CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A002700110001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 51
• Document Creation Date: December 16, 2016
• Document Release Date: March 1, 2005
• Sequence Number: 1
• Publication Date: June 9, 1960
• Content Type: SUMMARY

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CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
f0
COPY NO. 70
OCI NO. 2698/60
9 June 1960
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
DOCUMENT NO..
NO CHANGE IN CLASS. r I
DEC( HANGS Ito
CLASS. CHANGED TO: TS
NEXT REVIEW DATE:
AATE: -1(2
`iP,TE.
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State Department review completed !
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent the
immediate appraisal of the Office of Current Intelligence.
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T H E W E E K I N B R I E F
OF IMMEDIATE INTEREST
EAST-WEST RELATIONS . . . . . . . . . . . . . . . . . . . Page 1
Khrushchev maintained his campaign last week to blame
the United States for the collapse of the summit meeting,
but took pains to reaffirm his intention to work for an
improvement in Soviet-US relations. His new disarmament
proposals were designed to appear responsive to Western
views on. a number of important issues, as a means of re-
furbishing the image of the USSR as the champion of peace-
ful coexistence. The Chinese Communists have directly at-
tacked Khrushchev's justification for his continued policy
of peaceful coexistence which Moscow repeated in its lat-
est disarmament proposal.
25X1
POLITICAL UNREST IN JAPAN . . . . . . . . . . . . . . . . Page 4
Leftist elements in Japan, encouraged by the large
and relatively orderly turnout on 4 June, are striving to
expand the wave of demonstrations and strikes aimed at
forcing the resignation of Prime Minister Kishi and pre-
venting ratification of the US-Japanese. security treaty.
Under these pressures, however, most members of the ruling
Liberal-Democratic party have temporarily, halted efforts
to oust Kishi and are rallying to support his plan for
completing ratification prior to the arrival of President
Eisenhower on 19 June. The treaty will probably be rati-
fied as planned, but Kishi's prospects for retaining office
for long thereafter remain poor. 25X1
THE SITUATION IN TURKEY . . . . . . . . . . . . . . . . . Page 5
The new regime in Turkey has begun to show signs of
anxiety and insecurity. A countrywide military alert is
still in force, and widespread arrests of adherents of
the old regime and intensive screening of army, police,
and gendarmerie personnel have contributed to an atmos-
phere of tension. The new government has received wide-
spread diplomatic recognition. 25X1
CUBA . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 6
Khrushchev's acceptance of an invitation to visit
Cuba is the latest evidence of Soviet intentions to ex-
ploit fully Castro's open hostility to the United States.
No date has been mentioned; Moscow will probably seek
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PART I (continued)
invitations from other Latin American' countries. Reports
persist in Havana that Chou En-lai has also accepted an
invitation to visit Cuba. Western oil companies, which on
6 June advised the Cuban Government of their refusal to
refine Soviet crude oil, expect that their refineries will
NOTES AND COMMENTS
CONFERENCE OF INDEPENDENT AFRICAN STATES . . . . . . . . . Page 1
The second regular conference of independent African
states, to be held in Addis Ababa from 14 to 25 June, is
expected to bring together official delegates of some 15
independent or about-to-be independent countries and the
Algerian rebels' provisional government. Emboldened by
their growing numbers, the conferees will probably spend
most of their time devising new tactics to promote the
"African position" on such familiar issues as Algeria,
apartheid, South-West Africa, and France's nuclear tests.
Although a permanent intergovernmental African organiza-
tion seems likely to be created, inter-African frictions--
especially between "militants" and "moderates"--may be in-
tensified. 25X1
. . . . . . . . Page 2
Political activity in the Belgian Congo is centered
about efforts of various groups to keep Patrice Lumumba,
whose National Congo Movement forms the largest single
bloc in the new legislature, out of the premiership. In
all, 28 parties--many with only one seat--are represented
in the 137-man legislature elected in late May. Although
anti-Lumumba groups claim to have enough seats to form a
majority coalition, they are disorganized and fear that
Lumumba's exclusion from a Congo government might lead
him to increasingly irresponsible activities. Separatist
sentiment is once again being openly voiced in Leopoldville
and Katanga provinces. F_ I
MIDDLE EAST DEVELOPMENTS . . . . . . . . . . . . . . . . . Page 4
Election maneuvering in Lebanon is approaching a cli-
max, and sporadic violent incidents are sure to occur.
The parliamentary elections will take place on four suc-
cessive Sundays beginning 12 June. In Iraq, Prime Minister
Qasim in a speech on 4 June made an overture for better
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 June 1960
PART II (continued}
relations with the UAR and Jordan. The propaganda bat-
tling between Iraq and these countries has already died
down, and Iraqi relations with Iran have also shown some
slight improvement.
THE BLOC AID EFFORT IN YEMEN . . . . . . . . .
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Page 5
Moscow and Peiping have persisted in their work on
economic development projects in Yemen despite little ef-
fective cooperation from the host country; Substantial
progress has been made on port construction and road proj-
ects, and Yemen appears willin to accept additional bloc
aid.
25X1
COMMUNIST CHINA SIGNS NEW AGREEMENT WITH MONGOLIA . . . . Page 6
Premier Chou En-lai during his visit to Mongolia from
27 May to 1 June signed for Peiping a Treaty of Friendship
and Mutual Assistance, and the Chinese also agreed to ex-
tend a $50,000,000 credit for Mongolia's forthcoming Five-
Year Plan (1961-65). Statements by the Mongolian premier
made it clear, however, that Peiping is not supplantin
Moscow as the predominant influence in the country. 25X1
COMMUNIST ACTIVITY IN NEPAL . . . . . . . . . . . . . . . Page
Prime Minister Koirala believes that Communists in
Nepal are preparing to inaugurate a major drive for popu-
lar support throughout the country. The Communists are
reported setting up local "people's libraries," along with
a network of district headquarters. Koirala's dominant
position and his plans for counteraction will probably
limit the Communists' immediate prospects for success, but
the government's slow pace in implementing development
programs affords the Communist party ample opportunities
to broaden its political base. 25X1
PAKISTAN'S LOCAL COUNCIL PROGRAM DELAYED . . . . . . . . Page 8
The Pakistani regime has encountered difficulties in
making effective instruments of government out of the local
councils--"basic democracies"--which were elected with much
fanfare in late December and early January. President Ayub
has announced that because of "legal and administrative
difficulties" it will be six months to a year before these
councils are generally effective. The delay, which may be
even longer, will probably impede local economic develop-
ment programs and undermine the regime's reputation within
Pakistan for getting things done.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 June 1960
PART II (continued)
SOMSANITH GOVERNMENT INVESTED IN LAOS . . . . . . . . . . Page 9
The government of Premier Tiao Somsanith, approved by
the Laotian National Assembly on 5 June by an overwhelming
margin, is heavily weighted in favor of the Party of Democ-
racy and Social Progress, the new party sponsored by the
strongly anti-Communist Committee for Defense of National
Interests (CDNI). Despite some weak spots, the cabinet is
one of the abler ones in Laos' recent history; its viabili-
ty will depend in large part on the ability of Somsanith
and CDNI leader General Phoumi, who is defense minister,
to work together. The new government has reiterated Laos'
neutrality in international affairs, but is expected to
push repressive measures against local Communists. 25X1
DUTCH-INDONESIAN RELATIONS .. . . . . . . . . . . . . . . . Page
Several months of increasingly belligerent recrimina-
tions between the Netherlands and Indonesia are in prospect
following the departure from Rotterdam on 30 May of the
Dutch aircraft carrier Karel Doorman for a flag-showing
tour of the Far East. Djakarta continues to regard the
Dutch cruise as a provocative threat to Indonesian sover-
eignty, while The Hague is obsessed with fear that the
Indonesians may attempt to seize Netherlands New Guinea.
The chance of an incident cannot be ruled out, despite the
apparent desire of both sides to avoid one.
FINNISH POLITICAL SITUATION . . . . . . . . . . . . . Page
The effort of the past week to form a majority govern-
ment in Finland was promoted largely by President Kekkonen,
but also reflected Soviet attempts to exert influence in
Finnish domestic affairs. Moscow was believed by some
Finnish politicians involved to want a government more
broadly based than the present Agrarian cabinet, which com-
mands only 47 seats out of 200 in parliament, in order to
obtain a longer term trade'agreement. The Agrarian cab-
inet will probably last at least until the Diet reconvenes
in September.
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CONFLICTS IN BRITISH LABOR PARTY OVER FOREIGN POLICY . . . Page 13
Labor party leader Gaitskell is making an all-out
effort to gain acceptance for a new Labor defense policy
which, while "recognizing" that Britain is no longer
capable of developing an independent nuclear deterrent,
would reaffirm the maintenance of British ties with NATO
and support of nuclear weapons for NATO. Collapse of the
summit conference has brought some additional support for
Gaitskell's policy. As of now, however, advocates of
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PART II (continued)
unilateral British nuclear disarmament--who are mainly in
the trade unions--command enough votes to win on this
issue at the party conference in October.
25X1
ARGENTINA REINFORCES MEASURES AGAINST TERRORIST ATTACKS Page 14
President Frondizi has sent to Congress a proposal
to impose stronger penalties for bombings, which have
been frequent throughout Argentina, and a decree providing
for federal control over Cordoba Province. The army, in
charge of antiterrorist investigations since mid-March,
has accused inept and uncooperative Cordoba officials of
protecting and conniving with Peronista terrorists. The
army reportedly insisted on federal intervention in
Cordoba, a hi hl unpopular step throughout the country.
25X1
THE PRESIDENTIAL ELECTIONS IN BOLIVIA AND ECUADOR . . Page 14
In Bolivian and Ecuadorean presidential elections on
5 June, former Presidents Victor Paz Estenssoro and Jose
Velasco Ibarra won sweeping victories, each in four-way
contests marked by serious violence and coup threats. Al-
though both countries experienced revolutions repeatedly
in the 1930s and 1940s, prospects are good for peaceful
inaugurations on 6 August for Paz and on 1 September for
Velasco. Both men are noted for unorthodox financial
policies during earlier terms of office and both are ex-
pected to emphasize economic development, possibly at the
expense of the gains in economic stability made by the
incumbent administrations. 25X1
PATTERNS AND PERSPECTIVES
25X1
DETERIORATING INTERNAL SITUATION IN POLAND . . . . . . . . Page 1
Conditions in Poland have worsened steadily since the
crisis last fall over meat shortages. The continuing deteri-
oration results from the ineptitude of party and govern-
ment leaders, agricultural setbacks, and the public's low
morale. The people have lost hope of any improvement in
their situation, and they see the political changes of the
past six months and the return of former Stalinists to
power as foreshadowing worse things to come. Despite sev-
eral recent riots over religious issues, the prevailing
public mood seems one of apathy. 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PART III (continued)
OUTLOOK FOR THE FRENCH COMMUNIST PARTY . . . . . . . . Page 6
De Gaulle's policies on economic austerity and church
schools and his authoritarian attitude toward parliament
have given the French Communist party an unusually promis-
ing opportunity to break out of its political isolation.
Despite its present insignificant parliamentary strength,
the party retains the best organized political machine in
France, and its labor arm has succeeded in establishing a
pattern of cooperation with non-Communist unions. The
continuing stalemate in Algeria and any move toward relax-
ation of East-West tensions will probably facilitate Com-
munist efforts to win acceptability as a responsible polit-
ical group.
25X1
IZVESTIA INSPIRES NEW LOOK IN THE SOVIET PRESS . . . . . . Page 9
Aleksey Adzhubey, Khrushchev's son-in-law, has given
Izvestia, the Soviet Government mouthpiece, a face-lifting
esigne `to increase its reader appeal and its propaganda
effectiveness. Adzhubey has introduced innovations in
format, style, and content--many borrowed from Western
newspapers---which have gained numerous new readers and
probably increased the paper's impact. Adzhubey's changes
appear to. be in answer to the party's call for a revitali-
zation of the regime's lumbering propaganda machinery, and
other Soviet newspapers are beginning to follow his ex- 25X1
ample. F- I
PETROLEUM DEVELOPMENTS IN LATIN AMERICA . . . . . . . . . Page 15
Although Latin America in 1959 retained its approxi-
mately 18-percent share of world petroleum production
which it held in 1958, its portion of the mounting total
may decline in 1960, in part because of the indicated
leveling of production in Venezuela,_the world's second
largest producer and leading exporter of petroleum. The
highest percentage gains in Latin America in 1959 were
registered by Argentina and Brazil. Nationalistic senti-
ment against foreign-owned oil companies--a continuing
problem in Argentina, Brazil, and various other countries--
flared up particularly in Peru and Cuba. The USSR's ef-
forts to expand petroleum exports scored successes in Cuba
and Uruguay, but its offers of technical aid and credits
to various national oil agencies have been accepted only
in part. F7 I
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CURRENT INTELLIGENCE WEEKLY SUMMARY
OF IMMEDIATE INTEREST
EAST-WEST RELATIONS
Khrushchev maintained his
campaign last week to blame the
United States for the collapse.
of the summit meeting. While
his intemperate attacks on Pres-
ident Eisenhower during his
press conference on 3 June were
intended for this purpose, they
reflect his sensitivity to
charges that his pre-summit pol-
icy has been proved wrong and
that he allowed himself to be
deceived by the President. Khru-
shchev last week also usdd ques-
tions posed by Izvestia and
Pravda to refute statements by
Secretary Herter and White House
Press Secretary Hagerty concern-
ing his refusal to agree to bi-
lateral discussions in Paris on
the U-2 incident.
ference of wartime allies. As
to the timing, he stated only
that the USSR would initiate
this process "when we see that
enough'time has passed."
Disarmament
Khrushchev has again turned
to the disarmament proposals as
a means of refurbishing the image
of the USSR as the champion of
peaceful coexistence. In his
letter to President Eisenhower
on 2 June, he stated that "re-
cent events not only have not
lessened but, on the contrary,
have strengthened the Soviet Gov-
ernment's determination to achieve
a radical solution of the dis-
armament problem,"
Khrushchev at the same time
reaffirmed during the press con-
ference his intention to work
for better Soviet-US relations.
He predicted that an improvement
will come about "in a more tan-
gible way" after the US elec-
tions. He also stated that the
USSR would not impose any re-
strictions on cultural exchanges.
Khrushchev did not modify
his earlier position that the
status quo in West Berlin would
be maintained until another sum-
mit meeting takes place in "six
to eight months." However, he
warned the West against believ-
ing that conclusion of a sepa-
rate treaty with East Germany
could be delayed by postponing
a summit conference beyond the
time period he has suggested.
He indicated that, before taking
any unilateral action, Moscow
would go through the normal
steps of calling a peace con-
Khrushchev's new proposals,
which he said had been prepared
for presentation to the summit
meeting, are designed to appear
responsive to Western views on
a number of important issues.
However, in an effort to exploit
Western differences resulting
from France's insistence on giv-
ing top priority to measures for
controlling nuclear weapons de-
livery systems, the new Soviet
plan provides, as the first
stage toward complete disarma-
ment, for the prohibition and
destruction of all means for the
delivery of nuclear weapons.
The USSR insists, however, that
these measures must be accompanied
by the liquidation of foreign
military bases and the withdrawal
of all foreign troops from the
territory of other states.
To counter Western criticism
of the vague and ambiguous con-
trol provisions contained in the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 June 1960
plan Khrushchev placed before
the United Nations last Septem-
ber, the new proposals include
details on the nature and func-
tions of a control system. They
,spell out control measures for
each of the three stages in the
Soviet program and outline the
composition and voting proce-
dures of the proposed Interna-
tional Control Organization.
Moscow now provides for on-site
inspection of successive dis-
armament steps, missile launch-
ing sites, and plants and in-
stallations engaged in military
production.
The Soviet Union apparently
regards the renewed negotiations
on disarmament in Geneva as a
holding operation until it can
bring the issue before the larg-
er propaganda forum of the UN
General Assembly. Soviet chief
delegate Zorin's moderate state-
ments on his arrival for the
reopening of the talks and at
the initial session on 7 June
were designed to reinforce the
impression of Soviet sincerity
in seeking a speedy agreement
with an effective control sys-
tem. He expounded on the new
Soviet proposals at some length,
but he offered no new points of
substance or significant clari---
fications.
At a news-.conference on 7
June, Zorin anticipated that a
stalemate might be reached in
the talks when he again warned
of the USSR's intentions to turn
over its plan to the General
Assembly, which reconvenes in
September, if no agreement can
be reached in Geneva.
A member of the Soviet
delegation to the nuclear test
talks told an American official
on 1 June that he saw no hope
for progress at the disarmament
talks. He said Moscow has, not
requested a special meeting of.
the UN General Assembly to deal
with the problem because the USSR
could not yet muster the votes
required to convene one. Mos-
cow's propagandists are assert-
ing that while the Soviet Union
has-brought specific and broad
new proposals to the resumed
negotiations, the West has come
empty-handed. They point, as
did Zorin, to certain "forces"
in the West which they allege
are obstructing an agreement,
and identify them as the same
forces responsible for thwart-
ing the summit conference.
The USSR has stiffened its
position on the terms of a joint
research program to perfect
means of detecting small under-
ground tests. Soviet delegate
Tsarapkin on 2 June expressed
dissatisfaction with the safe-
guards offered by the American
delegation to assure that US
research explosions would not
be used to develop new nuclear
weapons. He demanded full So-
viet participation in the formu-
lation and execution of the US
program and announced that the
USSR has no plans to conduct
underground explosions of either
chemical or nuclear devices.
This turnabout occurred
after Soviet experts at Geneva
had outlined a Soviet research
program for 1960-63 providing
for six large chemical explosions
during 1960 and 1961 in the USSR.
Tsarapkin contended that the
only reliable safeguard would be
the right to inspect the US de-
vices used in research explosions.
The shift in the Soviet po-
sition on research tests may have
resulted in part from Soviet
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 June 1960
concern that the Geneva discus-
sions on a joint research pro-
gram had implied Soviet acknowl-
edgment: of deficiencies in the
1958 system. This system, the
USSR has previously argued,
needs no improvements,and Tsarap-
kin's objective probably was to
re-emphasize Moscow's full con-
fidence in the 1958 experts'
report. Tsarapkin strongly
argued that the USSR had agreed
to a joint research program not
because it doubts the capabili-
ties of the 1958 system but
only because the United States
had made this a condition for
a moratorium on small under-
ground tests.
Another member of the So-
viet delegation told a member
of the American delegation that,
contrary to his feelings in
April, he now is pessimistic
about prospects for the talks.
He noted that the President has
twice stated he could not com-
mit his successor, and claimed
that therefore a moratorium
could not last longer than
eight months at best. He saw
no hope of any agreement until
at least next year, when the
United States has a new admin-
istration.
Chinese Reaction
In their dispute with the
USSR over tactics toward the
United States, the Chinese Com-
munists have directly attacked
Moscow's justification for its
policy as restated by Khrushchev
in the Soviet disarmament pro-
posals of 2 June. An editorial
in the Peiping People's Daily
on 7 June, while generall-ysup-
porting the Soviet proposals,
flatly stated that the Chinese
cannot agree that war now can
be"fundamentally eliminated"--
a statement taken from the text
of Moscow's proposals.
In attacking this state-
ment as an "unpractical illusion
about peace" and affirming that
it is "entirely necessary" for
bloc countries to "strengthen
their armed forces," the Chi-
nese are making it clear they
are reluctant to reduce their
armed forces and to alter their
hostility toward American pol-
icy in the Far East.
The Chinese are also step-
ping up their criticism of the
concept of East-West negotia-
tions as a means of reducing
American strength and influence.
Party Chairman Liu Shao-chi
stated on 3 June that the "im-
perialists... will not accept
negotiations unless hard pressed
by circumstances"--a line con-
sistent with their position that
American hostility toward Pei-
ping has not changed despite
talks at Panmunjom, Geneva, and
Warsaw. Trade union chief Liu
Ning-i recently told the gen-
eral council of the World Fed-
eration of Trade Unions--now
meeting in Peiping--that "no
talks in any case can take the
place of the struggle of the
working class" on the interna-
tional scene.
The Chinese are clearly
concerned about Khrushchev's
apparent desire not to close
the door on the possibility of
future summit meetings, from
which they feel they will be ex-
cluded. They probably calculate
that Soviet diplomatic maneuver-
ing may again require a thaw in
Soviet-American relations--an
atmosphere which would again ham-
per their effort to inflame anti- 25X1
American sentiment in various
countries and thus "isolate the
us,
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POLITICAL UNREST IN JAPAN
Leftist elements in Japan,
encouraged by the large and rel-
atively orderly turnout on 4
June, are striving to expand
the wave of demonstrations and
strikes aimed at forcing the
resignation of Prime Minister
Kishi and preventing ratifica-
tion of the new US-Japanese se-
curity treaty. Under these
pressures, however, most members
of the ruling Liberal-Democratic
party (LDP) have temporarily
halted efforts to oust Kishi
and are rallying to support his
plan for completing ratification
prior to the arrival of Presi-
dent Eisenhower on 19 June.
Kishi's. prospects for retaining
office for long thereafter re-
main poor.
Japanese police officials
have estimated the nationwide
turnout on 4 June at 830,000
persons, considerably less than
leftist claims, but still the
largest demonstration of its
kind in Japan since World War
II. Encouraged also by the rel-
ative lack of adverse public
reaction--even to the railway
strike, which was illegal--the
leftists are planning still
larger performances during the
week of 11 to 18 June.
on the ratification issue. Fac-
tions led by Tanzan Ishibashi,
Kenzo Matsumura, and Ichiro
Kono, whose members constituted
the bulk of the 25 LDP absten-
tions when the lower house
voted on the treaty on 20 May,
are still refusing to cooperate
with Kishi on the issue.
The Socialists' threat to
resign en masse from the lower
house is calculated to force
Kishi into dissolving the Diet,
thereby nullifying all legis-
lative action on the treaty.
Even if they do so, however,
Kishi is constitutionally em-
powered to continue the rati-
fication process. He is still
expected either to use his sub-
stantial majority in the upper
house to complete passage about
15 June or, in the absence of
a vote, to allow ratification
to occur automatically on 19
June.
Kishi has steadfastly re-
fused to resign or. to dis-
solve the Diet until the treaty
is ratified. Thereafter, how-
ever, intraparty rivals, tacit-
ly supported by business inter-
ests which finance the LDP, are
certain to redouble their ef-
fot?ts'to unseat him because he
Apparently recognizing that
disunity in the LDP could en-
danger passage of the treaty,
the conservative party factions
led by Hayato Ikeda, Eisaku
Sato, Takeo Miki, and Bamboku
Ono are moving to support Kishi
stands in the way of their
aspirations for power. Most
informed observers believe
Kishi cannot long withstand
intraparty pressures for his
resignation.
D
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CURRENT INTELLIGENCE WEEKLY SUMMARY
THE SITUATION IN TURKEY
The new military regime in
Turkey, which has received wide-
spread diplomatic recognition,
has begun to show signs of anx-
iety and insecurity, although
the reason for the air of un-
easiness is not clear. The re-
gime of the military National
Unity 'Committee' is' not.
as relaxed as it was a week ago.
The countrywide military alert
suggests
Lunce over POSSIDle active
organized resistance.
The National Unity Commit-
tee (NUC) still suspects the
loyalty of the National Police
and believes the gendarmerie
is too politically oriented to-
ward the old Democratic party
regime. Some members of the
Turkish National Police who
have been screened have already
reappeared on the streets of
Ankara. Security screenings
within the army, including the
General Staff, show a continu-
ing concern over military re-
liability. There were earlier
rumors of localized antiregime
demonstrations in the provinces.
The Kurds in southeastern
Turkey also remain a continuing
problem to the provisional gov-
ernment, as they did to the pre-
vious regime. However, no defi-
nite areas of effective or or-
ganized opposition have emerged.
Other unsettling factors
are adding to the tension. Many
press articles and leaflets
aimed at stimulating hatred for
the former Menderes regime are
appearing. At least one of these
has included anti-American ref-
erences. The military "outs,"
especially in the higher grades,
are showing resentment toward
the relatively junior NUC group.
The demand for revenge from
some of the middle grades in the
military and from other anti-
Menderes elements is encouraging
the regime to adopt a harsher
attitude toward the members and
supporters of the old govern-
ment. The arrest of Democratic
deputies and local functionaries
has been broader than indicated
by a previous NUC pronouncement.
Despite these pressures
and anxieties, the provisional
government and the revolutionary
committees established to de-
termine evidence of guilt and to
draft a new constitution appear
to be operating in a business-
like manner in an attempt to
hasten a return to normalcy.
The constitutional committee
has indicated that it hopes to
complete its work by the end of
June. Other committees of legal
experts and professional spe-
cialists are7?reviewing legis-
lation passed by the former re-
gime and studying records to
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determine evidence of malfea
sance in office.
New provisional appointees
to economic posts who are viewed
by the US Embassy as competent
and efficient were also announced
on 1 June, indicating an attempt
to right Turkey's economic im-
balance. Provincial government
should also return to normal
now that most civilian governors
of Turkey's 67 provinces are re-
suming their duties following
their declaration of loyalty to
the regime. New governors are
to be appointed to Ankara,;Istan-
bul, Izmir, Agri, and Siirt.
While the domestic polit-
ical picture remains unclear,
the Republican People's party
is still confident of victory
when elections are held. A new
factor has entered the picture,
however, as provisional Presi-
dent-Premier Gursel has let it
be known through the press that
contrary to earlier indications,
he might enter political life
"if the country's interest de-
mands it." Gursel has also
stated that unless elections
are held by October, adverse
weather conditions will necessi-
tate delaying them until spring.
25X1
Khrushchev's acceptance of
an invitation to visit Cuba is
the latest evidence of Soviet
intentions to exploit fully
Castro's open hostility to the
United States and evident de-
sire for closer relations with
the bloc. Khrushchev would use
any visit as a forum to speak
to the peoples of all the Latin
American nations in an attempt
to remove their fears of estab-
lishing closer ties with the
USSR and to convince them that
such ties would be to their
benefit. Moscow will probably
seek invitations from other
Latin American nations in order
to make the greatest possible
propaganda impact.
A large number of articles
on Cuba have appeared in the
Soviet press, all praising the
revolution and denouncing al-
leged American "imperialist"
efforts to topple Castro and
destroy the revolution. Khru-
shchev himself on several oc-
casions recently has praised
Castro personally, and indicated
clearly that the USSR hopes to
encourage similar nationalist
movements throughout Latin Amer-
ica.
At his 18 May press confer-
ence_:in Paris, the Soviet pre-
mier welcomed the events in
Cuba and stated, "I am convinced
the other Latin American coun-
tries will also rise up in the
struggle for their independence."
On 28 May, Khrushchev calldd
Castro a "fiery patriot ...who
carries out a policy that meets
the needs of the Cuban people."
Reports that Chinese Com-
munist Premier Chou-En-lai has
also accepted an invitation to
visit Cuba persist in Havana,
where the Peiping Opera Company
continues to be feted by Castro
officials. The troupe is the
guest of the Castro government
for its month-long tour, Chou
may have been invited by Armed
Forces Inspector General Galvez,
who received red-carpet treatment
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during two recent visits to Com-
munist China. Galvez now is end-
ing a global good-will tour to
the USSR, North Vietnam, and
Other bloc and neutral countries.
The Czech foreign commerce
minister arrived in Havana on
6 June with an official delega-
tion to conclude commercial,
payment, technical, and credit
agreements negotiated between
the Cuban and Czech governments
over the past few weeks.
The one British and two US
oil companies in Cuba, which
advised the Cuban Government on
6 June of their refusal to re-
fine Soviet crude oil, expect
that their refineries will soon
be taken over. However, as of
9 June, Castro officials did not
appear ready to press the issue.
The American Embassy believes
the publicity attendant on the
refusal will spark another anti-
US propaganda blast by Castro-
controlled media.
Cuban President Dorticos ar-
rived in Caracas on 6 June, de*,:
spite Venezuelan President Betan-
coutt's efforts to cancel the
visit. The Cubans were accorded
a minimum of official attention
and stayed only 36 hours instead
of the originally scheduled four
days before leaving for Mexico,
last stop on Dorticos' Latin
American trip. The Nicaraguan
Government on 1 June demanded
the recall of the Cuban ambassador
and his entire staff for having
repeatedly engaged in subversive
activities. Nicaragua says it
has "suspended" relations with
Cuba.
25X1
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CURRENT: INTELLIGENCE WEEKLY SUMMARY
9 June 1960
NOTES AND COMMENTS
CONFERENCE OF;.INDEPENDENT"AFRICAN-STATES
The conference of independ-
ent African states which is to
be held in Addis Ababa from 14
to 25 June will be another step
in the emergence of the "African
personality" on the internation-
al scene. Billed as the second
"regular" meeting in a series
inaugurated by an eight-nation
gathering in Accra in April
1958, it is actually the third
Algeria
only provisional rebel
government invited
general intergovernmental meeting,
a "special" session having been
convened in Monrovia last August.
Ethiopia is preparing to
play host to at least 140 offi-
cial delegates and an equal num-
ber of observers, spectators,
journalists, and other visitors.
Formal invitations have gone out
to each of the 12 indepedent
Addis Ababa* Br. Somal
Ethiopia
Somalia
British 5omal it and
KENYA and Somalia invited
Countries Invited to Participate in
Second Independent African States Conference
SWAZILAND
SOUTH AFRICA
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 June 1960'
African states except South Af-
rica, to the Algerian rebels'
provisional government, and to
five states--Mali, the Belgian
Congo, Somalia, the Malagasy
Republic, and Nigeria--which
will become sovereign between
20 June and 1 October. Togo,
however, has indicated it will
not attend the meeting.
Numerous nationalist lead-
ers from dependent territories
will attend as observers, on
subsidies from Ethiopia. Spe-
cial representatives of several
Soviet bloc countries, includ-
ing the USSR, are expected to
be on hand and may obtain some
official status.
An informal secretariat
composed of the UN delegates of
the African states has drawn up
a 20-item provisional agenda
for the conference. Although
the agenda is comprehensive in
nature, its emphasis and the
recent remarks of African offi-
cials indicate that the con-
ferees will probably spend most
of their time attempting to co-
ordinate policy and work out
new tactics to promote the "Af-
rican position" on certain
familiar issues. These include
Algeria, France's nuclear test-
ing program, and South Africa's
apartheid policy and refusal to_
place the mandated territory
of South-West Africa under UN
trusteeship.
In contrast to the first
meeting, at which the UAR was
the chief proponent of extreme"
positions and Ghana's Nkrumah a
moderating influence, the Gha-
naians now appear determined,to
be in the vanguard of those ad-
vocating militant action. Nkru-
mah's representatives are re-
ported planning to urge forma-
tion of,an Algerian "liberation
committee" charged with seeking
an early UN-supervised referendum
in Algeria to determine that
area's future. The Ghanaians
also reportedly intend to press..
for a "total" boycott of South
Africa and for agreement on con-
stitutional issues related to
the formation of a close-knit
African political union.
Other participants, while
likely to support proposals aimed
at increasing pressure on France
and South Africa, can be expected
vigorously to oppose Ghana's ideas
on union. Liberia,, in particular,
has indicated its intention to
campaign for a more moderate ap-.
proach, beginning with the de-
velopment of constructive, coopera-
tion among African states in
specific fields. At the same
time,'the Liberians plan to pro-
pose--and most of the conferees
appear ready to accept--the im-
mediate establishment of.some
type of permanent intergovernmental
organization, perhaps patterned
after the Organization of Ameri-
can States.
25X1
CONGO POLITICS
Political activity in the
Belgian Congo is centered about
the efforts of variors African
groups to.agree on a premier-
designate. In all, 28 parties
--many with only one seat--are
represented in the Congo'legis-
lature elected in late May.
No party holds a majority, al-
though Patrice Lumumba's Na-
tional Congo Movement (MNC) con-
trols at least 41 of the 137
seats, as many as the next
three parties combined.
Lumumba--anticipating
moves by his rivals to form a
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 June 1960
,~EQUATEUR ~ StanleyvillecJ'
~
J
4
t_ ORIENTALE
s
CONfiO r
t pond u / ~ r ~ ~ y. Bukavu
_BELGIAN CONGO
eopoldville K_ 1 V U
Adantic }
Ocean
A N O L A
FEDERATION OF RHODESIA
`AND' NYASALAND
coalition against him--demanded
after the elections that he be
appointed premier on the basis
of his plurality in the new
legislature. Hinting darkly
of "trouble" if his demands
were not met, Lumumba also
called for the immediate with-
drawal of Belgian troops from
the Congo and the election of
a chief of state by popular
vote rather than by
the legislature. He
predicted that any
government opposed by
his party "would not
last two months."
Current maneuver-
ing is aimed largely
at blocking Lumumba,
whose extremist ora-
tory during the elec-
tion campaign disturbed
many Africans as well
as Europeans. Some
anti-Lumumba groups
are only insisting that
he indicate his will-
ingness to join with
other parties in a
coalition, while others
are working to bring
about his exclusion
from the government al-
together. The Consulate
General at Leopoldville
characterizes the op-
position to Lumumba as "confused,
fearful, and disjointed." Lumumba's
assertion on 7 June that he is
supported by 70 of the assembly-
men-elect suggests that he is
working to build up an assembly
majority and may not press his
claim to the premiership on the
basis of the MNC's plurality
alone.
Belgian officials, although
distrustful of Lumumba, could
probably accept him as premier
should he be supported by a
majority of the legislature.
One factor in the current maneu-
vering is the fear--among
both Europeans and Africans--
that Lumumba's exclusion from
the government would lead to
increasingly irresponsible
activity on his part, and even
to an effort to seize power.
Nevertheless, anti-Lumumba
forces claimed on 7 June to
control 80 seats, and indicated
that they were prepared to form
a government.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
9 June 1960
Meanwhile, the prospect
of a government dominated by
Lumumba has revived separatist
tendencies in Leopoldville and
Katanga provinces. In Leopold-
ville, the powerful Abako par-
ty announced on 8 June the for-
mation of an "independent pro-
vincial government," while in
Katanga the Conakat party--
which controls a majority of
the provincial assembly--may
..still attempt to secede from
the Congo after independence.
While neither the Abako nor
the Conakat appears likely to
dissolve completely its ties
with the Congo at this time,
the present trend toward polit-
ical disorganization will prob-
ably continue throughout the
Congo in the absence of posi-
tive guidance from Brussels.
25X1
Lebanon
With parliamentary elec-
tions starting on 12 June,
Lebanese politicans are en-
gaged in maneuvering and nego-
tiations. The first important
pre-election clash occurred on
2 June when security forces
apparently precipitated an in-
cident jn,order to warn the
anti-UAR Socialist Nationalist
party against taking an active
part in the elections.
some extent by the recent up-
heaval in Turkey, Prime Minister
Qasim extolled the Iraqi revo-
lution and stressed national
unity, declaring, "No turncoat
will appear among us." Emphasizing
Election Areas in Lebanon
The first group of elec-
tions--which will be held on
four successive Sundays--will
be in the Mount Lebanon region,
where 99 candidates are running
for 30 seats. The most critical
contests there from the security
standpoint will be in Alayh and
the Druze-inhabited Shuf, In
this area the election alliances
present a bewildering array of
candidates, with many crossing
over traditional lines. Serious
incidents are likely despite
the presence of large security
forces.
Iraq
In a defensive speech on
4 June, probably-influenced to
T` ROI1 NORTH
f LEBANON
26 J-/1
3 July
B.I.bekk.
MOUNT
BEIRUT _ LBANO
BE1AIT J`
12 Jvn. 'i II.yh
SOUTH
LEBANON
19 Jun.
25X1
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the unity theme, he reaffirmed
Iraq's solidarity with Arab
nationalism and made a bid
for burying the hatchet with
Nasir and King Husayn. He
used the term "United Arab
Republic" in a favorable con-
text and included "Egypt and
Syria and Jordan" in the list
of Arab states with which he
affirmed friendly ties. The
propaganda battle between
Cairo and Baghdad has al-
most died out, and Qasim
may have felt that now is
an opportune time to put Iraqi-
UAR relations on a more friend
ly footing.
. Although he did not mention
relations with Iran, the Iraqi-
Iranian feud also seems to have
died down at least temporarily.
Iraq recently sent a new ambas-
sador to Tehran after many months
of having its embassy there in
the hands of a charge. Iran has
appointed an ambassador, but he
has asked to be excused from as-
suming his post in Baghdad be-
cause of illness. The foreign
rhinister, fearing that protracted
delay will be misunderstood in
Baghdad, has asked the Shah to
order the new ambassador to as-
sume his post immediately.
25X1
The persistent efforts of
the Soviet Union and Communist
China to carry out their eco-
nomic aid programs in Yemen ap-
parently are meeting with some
success and adding to the bloc's
prestige. Bloc undertakings
in the past were hampered by a
lack of effective Yemeni co-
operation, but recently there
.have been signs Of increasing
Yemeni appreciation for the
bloc's efforts and an apparent
willingness to accept addition-
al bloc aid.
probably will be completed next
year.
In addition to the harbor,
the major Soviet project, Soviet
engineers who arrived last
month are conducting surveys
for possible irrigation and
agricultural improvements in
the Hudayda area. Most of the
estimated 300 Soviet technicians
in Yemen, however, are working
on the harbor project.
Under its $25,000,000 aid
credit extended in 1956, the So-
viet Union is constructing a
modern three-quay harbor at
Hudayda. The first stage of
the project has been completed,
and ocean-going vessels now can
enter the harbor through the re-
cently dredged five-mile channel.
Portions of newly constructed
quays were officially opened
for business in early May. Work
in continuing, and the harbor
Communist China, which ex-
tended a $16,000,000 credit to
Yemen in 1958, appears to be
commanding more public attention
for its efforts than the USSR.
The Hudayda-Manakha-Sana road,
which is being built by about 700
Chinese "technicians," apparently
is progressing fairly rapidly
from the Hudayda:end despite
adverse working conditions. A
start has also been made from
the Sana terminal, and the Chinese
recently began dynamiting a tunnel
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CURRENT INTELLIGENCE WEEKLY SUMMARY
through the mountains
near there. The Chi-
nese workers have re- Major Bloc Projects in Yemen
in
order to
complete
the
project
on sched-
ule
but are
unlikely
to
complete
the as-
sorted to night shifts
phalt surfacing :of -
the entire road until
at least next year.
Chinese experts
may soon begin work
on a textile mill in
Sana. Yemen previous-
ly permitted only
token acceptance of
bloc: training offers,
but about 75 Yemenis
now are to be sent to
China for training in
textile manufacturing
and road construction.
More than 20 have al-
ready arrived in Pei-
ping.
25X1 (Prepared by ORR
b
Ras at Kathib
SOVIET PORT
DEVELOPMENT
PROJECT
9 JUNE 1960
STATUTE MILES 100
6111b
COMMUNIST CHINA SIGNS NEW AGREEMENT WITH MONGOLIA
Premier Chou En-lai. Wasp
given'a'red -carpet'.reception'
during his visit to Mongolia
from 27 May to 1 June.
and he is the first important
guest the Mongolians have en-
tertained since Mikoyan in 1958.
The two public rallies and the
several banquets held in his
honor, as well as the consider-
able fanfare which accompanied
the Chinese delegation's every
move, reflect Mongolia's desire
for enhanced international'stand
ing more than an attempt to
flatter the Chinese.
His only previous visit in
Ulan Bator had been in July 1954,
The Sino-Mongolian Treaty
of Friendship and Mutual As-
sistance signed during Chou's
visit will increase high-level
contacts. It provides for con-
sultation between the two states
on "important international
questions of common interest"
and formalizes China's interest
in giving Mongolia all possible
economic and technical aid.
This treaty replaces a protocol
on economic and cultural cooper-
ation signed in 1952. Mongolia
has previously negotiated trea-
ties with only three other coun-
tries--the USSR in 1946, and
Czechoslovakia and East Germany
in 1957. Of the four, only the
25X1
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CHINESE COMMUNIST
ROAD PROJECT
Sections being Y E M E N
worked on S
ana
-~ ~Manakha
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CURRENT INTELLIGENCE WEEKLY S RY
Soviet-Mongolian treaty contains
a clause promising military as-
sistance in case of need.
The economic aid agreement
signed during Chou's visit pro-
vides for a new Chinese credit
of $50,000,000 to be used during
Mongolia's Third Five-Year Plan
(1961-65). Previous Chinese
grants and credits to Mongolia,
USSR
totaling $65,000,000 since 1956,
have been obligated for a wide
variety of agricultural and
light industrial projects and
will be nearly exhausted by 1961.
The new aid assures further
Chinese participation in these
fields and may include more
emphasis on industrial projects,
possibly including iron and steel
facilities. Large-scale Chinese
technical assistance will be
continued during the next five
years. More than 10,000 Chinese
technicians and laborers now
are at work in Mongolia.
Mongolia, heavily dependent
on external support for the
development of its economy, also
is receiving substantial economic
aid from the Soviet Union,
primarily in the fields of com-
since1948 totals
$275,000,000, plus about
$100,000,000 worth of
Soviet property turned
over to Ulan Bator.
Earlier this year a
new agreement with the
USSR was signed under
which Soviet credits
and technical assist-
ance will be extended
during the next five
years. The Soviet and
Chinese aid programs
are largely complemen-
t.-Ty because of different
areas of concentration.
There is no reas_an
to believe that Peiping
is supplanting Moscow
as the predominant in-
fluence in Mongolia.
In accepting the aid,
Premier Tsedenbal made
it clear that Mongolia continues
to look primarily to the USSR
for guidance. He termed the
Russians "our oldest friends"
and referred to the new Sino-
Mongolian agreements as means
of consolidating "the unity and
cohesion of socialist camp coun-
tries led by the Soviet Union."
(Prepared joint-
ly with ORR)
25X1
munications, power,
heavy industry, and
large-scale public
orks Soviet aid
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CURRENT INTELLIGENCE WEEKLY SUMWARY
Prime Minister Koirala has
concluded that the Nepalese Com-
munist party is preparing to
inaugurate a major drive for
popular support throughout the
country. He expects that the
party's efforts will be assisted
by the Chinese Communists after
Peiping establishes an embassy
later this summer. To counter
the expected Communist drive,
rroirala plans to establish a
committee of respected scholars
to alert the public to the
dangers of Communism! his
home minister will give "dis-
creet direction" to the group.
Recent Nepalese press arti-
cles have reported the estab-
lishment by the Communists of
"people's libraries" and of a
network of district headquarters
at strategic points around the
country. The "libraries," ac-
tually bookstores, will sell Com-
munist literature and turn over
the profits to the party.
In any such drive, the Com-
munists are likely to continue
to exploit charges from many
quarters of corruption within
the ruling Nepalese Congress
party; they are also likely to
echo charges voiced at the Con-
gress party's recent conclave
that the government has failed
to maintain the promised pace
of economic development. In
addition, the party, will prob-
ably step up its efforts to fan
later anti-Indian sentiment as
a means of discrediting Koirala's
policies and undermining close
Indo-Nepalese cooperation. In
April, Communist-inspired demon-
strations based on these issues
led the government to jail more
than a dozen Communist leaders,
including the spokesmen of the
four-man Communist contingent in
Parliament. They were subse-
quently released.
While the Nepalese Commu-
nist party itself is small and
does not wield significant in-
fluence, it probably can incite
agitation on a fairly wide
scale. However, Koirala's dom-
inant position, combined with
growing Nepalese concern over
Peiping's intentions, is likely
to limit the Communist party's
success in any drive to increase
substantially its popular base.
25X1
PAKISTAN'S LOCAL COUNCIL PROGRAM DELAYED
The Pakistani regime has
encountered difficulties in mak-
ing effective instruments of
government out of the local coun-
cils, or "basic democracies,"
elected with much fanfare in late
December and early January. Pres-
ident Ayub has announced that
because of "legal and administra-
tive difficulties." it will take
from six months to a year for
these councils to be generally
effective.
One of the government's
primary problems appears to be
finding suitably loyal and com-
petent persons to fill the
appointive positions on the coun-
cils. After five months, the
government still has not an-
nounced its selections for the
40,-000.:.Appointed. members who
are to serve on the councils,
along with the 80,000 elected
members. Councils at the dis-
trict and divisional levels--
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9 June 1960
previously promised for late
March or early April--are only
now being established. Councils
at all levels are not to be "in
office" until 1 July, accord-
ing to the latest announcement.
Ayub apparently expects addi-
tional delays before the system
begins to function effectively.
These delays will probably
result in slower progress on
Pakistan's economic development
programs. The councils are to
be given major responsibility
for economic-development work
at the local level, and the lo-
cal development authorities who
are to be supplanted by the
councils are likely to show
little initiative in the
interim. The delays will be
particularly harmful for efforts
to increase agricultural pro-
duction and improve transporta-
tion facilities.
heavily publicized its rapid
implementation of land-reform
and refugee-resettlement pro-
grams in 195^9; the delay in
putting the councils to work
will undermine its reputation
for getting things done. Some
elected council members have
already complained that they
have had nothing to do since
their election. The "basic
democracies" election also was
originally publicized as a
major step by Ayub in returning
the government to the people,
and many Pakistanis will prob-
ably criticize the government
for taking so long to give their
representatives real responsi-
bility.
Ayub may try to show some
progress soon. He is person-
ally identified with the
"basic democracies" scheme
and apparently feels the coun-
cils will provide the basis for
a return to "constitutional"
Government prestige is also
likely to suffer. The regime
government.
25X1
The Laotian National Assem-
bly on 5 June approved the new
government of Premier Tiao Som-
sanith by an overwhelming mar-
gin, ending the five-month in-
terlude during which the country
was governed by the nonparlia-
mentary caretaker government of
Kou Abhay.
The membership of the new
government is heavily weighted
in favor of the Party of Democ-
racy and Social Progress (PDSP),
recently created by the strong-
ly anti-Communist Committee
for Defense of National Inter-
ests (CDNI). Former Premier
Phoui's alliance of old-line
politicians, the Rally of the
Lao People (RLP), received only
one post, the relatively
minor justice portfolio, which
will be held by Phoui's brother
Ngon Sananikone. The rest of
the 14-man cabinet, except for
two or three lesser appointees
classed as "independents," is
made up of PDSP members.
Despite some weak spots,
the new government appears
to be one of the abler ones in
Laos' recent history; its
viability will depend in large
part on the ability of Somsanith
and Brigadier General Phoumi to
work together.
Phoumi, the most powerful
of the CDNI leaders, again heads
the Defense Ministry; he will
probably be the real power in
the new government. Another
CDNI leader, Khampan Panya, is
the foreign minister, as he was
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CURRENT INTELLIGENCE WEEKLY SUMMARY
in the caretaker government and
in the Phoui government prior to
the CDNI-RLP split last Decem-
ber. Somsanith will act as his
own interior minister, a post
for which he is well suited in
view of his experience as Na-
tional Police chief and his knowl-
edge of village-level problems.
The lack of RLP opposition
in the assembly investiture vote
suggests that this party has re-
signed itself to the role of a
"loyal opposition" in the months
to come. It is badly split,
however, and may not survive as
an organization.
The Somsanith government can
be expected to push repressive
measures against local Communists
and perhaps to make more vigor-
ous efforts than previous regimes
to extend the central government's
control in the remoter areas of
the country. Internationally,it
will probably not change Laos'
neutrality stand--particularly
during the early months of its
tenure. It will be anxious to as-
suage the fears of friendly pow-
ers that CDNI dominance might lead
to an extremist anti-Communist 25X1
posture which would spark a new
international crisis in connec-
25X1
Several months of in-
creasingly belligerent recrim-
inations between the Netherlands
and Indonesia are in prospect
following the departure from
Rotterdam on 30 May of the Dutch
aircraft carrier Karel Doorman
for a flag-showing tour of the
Far East. Djakarta continues to
regard the Dutch cruise as a
provocative threat to Indonesian
sovereignty, while The Hague
is obsessed with fear that the
Indonesians may attempt to seize
Netherlands New Guinea. The
chance of an incident cannot be
ruled out, despite the apparent
desire of both sides to avoid
one.
orz
uns has ada- 1
man y e en e the Dutch "right"
to dispatch the Karel Doorman, 25X1
and plans are proceeding to
strengthen New Guinea's very
Aware of Indonesian sensi-
tivity, however, the Dutch
have been prevailed on to tone
down publicity accompanying
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CURRENT INTELLIGENCE WEEKLY SUMMARY
June 1960
BIAN ~Sie~us in Disv~~~e)
4SLAND
~
'r~.
'~'?.^, J Ho Iondk
ROUTE OF THE DUTCH NAVAL CRUISE
Tentative Itinerary
the tour and are otherwise
attempting to minimize tensions
lest an incident be provoked.
They have stated that the air-
craft carrier--accompanied by
two destroyers and a tender--
will not enter territorial
waters adjacent to Indonesia
proper, but that it will approach
West New Guinea from Fremantle,
Australia, around the southern
and eastern Australian coasts,
arriving in Hollandia at the
beginning of August. Since
Indonesia claims West New
Guinea and the waters around
it, however, the Dutch fleet will
be penetrating Indonesia's
claimed territorial waters as it
approaches its destination.
Indonesian action since
the sailing of the Karel Door-
man has been confined to a
complaint filed with the Dutch
25X1
Foreign Ministry protesting
reinforcement of New Guinea
and to a statement asserting
that Dutch policy toward that
area is "provocative and ag-
gressive." The statement says
the Netherlands' action has
created an explosive atmosphere,
"the consequences of which must
be fully borne by the Dutch
Government."
An Indonesian naval task
force which has been conduct-
ing exercises in a show of
force in eastern Indonesian
waters has returned to port
to prepare for joint exercises
scheduled with the Indian Navy
for July in waters not yet an-
anounced. Indonesia continues
its military alert on is-
lands adjacent to New Guinea.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
FINNISH POLITICAL SITUATION
The effort of the past week
to form a majority government
in Finland, promoted largely
by President Kekkonen, was ac-
companied by indications of
Soviet attempts to influence
Finnish domestic affairs. Kek-
konen succeeded in obtaining
Conservative support for a coa-
lition to include all parties
except the regular Social Demo-
crats and the Communist-front
Finnish People's `Democratic
League (SKDL), but his effort
foundered on the opposition of
the small Swedish People's party
to the number of cabinet seats
to be given to the Opposition
Social Democrats.
The USSR, which brought
about the fall of the Fagerholm
coalition in December 1958, ap-
pears to have attempted to in-
fluence Finnish developments
again during the effort to re-
place the Agrarian government,
which commands only 47 seats
out of 200 in parliament. Ac-
cording to the Conservative
leader Hetemaki, "the Russians
wanted a broader based govern-
ment" in order to nail down ad-
ditional Finnish trade and
economic commitments to the
USSR. In return,he said the
USSR would give its assent to
Finnish affiliation with the
European Free Trade Associ-
ation (EFTA).
The Finns have been ex-
tremely anxious to be associated
in some way with the EFTA but
felt they could not do so with-
out Moscow's assent. Moscow in,
general has castigated the EFTA-
but apparently would accept as
a quid pro quo a very long-range
trade agreement assuring for
years ahead the USSR's share in
Finnish trade. Finland's third
five-year trade agreement with
the USSR, covers the period
1961-65.
Another motive for Moscow's
interest in having the government
broadened might be a desire to
strengthen the position of the
Agrarians, who appear to be the
USSR's favorites among the non-
Communist parties. The present
Agrarian government has depended
on the tacit support of the 50
SKDL and 14 Opposition. Social
Democratic deputies and has seemed
more and more vulnerable to the
efforts of the regular Social
Democrats to unseat it and bring
about new elections.
A formal majority coalition,
led and dominated by the Agrarians,
effort at coalition
means, however, that the
minority Agrarian govern-
ment will probably con-
would be able to exclude
the regular Social Dem-
ocrats--whose leader-
ship Moscow detests-- 25X1
from any influence in
either the government
or parliament. The
failure of the recent
tinue in power at least
until the Diet recon-
venes in September.
F_ -D 25X1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Revival of anti-Soviet
feeling in Britain following the
summit breakdown has provided at
least temporary help to Hugh
Gaitskell in his efforts to
maintain Labor party endorsement
of a pro-NATO foreign policy.
Advocates of unilateral nuclear
disarmament for Britain remain
powerful within the party, how-
ever.
The line Gaitskell has been
developing in the past month is
to reaffirm the maintenance of
British ties with NATO
and support of nuclear
weapons for NATO while
"recognizing" that
Britain is no longer
capable of developing
an independent nuclear
deterrent. This view
won endorsement on 24
May both from the La-
bor members of Parlia-
ment and from the Gen-
eral and Municipal ,
Workers Union, Brit-'.
ain't third largest..
A joint committee of
Labor party and trade
union leaders now is
drafting a policy
statement along these
lines for publication prior to
the annual conference of the
powerful mineworkers and rail-
waymen unions scheduled for
July.
As of now, however, trade
union elements demanding uni-
lateral British nuclear dis-
armament--plus similarly in-
clined party organizations iri
the constituencies--command
enough votes to win on this
issue at the annual party con-
ference in October. Frank
Cousins, head of the 1,300,000-
member Transport and General
Workers Union, agreed to be a
member of the drafting committee
but then scuttled Gaitskell's
hopes that he might seek to
reverse his union's unilateralist
stand by reaffirming on 3 June
that Britain must renounce the
nuclear deterrent and by em-
phasizing that the U-2 incident
pointed up the need to abolish
American bases in Britain.
There remains a slight
possibility that leaders of the
Amalgamated Engineering Union,
Britain's second largest, with
1,000,000 members, may call a
special session this summer in
an attempt to reverse its union's
vote on 4 May for unilateral
disarmament.
Gaitskell himself is less
than sanguine about defeating
the unilateralists, and has told
American Embassy officials that
once the initial disapproval of
Khrushchev's behavior in Paris
has spent itself, considerable
criticism of the United States
over the U-2 incident may again
erupt within the Labor movement.
Gaitskell also fears that his
policy, which calls for a NATO
nuclear deterrent, may stir up 25X1
the strong Labor sentiment 25X1
against permitting German to
have nuclear weapons.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
ARGENTINA REINFORCES MEASURES AGAINST TERRORIST ATTACKS
President Frondizi has sent
to Congress a proposal for
stronger penalties for bombings,
which have been frequent through-
out Argentina, and a decree
providing for federal control
over Cordoba :Province . The
army, in charge of antiterrorist
investigations since mid-March,
has accused Cordoba officials
of protecting and conniving with
Peronista terrorists. The Cor-
doba provincial government has
been inept and uncooperative
in dealing with the army, which
is determined to suppress the
bombings and Peronista plotting
that may be related to them.
The army command, faced
with growing unrest among junior
officers, decided to press Fron-
dizi for stronger measures be-
yond the two special security
measures now in force--the
nationwide state of siege de-
creed in November 1958 and the
emergency plan adopted in mid-
March to counteract' the wave
of terrorist bombings, many
aimed at military personnel.
The army dislikes its unpopular
police role, and the broad
powers afforded by these special
measures have been used with
considerable restraint.
New impetus for other
steps, however, was given not
only by developments in Cordoba
but also by a series of bombings
last week during the sesquicen-
tennial celebrations of the
Argentine revolution. Places
bombed included the houses of
the army commander at Mendoza
and the chief of state intelli-
gence.
In Cordoba, the detailed
report of the army command,
released on 12 May, included
charges of collusion between the
provincial authorities and
terrorists. Those primarily im-
plicated were Cordoba police
officials, but Governor Zani-
chelli was accused of having
been in contact with terrorist
leaders in 1958. Both local and
national leaders of Frondizi's
Intransigent Radical party (UCRI)
immediately endorsed Zanichelli
to demonstrate party unity.
Later, however, when it
appeared that the army was un-
willing to back down on its
charges, national UCRI leaders
suggested privately that Zanichelli
resign. His refusal necessitated
the unpopular federal inter-
vention decree. The minister of
interior has announced the inter-
vention issue will not delay
Frondizi's scheduled departure
on 13 June for state visits to
eight European countries.
The opposition political
parties, in their unrelenting at-
tacks on the administration,
will exploit popular concern
over provincial autonomy. Fron-
dizi's more immediate concern,
however, is to stem the growing
unrest within the army over the
need for and ineffectiveness of
antiterrorist measures.
25X1
THE PRESIDENTIAL ELECTIONS IN BOLIVIA AND ECUADOR
In Bolivian and Ecuadorean
presidential elections on 5 June,
former Presidents Victor Paz
Estenssoro and Jose Velasco
Ibarra won sweeping victories
in four-way contests marked by
serious violence and coup threats.
Although both countries ex-
perienced revolutions repeatedly
in the 1930s and the 1940s,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
prospects are good for peaceful
inaugurations on 6 August for
Paz and on 1 September for
Velasco. Both men are noted
for unorthodox financial poli-
cies during earlier terms of
office and both are expected
to emphasize economic develop-
ment, possibly at the expense
of the gains in economic sta-
bility made by the incumbent
administrations.
In Bolivia, Paz' receipt
of more than 70 percent of the
vote is a major triumph-Tor the
government party organization,
although strong-arm methods
prevailed in some areas. The
opposition was divided between
the dissident faction of the
government party and the right-
ist opposition; support for the
Trotskyite candidate was negli-
gible.
Expectations of Paz' vic-
tory had led to his participa-
tion in key government deci-
sions prior to the election.
The resignation of the cabinet
on 7 June to permit appointment
of a "transitional" body sug-
gests that Paz now may become
de facto leader of the country
even before his inauguration.
A study group linked with him
is to report by mid-June on the
threatening financial crisis
caused by falling production in
the tin mines, the country's
key economic enterprise.
In Ecuador, almost complete,
although unofficial, returns
indicate that Velasco won by
the largest plurality in
Ecuadorean history--about 47
percent of the total vote cast.
His vice-presidential running
mate,
former cabinet m -
s,er under Velasco, was al-
so victorious, and Velasco's
followers apparently won
control of the lower house of
congress.
25X6
25X6
The 67-year-old Velasco,
who was ousted by coups in two 25X1
of his three previous terms in
office, is believed friendly to
the United States
25X1
]HIs e. ec on 25X1
grounded on widespread personal
popularity rather than on his
program or ideology; he may be
partly indebted for his unex-
pectedly wide margin of victory
to another demagogue, the lead-
er of the leftist Concentration
of Popular Forces, Carlos Guevara,
who possibly shifted his support 25X1
from the Communist-backed can-
didate.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PART III
Political and economic con-
ditions in Poland have worsened
steadily since the crisis early
:last fall over the serious meat
shortages. The continuing dete-
rioration results from the al-
most unbelievable ineptitude of
party and government leaders,
agricultural setbacks, and the
public's low morale. While the
factors contributing to this
situation are not individually
significant, together they pre-
sent a picture of a disorgan-
ized country with leaders in-
capable of coping with nation-
al problems.
The people, especially in
the cities, are becoming in-
creasingly dissatisfied with
living conditions, but certain
key elements for a revolt are
missing. Most observers re-
port that a sense of hopeless-
ness and near desperation per-
vades the populace.
Return of the Stalinists
A significant and worri-
some aspect of the party's re-
action to its problems has been
the return to key party and gov-
oxni,ient posts of men identified
with the hard-line policies of
the Stalinist Bierut regime.
The first of these appointments
came last fall when Eugeniusz
Szyr, Julian Tokarski, and Tade-
usz Gede were named to impor-
tant economic posts.
Shortly afterward, the re-
gime began a program of economic
retrenchment. Overtime and bo-
nus payments for industrial
workers were eliminated or dras-
tically reduced, surplus workers
were dismissed, a freeze was
placed on hiring, wages were
cut and norms revised in many
factories, and various measures
were taken to cut costs and im-
prove efficiency. Some offi-
cials regarded these steps as
temporary expedients, while
others saw them as the begin-
ning of a badly needed basic
reform.
The most ominous personnel
change was the recall from "ex-
ile" of General Kazimierz Wita-
:szewski'inNoverhrv,
nicknamed "General Gaspipe" for
his advocacy of brutal suppres-
sive measures during the Poznan
riots in June 1956, had been
sent to Czechoslovakia as military
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CURRENT INTELLIGENCE WEEKLY JUM1f&RY
attach, after Gomul-
ka's return to power
in October 1956. On
his return to Warsaw,
Witaszewski was given
an important but un-
specified post in the
military intelligence
organization.
Later, he was
also made chief of the
party central commit-
tee's reactivated ad-
ministrative section
which controls party
cadres in government
agencies. This ap-
pointment. places him
in a position to exert
and acquire ;, 1iaJ or in-
fluence over; military
and security forces
and the administration
of justice. The peo-
ple reportedly i.inter-
pret his appointment
as a sign of worse
things to come.
It soon became
evident that the
tightening up would
not be restricted to
the economy. The
forced resignation
in November of polit-
buro and secretariat
member Jerzy Morawski,
DISMISSED OR RESIGNED
MORAWSKI
HOCHFELD
BIENKOWSKI
CHALASINSKI
SLONIMSKI
ZARZYCKI
ALBRECHT
APPOINTED
GEDE
SZYR
TOKARSKI
WITASZEWSKI
TULODZIECKI
J. IWASKIEWICZ
JAGIELSKI
STRZELECKI
TITKOW
KULSZYNSKI
MISKIEWICZ
MARZEC
MALICKI
SYDLAK
WALASZCK
STASINSKI
RUMORED TO BE REPLACED
SPYCHALSKI
JEDRYCHOWSKI
GALINSKI
ZAMBROWSKI
POLITICAL ORIENTATION
Moderate (Pro-Gomulka)
Liberal
Liberal (Pro-Gomulka)
Liberal
Liberal (Non-Communist)
Moderate Liberal (Pro-Gomulka)
Moderate Liberal (Pro-Gomulka)
Hard Line
Hard Line
Hard Line
Very Hard Line
Moderate
Nonparty; regime tool
Moderate
Moderate (Pro-Gomulka in the past)
Moderate
? (Probably hard line)
?
? (Possibly pro-Gomulka but tending toward
hard line)
? (Probably hard line)
? (Probably hard line, but not anti-Gomulka)
Pro-Gomulka Moderate
Pro-Gomulka Moderate
Pro-Gomulka Moderate
Centrist (Generally Gomulka supporter)
RUMORED NEW APPOINTMENTS
RUMINSKI Hard Line (Anti-Gomulka in the past)
(To replace ALBRECHT)
long a close associate of Gomul-
ka, and the dismissal of other
"liberal" officials from impor-
tant positions in the cultural
and educational fields fore-
shadowed moves to tighten dis-
cipline and strengthen party
control in these areas.
Culture And Education
At the Writers' Union Con-
gress in December the regime
made clear its intention to cur-
tail the freedoms of Polish in-
tellectuals and to direct the
efforts of the intelligentsia
into "desirable" channels. The
writers showed little inclina-
tion to fight, and a new gov-
erning":board subservient to the
regime was elected.
The government is using
various methods to bring the
intellectuals to heel. While
there are no restrictions as
to what one may write, only
those works acceptable to the
regime can find a publisher.
Censorship has become stricter.
The regime, however, has been
unable to force writers to
make "a positive contribution
to the building of socialism."
There is considerable vacilla-
tion in censorship, and a
writer is occasionally able to
find a publisher for an article
critical of the regime.
The Gomulka regime has been
increasingly dissatisfied with
the political indoctrination pro-
vided by schools and universities.
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Polish youths are not becoming
Communists--in fact, few of them
show any interest in politics.
The government has threatened
to reinstitute compulsory
courses in Marxism-Leninism
in the universities; one high
party official said in late
April that this would be done
"in two or three years."
There would be many prac-
tical difficulties in imple-
menting such a policy, however.
University professors are not
interested in teaching Commu-
nist ideology and are "too busy"
to instruct such courses. Polish
youths deliberately avoid affil-
iation with the Communist party
because of their distaste for
its policies and because of the
social stigma attached to party
membership.
Party Weakness
The Communist party in
Poland is not the powerful or-
ganization it is in other bloc
countries, and its weakness has
forced Gomulka to move slowly
Lnd cautiously in attempting to
build up the apparatus. The
party is only one of a number
of competing forces; it can in-
fluence events, but it cannot
control them. One of Gomulka's
most difficult problems has been
to develop a party capable of
ruling. Frustrated by this sit-
uation, Gomulka has become less
and less in touch with the in-
ternal state of affairs; he pays
less attention to his advisers
and seems to be trying to make
all the decisions and run the
country singlehandedly.
There has been a tendency
in expanding the party appara-
tus to select men with a repu-
tation for blindly following
orders. Most of those removed
from important positions have
been moderates. The general
laxness of many functionaries
could have been pointed out by
advocates of a tougher line as
justification for firmer meas-
ures aimed at increasing party
control and at the same time
raising the general level of
efficiency.
During the fall and winter
of 1959-60 about half of the
provincial party first secretar-
ies were shifted or replaced.
While little information is
available on the men now hold-
ing these posts, they appear
for the most part to be zealous
party functionaries out to make
a name for themselves.
Personnel shifts in early
May removed two more moderate
pro-Gomulka men from important
positions. Major General Ja.T
nusz Zarzycki, deputy minister
of defense in charge of the
Main Political Administration
since November 1956, was re-
moved and named mayor of Warsaw.
Party leaders had criticized the
political indoctrination pro-
gram in the armed forces, and
it was rumored that Witaszewski's
return to an influential posi-
tion meant that Zarzycki would
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have to go. Witaszewski headed
the Political Administration
from 1952 until November 1956.
The new chief of the Polit-
ical Administration, Brigadier
General Wojciech Jaruzelski, is
an able young officer who has
risen rapidly. He is known as
a strict disciplinarian and is
an active party member. The an-
nouncement of his appointment,
however, did not state that he
would hold the rank of deputy
minister of defense, as did his
predecessor, and there have been
rumors that this post is to be
abolished.
Central committee Secretary
Jerzy Albrecht resigned in the
first part of May, reportedly
because of poor health. The net
result is to remove another
moderate from the powerful secre-
tariat. According to rumors in
Warsaw, the centrist politburo
and secretariat member Roman
Zambrowsk.i,, who swung his influ-
ence toward Gomulka in October
1956, is seriously ill and may
not be able to resume an active
role in party affairs.
It cannot yet be said with
certainty that Gomulka's posi-
tion has been seriously weak-
ened by these party and govern-
ment changes. The hard-liners
probably are not yet in a posi-
tion actually to decide party
policies, but as administrators
they have many opportunities to
set the tone in specific appli-
cations of the party line. Go-
mulka's popularity, which has
noticeably declined, may be fur-
ther weakened by the hard-liners
who deal more directly with the
populace.
There are reports that
Gomulka has become more auto-
cratic--sgme go so far as to
describe him as afflicted with
with megalomania--and increas-
ingly irritable. Many
subordinates are said to be with-
holding information from him for
fear that the truth about condi-
tions would upset him. If the
reports of the growing isolation
of the party first secretary from
the party apparatus and the peo-
ple are accurate, a serious sit-
uation--both for Gomulka and for
Poland--may be developing.
Church-state
Gomulka and Cardinal Wyszyn-
ski met in January to discuss
the ever-troublesome matter of
church-state relations. They
apparently agreed to attempt to
continue the modus vivendi, al-
though neither wished to make
concessions on fundamental dif-
ferences. They recognized, how-
ever, that open conflict would
not benefit either side. As a
result, the mixed church-state
commission, which was set up
after Gomulka's return to power
but which had long been inac-
tive, resumed meetings. There
appears to have been some diminu-
tion of state attacks on the
church for its opposition to
birth control measures.
Behind this official "live
and let live" attitude lies the
ominous threat of near-confisca-
tory taxation by the state, The
government has levied such taxes
on church income and property
but apparently has not taken
steps to collect them.
The effects of the riots
and demonstrations triggered in
the past several weeks by local
grievances over religious issues
are not yet clear. The most se-
rious disturbances occurred at
Nowa Huta on 27 April and Zielona
Gora on 30 May. Less serious
demonstrations took place at
Olsztyn on 27 April and 1 May.
The government blames the church
for not controlling religious
groups and may threaten punitive
action against religious leaders
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if there are further disorders
involving religious matters.
In the touchysituation in Po-
land today these purely local
grievances lead easily to out-
breaks of violence.
Agricultural Problems
Adding to Po-
land's woes, is the
serious agricultural
situation The
drought that began
last Bummer, and ad-
versely affected the
potato and sugar beet
harvest last year con
tinued- through the
fall and;.Winter in
many areas Fall sow-
ing of vvinter grain
was seriously hams-
pered, and at least 50
percent of the winter
grain--which consti-
tutes about 70 percent
of the total crop--
is estimated to have
been severely damaged.
Spring reseeding was
hampered by,the con-
tinu.ed., drys weather,
and the outlook is
for, a .,grain crop 1, -
000,000-1,800,000 tons below
last year's; The government
probably will seek to make
up this deficit by purchases
abroad if credits can be
arranged,
Mood. Of. the Populace
The Polish people are bit-
terly disillusioned because
Gomulka has not solved the
country's problems as they ex-
pected.. Many. Poles see a
gradual return to the old con-
ditions, with the present scene
differing from that prior to
October 1.956 only because there
now is more personal freedom.
As more tough-line functionar-
ies are.appointed to key posts,
however, people are becoming
more careful. about what they
say, especially in open meet-
ings. They see Witaszewski's
appointment as as'.warning that
the rdgime is ready to crack
down if necessary to keep
dissident elements in line.
More and more Poles see the
party and government as
tools of the Soviet Union,
obediently doing Russian bid-
ding. One no longer hears
"the Polish road to socialism"
mentioned.
There is a widespread feel-
ing that initiative and ingenu-
ity are wasted and nullified by
the inept and inefficient party
and government bureaucracy. Many
workers feel that it is no long-
er possible to do useful and
creative work, and some are com-
ing to believe that nothing
can improve the internal situa-
tion.
Corruption, bribery, and
thefts, especially of government
property, are widespread. Low
pay is only a partial reason
for this problem. The years of
living under hated authorities,
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first the Nazis and then the
Communists, have had their ef-
fect. Petty officials use
their position to extort pay-
ment for favors, workers steal
from their places of employ-
ment; in effect, corruption
has come to be an accepted part
of life.
The worker has little or
no interest in turning out a
quality product, since it makes
no difference whether the work-
manship is good or bad; the
only thing that matters is that
he produce the required number
of units per day. This is a
major reason for the accumula-
tion of vast inventories of
shoddy goods that no one will
buy. No one wishes to take
responsibility or initiative,
The worker considers that there
is little reason to work hard
because there is so little to
buy that is worthwhile.
Conditions in Poland hold
little prospect for any substan-
tial improvement. There are to-
day no leaders to direct a pop-
ular revolt. Even if there were,
the popular mood has not reached
the breaking point and is only
likely to if there is a serious
decline in food supplies or loss
of personal freedoms. The Pol-
ish people have endured much,
however, and a desperate people
may feel themselves driven to
take desperate measures--even in
the face of overwhelmin odds.
25X1
TH ; OUTLOOK FOR THE FRENCH COMMUNIST PARTY
De Gaulle's policies on
economic austerity and church
schools and his authoritarian
attitude toward parliament have
given the French Communist party
(PCF) its first real opportunity
since shortly after World War II
to break out of its political
isolation. Despite its present
insignificant parliamentary
strength, the party retains the
best organized political machine
in France, and its labor arm
has succeeded in establishing
a pattern of cooperation with
non-Communist unions. The con-
tinuing stalemate in Algeria
and renewed efforts toward re-
laxations of East-West tensions
will probably facilitate Commu-
nist efforts to win political
respectability.
Earlier Setback
De Gaulle's return to power
in 1958 gave the PCF its severest
setback since World War II. It
lost 30 percent of its customary
electoral following when it op-
posed the Fifth Republic consti-
tution, and the new electoral
law lopped off 90 percent of its
parliamentary seats. For months
its very existence was threat-
ened. The party recouped some-
what in the March 1959 munici-
pal elections, but in June, Sec-
retary General Maurice Thorez
reportedly admitted privately
that it had been a difficult and
dangerous year, in which the par-
ty could easily have lost its
legal position and political
strength.
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The party leadership care-
fully avoided risking provoca-
tive action. The 1959 party
congress resolved that "the
first condition of all further
progress" was the elimination
of the "personal power regime"
of De Gaulle and the "restora-
tion of democracy." The means
advocated, however, were peace-
ful: unity of action with the
non-Communist left "at all
costs," and increased prop--
ganda and recruiting activity.
The party's number-two man,
Jacques Duclos, said the PCF
proposal for the election of
a new constituent assembly to
restore supreme power to the
national assembly would not Le
pressed until "the time is
ripe. ,'
De Gaulle Provides Openings
De Gaulle's policies, fre-
quently applied in tactless
fashion by Premier Debr6, have
in the interim afforded increas-?
ing opportunities for Communist
efforts to promote unity of ac-
tion with non-Communists. The
economic austerity program, par-
ticularly the government's de-
termination to hold the wage
line, has benefited the Commu-
nists on the labor front. Ac-
cording to the American Embassy
in Paris, one of the most impor-
tant events of 1959 was the
progress made by the Communist-
dominated General Labor Confed-
eration (CGT) in overcoming its
previous isolation and in win-
ning increasing acceptance from
the non-Communist unions as a
legitimate ally.
Although the government's
threat to crack down on any
major strikes and its offer ox
token wage concessions in the
latter half of 1959 prevented
any nationwide strikes, labor
has become increasingly restive.
Unity of action in short work
stoppages has been widespread in
private industry, in the nation-
alized industries, and among the
civil servant unions. The re-
cently renewed militancy of the
ttransport unions may force the
,:on-Communist confederations into
.;lose alignment with the CGT.
Church-School Issue
Debre's reopening of the
_,hurch-school issue, partly dic-
tated by pressure from the right-
ist-dominated assembly but also
inspired by De Gaulle's wish to
settle this controversial ques-
tion of long standing, gave the
PCF an opportunity to break out
of its isolation on the polit-
ical level. The government's
bill to increase government aid
to church schools stirred up a
storm of protests. In the assem--
bly vote on the bill in December,
the Communists, Socialists (SFIO),
and most of the Radicals voted
Together in opposition.
Moreover, the National Com-
mittee for Laic Action (CNAL),
which aims to prevent implemen-
tation of the bill, at last count
had collected more than 9,000,000
signatures on a petition of pro-
test. The PCF and CGT have osten-
tatiously publicized and support-
ed the CNAL campaign, which is
backed by the Socialists, dis-
sident Socialists, and Radicals
as well as the Force Ouvriere
(Socialist) labor union, the
Autonomous Teachers' Union, and
the Union of Students.
Algerian Problem
The opportunities for unity
of action with the non-Communist
left were enhanced in October,
following Thorez' return from
Moscow, when the PCF switched
from condemnation to qualified
support-of De Gaulle's 16 Sep-
tember self-determination pro-
posal on Algeria. Paralleling
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Khrushchev's friendly state-
ments, this reappraisal also
aligned the PCF position with
the favorable response of the
non-Communist left and center.
The January rightist in-
surrection in Algeria provided
the PCF with its most dramatic
opportunity to exploit its
breakout from political iso-
lation. The party was able to
demonstrate its "loyalty" to
republicanism and to garner the
benefits of "respectability"
by alignment with majority opin-
ion in France. The CGT joined
without undue ostentation in
the nationwide token work stop-
page organized by the major free
unions to demonstrate support
for De Gaulle.
The opening made in Jan-
uary was widened in March when
De Gaulle questioned the like-
lihood of early French-Algerian
negotiations for a settlement
and predicted a long, hard mil-
itary campaign. This statement
was a major element in the
growing disenchantment the
moderate left has evinced toward
De Gaulle. Although SFIO Sec-
retary General Guy Mollet con-
tinues to maintain that there
is no alternative to De Gaulle,
another prominent Socialist
leader, Francis Leenhardt, has
indicated that the March state-
meat marked a turning point
in SFIO support. Many SFIO
militants reason that if the
government views Algeria as
just one of several tough
problems, they can no longer
be expected to practice the
restraint they have sought to
exert on other issues so as not
to inhibit a solution in Al-!
geria.
Even in the government
coalition, notably among the
Popular Republican party (MRP),
the PCF line that De Gaulle has
abandoned self-determination is
finding increased credence.
The Khrushchev Visit
The Khrushchev state visit
in March and April probably fur-
ther increased PCF respectabil-
ity, despite much adverse com-
ment concerning the welcoming
committees and "cheering sections"
the party organized. A major
publicity build-up, particularly
stressing French-Soviet cultural
ties, preceded the Soviet pre-
mier's arrival, and his trip was
covered in detail by all the
press as well as by state-con-
trolled mass communications me-
dia. Khrushchev and the PCF
spread the themes of peace, dis-
armament, peaceful coexistence,
and Soviet-French friendship.
The US Embassy believes
Khrushchev's circumspect and
dignified behavior lessened
any hesitancy the average French
citizen might have had regarding
a friendly settlement with the
USSR because of ideological dif-
ferences. Even the May summit
conference probably has not
completely shattered the favor-
able image of Khrushchev created
in France in March, since his
primary target in May was the
United States, and he took pains
to absolve France and to com-
mend De Gaulle's conciliatory
efforts.
Out look
A formal alliance of Commu-
nists and non-Communists in a
popular front still seems ex-
tremely unlikely, barring the
development of an extreme author-
itarian regime in France. Never-
theless, the extent to which De
Gaulle's policies have already
produced serious disaffection
was indicated by Jacques Fauvet,
chief political editor of the
influential Paris daily Le Monde,
in a 7 May article charging that
the inability of the political
parties to face up to the two
dominant forces in France today--
De Gaulle and the French Army--
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CURRENT INTELLIGENCE WEEKLY iSUMMARY
would inevitably lead to the
disappearance of what remains
of French democracy.
Fauvet exhorted the parties
to confront these issues, and
recommended that the left enter
into tactical agreements, limited
in time and scope, with the
French Communists; without such
agreements, he said, "There never
has been, nor can there be, even
temporary unity of the left."
Several splinter groups of
the traditionally divided left
have already united in the Uni-
fied Socialist party (PSU),
which was formed this spring.
While the dissident Socialists
in the PSU reject formal coopera-
tion with the PCF on the national
level, two other components of
the PSU are advocates of coopera-
tion with the Communists, and the
PSU has already cooperated with
the PCF in local elections,
The PSU counts in its ranks
ex-Premier Mendes-France, who
hopes to promote himself as
leader of the entire left, to
be ready to take over, when, as
he predicts, the Fifth Republic
disintegrates over another Al-
gerian crisis
25X1
IZVESTIA INSPIRES NEW LOOK IN THE SOVIET PRESS
Aleksey Adzhubey, Khru-
shchev's son-in-law, has given
Izvestia, the mouthpiece of the
Soviet Government, a face-lift-
ing designed to increase its
reader appeal and its propa-
ganda effectiveness. Since be-
ing named editor in May 1959 at
the age of 35, Adzhubey has in-
troduced innovations in format,
style, and content--many bor-
rowed from Western newspapers
which have substantially in-
creased the newspaper's circu-
lation and probably its impact.
Izvestia has been converted,
after 43 years, into an evening
newspaper, a step evidently de-
signed to give it a better com-
petitive position with respect
to the party organ Pravda, a
morning newspaper. Without los-
ing sight of the purpose of the
Soviet press--to promote polit-
ical conformity and mobilize the
population behind regime poli=
ties--the energetic Adzhubey,
probably with Khrushchev's per-
sonal encouragement, appears to
be answering the party's call
for a revitalization of the
1uax,uering Soviet propaganda
machinery. Some other Soviet
newspapers are beginning to fol-
low his example.
Drive to Revitalize Press
Khrushchev began the drive
to revitalize the press in late
1953, when he exhorted a confer-
ence of journalists to more in-
dividualistic and lively writing.
The youth paper, Komsomolskaya
Pravda, which Adzhubey then edited,
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was the first to break the old
mold. Discarding some of the
'timeworn practices of Soviet
journalism, the newspaper adopt-
ed a more eye-catching format,
crusaded against violations of
"Soviet morality" and local
abuses, including crime, and
introduced 'a personal touch into
stories designed to dramatize
important issues.
Adzhubey, who had admired
the dynamic style of American
journalism on a visit to the
United States in 1955, sent his
reporters into factories and
homes to report at first'hadd.
The results "obviously pleased
Soviet. readers: circulation rose
from 1,500,000 to 3,500,000 in
five years.
Although Pravda and Izvestia
remained aloof, other papers,
such as Trud;.and Soviet Russia,
took on a brighter look for a
time but retreated to the usual
safe dullness in the wake of
the tightening of controls af-
ter the Hungarian revolt. At
the same time, those provincial
papers which bad tried to imi-
tate Komsomolskaya Pravda but
had lacked the judgment and po-
litical backing to carry it off
were attacked for neglecting
ideology and for "sensational-
ism."
Adzhubey duly embraced the
new line by giving space in his
pages to the assault on "revi-
sionists" and free-thinking
writers. His newspaper;, , never. --
theless, retained its distinctive
touches. His. position was am-
bivalent: on 10 February 1958 he
received a high award, the Red
Banner of Labor, but on the fol-
lowing day hits newspaper was cen-
sured by the party central com-
mittee for excessive use of
photographs to the detriment of
ideological content.
Immediately after the 21st
party congress in February 1959,
however, a new effort was
launched to gain better prop-
aganda support of the new Seven-
Year Plan. A highlight of the
campaign was the January 1960
central committee decree on
propaganda; this. called on all
elements of the vast propaganda
mechanism to bestir themselves
in behalf of the regime's polit-
ical and economic objectives.
In order to buttress the press
as a major instrument in this
campaign, the party organized
the Union of Soviet Journalists,
created a new Lenin Prize cate-
gory for "journalism and pub-
licity work," and dedicated a
separate May Day slogan to press
and radio workers.
Khrushchev told the first
congress of the. Journalists'
Union in November 1959, "There
is still too much dull stuff in
our papers," and Pravda called
on the union to make the Soviet
press lively, daring, and varied.
Adzhubey and Izvestia
Izvestia at the time Adzhu-
bey was appointed editor was the
USSR's second-ranking but dull-
est all-Union newspaper. Pub-
lished six days a week (exclud-
ing Monday), it stressed inter-
nal and foreign governmental
developments. About half of its
copy, however, duplicated Pravda,
the official party paper.
Adzhube.y had begun writing
for Komsomolskaya Pravda while
studying journalism and world
literature at Moscow State Uni-
versity after wartime service.
During the early 1950s he mar-
ried Khrushchev's daughter Rada,
traveled widely abroad, and rose
on the Komsomolskaya Pravda staff,
becoming chief editor about May
1957. In April 1958 he was
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CURRENT INTELLIGENCE WEEKLY S MARY
elected to the top governing
body of the Komsomol and began
participating frequently in ex-
changes of journalist delega-
tions.
Other marks of favor have
been conferred on Adzhubey since
his appointment to Izvestia. In
the summer of 1959 he was elect
ed to the USSR Supreme Soviet,
was a leader of the Soviet youth
delegation to the Seventh World
Youth Festival in Vienna, was
named vice president of the
Soviet-Italian Friendship So-
ciety, and received the silver
peace medal from the Communist-
dominated World Peace Council.
He is also a secretary of the
board of the new Union of Soviet
Journalists.
Adzhubey was a member of
Khrushchev's immediate party on
the premier's visits to the
United States, Asia, and France,
and was one of the 12 authors of
Face to Face With America, an
account of Khrushchev's US trip;
this book received a Lenin Prize.
Adzhubey now is apparently one
of Khrushchev's close personal
advisers and speech writers.
Despite his advantages,
Adzhubey faces problems as
Izvestia's editor in meeting
the party's simultaneous demand
for both more explicit devotion
to propaganda themes and more
appealing fare for Soviet read-
ers. As editor of the govern-
ment organ, he is obliged to
report in full the long, dull,,
official speeches, and to carry
announcements and articles which
TASS sends in as "must copy." It
is primarily in the remaining
space of the usual four- or six-
page spread that he can promote
innovations, but even here,
party and government officials
interfere to tell him what to
print and the censors tell him
what not to print. If he in-
troduces more human-interest
material, he risks charges of
apoliticality and lurid sensa-
tionalism "under the influence
of the Western bourgeois press."
Livelier Format
Adzhubey has, nevertheless,
succeeded in brightening Izvestia
to such an extent that its cir-
culation has climbed in one year
from a stationary 1,500,000 to
more than 2,000,000. Izvestia's
pages have begun to bloom with
larger, warmer, and more strik-
ing photographs, cartoons, and
drawings on a great variety of
themes. Khrushchev was shown
patting children's heads; at-
tractive couples waterskiing- -
a three-column photograph; a.
crane'taking off from its nest;
a sailboat on the Neva at sun-
set--a tall one-column shape.
Frequent use is made of pic-
tures of children, animals, and
movie actresses.
Almost every issue now has
one or two photographs chosen
for the handsomeness of the sub-
jects rather than their achieve-
ments. Izvestia has even printed
photographs of nude sculpture.
The new policy is to select pic-
tures which penetrate into all
corners of Soviet life, includ-
ing rest and nature as well as
work.
Cartoons, including re-
prints from Western papers, are
published in almost every issue.
The vast majority harp on stand-
ard propaganda themes, but
apolitical cartoons also have
appeared.
Adzhubey has used a great
variety of eye-catching head-
lines which feature colloquial
phrases, literary allusions,
rhetorical questions, puns, and
rhyming couplets. The headline
"Do a Better Job of Bringing Up
Our Youngsters" introduced a
party-government decree on
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pre-school institutions; and
"They've Forgotten About the
Grandmothers" introduced a
complaint about the shortage
of clothes for older people.
Izvestia's front page re-
veals the extensive innovations
in format. The masthead has
been enlarged, boxed in, and
moves around the top of the
page. Western-style banner
headlines in capitals are fre-
quent. The old stereotype re-
quiring an article extending all
the way across the bottom of the
page has largely disappeared.
The dull, symmetrical, horizon-
tal layout of articles in large
rectangles has been supplanted
by a more vertical layout with
articles arranged in a lively
zigzag pattern. Pages which
formerly were often unbroken
blocks of print are now punc-
tuated by numerous photographs,
larger, blacker headlines and
subheads, articles set off by
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heavy lines or scrolls, varie-
gated type faces, and indented
passages.
Cartoons, news briefs, po-
ems, and letters to the editor
now frequently enliven page
one. The prime spot in the up-
per left-hand corner, formerly
monopolized by the unsigned lead
editorial, now carries announce-
ments, signed articles by jour-
nalists, government leaders, or
workers--or photographs. The
new, last-page column "Official
Announcements," which presents
capsuled news of diplomatic
events, has cleared the front
page of much routine material.
"Latest News," a new boxed
column in a roving location,
summarizes selected timely in-
ternal achievements and inter-
national events.
Izvestia is cultivating a
warmer tone and a simpler, more
colloquial style. Many feature
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articles and some editorials
are written in the first per-
son. The familiar form of the
pronoun "you" even appears in
headlines. To emphasize their
closeness with the readers,
the editors have replaced the
formal editorial phone listing
with a cheery box entitled:
"Our Addresses."
Adzhubey has given more
space to a greater variety of
human-interest materials. The
entire back page and some space
in ;inners.* pages are now devoted
to subjects of wide reader ap-
peal--spots-, ;bhess, , theater,,
literature, art exhibits, sci-
ence, nature, family, morals,
consumer goods, and the daily
television schedule.
Izvestia has refurbished
its techniqu'ee of exploiting
news stories to inculcate of-
ficially desired attitudes.
It was, for example, the first
Soviet paper to publish the
story of the four Soviet sol-
diers adrift in the Pacific.
In the enormous coverage which
followed, the Soviet press pre-
sented the episode as a West-
ern-style human-interest story,
seeking to portray a spontaneous
national response to the sol?-r:
diers' "heroic" endurance and
also extolling the virtues and
superiority of the "new Soviet
man." Izvestia has also report-
ed some act ecennts and natural
disasters, previously censored
from the Soviet press, to point
out strong morals, such as So-
viet self-sacrifice and the
heroic conquest of nature.
By its focus on individual
cases, Izvestia has sought to
increase the human interest as-
pect of old propaganda themes.
Indignant stories about victims
of bureaucratic indifference,
slander, snobbery, exploitation
of women, or judicial error aim
to stamp out these "bourgeois
survivals." Often told in a
sentimental and melodramatic
fashion, these stories have even
involved rape, mux'der,:and, ;sui4
cide--subjects previously banned.
Numerousi:: cases (?. of specula-4 .:.; ,
tion, antilabor attitudes, and
hooliganism are exposed.
Izvestia's Campaigns
Izvestia in the past year
has conducted a number of cam-
paigns which capitalized on
human interest and reader partic--
ip4tion,.. Such series of arti-
cles as "Spring Campaigns of
Izvestia" and "Leninist Labor
Guard" extol the heroic exploits
of Communist labor brigades in
an effort to stimulate overful-
fillment of the Seven-Year Plan.
Other campaigns--for the new
policy aimed at conversion of
criminals through social influ-
ence, against excesses committed
by the People's Gtiard 'and other
groups in Qverzeaious: protection
of the public, and for better
taste in dress and home furnish-
ings--appeal to the growing gen-
eral concern with Soviet morality,
manners, and taste. The newspaper
usually initiates these campaigns
with several editorials and then
opens its pages to readers' Betters.
Izvestia has also intensi-
fied the aditional role of
the Soviet press in publicizing
local abuses and shortcomings
and in encouraging "self-criti-
cism." Local or special cor-
respondents are detailed to
check reported defects on the
spot. Exposes sometimes in-
volve persons as high as re-
public ministers. Although un-
doubtedly annoyed by this out-
side interference and obligatory
"self-criticism," the directors
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CURRENT INTELLIGENCE WEEKLY BUUI1ARY
involved usually., admit that "the
facts reported by Izvestia are
correct." Izvestia tries to
follow up on i s criticism and
keep the public informed of prog-
ress being made to overcome
shortcomings through its regular
column "After Izvestia Came
Forward."
The Soviet press has al-
ways represented itself as a
public forum to which every
citizen has access. The new
Izvestia gives considerably more
space and prominence to the 500-
1,000", letters it purportedly re-
ceives daily from its readers.
"From the Latest Mail" has be-
come a daily feature and frequent-
ly appears on page one.
Other columns based on let-
ters and often accompanied by
the editor's notes on his follow-
up of the letter include "The
Readers Propose," "Marginal Notes,"
"The Reader Asks; the Minister
Replies," "Responses, Replies,
Proposals," "Ideas on Education,"
and "The World of an Intellectual."
Most of the published letters
make complaints or suggestions
about consumer goods and serv-
ices--a device which presumably
gives readers a sense of partici-
pation as well as an outlet for
frustration.
Izvestia now devotes its
entire nex - o-last page to
international news. It has
added several columns such
as "International Notes," a
monthly international review
page, frequent travelers' re-
ports, and more reprints of
foreign cartoons, photographs,
and articles, including several
by Walter Lippmann. This in-
crease in foreign coverage, al-
though still extremely limited
in comparison with Western papers,
appeals to Soviet curiosity
about the outside world. The
materials are carefully selected
and distorted to promote stand-
ard propaganda themes and swell
Soviet pride in the USSR as a
respected, magnanimous world
power.
Western--Style ~Sunddy..:Supplement
The Week, a tabloid-size,
24-page i ustrated Sunday sup-
plement which Izvestia began in
March 1960, is an attempt to ex-
pand the newspaper's drawing pow-
er without cutting into the space
necessary for "must copy" in the
daily issues. Its pictorial ap-
proach, lively format, focus on
people, and varied coverage--
sports, art, fiction, health,
science, home, family, and foreign
countries--make-it one of the
most appealing Soviet publica-
tions. Incorporating many
features of American Sunday
supplements, The Week even con-
tains a section foorr do-it-your-
self enthusiasts, some advertise-
ments, and a cartoon page.
Significance
Faced with the warning that
newspapers which do not sell will
be eliminated, some other editors
are beginning to follow Adzhubey's
example. The new look Adzhubey
has brought to the Soviet press
consists of using every possible
device to make propaganda more
interesting and effective. The
concept of the Soviet press as
a major propaganda instrument
and the selection of materials
on that basis have not changed,
but the new Izvestia is a re-
freshing change for the Soviet
reader. The example Izvestia is
setting for the Sovie press
will give the regime a more 25X1
effective weapon for c _
01ishing its goals.
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Although Latin America in
1959 retained the share of to-
tal world petroleum production
which it held in 1958--approxi-
mately 18 percent--its portion
of the total and possibly also
the quantity of its production
may decline in 1960, especially
in view of forecast increases
in other areas and the indi-
cated drop in Venezuelan out-
put. A 6.4-percent increase
in 1959 in Venezuela, the
world's largest exporter of
petroleum and second largest
PERCENT CHANGE BID CHANGE
1958 TO 1959 1958 TO 1959
LATIN AMERICAN CRUDE OIL PRODUCTION, 1957-1959
THOUSAND BARRELS PER DAY (BID)
9. 8
9.4
27.7
51.8
COLOMBIA
CUBA
1 0
0.9
ECUADOR
PER U
52.7
51. 3
VENEZUELA
2, 779.2
2,604.0
TRINIDAD
TOTAL LATIN AMERICAN
PRODUCTION
TOTAL WORLD PRODUCTION
17, 887. 2
17, 993.9
8.7 -7.4%
64.6 24.7%
0.5
19,456.0
LATINOE WORLD AMERICAN TRADE PERCENTAGE 19.3 % 18.6 /p 18.4 /p
1960 by the USSR as the second-
ranking producing country after
the US. Exploration and drilling
in Venezuela have dropped sharp-
ly since 1957. Venezuela faces
difficulty in retaining its
traditional markets because of
a number of factors, including
the world oil surplus, US im-
port restrictions, competition
from low-cost Middle Eastern
oil, expanding Soviet oil ex-
ports, and the opening of new
producing areas in Algeria and
Libya.
900
167,000 The government
producer after the US, was pri-
marily responsible for main-
taining Latin America's share
of expanding world production.
Nationalistic sentiment against
development of oil resources by
foreign companies continued to
be evident, as were Communist
efforts to exploit this senti-
ment in various ways.
Production and Drilling
Venezuela, which in 1959
accounted for over 77 percent
of Latin American oil produc-
tion and over 14 percent of the
world total, may be replaced in
Venezuela's com-
petitive position in
world markets may be
further reduced by a
rise in production
costs caused by a new
oil workers contract
signed early this year.
In addition, the Vene-
zuelan Government ret-
roeactively. increased
its share of petroleum
company profits in late
1958 from 50 to about
63 percent.
claims that oil produc-
tion in 1960 will in-
crease approximately
4 percent over 1959 and
has partly premised a
long-range economic
development program on
profits from this annual increase
being maintained over the next
four years. Production through
the first quarter of 1960, how-
ever, is trailing the correspond-
ing 1959 period by over 5 percent.
25X1
Argentina in 1959 registered
the highest percentage 'gain in
Latin America--25.2 percent above
1958--and the largest quantity
increase outside Venezuela. The
recent achievements of the State
Oil Fields (YPF) are largely at-
tributable to a number of foreign
oil companies, mostly US?owned,
which are operating under a wide
variety of contractual arrangements
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CURRENT INTELLIGENCE WEEKLY SUGARY
PRODUCTION:
(barrels per day)
? over 2,500,000
2 250,000 to 300,000
100,000 to 150,000
1 50,000 to 100,000
under 50,000
Latin,. American Oil-Producing Areas
Dominican
C' ' Cuba Republic
s-TBritish Hisnduras 1-luti
`? Jfy L - H aiduras
!
Guatemala 14-'
El Salvador " Nicaragua -
Panama 2 Trinidad
Costa Ricil
~Brirish Guiaua
,~.i IV .~unnam
Colombi ~ French Guiana
Ecuador
i
y .
i:._/
r'?
in,Argentinaa YPF's develop-
ment program includes extensive
exploration and drilling activi-
ties and the rapid expansion of
refinery and transportation
facilities. Its officials' be-
lieve that Argentina will attain
its goal of domestic self-suf-
ficiency in oil production by
the end of 1961, which would
require more than doubling 1959
output.
Brazil, now the largest
net importer of petroleum in
Latin America, recorded a gain
in production of nearly 25 per-
cent over 1958, when its na-
tional oil monopoly Petrobras
made an 87-percent gain over the
previous year. The increase in
1959, however, fell short of
the growth in domestic consump-
tion during the period.
Colombia, Mexico, Trinidad,
and Chile also registered modest
quantity gains in 1959, while
production declined in Cuba,
Bolivia, Peru, and Ecuador:
Ecuador how has become a net
importer of petroleum instead
of a net exporter, and recent
trends suggest that Peru may
soon be in a similar position.
Foreign oil companies made
no major discoveries in the area
during 1959, despite costly
Peru
f ~~ti
Brazil
X Bolivia Z.
Paraguay.
?Argentina'
drilling and exploratory work
in Guatemala and Paraguay, and
offshore operations in Ecuador
and Venezuela's Gulf of Paria.
Operations now have been aban-
doned in Paraguay and reduced
in some of the other countries.
Opposition to Foreign Companies
Nationalistic sentiment :i
against foreign oil companies has
flared up in several producing
countries. In Peru, the Texaco
Corporation in late 1959 was
charged with possessing aerial
25X1
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 photographs of one of its con-
cession areas in "violation" of
Peruvian sovereignty and secu-
rity interests.
CURRENT INTELLIGENCE WEEKLY SUMMARY
A more serious attack has
been made against the US-owned
International Petroleum Company,
which accounts for about 68
Brazil PETROBRAS Est, 1953; exclusive production monopoly and
principal refiner; private companies are
allowed to engage in refining and marketing.
Chile ENAm Exclusive production and refining monopoly;
private companies allowed to market and
control most of this phase of the industry;
recent attempts to pass legislation per-
mitting private investment in exploration,
drilling, and production have not been suc-
cessful.
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DES TGNAT ION
issue is resolved,. the position
of the private producers will
remain uncertain.
In recent months both Vene-
zuela and Cuba have established
national oil agencies which are
designed to engage in all phases
of oil industry operations. Al-
though Venezuelan
F.st. 1922; virtually exclusive monopoly for
production and principal refiner; private
producers working depleted concessions
granted before 1135 account for only small
fraction of total production; private for-
eign companies operating under contracts
granted since 1353 are under YPF's authority
Est. 1.338; accounts for all of nation's pro-
duction and refinery output. Exclusive mo-
nopoly 1 937-52, A num her of concessions have
been -=ranted to foreign companies since 1953
especially after adoption of petroleum code
of 1355, which is favorable to private
enterprise.
In recent years, has accounted for more than
20 percent of production and over 15 percent
of refinery output.
Cuba Cuban Petroleum Est. 1159 as division of National Agrarian
Institute (TC') 7eform Institute, a state agency engaged in
wide number of agrarian and industrial
activities; ICP has become virtually exclu-
sive monopoly for production since adoption
of November 1959 petroleum law. which is
highly adverse to private foreign investment
in this phase of the Industry; foreign
companies' refining and marketing operations
are tieing severely restricted by TCP.'s
entrance into these fields of activity.
Est. 1938; exclusive monopoly for all phases
of the industry except small amount of re-
tail market Ing allowed private companies.
percent of the nation's oil out-
put. The company's outright
ownership of the subsoil rights
to the La Brea - Parinas field
in the northern coastal area
was derived from an internation-
al arbitral award in 1922. The
award has been a major political
issue during 1960, and Interna-
tional Petroleum has been de-
nounced by political groups--
including Communists and extreme
rightists--with concomitant de-
mands for cancellation or altera-
tion of its holdings. Until the
Exclusive monopoly for exploration and re-
fining. Uruguay has no production.
Venezuelan Petroleum Est. 1:360 as nonrestrictive agency to engage
Corporation in all phases of the oil industry in compe-
tition with private companies; initial gov-
ernment financing $750,00i;.
President Betancourt
has recently stated
emphatically that his
government has no plans
to nationalize the
Venezuelan oil indus-
try, he also reiterated
his firm policy of
not granting any new
concessions to for-
eign oil companies.
The:establishment
of the Cuban Petroleum
Institute (ICP) large-
ly reflects the Castro
regime's hostile posi-
tion toward all for-
eign investment. The
foreign oil companies
now have virtually
terminated their drill-
ing and exploratory
activities--which have
achieved little suc-
cess after heavy in-
vestments--and their
operations are re-
stricted to refining
and marketing. -These
activities. too .Inayi.,.
soofi be; taken : over by
the .government a
In Colombia, Latin
America's third largest oil
producer, private companies,
whose labor unions are Communist?
influenced, have also been sub-
ject to nationalistic sentiment.
Gasoline price increases in May
brought special criticism of the
companies, and a pro-Communist
organization has submitted to
Congress a proposal calling for
nationalization of the oil in-
dustry.
In Ecuador, labor and other
public pressures apparently
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CURRENT INTELLIGENCE WEEKLY SUMARY
forced the government to retract
the gasoline price increases
which it had allowed in return
for the completion of a refinery
expansion program by the prin-
cipal foreign oil producer.
Proposed Chilean legisla-
tion in 1959 to allow private
foreign investment in oil pro-
duction provoked serious nation-
alist opposition in Congress
which its backers have not as
yet overcome.
In Argentina, the princi-
pal opposition party and other
groups hostile to President
Frondizi continue their strong
denunciation of YPF's contrac-
tual arrangements with foreign
oil companies despite the en-
couraging results these have
achieved thus far. General
public sentiment in Argentina
also opposes foreign partici-
pation in the development of
national petroleum resources,
although the inroads being made
on the country's oil deficit
seem to have softened this op-
position somewhat.
In Brazil, nationalistic
feeling against foreign invest-
ment in oil development appar-
ently continues unaffected by
the gains in neighboring Argen-
tina's production.
In Mexico, the national
oil monopoly, Pemex, which spon-
sored a regional petroleum con-
ference last March in Mexico
City, now may offer its serv-
ices and guidance to other na-
tional petroleum agencies in
the hemisphere--reversing the
policy of the previous Pemex
director
Soviet Activity in Area
The USSR, which is expand-
ing its oil exports to the free
world, is apparently using pe-
troleum as a means to exploit
nationalistic sentiment against
US investments in the Latin
American petroleum industry, and
to disrupt the marketing patterns
of US-owned companies in the
area. The principal Soviet suc-
cess thus far is in Cuba, where
at least 900,000 tons of Soviet
crude oil--about.4S percent of
Cuba's consumption for the rest
of this year--are to be imported
in 1960 under the new Cuban-
Soviet trade agreement.
`The Soviet oil import ar-
rangement--which could eventually
be expanded to meet all of Cuba's
needs and foreshadow the com-
plete nationalization of private
companies--seriously affects
Venezuelan exports to Cuba and
has already aroused strong re-
action in the Venezuelan press.
In Uruguay, which has a
critical foreign exchange prob-
lem because of declining wool
exports, repeated Soviet offers
to exchange oil for wool over
a three-year period are appar-
ently being seriously considered,
Under the terms of the Soviet
proposal, the USSR would probably
supply at least 25 percent of
Uruguay's normal oil requirements
on a semibarter basis, condition-
ing wool purchases on Uruguay's
acceptance of Soviet crude oil.
Such an arrangement.-would'fur-
ther affect the traditional
Western oil suppliers of Uruguay,
including Venezuela.
Brazil imported about 420,-
000 barrels of Soviet crude oil
in 1959 under a cacao-for-oil
barter agreement, and agreed
last December to accept over
4,000,000 barrels per year--
roughly 4 percent of Brazilian
consumption--beginning in 1960
under a new three-year trade
agreement. Since then, however,
Brazil has expressed reserva-
tions about going through with
this arrangement, ostensibly for
tebhnical reasons.
Argentina, which has ob-
tained some petroleum imports
from the USSR since 1954, in
1959 took 2,267,000 barrels of
Soviet crude and 2,082,000 barrels
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CURRENT INTELLIGENCE WEEKLY 'SUMMARY
9 June 1960
of other petroleum products--
totaling about 5 percent of
Argentine consumption. Future
Soviet oil shipments seem
likely to decline as Argentina
approaches its goal of self-
sufficiency.
Argentina has ordered
only $32,000,000 worth of oil
equipment under the $100,000,000
Soviet credit for this purpose
under an agreement signed in
October 1958, and only a small
portion of the amount on order
has been delivered. A supple-
mentary protocol to the 1958
agreement signed in May 1960
provides- that Argentine state
organizations may use this credit
for fiachir e:rY, imports other
than .o31 equipment . YPF offi-
cials reportedly plan to cancel
some Of their orders and to
permit the entry of not more
than four Soviet petroleum
technicians into the country,
instead of the 20 previously
considered for servicing the
Soviet equipment.
The USSR has made over-
tures to various other Latin
American governments to supply
credit, equipment, and technical
aid for oil development. A
large Brazilian trade delegation
which visited Moscow in late
1959 included members of the
national petroleum monopoly,
Petrobras, who reportedly in-
vestigated Soviet oil equipment
for possible acquisition under
the Brazilian-Soviet trade
agreement signed at that time.
Later, four Soviet technicians
visited Sao Paulo to advise a
private concern on the proposed
establishment of a shale-ex-
traction plant.
Influential political groups
in Bolivia, including the oil
workers:' federation and elements
of the ruling party, have urged
the acceptance of $60,000,000
general Soviet credit overture
--first made in late 1958--for
development of the national
petroleum agency, and it has
been rumored that a special
mission will soon go to Moscow
to. investigate this offer.
In Cuba, some of the re-
cently arrived bloc technicians
may have been assigned to assist
n Institute.
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