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Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 C %00 LM %.0 IN " I (CURRENT INTELLIGENCE WEEKLY SUMMARY 1 June 1961 CENTRAL INTELLIGENCE AGENCY DOCUMENT NO. s7 OFFICE OF CURRENT INTELLIGENCE NO CHANGE IN CLASS. ^ EI DECLASSIFIED CLASS. CHANGED TO:,~S ?. 25X1 111 AUTH: HR 70-2 DATE: ~'/~?U State Dept. review completed COPY NO. 76 OCR NO. 0282/61 TOAL 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 THIS MATERIAL CONTAINS INFORMATION AFFECT- ING THE NATIONAL DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE ESPIONAGE LAWS, TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS- SION OR REVELATION OF WHICH IN ANY MANNER TO AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW. The Current Intelligence Weekly Summary has been prepared primarily for the internal use of the Central Intelligence Agency. It does not represent a complete coverage of all current situations. Comments and conclusions represent the immediate appraisal of the Office of Current Intelligence. Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY T H E W E E K I N B R I E F LAOS . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1 In the Namone talks, the Souvanna group and the Pathet Lao refuse to agree to effective procedures for ICC supervision of the cease-fire and continue to empha- size the importance of a political solution. A similar stand has been taken by their representatives and bloc delegates at Geneva. Attacks are continuing against government Meo guerrilla bases in Xieng Khouang Province. Elsewhere, Pathet Lao forces are engaging in limited skirmishing to consolidate their positions. DOMINICAN REPUBLIC . . . . . . . . . . . . . . . . . . . . Page 5 President Balaguer and other Trujillo associates re- tained power immediately following the dictator's assassi- nation by a retired army general who had been in close contact with a pro-US, middle-of-the-road dissident ci- vilian group. An internal power struggle is likely; the longer it is protracted, the greater the opportuni- ties offered to pro-Castro elements, both inside the country and in exile. 25X1 EAST-WEST DEVELOPMENTS . . . . . . . . . . . . . . . . . . Page 6 Khrushchev, in his conversation with Ambassador Thompson preliminary to the Vienna meeting with President Kennedy, strongly emphasized his determination to con- clude a separate peace treaty with East Germany if no agreement can be reached on Berlin by this fall or winter. Soviet bloc statements and propaganda commentaries have treated the Vienna meeting as a point of departure for further negotiations and as a step toward an accommoda- tion of Soviet and American positions on key East-West issues. Peiping's first editorial comment on the talks avoids the polemical language which marked its comments on the Khrushchev-Eisenhower meetings but suggests con- tinued reservations about the talks. 25X1 SOUTH KOREA . . . . . . . . . . . . . . . . . . . . . . . Page 8 The South Korean military leaders seem to envisage an extended period of military rule. The ruling Supreme Council for National Reconstruction is drafting a basic law--in effect revising the constitution--in order to provide a legal basis for ruling by fiat. All social and political organizations are being brought under con- trol of the regime, and direct military control of the government is being extended down through the county level. There are continuing factional differences within the council. The regime appears to have little popular support and may turn increasingly to repressive measures to stay in power. SECRET i Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET 25X1 25X1 . . . . . . . . . . . . . . . . . . . Page 9 Prime Minister Amini has so far been unable to gather any base of popular support, and pressure on him has in- creased with strikes and threats of strikes. A government spokesman said that the Shah, following his return from Norway on 31 May, had expressed "full support and appreci- ation" to the prime minister. The anti-regime National Front is refusing to cooperate with Amini, and Tudeh (Communist) party activit is increasing. CONGO . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10 With the conference at Coquilhatville ended, Kasavubu apparently plans to convene parliament soon in Leopold- ville to discuss proposals made at that meeting, and Gizenga continues to demand that it meet at Kamina. The UN seems willing to provide protection for legislators whether parliament meets there or at Leopoldville. Ham- marskjold appears to prefer Kamina as the more practical site and has stated that the session would be senseless unless the Gizenga faction is represented. Economic deterioration is widespread, and both Gizenga and Kasa- vubu are facing increasingly serious financial problems. CUBA . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 13 President Dorticos has accepted an invitation to visit Prague beginning on 9 June. Foreign Minister Roa ead the Cuban delegation to the preliminary Cairo SECRET ii BRIEFS Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY conference of neutralist nations opening on 5 June and will probably maintain that the Castro regime is inde- pendent of the Sino-Soviet bloc; the Cuban good will mission visiting Latin American capitals has been reit- erating this theme. FOOD SHORTAGE IN NORTH VIETNAM . . . . . . . . . . . . . . Page 14 Food shortages are widespread in North Vietnam there is considerable evidence of food shortages and unrest in various localities. This situation is the result not only of a poor 1960 harvest but also of the growing indus- trial and export demands on agriculture and the need to satisfy the food requirements of a rapidly growing popu- lation. Hanoi acknowledged serious food problems during the first part of this year, but now that the early harvest is under way, it is expressing optimism that the food shortage will be alleviated. CHANGE IN SOVIET ECONOMIC ADMINISTRATION . . . . . . . . . Page 16 The councils for "planning and coordination" within the 17 economic areas into which the USSR was recently divided will deal with long-range economic development. They are intended to ensure a type of coordinated re- gional development not provided now either by the re- public bodies or by the more than 100 "councils of na- tional economy" (sovnarkhozes) which were established in 1957. The new councils, however, will not be em- powered to intervene in the day-to-day operation of the economy, nor will they replace any of the principal administrative agencies already in existence. This re- organization--first specifically discussed in 1960--is in accord with Khrushchev's statement in 1958 that larg- er economic regions for planning would be established as a modification of the 1957 reorganization ADMINISTRATIVE REORGANIZATION IN BULGARIA . . . . . . . . Page 17 The Bulgarian regime is continuing to reorganize its party and government machinery, ostensibly to rectify administrative shortcomings, particularly in the manage- ment of the economy. The leadership of the Central Coun- cil of Trade Unions has been changed and leaders in five of Bulgaria's 30 districts are known to have been removed. Those in several other-areas have been severely criti- cized in the frankest public discussion of internal difficulties in recent years. The regime's action was probably forced by the discovery within the party earlier this year of a dissident group which was demanding changes in Bulgaria's economic policies. SECRET iii Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY MALI . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 18 Mali's greater involvement with Sino-Soviet bloc countries has been marked by the arrival of increasing numbers of bloc technicians on long-term assignments. This bloc build-up presently is occurring mainly in the fields of civil aviation and information, both of which are headed by-members of the regime's extreme left wing. Mali also appears to be accumulating large stocks of Czech arms and military equipment. COMMUNISTS MAKE GAINS IN CYPRIOT LABOR MOVEMENT . . Page 20 Communists have recently made significant gains in the Cypriot labor movement, because anti-Communist elements and the government have proved unable to cooperate and government leaders have been unwilling to resist pressure from the left. The recently elected head of the Cyprus Confederation of Workers (SEK), the largest non-Communist labor federation, has come under the influence of the more astute leader of the Pan-Cyprian Federation of Labor (PEO), the Communist-dominated federation; as a re- sult the SEK is likely to become more closely aligned with the PEO or to break up into warring, factions. Mean- while, the government has chosen a Communist as a member of the Cypriot delegation to the conference this month of the International Labor Organization. EUROPEAN INTEGRATION DEVELOPMENTS . . . . . . . . . . . . Page 21 De Gaulle has apparently won renewed support from Adenauer for a loose political confederation of the Com- mon Market (EEC) countries, and France now hopes to hold the constituent meeting in early July. The two leaders also agreed at their recent meeting to press ahead with the scheduled implementation of the EEC treaty, including the early development of a specific program for agriculture. There are some indications that De Gaulle now is prepared to consider the possi- bility of British accession to the EEC. The expecta- tion that Britain will join is arousing concern among the other members of the Outer Seven (EFTA), whose council is due to meet on 6 June. WATER DEVELOPMENT IN THE NEAR EAST . . . . . . . . . Page 1 During the next few years a number of projects to develop the Near East's water resources will be completed. The political and economic consequences of this develop- ment, which involves the daily life of over three fourths of the area's population, can be expected to have a marked influence on assessments by local leaders of SECRET Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY future needs for foreign economic assistance. Among the points that stand out in a survey of the area are that Egypt's High Dam scheme is progressing without major difficulties; that Israel has nearly reached the limit of its water resources without embroiling itself further with the Arabs or using expensive new processes; that Iraq's once-promising developments are lagging badly; and that Iran's ambitious plans are, under present so- cial conditions, primarily of benefit to the landlords. BRITISH GUIANA MOVES TOWARD INDEPENDENCE . . . . . . . . . Page 10 The Communist-led People's Progressive party has a clear advantage over its divided rivals as British Guiana prepares to exercise internal self-government after elec- tions this August. Complete independence is scheduled to follow in 1963 or 1964. The party chief, Cheddi Jagan, in his four years as effective head of the colonial gov- ernment has pursued a moderate course and avoided actions that might jeopardize the colony's constitutional advance. During this time he and others in top party ranks have in- creased contacts with Communists abroad, and in the past year they have become less evasive in advocating a so- cialist program. SECRET v BRIEFS Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY WEEKLY REVIEW LAOS In the Laotian political talks at Namone, only the Sou- vanna delegates appear anxious to move forward on the forma- tion of a coalition government. The primary objective of the government delegation, under General Phoumi's directives, is to obtain definitive cease- fire terms while raising un- acceptable proposals in the political talks. At the 31 May military talks, Neo Lao Hak Sat (NLHS) representatives seized the initiative with pro- posals that would restrict sup- port activities of the Boun Oum forces. NLHS spokesmen appear to be stalling on both the cease-fire and political issues to enable Pathet Lao forces to eliminate pockets of government resistance and to consolidate their position throughout the country. Bloc Stalling Tactics A further manifestation of Communist stalling tactics is the interpretation by Pei- ping and Hanoi of the agree- ment reached at Namone to set up a military subcommittee to deal with cease-fire problems. Although picturing this agreement as the result of Communist reasonableness, both indicate that the new group will have little to do at this juncture. They assert that the sub- committee will merely "study and discuss" cease-fire rules, "form" tripartite inspec- tion teams, and "set up" terms of reference for the International Control Com- mission (ICC). The subcom- mittee, however, will not even report its findings under these headings to the Namone conference until agreement has been reached on the formation of a provisional government. A "major, pressing" cease-fire matter can be reported before that time only if all three parties agree. The deputy leader of the North Vietnamese delegation at Geneva reportedly told a jour- nalist that hostilities in Laos would end "only when the con- ference ends." The Soviets last week re- jected a British proposal at Geneva that the cochairmen--the USSR and the UK--specifically authorize the ICC to conduct on-the-spot investigations of cease-fire violations. In a long and fruitless exchange with the British delegate on 29 May, the acting head of the Soviet delegation, Deputy For- eign Minister Pushkin, refused to consider placing the ques- tion of ICC requirements on the conference agenda and contended that this matter should be dis- cussed by the cochairmen outside the plenary sessions without committing themselves on the substantive problems of the con- trol mechanism. First Deputy Foreign Min- ister Kuznetsov told British Am- bassador Roberts on 27 May that the cochairmen had done good work and should continue to, cooperate to secure the quickest SECRET WEEKLY REVIEW Page 1 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY SECRET Page 2 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY possible settlement in Laos and make sure that the conference is not distracted from essen- tials. The bloc's intransigence reflects concern that debate in the plenary sessions of the conference on these issues would keep the conference from considering the bloc's princi- ples for a Laotian settlement presented by Gromyko on 17 May and strengthen the Western case for establishing an effective control mechanism. The bloc probably feels that instruc- tions authorizing effective ICC investigation of cease-fire violations would inhibit Pathet Lao military pressure against government forces and weaken the bloc's bargaining position in future substantive negotia- tions on Laotian neutrality and related political prob- lems. The bloc delegates ap- pear to be pursuing the stand- ard Communist tactic of demand- ing agreement in principle on the general terms of a settler meat before taking up detailed consideration of control pro- visions. Another factor influenc- ing the stalling tactics of the Communist delegates at Geneva is their hope that the tripartite negotiations at Namone, in which the Vientiane Government has made a series of concessions, will produce a political agreement favorable to the Communists which would confront the Geneva conference with a fait ac- compli. Laotians in Europe The purpose of Prime Min- ister Boun Oum's trip to France on 28 May was to explain the government's position to Prince Sihanouk and to seek his sup- port. Boun Oum apparently is operating within narrow confines set by General Phoumi and is not likely to play any substantive role while abroad unless condi- tions change. Quinim Pholsena, leader of the Souvanna delegation, is also reported trying to get in touch with government delegates. The government delegation and the political party leaders are described as unanimous in their support of encouraging further SECRET WEEKLY REVIEW Page 3 of 21 25X1 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY contacts with the Souvanna group but are reluctant to pro- ceed without the sanction of General Phoumi in Vientiane. Military Situation Despite the obstacles it faces, there are indications that the ICC is now willing to interpret its directives more liberally and to undertake an inspection of cease-fire vio- lations against government Meo guerrilla bases in the Pa Dong area, southwest of the Plaine des Jarres. ICC action, however, continues to be hampered by lack of logistic support and of cooperation from the Souvanna factian ~ azid' ' the NLHS. Although minor skirmishing continues in several areas, the major focus of enemy mil- itary action remains the Pa Dong area, where artillery bom- bardment of the Meo guerrilla base was resumed on 29 May after a two-day lull. Pathet Lao forces control about two thirds of eastern Laos south of Xieng Khouang Province and that large num- bers of Communist troops are preparing to infiltrate south- ern Laos, where much of the population is s apathetic to the Pathet Lao. estimates of enemy troops in the area, which are probably exaggerated, are indicative of growing fear and defeatism. West of Savannakhet near the South Vietnamese border on Route 9, the small South Viet- namese special forces group in Laos is continuing to support Laotian army remnants near the border. Elements of a South Vietnamese regular battalion which had crossed a few miles into Laos reportedly withdrew to the border on 23-24 May. Bloc Airlift Soviet airlift planes flying between Hanoi and Xieng Khouang brought in North Vietnamese and Pathet Lao troops, that about 2,000 North Vietnamese troops had come in by truck via Route 7, and that convoys 25X1 of 40 to 50 trucks accompanied by armored cars were observed frequently. all types of food supplies 25X1 for the North Vietnamese troops were airlifted into Laos from Hanoi. By the end of April, Pathet Lao troops, except for regional troops and guerrillas, were receiving the same pro- visions as the North Vietnamese. The Kong Le forces at Khang Khay were also receiving rice from North Vietnam. During March, April, and May, cigarettes, beer, soap, textiles, shoes, and other con- sumer goods were flown into Xieng Khouang from Hanoi and turned over to merchants in Xieng Khouang and nearby Phong Savan to be sold. The receipts were given to Kong Le to pay his troops. The North Vietnamese said that consumer goods would soon be arriving on a continuing basis. SECRET Page 4 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY President Balaguer and oth- er Trujillo associates retained control in the Dominican Repub- lic immediately following the dictator's assassination on 30 May by a retired army general, Juan Tomas Diaz, who had been in close contact with a pro-US, middle-of- the-road dissident civilian group. An internal power struggle is likely. The capital was under tight security measures on 31 May, many dissidents were hiding out in the homes of friends, and a wave of panic food buying was developing; few reports were available on provincial areas. General Diaz is reported to be in hiding in the interior as the police and units of the Do- minican armed forces round up in- dividuals believed to have been associated with him. He may be heading for the traditionally dissident Cibao region in the east-central part of the country. Meanwhile, the late dicta- tor's two sons have arrived in the Dominican Republic after a hastily arranged charter flight from Europe. The elder son, Ra- fael "Ramfis" Trujillo, Jr., is a general and a minister without portfolio and is believed, with his military associates, to have a core of fanatical support in the air force mobile infantry unit stationed near Ciudad Tru- jillo. This military unit, rough- Latin American countries. It also includes officials of Radio Caribe, whose pro-Castro and bitterly anti-US and anti- clerical diatribes over the past ten months have probably contributed to at least some degree of anti-US feeling among the Dominican people. The longer an internal power struggle is protracted, the greater will be the opportu- nities offered to pro-Castro ele- ments, both inside the country and in exile. During the past ten months pro-Castro groups within the country have been strengthened by the dictator's own political machinations. Last week told the American Consulate that the officers involved in the plot hoped the US would have military strength available in the area in case a post-Trujillo government asks for assistance in controlling the internal situation. Reaction in the rest of Latin America to Trujillo's death was generally one of grim satisfaction. Chilean Foreign Minister Ortuzar told newsmen that the assassination was "a natural end that awaits all dic- ators...who make a mockery of the rights and freedoms of man." In Haiti, on the same island with the Dominican Republic, the reaction was one of alarm as the government sent troops to the border and mobilized the President's special militia. In Cuba, comment in the Castro- controlled press stressed the hope that the dictator's death will mean the "true liberation" of the Dominican people, who now have "a magnificent op- portunity to recover their freedom." two army brigades stationed in In Venezuela, where Pres- the capital city are commanded ident Romu].o Beta::icourt was by relatives of the late dictator. the target of an almost-suc- ly equivalent to a US World War II regimental combat team, is likely to play an important part in any struggle for power. The includes the de facto head of the hated Military Intelligence Service, John Abbes, who has been involved since 1957 in Trujillo's subversive operations in other the Chamber of Deputies unanimously passed a resolu- tion of solidarity with the people of the Dominican Repub- SECRET 1 June 61 WEEKLY REVIEW Page 5 of 21 I cessful assassination attempt The clique around "Ramfis" mounted by Trujillo last year, Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 SECRET Official Soviet bloc state- ments and propaganda commentary have stressed that the discus- sions. in Vienna between Khru- shchev and President Kennedy on 3 and 4 June will serve mainly as a point of departure for fur- ther talks, provided the US is willing to adjust its policy. Pravda established this line by stating on 28 May that it is "inconceivable" that all the disputes that have arisen since the end of the war can be cleared up in two days. Soviet spokes- men have echoed this view in public statements, and Soviet officials are apparently under instructions to.-portray the meeting as an opportunity to lay the groundwork for an ac- commodation of Soviet and Ameri- can positions on key East-West questions. The Soviet ambassador to Prague, in an address to a con- ference on European security and Germany, stated, "We believe that this meeting (in Vienna) will be a major contribution to a relaxation of international tension and an improvement in relations between the Soviet Union and the United States." A Soviet Embassy official in Belgrade took a similar line in a private conversation with-an American Embassy officer, stat- ing, "While we realize that no agreements can be reached in Vienna, spade work for future accords is both desirable and possible." At an American-Soviet con- ference in the USSR attended by nonofficial representatives, Soviet writer Aleksandr Korney- chuk stated that the Vienna talks "should lay the beginning for a change in the climate of US-Soviet relations." Czech President Novotny,; in a state- ment at a reception for Presi- dent Sukarno, said the talks would have an "important effect on the subsequent development of the international situation," and it was to be hoped that the meeting would open the way to further negotiations. Pravda has listed general and complete disarmament as the paramount issue in the talks. The only other issues mentioned by Pravda were a German peace treaty and a Berlin settlement. A TASS correspondent claimed that the talks will be an ex- change of positions, with a pos- sibility of agreement on "posi- tive steps" to improve the situation. The first secretary of the Czech Embassy in Paris told a US official that Khrushchev would bring up disarmament, Germany, and a future summit. He said the Soviet leader will make it clear that the test-ban talks in Geneva will not succeed unless agreement can be reached on general disarmament. Khru- shchev, according to the Czech diplomat, is also planning to request agreement on a date for reopening negotiations on Ger- many, will state his "obliga- tion" to sign a separate peace treaty with East Germany, and will press for an agreed date for a summit conference. The official speculated that Khru- shchev will also raise the Rapacki plan for a nuclear-free zone in Central Europe, since the Soviets have been discussing this plan in talks with bloc countries. Moscow has printed parts of the President's special mes- sage to Congress a.nd excerpts from his address in Boston. The TASS summary of this address stressed that the President fa- vored personal meetings to help lessen international tension and that such meetings could play a useful role in the search for peace. SECRET WEEKLY REVIEW Page 6 of 23 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY A note of caution in bloc commentaries is reflected in Pravda's warning that "many commentators" feel that US foreign-policy makers "will not be able to get out of the impasse resulting from their own reckless course until they discard the position-of-strength policy and other outmoded con- cepts and ideas." Peiping's first comment --a People's Daily editorial on 1 June--portrays the Presi- dent's decision to hold talks with Khrushchev, after having first proposed that such talks be delayed., as evidence of US weakness after "repeated set- backs" in domestic and for- eign affairs. In contrast to the Soviet attitude toward the talks--which is described as "new proof" of the USSR's desire for peace and improved relations with Washington-- the US is depicted as in- sincere. While the editorial avoids the polemical language which marked Peiping's comment on the Khrushchev-Eisenhower meetings, it suggests con- tinued reservations about such meetings. In his conversation with Ambassador Thompson on 23 May, Khrushchev emphasized his de- termination to sign a sepa- rate German peace treaty by this fall or winter at the latest if no agreement is reached on Berlin. He denied any intention of blockading the city but made it clear that East Germany would be given complete control over Allied military access. He asserted that access would then be prevented unless the Western powers came to some agreement with East Germany. While recognizing that this would produce a sharp increase in tensions, Khrushchev again expressed his conviction that this would not lead to a gen- eral war, since none of the Western powers really wanted German-unification. Khrushchev also empha- sized the importance of rec- ognition of the.Polish.and Czech frontiers. Finally, he insisted that Berlin was the crucial issue and that there could be no agreement on disarmament until that question was solved. The Soviet leader also mentioned the standard Soviet offer'to conclude a nonag- gression pact between NATO and the Warsaw Pact. On a nuclear test ban, Khrushchev was adamant in insisting on ac- ceptance of the Soviet proposal for a three-member council to administer the treaty's control system. Khrushchev's purpose in arranging this informal discus- sion with the ambassador was to convey to Washington a forceful restatement of his views on Ber- lin and Germany, using strong language which he would not wish to employ in his initial meet- ing with the President. By speaking in such forthright terms, Khrushchev sought to ex- ert pressure on the US to be amenable to early negotiations on this question and to make this an attractive alternative to a separate treaty granting the Ulbricht regime full control over Allied access to Berlin. One of Khrushchev's aims in detailing the consequences of a separate treaty was to counter Western statements that a treaty would not affect Western rights. Khrushchev also sought to forestall any effort to subordinate the Ber- lin question to other issues or to a general improvement in the international situation. While Khrushchev did not alter the substance of the Soviet position on Berlin, he did hold open the way for a nego- tiated solution along the lines of previous Soviet pro- posals for a temporary or in- terim agreement on West Ber- lin's status. SECRET WEEKLY REVIEW Page 7 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY South Korea's revolutionary leaders are providing increasing evidence that they envision an extended period of military rule. The regime is moving to bring all social and political organi- zations under its control and appears to be moving toward a controlled economy. Brigadier General Kim Yun-kun, commander of the marine unit which partic- ipated in the coup and a member of the ruling Supreme Council for National Construction, has stated that the junta intends to develop a group of young civil- ian leaders to whom it will give control of the government "pos- sibly after two years." Factional differences with- in the junta leadership are much in evidence, and lines of com- mand between moderate senior of- ficers and their more rash juniors are becoming increasing- ly uncertain. Tension between Army Chief of Staff Lt. Gen. Chang To-yong and coup strong- man Maj. Gen. Pak Chong-hui may be approaching a climax, with the ouster of one or the other from the ruling junta reported possible before the end of the month. Chang is credited with being a moderating influence on the insurgent leadership and is believed to favor a relatively early return to civilian govern- ment. The clique of young colonels surrounding Pak favor prolonged military rule. The Supreme Coun- cil has been expanded and reor- ganized to provide them with greater representation. As a group, the colonels are extreme- ly nationalistic and eager to undertake extensive reforms but they lack positive plans or ad- ministrative training. Should the regime fail to win public support, these junior officers probably will push for increas- ingly repressive measures against any opposition. Foreign Minister Kim Hong- il informed the American charge on 27 May that the regime was drafting a "provisional" consti- tution to "legalize" the trans- fer of power to the Supreme Coun- cil. The "provisional" constitu- tion--which may be dignified by a popular referendum--is intended to provide a legal basis for the extraconstitutional actions of the regime while preserving the appearance of continuity of gov- ernment. The military leaders fear that unless such continuity is maintained--the Rhee govern- ment was recognized by the UN resolutions of 1950 and 1951-- Seoul's claim to be the only legitimate Korean government will appear no more valid than that of Pyongyang. Generals and one admiral have been appointed governors of all provinces and mayor of Seoul. The regime is seeking some 500 field officers to staff national and local government administrative posts down to and including the county level. Former Lieutenant General Kang Mun-poing--a follower of the pro- posed ambassador to the United States, retired General Chong I1-kwon--has been ordered to or- ganize an extreme right-wing veterans' group to support the revolutionary government. Twelve leading businessmen accused of accumulating "illegal fortunes" have been ordered ar- 25X1 rested, possibly as a sop to public economic and social dis- content. SECRET 1 June 61 WEEKLY REVIEW Page 8 of '2 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Public reaction to the new regime continues to be largely passive, with known opponents reluctant to speak up for fear of possible repression. .tu- dents, who toppled the Rhee gov- ernment in 1960, appear to be Prime Minister Amini has so far been unable'to gather any base of popular support, and pressure on him has increased as various labor groups threaten postal and telegraph workers are reported to be on strike, and a bakers' organization claim- ing 15,000 members has given the government two weeks to meet its demands or face a walkout. A strike in the oil fields, where there is always labor unrest, is also a possibility. From the beginning of Amini's tenure the Shah has at- tempted to retain significant personal power. The Shah has consulted security officials independently of the prime min- about evenly divided for and against the coup. Many have been impressed by the speed and effi- ciency of the military in moving to clean up government corrup- tion and other obvious: manifes- tations of bureaucratic ineffi- ciency. Some, however, are be- coming increasingly concerned over limitations placed on academic freedom. Should re- pressions continue, student elements may be moved to take bolder action calling for a return to civilian government. ister, and apparently was also instrumental in having former Prime Minister Eqbal appointed ar.}-) tssador to Spa i.n . In the first public state- ment following the Shah's return from Norway on 31 May, a govern- ment spokesman said that the ruler had expressed "full sup- port and appreciation" to Amini during a meeting with the prime minister. Minister of Agriculture Arsenjani, who is a confidant of Amini and has been the spokesman for the government, on 20 May expressed the fear that a mili- tary coup is both imminent and inevitable. SECRET 1 June 61 WEEKLY REVIEW Page 9 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET Although Amini has adopted most of the program demanded by the National Front except im- mediate elections, it is not in- clinedto cooperate with him, Its leaders believe that Amini will not succeed in his reform pro- gram and that he will be forced to act strongly against the Front, A radical offshoot of the National Front, the National Liberation Movepnent (formerly the National Resistance Movement] has decided to begin agitation independently of the National Front and to demand the return of former Premier Mossa- deq to active politics, The Coquilhatville confer- ence--which was dominated through- out by officials from Leopold- ville, particularly Foreign Min- ister Bomboko--ended on 28 May after five weeks of deliberation. Its final resolutions reiterated earlier Leopold ille proposals for a federal glouping of trib- ally based states with a strong central authority. The Kasavubu regime apparently plans to call a meeting of parliament early in June to discuss these proposals, The American ambassador in Leopoldville believes that Gi- zenga will try to prevent the convening of parliament by Kasabuvu and, if unsuccessful, The Tudeh (Communist) party 25X1 appears to be taking advantage of the uncertain situation to step up agitation, will seek to delay any parlia- mentary session while attempt- ing to line up support in the Congo and abroad, If the legislature does meet, the ambassador feels Gizenga will probably boycott it and attempt to discredit its ac- tivities, Gizenga continues to demand that parliament meet at Kamina in Katanga, and he is supported in this by the bloc and the rad- ical African states, The UN ap- pears willing to provide protec- tion for legislators whether parliament convenes there or at Leopoldville; Hammarskjold, how- ever, apparently has endorsed Kamina, a UN-controlled base where SECRET WEEKLY REVIEW Page 10 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 2,900 Indian troops are statigmed, as the more practical site. He has also asserted publicly that a meeting without the Gizenga faction would be senseless. The Leopoldville government has moved Tshomb6 from Coquil- hatville to Leopoldville, where he is being kept under house ar- rest. It appears to be using the Katanga president as a bar- gaining counter in its negotia- tions with the acting government in Eli*abethville, with the ob- ject of including Katanga in a federal system and obtaining the support of Elisabethville?s dep- uties to the national assembly. In Elisabethville, the re- gime led by Interior Minister Munongo has reluctantly acqui- esced in the eventual withdrawal of several key Belgian military and civilian advisers but has refused to agree on a date for their departure. A member of the Belgian Foreign Ministry in- dicated to an American official on 29 May that Brussels intended to put further pressure on the Katanga regime to permit the speedy repatriation of the ad- visers; Belgium is still con- cerned, however, that a whole- sale Belgian withdrawal would lead to economic chaos. Economic difficulties are increasing elsewhere in the coun- try.[ 25X1 the central government's financial position ma collapse in July or August. dete- 25X1 rioration has so far been checked in part by psychologi- cal factors which led to a hoard- ing of banknotes and thereby held off an inflationary spiral. if this tendency, 25X1 should be reversed by favorable political developments, the Congolese Government would be unable to cover its own expenses and the monetary system would begin to crumble. The Stanleyville regime ap- parently has more immediate fi- nancial problems. According to United Nations economic officials, army units in' Stan- leyville are pre-empting all available banknotes, with the result that no currency is available for other purposes. Gizenga?s position will be in jeopardy unless he can find funds for his troops. The Leopoldville government re- portedly is relying on this economic deterioration to topple the Gizenga regime. 25X1 SECRET' Page 11 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Typical of the growing num- ber of economic and cultural delegations now shuttling be- tween Havana and the bloc is a recently announced Cuban-Soviet exchange in the field of agri- culture. Moscow radio re- ported on 27 May that a group of Soviet "agronomists, tractor drivers, and technicians" had left for Cuba, and that a Cuban agricultural delegation would soon arrive in the USSR to "study agricultural tech- nology, engage in sports, and rest and amuse themselves." The Ship carrying the Soviet delegation is said by the Cuban radio to be due in Havana on 5 June. A Havana radio an- nouncement of 25 May said that President Dorticos has accepted an invitation to attend the.9 June opening of a national fair in Prague. SECRET 1 June 61 WEEKLY REVIEW Page 13 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Cuban Foreign Ministry of- ficials are still engaged in what seems to be a major dip- lomatic offensive aimed at con- vincing other countries of Havana's peaceful intentions and independence from the political system of the Sino-Soviet bloc. This is evidently the theme that has been reiterated by the Cu- ban good-will mission in each Latin American capital visited --apparently with limited ef- fectiveness in some countries. That part of the delegation led by Foreign Affairs Under Secre- tary Carlos Olivares arrived in Ecuador on 27 May, its last stop before returning to Havana via Mexico City about 1 June. The other part of the delega- tion was to go on to Argentina, Bolivia, Chile, Colombia, and Uruguay after conferring with Venezuelan officials on 24 May. Foreign Minister Raul Roa, who will represent Cuba at the pre- liminary conference of neutral- ist nations opening in Cairo on 5 June, will probably take a similar line on Cuba's "in- dependence" of the bloc. Private groups in at least 14 Latin American coun- tries have organized fund- raising drives in order to con- tribute to the purchase of the the 500 heavy tractors demanded by Castro in exchange for the lives of some 1,200 insurgents captured in the mid-April landings. The responsible press in nearly all Latin American countries continues to condemn Castro for the proposal, scoring him for his lack of regard for human life. Food shortages are wide- spread in North Vietnam, accord- ing to a French diplomat sta- tioned in Hanoi. During a re- cent trip to Bangkok, he told the US ambassador to Thailand that he had seen persons faint from malnutrition in the streets of the North Vietnamese capital and that Ho Chi Minh had apol- ogized to the diplomatic corps for the general shortage of food. The French official said he had heard of three recent riots brought on by hunger and resentment of the regime's forced-draft labor policy. SECRET Page 14 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY While the Frenchman's re- marks probably exaggerate the situation, there is considerable evidence of food shortages and unrest in various localities. In February 1961, the Indonesian consul general in Hanoi reported that his office has heard numer- ous complaints from North Viet- namese about difficult condi- tions in Hanoi; the average North Vietnamese, he said, was weary of statistics about the country's progress and wanted more food. the ration for both rice and meat was progressively reduced during late 1960. This has contributed to the exist- ence of a flourishing black market and to hoarding. Fre- quent and bitter complaints in the Hanoi press about the lack of "socialist consciousness" on the part of peasants who hoard grain or seek to dodge tax pay- ments in kind provide ample testi- mony to the passive resistance the regime is encountering from a hungry population. Hanoi acknowledged serious food problems at the beginning of the year, admitting that these difficulties were basic and would take many years to solve. Demands on agriculture to meet the consumption requirements of a rapidly expanding popula- tion and to supply raw materials for local industry and for ex- port have outpaced the somewhat erratic growth in agriculture. As a consequence the regime has not been able to build up ade- quate reserve stocks of food to keep unfavorable weather from disrupting the supply. The poor agricultural year in 1960 was due primarily to weather. Prolonged drought damaged last year's spring har- vest, and floods and insects affected the fall crop, causing a drop in food production of 14 percent from the previous year's level., Per capita consumption of food is._cprrebtly estimated to be the lowest since 1957 and considerably below the prewar level. As is normal in a year of poor harvests, short- ages are most severe during the spring, immediately before the first harvest. Stepped-up so- cializatiorr, drives in the rural areas also contributed to the present food difficulties. In a press announcement of 24 May, Hanoi expressed opti- mism over the prospects for the harvest now in progress, asserting that this crop will be the best in many years. The Communists claim that in the im- portant rice-producing prov- inces of Ha Nam, Ninh Binh, and Nam Dinh--in the delta area --the early rice crop should be even better than in 1959, the peak year for rice produc- tion in North Vietnam. Al- though rainfall this year has been below normal, it has been better than in 1960. In addi- tion, crop acreage has been ex- panded--more than doubled for corn and sweet potatoes. SECRET 1 June 61 WEEKLY REVIEW Page 15 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY CHANGE IN SOVIET ECONOMIC ADMINISTRATION A network of 17 economic areas has been created in the USSR, and all but one are to have a council for "planning and coordination," according to the Soviet press. The new councils will plan and coord- inate long-range economic de- velopment at an administrative level not adequately covered in the present organizational setup. However, the councils, as outlined last year in a pre- liminary recommendation, will not be empowered to intervene in the day-to-day operation of the economy, nor will they replace any of the principal administrative agencies now existing. The present reorganization, an adaptation of a plan dis- cussed in Soviet journals in mid-1960, is in accord with Khrushchev's statement in 1958 that larger economic regions for planning, rather than opera- tional purposes, would be estab- lished as a modification of the 1957 reorganization, which divided the country into over a hundred areas administered by councils of the national econ- omy (sovnarkhozes). The 17 new economic areas will in all cases contain sev- eral sovnarkhoz areas; in the Baltic, Caucasus, and Central Asiatic regions they will con- tain more than one republic; both the Ukraine and the Rus Sian Republic will be divided into several economic areas. The Kazakh area alone is con- terminous with the boundaries of that republic; this fact, probably accounts for the deci- sion to permit the Kazakh State Planning Committee (Gosplan) to handle the work relegated in other areas to the coun- cils. The entire Soviet Union will be included in the new scheme, excepting Belorussia and Moldavia, which will remain independent administrative eco- nomic units. The new areas replace 13 areas which did not adequately fulfill the planning purposes for which they had originally been created. The TASS report indicates, as one example, that the populations of the former areas were quite disproportion- ate, ranging from 3,000,000 to 45,000,000. The new units will be more uniform in this respect. The relationship of the new economic areas to republic- level agencies and to the local sovnarkhozes has not been re- vealed. When the subject was discussed last year, one Soviet official said the councils would be under the USSR long- term planning agency (Goseko- nomsovet). As recommended last year, the councils will deal with territorial planning problems, such as the development of com- plementary industries in adja- cent sovnarkhoz areas. They will provide a type of coordi- nated regional development which neither the republic bodies nor the individual sovnarkhozes now accomplish. The councils are intended to formulate for higher planning organs proposals and recommenda- tions concerning the basic di- rection of economic development in their respective areas, new technological developments and their effective introduction in production, the correct distri- bution of capital investment, improvements in inter-enterprise specialization, cooperation, and combination, and better utilization of labor and natural resources. They would work out SECRET WEEKLY REVIEW Page 16 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 SECRET CURRENT INTELLIGENCE ?''EEKLY SUMMARY balances for products to be produced and consumed mainly within the boundaries of each economic region. The present changes reflect the regime's continuing concern with the problem of finding the most effective way of achieving its economic goals and at the same time encouraging local in- itiative. Other changes since the major reorganization of 1957 included the creation last year of republic-level sovnar' khozes in the Russian, Ukrainian, and Kazakh republics; the sepa- ration of responsibility for national long- and short-term planning functions into two separate agencies; and occa- sional alterations in the terri- torial and internal structure of the sovnarkhozes. ,Vhile the present change has long been planned and ap- pears to be routine, the coun- cils might in the future be assigned significant additional responsibilities such as regulat- ing intersovnarkhoz industrial supply, a troublesome problem currently evoking sharp argu- ment among Soviet economic ad- ministrators. The Bulgarian regime is continuing to reorganize its party and government machinery, ostensibly to rectify admin- istrative shortcomings, particu- larly in the management of the economy. The leadership of the Central Council of Trade Unions has been changed, and leaders in five of Bulgaria's 30 dis- tricts are known to have been removed. Those in several other areas have been severely criticized in the frankest public discussion of internal difficulties in recent years. The decision to air these shortcomings--many of which have existed for years--was probably forced on the regime by the discovery within the party earlier this year of a dissident group which was de- manding changes in Bulgaria's economic policies. On 6 April the party first secretary in Pleven was fired, and it was recommended that the head of the People's Council be dismissed; the charges have not been spelled out. On 22 April the first secretary in Dimtrovo was fired; on the same day, Spas Rusinov, member of the Mikhailovgrad party committee, was ousted for "in- correct methods of work" and for violations of "state and financial discipline" during the time more than a year earlier when he had been first secretary. A local paper revealed that sometime in early May the party first secretary in Khas- kovo District had been ousted, and on 17 May, the Plovdiv District People's Council chief, Nikola Stoilev, was fired "for having tolerated serious short- comings and mistakes in work." On 30 May, Todor Prakhov,chair- man of the Central Council of Trade Unions, was fired along with three of the six secre- taries. No reasons for the changes were given. Many of the individuals who have been purged may have been among the "doubters" who questioned the feasibility of the "leap forward" in the spring of 1959. At that time, polit- buro member and Trade Minister Boris Taskov was fired for this SECRET 1 June 61. WEEKLY REVIEW Page 17 of 21 25X1 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927A003200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SIRY reason, but the regime contin- ued into July of that year to warn against questioning the '.'leap" and against Attempting to establish "other centers" aside from the party central committee. Purges did not follow the warnings, however; the regime may have felt that it could not afford to shake up its administrative organs in the midst of its forced- draft economic program, or that Taskov's ouster would be suf- ficient warning. However, a dissident party group was uncovered last Feb- ruary. The May issue of the party theoretical journal, Novo Vreme, confirms earlier reports that the dissidents used Bulgaria's economic and administrative ills to argue for an economic reform of un- specified dimensions. The Novo Vreme article and the regime an ing of the expulsion of Yugoslav diplomat Sindjelic on 8 March implied that the dissi- dents were oriented toward Yugoslav "revisionist" economic policy and were working with Sindjelic. The man said to be leader of the dissident group was a secretary of the Central Council of Trade Unions but was not among those ousted at the end of May. Mali's drift away from the West and toward greater involve- ment with Sino-Soviet bloc countries is underscored by the arrival in Bamako of increas- ing numbers of bloc personnel-- mostly technicians--on long- term assignments. The Novo Vreme article also stated that the regime was having to defend its policies against attacks by supporters of Bulgar- ia's former party boss, "Stalin- ist" Vulko Chervenkov, who was ousted as premier in 1956 but still holds high positions in the party and government. There may be little substance to this assertion, however. In every move the regime has taken against real or alleged opponents in the last five years, it has in the process condemned the policies of the Chervenkov era. The potentially disparate elements, "revisionists" as well as "hard-liners," in the Bulgarian party may have viewed the Communist conference last fall at Moscow and its subsequent Declaration as a sign of Moscow's inability to rule over the inter- national Communist movement. The regime of party boss Todor Zhivkov, in purging the district apparatuses, may be reacting, therefore, to a deterioration of party discipline resulting from the Moscow conference. The regime remains in firm control of the situation and apparently does not intend to 25X1 make a public display of the 25X1 dissidents in trials. incar- cerations, or executions. there were more than 100 bloc representatives in the country; most of them are from Czechoslo- vakia, which has been most prominent in the bloc effort in Mali. SECRET WEEKLY REVIEW Page 18 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY $t~IMARY This bloc build-up is most marked in the sensitive fields of civil aviation and informa- tion, both of which are headed by members of the regime's ex- treme left wing. Some 15 other Czech avia- tion specialists have arrived in Mali and been assigned by Corenthin to control tower and other duties at Mali's prin- cipal airports. However, as of late May, these specialists apparently had not yet appeared at the control towers, which were still being manned by French military personnel. The delay may have resulted from threats by France to remove some of its more sensitive equipment from Mali's airports unless French civilians are permitted to man the towers after French military forces have been with- drawn from Mali. Bloc aviation personnel in Mali will almost certainly increase when the USSR de- livers the three IL-14, twp IL- 18, and an unspecified number of AN-12 aircraft which a Malian official contracted for in Moscow last March. Mean- while, 39 young Malians are pursuing two-year flight and maintenance training courses in Czechoslovakia. Mali ac- cepted three gift DC-3s from Britain in March, but recently rejected a US offer to pro- vide two DC-4s. Secretary of State for In- formation Gologo--like Corenthin a bard-core Marxist--has simi- larly facilitated bloc penetra- tion efforts. Aid-seeking vis- its by Gologo to both Czech- oslovakia and East Germany last February have resulted in the placement of at least two East German journalists in Mali's Information Ministry and in Czech commitments to help Mali set up its own'news agency and educate journalists. With the recent establish- ment of a Polish Embassy in Bamako, Mali now maintains dip- lomatic relations with seven bloc countries. In addition, East Germany has a permanent trade mission for which it is seeking maximum official status. Mali has also signed trade, economic, or cultural coopera- tion accords with at least five bloc countries, including Com- munist China and the USSR-- which has extended a $44,000,- 000 line of credit. A sixth bloc country--Bulgaria--pro- posed the conclusion of such agreements last month. Mali also appears to be acquiring relatively large stocks of Czech arms and mili-25X1 tary equipment and may be nego- tiating for bloc military ad- visers as well. Czech military items recent y purchased by Mali had arrived the previous week from neigh- boring Guinea. At least one other shipment of arms from the bloc reached Mali last winter. Mali has also accepted the military aid program offered by the United States under which it is to receive uniforms, certain25X1 types of equipment, and some training assistance. SECRET WEEKLY REVIEW Page 19 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY COMMUNISTS MAKE GAINS IN CYPRIOT LABOR MOVEMENT The Communists, who have long been active in the organ- ized labor movement on Cyprus, appear to have made significant new gains. Anti-Communist ele- ments within labor and members of the conservative, pro-West- ern government have contributed greatly to this situation by their inability to cooperate and unwillingness to take a firm stand against Communist pres- sures. About 65,000 Cypriots be- long to labor federations, the largest of which is the 40,000- member, Communist-dominated Pan- Cyprian Federation of Labor (PEO). The Cyprus Confederation of Workers (SEK), a non-Commu- nist federation established to counter PEO influence, has some 15,000 members. Both federa- tions are Greek Cypriot in com- position; the Turkish Cypriots have their own right-wing organ- ization. Prior to Cypriot independ- ence last August, PEO initiated a concerted drive to dominate the Greek Cypriot labor move- ment. In this effort, its past achievements on behalf of its members constituted an advantage. PEO leaders are experienced trade unionists with a reputa- tion for getting concessions from industry and for estab- lishing workers' benefit proj- ects--such as clinics and rest homes. SEK, on the other hand, has had inexperienced leaders, some of whom have devoted more energy to politics than to labor matters. It has received some financial support from the right-wing leadership of the Greek Cypriot community and from the International Confed- eration of Free Trade Unions. Since independence, PEO, under the leadership of Secre- tary General Andreas Ziartides, has sought to work more closely with the other labor federations --in particular SEK. Last Novem- ber, Michael Pissas, long-time leader of SEK, resigned, and Petros Stylianou was named to fill the position until an elec- tion could be held in May. During this period Stylianou, a rela- tively inexperienced labor func- tionary, appears to have fallen increasingly under the influence of the more astute Ziartides. As the SEK election ap- proached, the anti-Communists sought to find a candidate who could defeat Stylianou. Both Pres- ident Makarios and Minister of Labor Papadopoulos assured the American ambassador of their in- tention to prevent his selection. The government and the leading anti-Communist members of SEK were unable to agree on an opposi- tion candidate, however; as a result the anti-Stylianou forces divided their vote, and Stylianou won a plurality. Under Stylianou's leadership, SEK probably will draw closer to PEO or split into warring fac- tions. PEO and the Communist par- ty, meanwhile, have charged the US with interfering in the elec- tion and hope to capitalize on any anti-American feelings which Stylianou may have developed from rumors of US opposition to his election. In an almost simultaneous development, the Communists gained increased respectability by the government's selection of Ziar- ti-des as the workers' representa- tive in the Cypriot delegation to the conference this month of the International Labor Organization (ILO) in Geneva--the first ILO meeting attended by Cypriots. While both Makarios and Papado- poulos were aware of the potential danger of sending Ziartides, they apparently were unwilling to risk PEO hostility and criticism by picking a non-Communist for the post or by declining to send any delegation. SECRET WEEKLY REVIEW Page 20 of 21 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET European integration was apparently the predominant sub- ject at the meeting in Bonn on 20 May between De Gaulle and Adenauer--a meeting highlighted by an unusual interest on the part of De Gaulle in some of the substantive problems con- fronting the European Economic Community (EEC or Common Market). De Gaulle confirmed that France is prepared to move ahead next January to the second of the three four-year transitional stages of the Common Market, provided only that prior agree- ment is reached on the EEC's agricultural policy. Any mem- ber may veto the transition to the second stage for one to two years, and there has been some concern that Paris might exer- cise this privilege. In making French approval of the next stage of the EEC conditional on a solution of the controversial farm problem, De Gaulle may be doing the Common Market a service. Most observers agree that the EEC will be in serious trouble if integration is confined to in- dustrial products, but the strong protectionist sentiment of the German farmer has so far prevented agreement on how to harmonize the various national markets for farm produce. Ade- nauer reminded De Gaulle that he would have difficulty in at- tempting any decision on agri- cultural policy before the Bundestag elections next Septem- ber, but he did agree to begin interim talks, perhaps in July. More in line with his usual approach, De Gaulle pressed Adenauer as well for support of his "confederation" plan, which has been stalled principally by Dutch insistence that six-nation consultations not extend to the "structure and strategy of NATO." Adenauer federation's council should be competent to discuss all mat- ters, including defense. As a result of this agreement, Bonn and Paris now hope to call the constituent meeting for the con- federation early in"July. Britain's place in this developing economic and politi- cal community was also discussed, and there has been some evidence lately that De Gaulle is willing at least to consider London's The expectation that London will eventually opt for the Com- mon Market is creating sharp tensions among the other members of the European Free Trade As- sociation (EFTA or Outer Seven), whose council is expected to meet on 6 June. Although EFTA was designed to maintain a "solid front" against the EEC, several EFTA countries have realistically taken private soundings with the Common Market. However, Sweden, which was encouraged by Britain to play a leading role in forming the Outer Seven, is finding it particularly diffi- cult to contemplate its dis- integration. Swedish officials have declared that Britain's name in Northern Europe "would be mud" if it joined the EEC. These officials have termed "outrageous" Washington's favor- ing negotiations to this end while opposing simultaneous still gives primacy to NATO in talks between EFTA's neutrals military affairs, but he never- I and the EEC. theless agreed that the con- I SECRET WEEKLY REVIEW Page 21 of 21 25X1 25X1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY While international atten- tion and the concern of Near Eastern governments themselves have generally been focused on the spectacular oil develop- ments or on prestige and "im- pact" projects of industriali- zation, the development of water resources remains the most important basic factor in the economic future of the area. Agriculture occupies between 75 and 80 percent of its popula- tion, and the "little man" in Iran and the Arab states--and to a large extent even in West- ernized Israel--is still the farmer, whose concern over water supply is constant. Moreover, the most pressing current is- sue which might again bring on an Arab-Israeli war appears to be the distribution of water from the Jordan River. The decade of the 1960s is a critical period for the Near Eastern water problem. During the next nine years the schemes planned and started after World War II will either be completed or will have at least reached a stage where assessments of their economic and political impact are likely to be made by the area's leaders. The water devel- opment balance sheet would, in turn, seem likely to have a sig- nificant effect on these leaders' views of the kinds and sources of foreign economic assistance that are wanted in the future. This article is intended as an interim report on the various water-development plans, the stages they have reached, and their short-range pros- pects. A number of points stand out: Egypt's High Dam project is proceeding, under Soviet guidance, on schedule and without significant setbacks. Israel, apparently very near to- tal exploitation of its water resources except for the polit- ically sensitive Jordan River, must either defy the Arabs or turn to sea-water conversion on a large scale if its over-all development is to continue. There is a chance--as seen in Kuwait--that new technical ef- forts will reveal water sources in hitherto unpromising areas. Iraq's water program, once the most promising in the area, has been dragging under the rev- olutionary regime, and a gran- diose plan has been substituted for genuine achievement. Iran, still relying to a very large extent on ancient irrigation techniques, is developing schemes which are likely to add to its social and political problems. There is no rainfall in Egypt except along the narrow Mediterranean littoral, and agriculture is completely de- pendent on the Nile. Most other Egyptian streams are ephemeral, flowing possibly only once in ten years. Ground water is available in the desert on both sides of the Nile, but peren- nial quantities have been devel- oped only in the oases which dot the Western Desert. About 6,400,000 acres are watered by the Nile. The Aswan High Dam being built by the Soviets will put a further 2,000,000 acres under perennial irrigation over the next few years. Despite thousands of years of use, the Nile is still SECRET 1 June 61 SPECIAL ARTICLES Page 1 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET controlled only on an annual basis. The Aswan High Dam is designed to provide storage over the years, in addition to increasing the acreage under irrigation. The Nile flow, relatively constant in recent years, is capable of wide swings. In 1913-14, for ex- ample, the water flow at Aswan was only. 40 billion cubic me- ters--less than half the annual average of 84 billion cubic meters. A recurrence of:such a flow would be disastrous. Construction of the High Dam appears to be proceeding according to plan. No setbacks have developed, nor are any ex- pected. A substantial quantity of Soviet heavy construction equipment has been at the site for several months. Plans,call for water storage to begin af- ter the 1964 flood. Recent Egyptian press announcements claim that stored water will increase to 4 billion cubic meters in 1965, 6 billion in 1966, and 8 billion in 1967. These quantities reportedly will enable reclamation of about 1,000,000 acres of now I! 25X1 S U D A n. (" UAR (EGYPT) Irrigation are. L~ Desert area ^ Bread grains ? Clover o Cotten ? Rice () Legumes barren land and the conversion of about 100,000 acres from basin to perennial irriga- tion. The General Desert Devel- opment Authority, with some assistance from the United States, is moving ahead rapidly on the so-called "new Nile Val- ley" scheme, officially called the Wadi al-Rakha Project., Work began in earnest in 1959 fol- lowing a speech by President Nasir calling for creation of "a new valley parallel to the Nile Valley." Basically, the plan envisages developing un- derground water resources in a string of oases which parallel the Nile in the Western Desert. Several hundred thousand acres are involved, and substantial progress has already been made in the Kharga Oasis, which con- tains several towns. According to the director of the de- velopment authority, more than 300,000 acres. will be recovered within the next five years. Plans call for distributing this acreage to landless peasants, who would each be given about ten acres and a cow. While it is clear that vast quantities of underground water are available--officials Mnh.r.h Dem e,.Harnah TartusF "I V-- Dam F o Homs Tvdm o 2 J BEIRUTW/ r ~S o DAMASCUS vl /: SECRET 1 June 61 SPECIAL ARTICLES Page 2 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 UAR (SYRIA) ? Fo rest area Cultivated area Barren area Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY claim usable water reserves are equivalent to the flow of the Nile over an eight-year period--it is not at.all cer- tain that the water source is recharged. It might be that the water now being tapped was laid down in earlier geological and rainy epochs and is not re- plenished naturally. On the other hand, the water-bearing strata may be recharged con- tinuously by seepage from the Nile and from the rainier re- gions of north-central Africa. In any case, the water avail- able by this means probably is adequate to support a consid- erably increased agricultural output for some time. In the Syrian Region, sub- stantial progress is being made, largely with Communist bloc help, on a five-year plan (1960-65) for greatly expand- ing the irrigated area under cultivation. Over 1,240,000 acres are irrigated now, but farming on the remaining 10,000,000 acres is risky. Syria normally is capable of producing a small export sur- plus of food grains, but.three successive years of drought have forced the import of substantial quantities of grain, including American surplus stocks. Generally, Syrian water- development plans envisage the construction of a relatively large number of small earthen dams, as opposed to a single major project such as Egypt's Aswan High Dam. Although the Soviets have been studying the location of a major dam on the Euphrates, a decision to build this dam has been postponed pending conclusion of a water- sharing agreement between the UAR and Iraq, West German in- terests are considering under- taking the project. Source Annual flow in Cubic Meters Percent Orontes River 1,000,000,000 3.5 Euphrates River 26,500,000,000 84.0 Khabour River 1,750,000,000 5.5 Other 2,250,000,000 7.0 Syria has a large number of rivers varying in size from the Euphrates to some only slightly larger than streams. However, most of the usable water comes from three major streams. Of the 31.5 billion cubic meters available, some 17 or 18 billion could be diverted into irriga- tion. The Bulgarians have al- ready completed work on the Rastan Dam on the Orontes River and are well along on the Muhar- dah Dam farther downstream. Ras- tan, now partially filled from the heaviest spring rains in recent years, will store about 250,000,000 cubic meters of water. The Muhardah Dam is de- signed primarily to control flood waters and relieve the Rastan Dam. Provided the earthen walls of the dam are not excessively porous, this dam may be used for perennial storage of about 100,000,000 cubic meters. How- ever, because of a shortage of foreign exchange and overambi- tious planning, it appears un- likely that Syria will be able to fulfill its plans for in- creasing irrigated acreage 50 percent by 1965. Syria also controls the source of the Baniyas River-- an important tributary to the Jordan--and has threatened to divert this stream if Israel implements its plans to in- crease withdrawals of Jordan water. The cost of such a diversion would be enormous, SECRET 1 June 61 SPECIAL ARTICLES Page 3 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY IRAQ C~ woodland and grazing, cu et+on valleys Cultivation watered by rain or small streams C7 Desert grazing E7 Irrigated cultivation E Desert and semidesert however, and the engineering problems formidable. Syria could engage in activity which would arouse Israeli hostil- ity, but it would fall far short of a meaningful denial of water. Iraq Iraq since antiquity has depended on a river system to provide irrigation for agricul- ture. Unlike the Nile, however, the Tigris and Euphrates have until recently been uncontrolled. Also unlike the Nile, the Tigris and Euphrates tend to rise without warning. They carry five times the sediment of the Nile; have their annual flood in March, April, and May --too late for winter crops and too early for summer ones; trav- erse a country where the temper- ature rises to 120 degrees in summer and falls to .20 degrees in winter; and flow between degraded deserts of:gypsum and salted mud. Despite these disadvan- tages, the Tigris and Euphrates basins can be made to support several times the present pop- ulation of Iraq at a consider- ably higher standard of living. Since 1951, control of rivers has been a major feature of de- velopment programs. While far from bbmplete, the new works are adequate to prevent disas- trous spring flooding of the cities and farms downstream. When all works planned are com- plete, Iraq will have about 14,- 000,000 cultivatable acres, compared with about 8,000,000 acres in Egypt when all proj- ects on the Nile are completed. Following Qasim's assump- tion Of power in July 1958, work on the major irrigation projects begun under the for- mer regime was either actually or virtually brought to a stand- still, and Qasim began to divert development funds to ordinary government expenditures. Since then the momentum of work has increased somewhat, but com- pletion dates for most projects have been extended substantially. A new $2 billion, five-year development program beginning 1 April 1961 replaced the older development plan, but even with Communist aid this plan is patently out of Iraq's financial reach and is designed largely for public consumption. Thus it is not possible to predict when new irrigated acreage will be added. At present, more than 50 percent of the cultivated acre- age is under irrigation. Jordan The dearth of water is per- haps the chief reason for the nonviability of Jordan's economy. Jordan is increasing the number of artesian wells and utilizing more efficiently the modest flows SECRET 1 June 61 SPECIAL ARTICLES Page 4 of 13 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 Approved For Release 2007/10/23: CIA-RDP79-00927AO03200060001-1 SECRET by December 1962 and will irri- gate another 10,000 acres. Thus far no date has been set to be- gin the 14-mile link which will complete the 30,000-acre project. Even this project will fall far short of making Jordan self-sup- porting, however, although it might reduce the burdens on Jordan's foreign backers--the US and Britain--which in recent years have paid for almost three fourths of Jordan's imports and government expenditures. CURRENT INTELLIGENCE WEEKLY SUMMARY The Johnston Plan for unified development of the Jordan Valley irrespective of political bound- aries was prepared by the Tennessee Valley Author- ity at the request of the UN Relief and Works Agen- cy for Palestine Refugees. The plan was presented for consideration and used as a basis for negotia- t ton by Eric Johnston, special American envoy to the Arab states and Israel. Counterproposals by the Arab states and Israel regarding division of the Jordan River's water and the means by which the plan was to be accomplished resulted in pro- longed negotiations in the period 1954-55. Tech- nical agreement on the plan was virtually achieved, but in late 1955 the Arab League political commit- tee refused to approve it on political grounds. of its numerous wadis (water courses which are dry part of the year) especially in the western portion of the country, Its only important source of water, however, is the Yarmuk River, a tributary of the Jor- dan. Under an American-financed program, a 43-mile canal which "would not draw from the Yarmuk River more than the share allot- ted to Jordan under the Johnston plan" was approved in 1958. The first 14-mile section is sched- uled for completion this June. When finished, this section will irrigate about 10,000 acres, which are being distributed to 866 families. Section two of the main canal--about 15 miles long--is expected to be complete Forest and scrub. Small areas of crops valieys, on slopes and terraces. UNITED ARAB REPUBLIC -R- u ~iuz nl~un ~ cj . ons sau (lea e ... ZONE