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June 9, 1960
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Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 VV 100-1 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. 25X1 25X1 State Department review completed ! Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 Approved For Release 2005/03/29 : CIA-RDP79-00927A002 00110001-2 Cov 1.0 THIS MATERIAL CONTAINS INFORMATION AFFECT- ING THE NATIONAL DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE ESPIONAGE LAWS, TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS- SION OR REVELATION OF WHICH IN ANY MANNER TO AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW. The Current Intelligence Weekly Summary has been prepared primarily for the internal use of the Central Intelligence Agency. It does not represent a complete coverage of all current situations. Comments and conclusions represent the immediate appraisal of the Office of Current Intelligence. Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 Approved For_RRelease 2005/03I DP79-00927AOA2700110001-2 1W V~r 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 Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 THE WEEK IN BRIEF Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 ... SECRET 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 SECRET ii 25X1 25X1 Approved For Release 2Qt /QS12ac QI1A-I$if fl 00927AO02700110001-2 Approved For_Release 2005/03/ lf*tTP79-00927AA002700110001-2 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 . . . . . . . . . 25X1 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. SECRET iii Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 THE WEEK IN BRIEF 25X1 Approved For Release 2005/03/29 : CIA-RDP79-0092 002700110001-2 vow SECRET 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. 25X1 25X1 25X1 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 SECRET iv Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 THE WEEK IN BRIEF Approved For BJease 2005/03/YELC` 4RDP79-00927AO02700110001-2 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 SECRET v Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 THE WEEK IN BRIEF Approved Fortelease 2005/03/29: CIA-RDP79-009274 SECRET 5 092700110001-2 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 25X1 SECRET vi Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 THE WEEK IN BRIEF Approved For, please 2005/03/29 SJ?fi!'9-00927A 02700110001-2 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927A002700110001-2 PART I OF IMMEDIATE INTEREST Page'l.of 7 Approved For Release 2005/03/29 C1TRDP79-00922 p02700110001-2 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART I OF IMMEDIATE INTEREST Page 2.of 7 Approved For rRelease 2005/03/29: CIA-RDP79-0092.002700110001-2 SECRET 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, SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART I OF IMMEDIATE INTEREST Page 3 of :I Approved For Release 2005/03/23EeRi P79-0092ZA002700110001-2 CURRENT INTELLIGENCE WEEKLY SUMMARY .9 June 1960 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001 P PART I OF IMMEDIATE INTEREST age 4'of 7 Approved For~&ease 2005/03L291- C9 RDP79-00927A ,02700110001-2 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927A002700110001-2 PART I OF IMMEDIATE INTEREST Page 5of 7 Approved For,`elease 2005/0?k~k DP79-00927, 02700110001-2 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 SECRET PART I Approved For Re1eas8 j0gWJ31ED TE 2? jA -- jR Sq27A00270011000Pa2ge fa of 7 Approved For Zelease 20058&6k.iIA-RDP79-009274gO2700110001-2 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART I OF IMMEDIATE INTEREST Page 7 of 7 Approved For~Release 2005/03/29 : CIA-RDP79-0092ZA002700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART II NOTES AND COMMENTS Page 1 of 15 Approved Forlease 2005/03/29 : CIA-RDP79-00927,402700110001-2 SECRET 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 Approved For Release 2005/03/295. E 79-00927A002700110001-2 PART II NOTES AND COMMENTS Page 2 of 16 Approved FoRelease 2005/03/29 : CIA-RDP79-009ZZA002700110001-2 SECRET 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. SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 3 of 15 PART II NOTES AND COMMENTS Page Approved Fork~R,glease 2005/03/29 : CIA-RDP79-00927 D02700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927A002700110001-2 PART II NOTES AND COMMENTS Page 4 of 15 Approved For tle ,lease 2005/03/29 : CIA-RDP79-009274 2700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927A002700110001-2 PART II NOTES AND COMMENTS Page 5 of 15 Approved For Release 2005/03/29: CIA-RDP79-00927A02700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART II NOTES AND COMMENTS Page 6 of 15 CHINESE COMMUNIST ROAD PROJECT Sections being Y E M E N worked on S ana -~ ~Manakha Approved For Release 2005/03/29: CIA-RDP79-009274Q02700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 of 15 PART II NOTES AND CO AEi NTS Page Approved For,&lease 2005/03/29 : CIA-RDP79-00927A302700110001-2 SECRET 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-- SECREpT79 pp PART IAlpproved For Release 2NOO5TES AND AC-RD kJ&I %927A002700110001-2 Page 8 of 15 Approved FowRR lease 2005/03/29 : CIA-RDP79-00922 902700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART II NOTES AND CO, AENTS Page 9 of 15 Approved For, W ease 2005/03/29 : CIA-RDP79-0092742700110001-2 SECRET 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 SECRET 25X Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART II NOTES AND COMMENTS Page 10 of 15 Approved For le ease 2005/03/29: CIA-RDP79-00927A 2700110001-2 SECRET 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. SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART II NOTES AND COMMENTS 25X1 Page 11 of 15 Approved For Release 2005/03/29: CIA-RDP79-00927A,0700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-0 927AO02700110001-2 PART II NOTES AND COnME T Page 12, of 15 Approved For ease 2005/03/29: CIA-RDP79-00927A 2700110001-2 SECRET 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. SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART II NOTES AND COMMENTS Page 13 of 15 Approved Forjease 2005/03/29 : CIA-RDP79-009272700110001-2 SECRET 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, SECRET PART I I Approved For ReleaseWgA/S,Q3/ CIA-R0927A002700110001-2 Acv D COMMENTS ge 14 of 15 Approved For Release 2005/03/29 : CIA-RDP79-00922 .002700110001-2 SECRET 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. SECRET PART IlApproved For Release 200503/299bC .RDPTh-00927A002700110001-2ge 5 0~ o Approved For JWease 2005/03/29 : CIA-RDP79-009274,W2700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927A002700110001-2 PART III PATTERNS AND PERSPECTIVES Page 1 of 19 Approved For Release 2005/03/29: CIA-RDP79-00927AQ2700110001-2 SECRET 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. SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART III PATTERNS AND PERSPECTIVES Page 2 of 19 Approved For Release 2005/03/29: CIA-RDP79-00927AZ2700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART III PATTFRN3 AND PERSPECTIVE'S Page 3 of 19 25X1 Approved For Pease 2005/03/29 : CIA-RDP79-009274Q,02700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927A002700110001-2 PART III PATTERNS AND PERSPECTIVES Page 4 of 19 Approved ForQplease 2005/03/29 : CIA-RDP79-009274 02700110001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 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, SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART III PAT'T'ERNS AND PERSPECTIVES Page 5 of 19 Approved For RAlease 2005/03/29 : CIA-RDP79-00927Ap02700110001-2 SECRET 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. SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART III PATTERNS AND PERSPECTIVES Page 6 of 19 Approved For,,$elease 2005/03/29 : CIA-RDP79-00927 002700110001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMkARY 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART III PATTERNS AND PERSPECTIVES Page 7 of 19 Approved For elease 2005/03/29 : CIA-RDP79-00921 002700110001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 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-- SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927A002700110001-2 PART III PATTERNS AND PERSPECTIVES Page 8 of 19 Approved FoLjelease 2005/03/29 : CIA-RDP79-0092 Q'002700110001-2 SECRET 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, SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927A002700110001-2 PART III PATTERNS AND PERSPECTIVES Page 9 of 19 Approved For R,Iease 2005/03/29 : CIA-RDP79-00927A 02700110001-2 SECRET CURRENT INTELLIGENCE WEEKLY 'SUMMARY 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART III PATTERNS AND PERSPECTIVES Page 10 of 19 Approved Fore ease 2005/03/29 : CIA-RDP79-00927AW2700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART III PATTERNS AND PERSPECTIVES Page 11 of 19 Approved Forplease 2005/03/29 : CIA-RDP79-00922 02700110001-2 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY COflETOD 1q oarlaux.~ 6e3rp axxvxwc xoaMO)xxoCx R N:n YTATOB 2L p- ecocTapoxxero x cno60N.Or0 paTentoR . KECII1B rYYAA.4,txcA . , , a y . . . , G C CY ....... .....Y-A Capdapa Myear reda .Aayda, ? Moe..,na,,...,am... 6 coKpame-me cpoxn 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 I "cbE` A MHHHCTPOB CUP == TOBAPHH(A H. C. XPYHtEBA )KECI COBETCKOE BCEFAA AOA>KHO bblTb OTAWIHb1M! 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 e 9~ WtJAt S,UIP?CW96~ A .gB?iM1.y r. B IIOCAEIIH YAC SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART III PATTERNS'AND PERSPECTIVES Page 12 of 19 Approved For4elease 2005/03/29: CIA-RDP79-009274D02700110001-2 SECRET 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 p SECRET 27A A PART III proved For Release 2005/03/29: CIA-RDP79-009 age e 13 of 19 Approved Foc(ease 2005/03/29 : CIA-RDP79-00927,002700110001-2 SECRET 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. SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART III PATTERNS AND PERSPECTIVES Page 14 of 19 Approved Fo elease 2005/03/29 : CIA-RDP79-009223002700110001-2 SECRET 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART III PATTERNS AND PERSPECTIVES Page 15 of 19 Approved Fo Release 2005/03/29 : CIA-RDP79-00922 002700110001-2 SECRET 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 SECRET PART IIiproved For Release AND IPE,RRDPP7EC0,,,~ J? 002700110001 Page 16 of 19 S 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. Approved Fors ease 2005/03/29: CIA-RDP79-0092702700110001-2 SECRET SYMBOL 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 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 SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 PART III PATTERNS AND PERSPECTIVES Page 17 of 19 Approved For-Release 2005/03/29 : CIA-RDP79-00927A 02700110001-2 SECRET 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 SECRET PART II proved For Release PTT05ERNS/2AND CIA-2 Page 18 of 19 Approved For Release 2005/03/29 : CIA-RDP79-0092jA002700110001-2 Noe SECRET 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 $60,000,000 general Soviet credit overture --first made in late 1958--for development of the national petroleum agency, and it has been rumored that a special mission will soon go to Moscow to. investigate this offer. In Cuba, some of the re- cently arrived bloc technicians may have been assigned to assist n Institute. 25X1 SECRET PART T proved For Releas~j~;f R9 AjqjX~3@Rg$~Q: 7V2700110001-2 Page 19 of 19 25X1 Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2 Approved For Release 2005/03gtktfDP79-00927A0 2700110001-2 Nw, SECRET Approved For Release 2005/03/29 : CIA-RDP79-00927AO02700110001-2