below those pre- vailing in the West, the larg- est part of Western aid to un- derdeveloped countries has been in the form of outright grants. Less than 5 percent of bloc aid has been in this form. The bloc, on the other hand, has real ad- vantages in its lack of a his- tory of colonialism and in its willingness to accept goods rather than foreign exchange in repayment. The bloc also profits by its ability to seize an exploit- able situation, offer aid imme- diately, construct a few proj- ects with favorable propaganda impact, and conclude a simple document regulating the credit extended. Bloc flexibility frequently does not extend be- yond this point. Because of the planned nature of bloc econ- omies, contracts once concluded are rigid, and subsequent al- teration of projects is virtual- ly impossible. The bloc program will, however, continue to be accept- able in the underdeveloped countries, and bloc countries' fulfillment of their credit agreements--which for the most part has been satisfactory-- probably will make underdevel- oped countries increasingly willing to seek aid from them. The bloc, chiefly the USSR, will be able to continue this pro- gram at least at the 1958-59 level of about $1 billion an- nually, and an expansion of this rate is possible. Repayments of existing credits, which will reach a peak in the mid-1960s, presumably will enable the bloc to expand the program without further increase in the burden of foreign aid. These repay- ments will tend to sustain trade with the underdeveloped areas. Technical Aid and Training About 5,040 bloc economic technicians are helping to fill the need for qualified technical personnel in the underdeveloped countries.` Nearly half the spe- cialists are engaged in planning and supervising construction projects, and the remainder are employed in geological surveys and prospecting or are construc- tion personnel working on public utilities. For the most part, bloc technicians enjoy a good reputa- tion in the underdeveloped coun- tries. They have refrained from political activities. The most frequent complaint seems to be that they keep too much to them- selves. This stems in part from the language barrier. Neither the USSR nor the host countries publicize the presence of the 1,500 bloc mil- itary specialists abroad--more than half of whom are located in the UAR. They are engaged in training and equipment mainte- nance and, at least in Afghan- istan, perform some staff func- tions as well. Few complaints have been registered about the qualifications of bloc military specialists. Less successful is the training and advanced education within the bloc for workers and students from the underdeveloped countries. Innate distrust of Communism and fear that their citizens may be-subverted have made governments reluctant to foster this program. Since 1955, 3,500 military personnel--about half from the UAR--and nearly 2,000 technical trainees--about half of them Indian steelworkers --have received instruction in the bloc; just over 1,800 students SECRET PART III PATTERNS AND PERSPECTIVES Page 3 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY Sl1RY 14 April 1960 --80 percent from the Middle East--have been sent to bloc educational institutions. The Trade Program The bloc program of bar- tering machinery, equipment, with the bloc. Bloc trade with the entire free world, however, has risen only from 2 percent of total free world trade in 1954 to 3.5 percent last year. USSR, SINO- SOVIET BLOC TRADE WITH THE FREE WORLD MILLION DOLLARS The bloc, especially the formerly sought to expand FREE WORLD __T _ FREE WORLD SECRET UNDERDEVELOPED INDUSTRIAL TOTAL AREAS COUNTRIES B BLOC IMPORTS LOC IMPORTS BLOC EXPORTS BLOC EXPORTS 1954 402 468 1408 1283 3561 1956 769 697 2126 1824 ? 5416 1958 1076 1044 2326 2331 6777 1959 482 551 i 1152 1067 3252 JAN-JUNE I I and industrial raw materials for surplus agricultural prod- ucts has established trade ties with the underdeveloped coun- tries. While these exchanges are expected to increase, they are not likely to establish the bloc as a major influence in international commerce in the near future. Despite the ex- pansion of its trade in the past few years, the USSR is still only a minor force in world trade; most of its trade is still with other Communist states. Furthermore, two thirds of the USSR's free world trade is with industrial coun- tries whose economic and polit- ical affiliations are relative- ly well established. On occasion, trade in cer- tain commodities such as tin, oil, rubber, and sugar--despite statistical insignificance--has had important effects in free world markets. Moreover, bloc trade in a few cases now ac- counts for an important share of the total trade of some non- bloc countries. The UAR, Af- ghanistan, Iceland, Yugoslavia, Turkey, Finland, Uruguay, Aus- tria and Guinea carry on from 10 to 33 percent of their trade eral trade. Trade presumably will con- tinue to expand, but except in special cases and for limited periods of time it is expected to remain rel- atively insignificant. Bilateral trade now is more frequently resisted by underdeveloped countries, where the practice has only tem- porarily corrected trade prob- lems resulting from surpluses. Burma discovered in 1957 that its rice barter deals with the bloc COMMODITY COMPOSITION OF BLOC-FREE WORLD TRADE D BLOC IMPORTS BLOC EXPORTS Crude raw materials 33 17 Manufactured goods 30 24 Machinery and Transport Equipment 15 8 Foodstuff s 13 24 Chemicals 8 6 Fuels 18 Miscellaneous 1 3 100% i 100% prevented it from fulfilling .cash orders from traditional customers. This and other dif- ficulties inherent in the direct exchange of commodities were so great that the bloc's portion of Burma's trade fell from 16 per- cent in 1956 to 7 percent in 1958. SECRET trade with underde- veloped countries at a rapid pace, but these efforts have been minimized by the paramount priority of intrabloc trade and will be increasingly hindered by the re- strictions of bilat- PART TTT PATTERNS AND PERSPECTIVES Page 4 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 A SECRET CURRENT INTELLIGENCE WEEKLY SPRY 14 April 1960 More recently, Indonesia has refused to commit itself to barter agreements involving rub- ber, Argentina, Indonesia, and Burma are terminating bilateral trade agreements with bloc coun- tries. The Sudan is not inter- ested in maintaining last year's level of cotton exports in ex- change for Soviet goods. Some underdeveloped countries also have found themselves in a creditor position as they ship surplus agricultural commod- ities and learn that desired imports are not available in the bloc. The growth of multilateral trade involving the bloc is not likely. Such trade would loosen bloc control over its imports and exports, which are regulat- ed to fulfill planned commit- ments primarily within the bloc. Moreover, the underdeveloped countries probably would look to the bloc more as a market than as a source of goods--the result of which would be to drain off bloc holdings of for- eign exchange for raw materials and agricultural products at a time when the bloc needs such financing for the large imports of advanced free world machinery it seeks. On the other hand, there is a more natural relationship in Soviet trade with the indus- trialized countries. As Mos- cow frequently states, the im- portant economic aspect of its trade drive now is to procure Western equipment and technol- ogy to improve its productive capability, particularly in the chemical field. Soviet de- mand for such imports--which was beginning to assume major proportions in late 1959--is so great that it has spurred ex- ports to earn foreign exchange to support these purchases. For the past two years Mos- cow has actively sought credits from Western suppliers to fi- nance such imports. Governments of free world industrial coun- tries already have indicated that a minimum of $250,000,000 is available as a guarantee for equipment delivered on credit to the USSR alone. Recent crit- icism by members of the Soviet Academy of Sciences about the lack of progress in the petro- chemical industries suggests that Moscow will continue its efforts to exploit advanced West- ern technology through imports. The satellites' success in establishing fairly promising trade ties in the underdeveloped countries results largely from the valid economic basis for such trade, as opposed to the USSR's attempts, which often appear contrived--even to the underdeveloped countries in- volved. Czechoslovakia and Poland are seeking to expand markets for growing industrial output aswell as sources of raw materials and agricultural products. The same is frequently true of East Ger- many, although in its search for diplomatic recognition East Ger- many has participated more in propagandistic activity than other satellites. The satellites continue to account for 50 per- cent of the Sino-Soviet bloc's trade with the underdeveloped countries. Pre- 25X1 pared by ORR) SECRET :.PART III PATTERNS AND PERSPECTIVES Page 5 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 ARAB POLITICS AND A PALESTINE "ENTITY" Although the Arab states usually speak in unison about the "crimes" of Israel and its "creators"--the Western powers-- they are frequently in discord on other facets of the Palestine problem. More than a million Palestinian Arab refugees from what is now Israel are pawns in their disputes. Some 604,000 of them still reside.. in Jordan : in what was formerly Palestinian territory on the West Bank of the Jordan River; 252,000 are in the Gaza strip, the other remaining Arab portion of Palestine; 113,000 live in the Syrian region of the UAR; and 135,000 are in Lebanon. With the exception of Jordan, their host states generally refuse to absorb the refugees, ostensibly fearing that the Palestinians' claims against Israel might be prejudiced, but also to keep the Palestine issue before the eyes of the world. The UN, through its Relief and Works Agency for Palestine Refugees (UNRWA), supports the refugees. Leadership of the Pales- tinians' cause--restoration of Arab "rights" to live and re- gain property in Palestine-- now is contested by UAR Pres- ident Nasir, Iraqi Premier Qasim, and Jordan's King Hu- sayn. This rivalry has re- cently focused on the question of a Palestine "entity" or state which in theory would embrace the remaining Arab ter- ritories of Palestine and unite all Palestinian Arabs for an all-out campaign against Israel. These proposals are important as propaganda for Qasim and Nasir, but for Jordan, which opposes them, they threat- en the very existence of the state. Jordan includes more than 2,200 square miles of for- mer Palestinian territory, and two thirds of its population is Palestinian. On 3 April, the Arab League political affairs committee failed to agree--as had the Arab League Council a few weeks ear- lier--on the UAR's proposals to create a Palestinian "national entity" and army. Further dis- cussion of the problem was de- ferred until a special session of the Arab League Council at the foreign ministers' level scheduled for 30 April. The deadlock involved only the UAR and Jordan, inasmuch as Iraq boycotted both the council .and the political affairs com- mittee meetings because they were held in Cairo. The Iraqis have said they will not attend the foreign ministers' meeting either, unless it takes place outside the UAR. Whether Iraq attends will probably have lit- tle effect on the already dubi- ous prospects for a settlement of the dispute. . 1947 Partition , Although the partition of Palestine in 1947 by the United Nations was intended to facil- itate the formation of a new Arab state, as well as a Jewish homeland, King Husayn's grand- father, King Abdullah, sought to incorporate the Arab sectors into his Kingdom of Transjordan. Egypt and Saudi Arabia refused to ac- quiesce in this and countered by proclaiming a phantom "Government of All-Palestine" under the no- torious Grand Mufti of Jerusalem, Hajj Amin al Husayni. Nevertheless, Abdullah pro- ceeded in 1950 to annex the so- called West Bank area of the Jordan River adjacent to his territory and to change the name of his kingdom to Jordan. Egypt occupied the "Gaza strip" por- tion of Arab Palestine adjoining its eastern frontier. The Mufti's continued agitation on behalf of his "government" from outside Palestine has had little effect. SECRET PART III PATTERNS AND PERSPECTIVES Page 6 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 14 April 1960 Recent Developments The disagreement among the Arabs regarding Arab Palestine was more or less quiescent until 1958, when the UAR, at an Arab League meeting in April, called for the formation of a "Pales- tine army." On 16 May 1958, the Gaza Legislative Council adopted two resolutions: one called for the establishment of a Palestine Liberation Fund; the other proclaimed the estab- lishment of the Arab National Union with the objects of re- covering "usurped Palestine," establishing "complete Arab unity," and organizing a demo- the West Bank and that Pales- tinians under its jurisdiction already have Jordanian citizen- ship and serve in Jordan's army. The league was unable to settle the differences. Jordan's Prime Minister Majalli claims the league refused to discuss a Jor- danian plan for solution of the over-all Palestine problem. SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY CXandre5Ta c 4 P Ru s;~. Baniyas 'Aleppo/1 UAR'?,, Hums (SYRIA) .cratic, socialist, and coopera- tive society, to include "all of Gaza, the West Bank. .and the other Arab countries." Nasir, possibly to advance his leadership of pan-Arab na- tionalism in the face of Qasim's rivalry, again proposed the for- mation of a Palestine government and army at the Arab League meet- ing in Casablanca in September 1959. Jordan opposed the plan on the grounds that it infringed on Jordanian sovereignty over and Jordanian plots against his regime. In a series of speeches in December 1959, he proclaimed his own championship of the Pal- estinian cause and branded the UAR and Jordan as partners of Israel in "occupying" Pales- tine. He has since also an- nounced unilateral plans to or- ganize and train an "army" of Palestinians, presumably fi- nanced by the fund he has es- tablished for a Palestine re- public. Qasim has expressed the hope that this fund, which SECRET Qasim then seized on the Palestine state issue as a prop- aganda weapon to counter UAR N~osul Kirkuk as accepted by the United on 29 November 1947 Arab J wit, ---Armistice Tin 1949 Palestinian Arab Refugees Registered with UNRWA as of 1 January 1960 J,.rd nn 604,000 Gaza Srrip 252,000 Lch:n,un, 135,000 UARISyria) 113,000 tonal 1,104,000 PART :III PATTERNS AND PERSPECTIVES Page 7 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 .~ SECRET CURRENT INTELLIGENCE WEEIU T SUMMARY 14 April 1960 has been enriched by contribu- tions from Iraqi workers and industries, eventually will to- tal $5,600,000. On 5 April he said the Palestinian situation had reached a stage requiring "violent action." These statements cost Qasim little, for Iraq is re- mote from Israel and only about 5,000 Palestinian refugees live within its borders.. Such agi- tation is nevertheless trouble- some to the UAR and Jordan, which harbor many more refugees and have common frontiers with the Israelis. Nasir has responded vigor- ously to Qasim's attacks. He re- introduced his Palestine pro- posals at the Arab League Coun- cil meeting on 8 February, de- spite the certainty of continued Jordanian opposition. In Jan- uary 1960 he set up the Pales- tine National Union in Gaza and expanded it to Syria with the aim of expanding it into an or- ganization of all Palestinians. An army of Palestinians report- edly is also being organized in the UAR. In speeches in Syria during the Israeli-Syrian bor- der crisis in February, Nasir challenged Qasim to demonstrate his sincerity by sending troops to the Israeli border and ac- cused Jordan of having withdrawn its troops from the Jordanian frontier near the scene of the clashes in order to avoid in- volvement in the fighting. Problem in Jordan Jordan has indicated it will not engage in any further discussion of the entity "inno- vation" at any level whatever. Husayn, reacting to the Nasir- Qasim maneuvers, has shown in- creased concern about the West Bank. He has visited its cities more often than previously in an effort to generate support for his regime and has arranged to hold meetings of the Jor- danian assembly in Jerusalem. This violates, as does the pres- ence of the Israeli Government in Jerusalem, a UN resolution favoring internationalization of the city and its environs-- the Holy Places. Husayn implicitly attacked Nasir and Qasim on 1.March for their statements about Palestine, arousing particular to renewed outbursts against the King. Husayn announced on 13 March that he would accept the results of a plebiscite among his Palestinian subjects on the question of whether or not they wish to become separated from Jordan. He hopes this move will undercut the potentially subver- sive proposals of Nasir and Qa.- sim, whom he suspects of wanting to bring down his regime. Husayn has insisted the of- fer is not a mere propaganda gesture and claims he will ac- cept the result whatever it may be. However, he has provided himself with a possible excuse for not fulfilling his offer by making a plebiscite conditional on the desires of Palestinians to have one. The King could cite the numerous expressions of support he has received since the announcement as "evidence" that a vote is not wanted, al- though he has said he will ac- cept'; the determination of "neu- tral members" of the league--i.e., Lebanon, Yemen, Libya, Sudan, Tunisia, and Morocco--on the question. The relatively urban and. Westernized Palestinians of the West Bank are not amalgamating easily with the more isolated and conservative Jordanians of the East Bank. Many of these Westernized Palestinians, bey lieve, as do some Western diplo- mats in Jordan, that the major- ity of voters in a plebiscite would opt for separation from the Amman government and for association with the UAR. Some Palestinian opponents of Husayn's regime are.even'?said to oppose SECRET PART III PATTERNS AND PERSPECTIVES Page 8 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY `STA'RY 14 April 1960 either independence or asso- ciation with the UAR because the West Bank would be left ex- posed to possible occupation by Israel. The Israelis, ex- tremely sensitive to;develop- ments in the West Bank, have indicated that UAR control there would "necessitate" its occupa- tion by Israel as a defensive measure, Neither a West Bank pleb- iscite nor the special session of the Arab League foreign min- isters scheduled for 30 April is likely to resolve the Palestine controversy. As long as Nasir, Qasim, and Husayn remain heads of their respective states, the dispute probably will endure as part of their rivalry for pan Arab leadership. Under these con- ditions, Arab?unity will remain a long-range dream, and divisive- ness will continue to weaken the effectiveness of Arab opposition to Israel. DE GAULLE'S VISIT TO THE UNITED STATES The timing of De Gaulle's acceptance of the long-standing invitation to visit the United States was probably determined by his desire to sharpen on the eve. of the summit conference the image of France as a great power, In his talks in Wash- ington from 22 to 25 April, De Gaulle will probably seek to subordinate specifically French- American issues to a discussion of world problems and, as the most recent Western statesman to have held discussions with Khrushchev, to expound his pro- posals for dealing with the Soviet bloc. He can be expected to continue to press for further implementation of Western tri- partite global discussions and for extension of NATO responsi- bilities to Africa, and to probe US attitudes on the development of independent European defense capabilities. De Gaulle delayed accepting President Eisenhower's invita- tion for almost two years, largely SECRET PART III PATTERNS AND PERSPECTIVES Page 9 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEILY SUAEY 14 April 1960 because he was preoccupied with Algeria and with the domestic problems consequent to the over- throw of the Fourth Republic in May 1958. He now:.~probably be- lieves that France's nuclear achievements, the popular sup- port he continues to command at home, and his success in induc- ing Khrushchev to visit France have sufficiently bolstered France's international position to give weight to French views, despite the stalemate on Ali geria. Personal Diplomacy On his visit to the United States, shortly after his talks with Khrushchev, De Gaulle will probably be anxious to compare notes and expound his estimate of the Soviet leader's inten- tions, and to suggest tactics for the summit meeting. The talks with Khrushchev have apparently not altered De Gaulle's opinion that the So- viet Union is motivated primari- ly by nationalist drives or that Communism is a passing phe- nomenon. He has believed for some time that the Soviet Union is under domestic pressures for higher living standards, and that the external pressures from an aggressively expanding China will eventually oblige Moscow to cooperate with the West. Khrushchev probably sought to encourage De Gaulle in the view that cooperation between "white men" is the only reasonable eventuality. De Gaulle has long insisted on a firm Western position to- ward the USSR on immediate prob- lems. His hope for a long-range East-West reconciliation may have led him, however, to read into Khrushchev's noncommittal reaction some positive endorse- ment of French proposals for easing East-West tensions: a joint East-West economic aid program to less-developed coun- tries, a noninterference agree- ment, and an agreement to control arms shipments to neutral areas. In addition to such summit topics as disarmament, Germany, and East-West relations--on which French and American views are in general agreement--De Gaulle in Washington will prob- ably want particularly to dis- cuss Africa and Communist China, which he regards as especially troublesome world problems. He apparently believes the Peiping regime is the greatest danger to world peace, and he feels some means must be found to curb the Chinese. He rejected, however, Prime Minister Macmil- lan's recent suggestion that Peiping be admitted to the UN. De Gaulle apparently hopes that Moscow-Peiping differences can be exploited to the advantage of the West, and he may spell out some suggestions as a result of his attempts to raise the China problem with Khrushchev. De Gaulle is particularly concerned over increased Chinese Communist interest in Africa. He believes that retention of a dominant Western influence in Africa is necessary for the sur- vival of Europe. This is why he insists that joint aid, nonin- terference, and an arms sales ban be discussed at the summit level. He may press for tripar- tite action to counter Communist expansion by extending Western defense responsibilities in Afri- ca, perhaps combined with a tri- partite economic aid program., Differences With US De Gaulle certainly has little hope of obtaining US sup- port for the retention of French bases in Morocco and Tunisia, but he can nevertheless be ex- pected to continue to seek some SECRET PART III PATTERNS AND PERSPECTIVES page 10 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 SECRET - 4%W CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 way to reduce pressures for France's withdrawal 'from. Africa and some means of indicating US support for French policies there, He will want a formal US endorsement of his Algerian policy in the official communi- que ending his visit here. The absence of a reference to Al- geria in the communique follow- ing the Khrushchev visit may have been due to De Gaulle's unwillingness to restate his acceptance of the Oder-Neisse line as Germany's eastern bor- der, or because Khrushchev had again endorsed "self-determina- tion" publicly. Partly to maintain the "global" atmosphere of his Washington talks and partly be- cause of the imminence of Amer- ican presidential elections, De Gaulle will probably not make an issue of any of the questions which have disturbed US-French relations in the past two years. His dislike of sub- merging national identities in an integrated NATO, his opposi- tion to foreign control of nu- clear weapons based on French soil, his reasons for withdraw- ing the Mediterranean fleet from NATO control, and his unhappi- ness with US policies in North Africa are all unchanged. More- over, his primary aim continues to be to win for France equal- ity with its "Anglo-Saxon" al lies in Western councils, in- cluding a voice in any Western decision to use the nuclear bomb. A French-led Europe While De Gaulle is unlikely to make any direct request for US aid to the French nuclear weapons program, he may ask clarification of President Ei- senhower's statement of 3 Feb- ruary on the possibility the United States might make avail-- able to its allies atomic in- formation already known to the Soviet Union. De Gaulle is de- termined to establish a French nuclear striking force armed with sophisticated weapons and a modern delivery system. He has also shown increasing in- terest in the development of a European defense capability to provide military backing for the Continental European bloc he hopes to establish. De Gaulle's basic aim is to "free" Europe from its pres- ent dependence on US- and Brit- ish-controlled nuclear weapons, and to make a French-led Europe strong enough to play a leading role in East-West relations. He is also anxious that Europe be prepared for the day when the United States might decide to withdraw its forces from the Continent. De Gaulle's public state- ments have from time to time reflected the fear expressed in some European circles that the United States and Britain would be reluctant to use their nuclear weapons to defend Eu- rope for fear of provoking So- viet retaliation. He has re- peated. as recently as February that France must provide for its own defense "without relying on others." In a November press con- ference, he justified France's development of a nuclear capabil- ity, indicating he did not ex- pect the "sort of equilibrium" which exists between the United States and the USSR to remain static. He warned that the ad- vantage of "sudden advances" in the capabilities of either side might be so great as to overcome peaceful inclinations. "Who can say," De Gaulle stated, "whether in the future the two powers having the nuclear monopoly will not agree to di- vide the world.... Who can say ...whether on some awful day Western Europe should be wiped out from Moscow and Central Eu- rope from Washington." "France," the French President said, "in equipping herself with a nuclear weapon, will render a service to world equilibrium." SECRET PART III PATTERNS AND PERSPECTIVES Page 11 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 OKLIN ZAGORSKO "SOLNEECCK p ARRAMQTSEVQI~?J Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET Moscow's charges that dis- armament inspection, as envis- aged by the West, equals espi- onage are symptomatic of Soviet preoccupation with internal se- curity. The 71remlin boasts Of military and technological su- periority, concedes that war between East and West is no longer "fatally inevitable," and claims that the "victory of socialism in the USSR is final and complete," but it still treats an ordinary tele- phone directory as a classified document. Despite the partial lift- ing of the iron curtain, the Soviet regime, through such means as all-pervasive censor- ship, travel restrictions, sur- veillance, and harassment, ~NtKOLAY V r' ( _ 5EV kOAArIY{{pi yy pDlEpkfSPE RO SK ~iFEODl951Y~. .>Voi9 BA KEkW ~YE~lArN ~( LLIN Rrq, i/ reached pain Qo SHK1A L 1 ASHKE-0, -fglltyT~F M~~V F l,f 'lly ~~ .?j"cK ~T~MSf~ DKA s+al,s:/ma LeningfWo k amendi1, rsk, Ferkeposl, f'... zk, k, Yiacnv i\ MOK W -~RE5 1 ,.. ~olchir{g o5d Pelrodwrers are ree HER OV1 Y 'LAND tlAN51T ?~ ~' y J- R p bLee (5 S R1 Is Rebhc (A.S.S.R. !,hla,t or kray A l - noun JNa~I !. -.I Okruq .31105 fui CURRENT.INTELLIGENCE?WEEKLY SUMMARY 14 April 1960 USSR MAINTAINS SECRECY /8 780 T /3lt 3 L p \ o' ~' ._ 7 4b 1 O C O YA AND ..~~ a E~ 'La Y 0 TE o .9 R .~ A P '? V A SECRET seeks to hide from foreign ob- servers, -both official and private,, as much as possible, except that which may-contrib- ute directly to its political and propaganda aims. Travel restrictions have been revised three times since 1953, a series of East-West ex- changes have been arranged, and a policy of selective disclo- sure of scientific and mili- tary information has been- adopted.- Although thenet re- sult has been a generally more relaxed attitude, in some re- spects, the freer flow of peo- ple.and ideas hasinduced in security officials a. height- ened sense of vigilance, and the shield of secrecy around objects of military or U __ "\ 130~lr1 PART III PATTERNS AND PERSPECTIVES Page 12of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 4 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET _VW CURRENT INTELLIGENCE WEEKLY SU"hll'j 14 Aril 1960 technological interest is as thick as ever. Closed Areas The complex set of prohi- bitions which governs the trav- el of foreigners in the USSR was amended in June 1953, Au- gust 1957, and August 1959. On balance, the effect has been to open up some areas, in the Baltic states and the Western territories seized in 1939-41, for example, which had previous- ly been denied because of po- litical or economic instability, while adding to the prohibited list a number of areas of in- telligence interest from the military or technological point of view. Also denied are the Soviet Far North, the bulk of the Far Eastern provinces, the northern and eastern shores of the Caspian Sea, and parts of Central Asia, which have been formally forbidden to foreign- ers all along. There are, in addition, the devices of "temporary" and de f acto..'c iosures . Many of those parts of Central Asia normally open are "temporarily" closed each year during spring maneuvers. Other areas offi- cially accessible are, in fact, denied on various pretexts. Numerous requests by Western representatives to visit Vorkuta, the former slave-labor center above the Arctic circle, were denied,,although it has been formally prohibited only since August 1959. In other cases, approved travel is subjected to indirect restrictions along the route. Misroutings or delays are used to ensure that the observer will pass through an area of interest at night. Surveillance, provocations, and staged incidents have long been familiar to Western diplo- mats and military attaches in the Soviet Union. With the ex- pansion of East-West exchanges, the various forms of surveil- lance and harassment have been extended to cover exchange stu- dents, delegations, and ordinary tourists. Such activities di- rected against tourists have ap- parently increased. Printed matter was care- fully inspected by customs of- ficials at entry points in 1959, although in previous years lit- tle concern had been shown. In some cases, books were confis- cated at the"border and never returned to their owners. Fur- thermore, last year for the first time there were instances in which men's wallets and women's purses were inspected and pockets turned inside out. Customs inspections at exit points also became increasingly severe. Searches were more frequent. In a number of instances snaps and locks were simply broken. Personal items such as cameras and diaries frequently disappeared from their owner's rooms for days. In other cases, tape recorders, cameras, and unexposed film were obviously tampered with and some- times put out of commission. Noc- turnal telephone calls as a check or reminder of surveillance,tele- phone taps, and concealed micro- phones were encountered with in- creased frequency. In 1959, American tourists and businessmen resident in the USSR long enough to receive for- eign mail noticed that their let- ters were being opened. In many cases there was little or no at- tempt to conceal the tampering. Intourist guides make it clear that tourists are not permitted to photograph mili- tary installations, railroad SECRET PART III PATTERNS AND PERSPECTIVES Page 13 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 stations, airfields, bridges, government buildings, indus- trial enterprises, and the like. On the whole,Americans have abided carefully by the regulations, but in 1959 a number of Americans were de- tained or arrested for "mis- using" their cameras. Some made the mistake of photograph- ing unflattering scenes, but others had photographed ob- jects of natural interest to tourists whihh, unknown to them, included areas considered by the USSR to have military or economic intelligence in- terest. ` Since Stalin's death, and particularly since 1958, the Soviet regime has lost some of its inhibitions against the release of economic data. Sta tistics on the production of some items, on trade of some articles, and some planning data have replaced the former releases, which consisted of announcements of a series of percentage changes on A', base year for which data were con- cealed. Still protected,how- ever, is a very wide range of production data on the output of individual plants, armament and military-related products, and other state secrets such as practically all data re- lating to the output of pre- cious or base nonferrous metals. Limitation of Contacts Contacts between foreign- ers and Russians have expanded markedly in recent years as a result of both the increase in East-West exchanges and a great- er sense of personal security on the part of Soviet citizens. There remains, however, a con- siderable barrier to free, spontaneous contacts. Western officials must continue to reckon with more or less per- manent surveillance, while of- ficial delegations and tourists are almost constantly under the watchful eye of official guides, who operate under instructions from security officials. Disclosure or public dis- cussion of security--related topics in recent years has given the appearance of some relaxation, but, with hardly any exceptions, a self-serving aim is always evident. For example,'Chrushchev's disclosure in January of the size of his armed forces, although unprec- edented,. was intended to strengthen his hand in disarma- ment negotiations. On vital points the'. ' Soviet '. sense of security remains extremely strict. The USSR consistently denies access to information and facilities when it feels that such access would weaken military security, and that de- tails on similar activity in the West will routinely become available in open sources. and not'-.require a quid pro quo trade. Guided Missiles Statements by high Soviet officials, designed to under- score Moscow's self-confidence and to buttress its interna- tional prestige, have occasional- ly thrown some light on the gen- eral development of the USSR's guided missile program, but have not revealed details. Travel restrictions may be a barometer of sensitivity: five cities added to the denied list last August--Vorkuta,Gorky, Kazan, Kuybyshev, and Dneprope_ trovsk--may be involved in some aspect of the guided missile program. Soviet aircraft de- signer Tupolev was given a tour SECRET PART III PATTERNS AND PERSPECTIVES Page 14 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 April 1960 of Thor missile production fa- cilities during'a visit to the US, and Mikoyan was offered a trip to Vandenberg AFB. However, a request by the Nixon party for a visit to a Soviet missile production facility was never answered. Airdraft 'Industry, Shipbuilding Aircraft factories are in many instances situated in closed areas. Where this is not the case,Western travelers approaching areas known to con- tain aircraft plants are fre- quently turned back by security police or the military. The Russians have gone so far as to put a smoke screen around a factory airfield when it was known that the US air attached would be passing the field by train. General Twining's group in 1956 visited. Airframe Plant 20 and Aircraft Engine Plant 45, both in Moscow, but neither of the plants was doing work of military interest at the time. With these exceptions, aircraft factories have been strictly out of bounds to Westerners. Some foreigners, includ- ing a few Amerieans,have been allowed to visit certain Soviet shipyards producing merchant vessels. However, shipyards producing or suspected of pro- ducing naval vessels such as submarines and destroyers are generally located in closed cities, or, as in the case of Leningrad, access is prevented by the travel re- quests or by on-the-spot ac- tion by servicemen, police, or ordinary citizens to prevent observation and photographing. The USSR has not agreed to an exchange of shipbuilding spe- cialists. Only after strenuous protests was Admiral Rickover allowed to make anything but the most superficial tour of the nuclear-powered icebreaker Lenin. Military Secrecy Secrecy concerning all phases of the development and production of new weapons is extremely heavy until there is a public showing of the new weapons or an announcement that such weapons exist. These dis- closures are always tied to the current propaganda line in order to?_emphasize that the USSR has the strength to back its policies. The USSR never publishes information on the size of its military stock- piles, nor does it ever invite Western?attachds to unit exer- cises or publish the specifics of significant tactical or strategic doctrines. Vigilance Stressed There is thus no sign of a reduction of Moscow's far- flung internal security sys- tem. With the sharply increased influx of foreign visitors, the accent may fall on more, rather than less, internal se- curity. The State Secrets Act issued in 1956 is, like the ' 1947 statute it replaced, a lengthy compendium prohi- biting divulgence of many kinds of information regarded elsewhere a public property. A rigid cen- sorship of domestic publica- tions and of outgoing press dispatches continues J A resurgence of "security consciousness" was also evi- dent in the extensive "vigi- lance" campaign in the press in the latter half of 1958--a campaign which stressed the dangers of carelessness and complacency arising from "peaceful coexistence" and warned against the depreda- tions of US intelligence, which is said to employ "tens of thousands of people who bend all efforts to in- flict damage in the tries Of socialism." (Concurred in by ORR) SECRET PART III PATTERNS AND PERSPECTIVES Page 15 of 15 Approved For Release 2007/10/23: CIA-RDP79-00927A002700030001-0 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0 SECRET SECRET Approved For Release 2007/10/23: CIA-RDP79-00927AO02700030001-0