CURRENT INTELLIGENCE WEEKLY SUMMARY

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SECRET
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. '(`
OCI NO. 0311/61
22 December 1961
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
SECRET
State Department review completed
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent the
immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
WEEKLY REVIEW
EAST-WEST RELATIONS
Soviet press treatment of
the NATO meeting has represented
the approval of diplomatic con-
tacts with the USSR on Berlin
as a step forward. At the same
time, Moscow has taken the line
that even this move does not
hold promise for an early Berlin
settlement. Western divergen-
cies have received the usual
emphasis; the US and UK are de-
scribed as favoring negotiations,
and Paris and Bonn as opposed.
The idea of an interna-
tional authority for the Berlin
autobahn has been linked with
the concept of "narrow negotia-
tions" limited to the Berlin ques-
tion'ilone and both~are criti-
cized as designed to permit the
West to perpetuate West Berlin's
occupation status. Moscow has
also alleged that Bonn is try-
ing to impose restrictions on
the Western position and there-
by is threatening the success
of negotiations. Moscow is
also stressing "aggressive
plans" of NATO, with particular
emphasis on the proposals by
Bonn's Defense Minister Strauss
to make NATO an independent
nuclear power.
Moscow has taken the gen-
eral line that the decision to
renew exploratory talks on
Berlin represents the second
stage of the process of working
toward a settlement, the first
phase of which was the Rusk-
Gromyko talks. A public lec-
turer in Moscow on 17 December
took this view and said that
the American and British ambas-
sadors in Moscow would soon
start negotiations with the
Soviet Foreign Ministry. The
lecturer was noncommittal on
the prospect for the talks,
but emphasized that a settle-
ment of key European problems
must precede an East-West agree-
ment on all other important
questions such as nuclear test-
ing and disarmament. He said
that once this problem was re-
solved the "struggle" with the
West would take on the less
dangerous form of economic com-
petition.
In Bonn, Soviet Ambassador
Smirnov adopted a somewhat sim-
ilar attitude in public remarks
at a meeting of journalists.
He predicted an East-West con-
ference "some time next year"
and stated that the diplomatic
"probes" by Ambassador Thompson
should quickly turn into nego-
tiations, because "probes can't
go on much longer."
Despite the moderately
optimistic expressions of be-
lief that events are moving to-
ward a negotiated settlement,
Moscow and the East Germans
have continued to stress that
the two paramount conditions
for an agreement are termination
of the occupation status in West
Berlin and elimination of po-
litical relations between Bonn
and West Berlin. Ambassador
Smirnov emphasized that all
rights derived from the war
must be ended and replaced by
juridical rights under a new
agreement.
The issue of Bonn-Berlin
ties was also highlighted by
an unusual Soviet protest to
Lebanon on 12 December in a
note which claimed that inclu-
sion of West Berlin in a tech-
nical'cooperation agreement
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CURRENT INTELLIGENCE WEEKLY SUMMARY
between Bonn and Beirut was il-
legal and insisted that the
clause be eliminated. The So-
viets have made similar protests
regarding multilateral agree-
ments to which West Germany has
been a party, but this is the
first time a bilateral agree-
ment has been involved.
In a long letter to Prime
Minister Macmillan, Khrushchev
has repeated his previous argu-
ments and proposals on Berlin,
presumably to place the Soviet
terms on the record before the
Bermuda meeting between Macmillan
and President Kennedy. Ambas-
sador Smirnov, in a recent meet-
ing with Chancellor Adenauer,
struck an "amiable note" and
stated that the USSR wanted a
negotiated a;nd not a unilateral
settlement on Berlin. Smirnov
claimed that the settlement need
not alter the situation in Ber-
lin, provided the occupation
status was replaced.
On 12 December, Soviet
Embassy officials in Bonn met
with a Social Democratic jour-
nalist and expounded the Soviet
position in standard terms, but
said that Moscow would not in-
sist on a "symbolic" presence
of Soviet troops in West Berlin
as part of the guarantees for a
free city. The Soviet officials
also said that financial and
economic ties between Bonn and
West Berlin could be maintained,
but no juridical or political
affiliations could be tolerated.
They claimed that if Moscow's
proposals for-an agreement were
accepted, nothing would stand
in the way of removing the wall
in Berlin.
Communist denunciations of
the movement of US troops along
the Berlin autobahn were cli-
maxed by an East German protest
note on 16 December to the US,
which seemed intended to lay the
groundwork for retaliation
against commercial traffic. The
note repeated previous allega-
tions concerning the illegality
of transporting "NATO troops"
to and from Berlin and warned
that such troop movements "im-
pede normal civilian traffic on
the autobahn" and cause "acute
danger to persons and goods."
In addition, the note claimed
that in view of the "exception-
al stress and damage to the Auto-
bahn" which requires "consider-
able expenditure," East Germany
reserved the "right to claim
adequate compensation." This
line may foreshadow new and
prohibitory tolls on commercial
traffic.
The USSR has stepped up
its campaign to increase non-
bloc, particularly neutralist,
opposition to US testing, espe-
cially in the atmosphere, and
to increase support for the So-
viet Union's "new approach"
calling for a test ban without
international controls. Deputy
Foreign Minister Zorin read a
new warning on nuclear testing
at the 13 December UN session,
following unanimous UN approval
of the Soviet-US agreement on
the participants in new disarma-
ment talks. He warned that US
underground testing during the
current Geneva test-ban talks
and "US plans" for a resumption
of atmospheric testing will
compel the USSR to carry out
such nuclear weapons tests "as
it finds necessary for strengthen-
ing its defense potential." The
statement did not mention break-
ing off the test-ban talks and
affirmed that the Soviet Govern-
ment "will continue to exert all
efforts" to secure a test.ban
agreement.
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CURRENT INTELLIGENCE WEEKLY :`SUMMARY
In another apparent effort
to attract support for a mora-
torium on testing, Ambassador
Menshikov in a television in-
terview on 17 December also
warned that if US tests are not
stopped at once, ,we will start
our tests again, and not only
ordinary bombs but perhaps
super bombs also." Menshikov
warned that it is "quite pos-
sible that the USSR will deto-
nate a 100-megaton bomb in any
new test series. A Soviet UN
delegate recently told an Ital-
ian delegate that US underground
testing would not cause the USSR
to test in the atmosphere, but
that if the US tests in the
atmosphere, the USSR will have
to "review its position."
After the 19 December
session of the test-ban talks,
in Geneva, Soviet delegate
Tsarapkin called the US and UK
delegation heads aside and re-
jected the informal Western
proposal for a recess from 21
December to 16 January. He
said the Soviet Government
wanted the work of the confer-
ence to proceed "so as to se-
cure agreement as rapidly as
possible" on the Soviet program.
The US delegate considers the
Soviet rejection of the recess
as mainly pointed toward forcing
the Western delegates to go on
record as "interrupting?' the
work of the conference.
Soviet UN delegates have
implied that the middle of March
would be an acceptable date for
the new 18-nation disarmament
committee to begin its work.
Soviet spokesmen have stated
that New York would be their
preferred site if Zorin is ap-
pointed their negotiator, but
have noted that the question
of location is "still open."
A Soviet delegate told an
Italian delegate that Khrushchev
has not yet decided to appoint
Zorin, and that it would take
two or three more weeks for
the decision to be made.
In the same conversation
the Soviet delegate asserted
that the USSR is ready to com-
promise on the matter of con-
trols but urged that the "world
balance of power" be borne in
mind. He stated that while
there are now two major powers,
a third, China, is "on the
horizon." He cautioned that
any control arrangements should
take China into consideration
and pointed out that what the
USSR now is willing to accept
in the way of controls "might
be unacceptable to China."
During an informal luncheon
with members of the American
UN delegation, Soviet delegates
"admitted" that the US has the
"propaganda advantage" in the
matter of control. They claimed,
however, that the Soviets do
not believe the United States'
public stand is its actual
position, because they are con-
vinced that neither the US nor
the USSR could accept very ex-
tensive controls in the early
stages unless "substantial
disarmament measures" were be-
ing implemented. The delegates
claimed the US plan lacks such
measures in the first stage
and said they had refrained
from criticizing it for this
publicly only in order not to
spoil the atmosphere at a time
when they knew "both sides"
wanted to reach agreement.
Concurred
in by OSI
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CU: e f:;1J'!:` INTELLIGENCE WEEKLY SUMMARY
The meeting at Kitona be-
tween Adoula and Tshombe has re-
sulted in an eight-point agree-
ment in very general terms in
which the Katangan leader ap-
pears to have accepted the prin-
ciple of greater Leopoldville
authority over Katanga and to
have promised to facilitate im-
plementation of the various UN
resolutions. Tshomb6,under
duress,. has previously made sim-
ilar generalized agreements; he
may now feel he has won time for
maneuver.
The agreement suggests that
Tshombe has accepted the basic
constitutional charter for the
Congo drawn up with the Belgians.
This has never been worked out
in detail, because of differences
over the degree of centraliza-
tion or local autonomy, and it
appears that a new constitution
is to be hammered out with the
pa::?ticipation of Katangan
representatives.
The agreement states broad-
ly that Tshombe recognizes Kasa-
vubu as the head of state, the
"indivisible unity" of the Congo,
and the "authority" over the
whole country of the Leopold-
ville government. The most
specific part of the agreement
appears to be that Katangan leg-
islators should attend the na-
tional parliament, and that the
Katangan gendarmerie is to come
under the control of Leopold-
ville. Preliminary reports
give no information as to the
disposition of the Katanga
mining proceeds.
It is unlikely that Tshom-
be has capitulated or abandoned
his belief that a loose federa-
tion is the only viable solu-
tion for the Congo. His "agree-
ment" appears to stem from UN
military pressures, which he
feels for the moment it is not
wise to oppose. Tshombe's
forces, although battered, are
largely intact, and his govern-
ment remains in place. He al-
most certainly believes that
the Kitona agreement will make
resumption of UN military force
against him difficult. Tshombe,
moreover, is not wholly a free
agent and is under considerable
pressure from his extremist minis-
ters--which may.force him to
renege once he is back in Elisa-
bethville.
Adoula appears to have mod-
ified his demands for a settle-
ment with Tshombe, and has prob-
ably left himself open to charges
from extremists in his own ranks
Of "softness" toward Katanga.
Before the Kitona talks, he was
insistent that there be no
halt to UN military operations
in Katanga, that Tshombe must
request a cease-fire, that he
must help with the ouster of
the white mercenaries, and that
he and his regime must resign.
The strains within the
Adoula government now may be
heightened. Even before the
Kitona agreement, the embassy
reported that these strains were
so great that the present coali-
tion seemed unlikely to last
much longer, no matter what the
outcome of the Katanga problem.
Adoula was then under fire for
not having taken decisive enough
action against Katanga and for
giving only passive support to
the attainment of a unified,
centralized Congo state.
Adoula told Ambassador Gui.-
lion that his relations with
Christophe Gbenye, minister of
interior and leader of the
National Congo Movement party,
who serves as a potential rally-
ing point for leftist elements.
in the government, had "greatly
deteriorated" during the past
two weeks. He said also that
Cleophas Kamitatu, president of
the Leopoldville provincial gov-
ernment, who has posed as a
spokesman for the "nationalists,"
was "up to no good."
Gbenye tried unsuccessful-
ly this week to fire pro-Adoula
security chief Nendaka. Gbenye
was reportedly also exhorting
other extremists to join him in
a "showdown" with the Adoula mod-
erates. Gbenye was trying to go
to Stanleyville, but was prevent-
ed by Adoula. A move to Stanley-
ville by Gbenye would not neces-
sarily mean he intended to join
Gizenga, but it would probably
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% .JLL,i~.. N..r
CURRENT INTELLIGENCE WEEKLY SUMMARY
Republic of the Congo
Bangossou
ORIENITALE
menu
,Aketi Buta
umba
. / U ~a~ Loke
1,000 Buyr Albert
,43
Stanleyville
Coquilhatville
Goma .
Pointe
Noire
UN
150
Lobito
Atlantic
Ocean
Leopoldville
.i
Thysvi l l e
FU __N 1050:.
scattered
-\KIVU
Bukavu
Kindu
Port Francgtri
Tskikapa
pQ United Notions Forces*
? Congo National Army (C.N.A.)
Selected road
+-- Selected railroad
I Selected airfield
Luluabourry
? Kamino
Kapangb
Kongolo7
Kabalo
UN 2110
scattered
TSHOMi
Manor
UN
UN
850
Loke
13ngenyika
TSHOM8E
7;20:0 i!
0
0 STATUTE MILES 400
torpedo the tenuous unity between
the ex-Lumumbists and the moderates
in the Leopoldville government.
The Leopoldville extremists
are not supporting Gizenga per-
sonally, but are increasingly
expressing views similar to his.
Members of this group, however,
may feel that Adoula's useful-
ness is ending, and that the
time is fast approaching to dump him
and grab for themselves the rewards
a Katanga victory might bring.
,Gizenga will probably call
the Kitona agreement a fraud and
a "'sellout to the imperialists."
Gizenga for the time being has
been prevented from overthrow-
ing the pro-Adoula provincial
government of Kivu by the re-
tention of UN forces in the?prov-
ince at Leopoldville's request.
However, Leopoldville's claims
to have establi
in northern Kat
the establishme
shed firm c
anga, arisi
nt of Jason
ontrol
ng from
Sendwe's
Baluba tribal state, are
probably
overoptimistic.
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Leopoldville's
e ors to establish a northern
Katanga state responsive to it and
to back it up with a battalion
of General Mobutu's forces may
spell the beginning of a struggle there
between ldville and Stanle -
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CUVtRENT
INTELLIGENCE WEEKLY SUMMARY
INDIAN SEIZURE OF PORTUGUESE ENCLAVES
The collapse of Portuguese
: ?esistanco in Goa on 70 December
ended India's quick military
venture, which had capped 14
years of unsuccessful prodding
aimed at eliminating the last
European enclaves in the sub-
continent. The decision to
resort to armed force--made by
Nehru only at the last minute--
was a reluctant reversal of long-
standing Indian policy. It fol-
lowed a series of minor inci-
dents near Goa which were ex-
aggerated in the context of
India's current election cam-
paign.but which led to a massive
Indian military buildup on the
border.
Despite Western pressures
to avoid violence, continued
Portuguese intransigence evi-
dently led New Delhi to conclude
that it could obtain its objec-
tive only by military action.
Krishna Menon, fighting for hits
political life and his Defense
Ministry portfolio, appears to
have played a key role in fanning
the crisis and influencing Nehru's
ultimate decision. The enclaves
now are under the control of an
Indian military governor, and
Steps are under way to provide
for a quick turnover to civilian
authority.
Portugal's appeal to the
'UN Security Council, its only
meaningful recourse, was frus-
trated by the USSR's veto of
a resolution calling on India
to cease fire and withdraw its
forces; Ceylon, the UAR,and
Liberia voted with the USSR.
The failure of the UN to support
Portugal has generated a bitter
reaction in Lisbon, and Portugal
is rumored to be considering
withdrawing from the organization
when the foreign minister returns
from New York. Lisbon has appar-
ently concluded that further UN
action would not be beneficial.
Ambassador Elbrick sees in-
creasing signs that the Goa
crisis has led Lisbon to "take
a new look" at its foreign policy.
There have been a number of re-
ports indicating that the regime
feels that Lisbon's allies could
have done more to deter Nehru,
and the reassessment derived in
part from this factor. Foreign
Minister Nogueira informed
Elbrick on 15 December of the
"possibility of a fundamental
change in foreign policy";
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CURRENT INTELLIGENCE WEEKLY SUMMARY
:Portuguese Minister of State
Correir.a de Oliveira publicly
announced on 19 December that
some foreign policy "revisions
:night have to be made" when
"full data on the Goan situation
is received"; and this same
topic was discussed at a 19
December cabinet meeting.
As to the direction this
"revision" is to take, an 18
December press report from Lis-
bon cites "mounting demands for
a sharp swing to 'neutralism'."
uch an alteration would have
far-reaching repercussions on
Portugal's relations with the
UN and NATO and be almost cer-
tain to affect the US-Portuguese
Azoree s Base Agreement.
The immediate effect of
the incident on the domestic
political scene in Portugal
has been to reunite all except
small extremist factions in
support of Premier Salazar in
a show of national unity. In
-view of the developing internal
dissatisfaction with the regime,
however, the longer range pros-
pects for serious domestic op-
position have been heightened
by the Goa episode, particularly
among many who now support the
regime.
International reaction to
the Indian action has followed
general.; predictable lines.
Asian-African support has been
strong. The Iraqi press has
been quick to apply the Indian
example to the Kuwait situation,
and the Indonesians, with their
claims to West New Guinea, were
among New Delhi's strongest
supporters.
Soviet President Brezhnev,
on a two-week state visit to
India, also strongly endorsed
India's action, and the Soviet
press has alleged that Goa
had a SEATO role and was de-
fended by NATO-supplied arma-
ments. Peiping has fully en-
dorsed India's invasion of
Goa in the context of Chinese
claims to Taiwan and opposition
to "US imperialism." The more
obvious counterpart to Goa--
Macao--was not mentioned in
Peiping's 19 December state-
ment, and no hint was given
of any Chinese intention to
attack that Portuguese terri-
tory, which Peiping claims and
against which it could bring
the same overwhelming force
that India applied against Goa.
The Chinese probably are
embarrassed by the contrast be-
tween their propaganda on anti--
colonialism and New Delhi's
direct action and apparently
want to disparage the Indian
action even while officially
endorsing it. An authoritative
Chinese Communist newspaper in
Hong Kong ridiculed Nehru on
19 December for choosing the
""world's tiniest imperialist
country" as his target.
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President Sukarno's much-
advertised "final command" on
the "liberation" of West New
Guinea (West Irian), delivered
in Jogjakarta on 19 December,
in effect stated that Indonesia
intends to take military action
against the Dutch-administered
territory unless it can obtain
a satisfactory political settle-
ment from the Netherlands. How-
ever, Sukarno's address, as ex-
pected, set no deadline. It
called on the Indonesian people
to "be prepared for a general
mobilization" at a time to be
determined by the President, to
frustrate the organization of
a "puppet state" in New Guinea,
and to hoist the Indonesian
flag there.
Evidence is ample that
Indonesia is preparing for ac-
there is genera
agreement among qualified ob-
servers that if Sukarno ordered
a move against New Guinea he
would be obeyed. India's inva-
ion, of Goa--a move heartily
MILEy 1000
31548
endorsed by Indonesia--will pro-
vide further encouragement to
Sukarno.
Lending urgency to Sukar-
no's campaign to acquire the
area are Dutch plans to pre-
pare the area for self-gov-
ernment and recent symbolic
evidences of self-rule which
include the adoption of a new
name for the area--West Papua--
along with a flag and a na-
tional anthem.
Indonesia has called
for bilateral talks with the
Dutch but maintains that its
minimum demand is administra-
tive authority over New Guinea,
whether or not under the UN;
Indonesia will not accept
the Dutch insistence on self-
determination for the Papuan
natives. The Dutch are will-
ing to negotiate but only in the
presence of a third party and
on the basis of Papuan self-de-
termination.
WEST
NEW GUINEA
TIMOR
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CURRENT INTELLIGENCE WEEKLY SUMMARY
General Phoumi, in a recent
conversation with an American
official, predicted that the
meeting of the three Laotian
princes scheduled to begin at
Vientiane on 27 December will
end in an impasse. He said
;Bonn Oum will continue to press
the demands presented during
the preparatory meeting at the
Plaine.des Jarres: (1) that
.four seats in the coalition
cabinet be given to each of
four groups--Boun Oum's right
wing, Souvanna's "neutralists"
at Xieng Khouang, the "neutral-
ists" outside Xieng,Khouang,
and Souphannouvong's Pathet Lao;
and (2) that members of the Boun
Oum faction hold the key posts
of defense and interior.
Phoumi is convinced that
Souphannouvong will reject these
terms, following which Phoumi
plans to have King Savang sum-
mon the three princes and estab-
lish a provisional government
headed by Savang himself.
.Phoumi'envisions a six-month
rule by ithe King, with the
princes as deputy premiers. He
said the King would "definitely"
assume the premiership, but it
is doubtful that Savang would
accept such a role in the face
of opposition from the Pathet
Lao, who would regard the
maneuver as,another Phoumi
strategem to prevent the
formation of a coalition under
Souvanna. Phoumi's machinations
provide further indication of
his basic unwillingness to
accept a Souvanna-led coalition
government.
Laotian Army elements have
begun limited action in the
Muong Sai area of northeastern
Laos, possibly to ease pressure
on Nam Tha. In the south, the
government forces have engaged
in limited clearing sweeps.
Pro-Communist forces in the
Plaine des Jarres area are con-
tinuing to press counter-guerrilla
action against Meo units.
The North Vietnamese are
apparently expanding their
activity to improve the road
network in rebel-held Laos.
Hanoi has also agreed to provide
additional financial aid to
the Souvanna Phouma regime. A
1962 aid agreement signed in
Hanoi on 15 December allotted
$2,800,000 for technical train-
ing, communications lines surveys
and repairs, consumer goods, and
various construction projects.
Bloc overland supply and
airlift operations to the Laotian
rebels continue active. "Heavy"
traffic on trails leading north
from Tchepone, the Soviet air-
lift terminal in southern Laos,
was noted on 12 December. An
80-truck convoy was observed
recently on the roar from the
North Vietnamese border to
Xieng Khouang.
The Geneva conference has
adjourned until 3 January
following a plenary session on
18 December at which an appeal
from the co-chairmen was sent
to the three Laotian factions
urging them to form a coalition
government as soon as possible.
The session announced agree-
ment on a declaration of Laotian
neutrality and on a protocol on
international safeguards. Soviet
delegate Pushkin remarked that
the conference had "basically
concluded its work." He said
that the accords were a "model
of international agreement" and
exemplified the principles of
peaceful coexistence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Inrn I?a N? MA1L..?
NAMI HA
Muong Soi~
r Muong ]oui J " s - oan
I ( * Ph Khn g'{
& ,,Xieg Kho~a
ang Vitng Tho Thom
N
} one !;2
NCm ~.
B Hat B
o
V I E N I I A NI
NORTHERN LAOS
GOVERNMENT
ft- KONG LE - PATHET LAO I
KONG IE - PATHET I AO ARE AS
GOVERNMENT (MEO) BASE AREAS
ROAD
TRAIL
ROUTE Nl
Pushkin failed, however, in
his attempts to secure formal
conference approval of all
issues on which tentative agree-
ment has been reached. During
the past two weeks he had tried
to secure Western agreement to
such approval in order to give
an impression that the work
of the conference was over and
to deflect attention from the
still unsettled "integration"'
question.
In addition to this prob-
lem of the reintegration of
the Laotian armed forces and
the disbanding of the Pathet
Lao forces, the conference still
has not resolved two other
~ o,vu v~b.het "`+
Muong Phine
major questions. These are the
issue of SEATO protection for
Laos, which both Soviet and Chi-
nese propagandists have attempted
to depict as the only remaining
unsettled problem, and a declara-
tion of neutrality by a unified
Laotian government.
On 20 December, Pushkin
gave the US pepresentative private
assurances that the SEATO issue
could be settled along the lines
of the latest Western formula.
The West has proposed that SEATO
council representatives take
official note of a Laotian
declaration of neutrality with-
drawing Laos from the protection
of any military alliances.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The high-level Chinese mil-
itary delegation which arrived in
North Vietnam in mid-December is
emphasizing Peiping's support of
Hanoi in the struggle for South
Vietnam. Delegation head Marshal
Yeh Chien-ring said on 19 Decem-
ber that "the Chinese absolutely
cannot ignore" recently increased
US assistance to the Diem govern-
ment. A similar statement was
made by the Chinese Communist
Foreign Ministry on 29 November.
The delegation has been
meeting with Hanoi's political
and military leaders and touring
military establishments. On
several occasions during the
visit, Peiping has reported
speeches alluding to Chinese vol-
unteers in the Korean war. Under
present circumstances, however,
there is little indication that
Peiping would offer--or that
Hanoi would welcome--assistance
in the form of direct interven-
tion. Any additional assistance
at this time probably will take
the form of logistic support.
Viet Cong efforts in South
Vietnam continue along lines of
widespread guerrilla activity
and propaganda against the Diem
regime. While less dramatic
than the massed attacks this
fall, this type of offensive is
easier for the Communists to sup-
port logistically, and has proved
successful in eroding government
authority in the countryside. The
enemy's sneak attacks, ambushes,
sabotage, and terrorism tend to
immobilize government forces on
static defense or disperse them
on generally fruitless security
sweeps, leaving the Viet Cong
greater freedom to initiate
large-scale attacks at times and
places of its own choosing.
The sustained high rate of
Viet Cong activity is pointed up
by Saigon's report that govern-
ment casualties for the week end-
ing 15 December exceeded those of
the enemy--402 and 359 respective-
ly. On the basis of mounting
Viet Cong losses are expected
to be about 18,000, a 50-per-
cent rise over 1960.
The Viet Cong forces now
are estimated to number at
least 20,000 full-time com-
batants, supported by many
times that number of part-time
fighters, agents, and active
sympathizers. South Vietnamese
forces presently consist of
about 175,000 regulars--includ-
ing 10,000 rangers specially
trained for counter-guerrilla
operations--and some 115,000
paramilitary elements less well
trained and equipped. The ex-
tended effort being made by the
government to cope with the
security problem is indicated
by the temporary deployment
to the field of at least one
company of the, presidential
guard brigade to take over the
duties of garrison forces com-
mitted to current security
sweeps.
In Saigon, joint South
Vietnamese - US planning for
a better coordinated and
more effective approach to
the security problem is pro-
ceeding smoothly, and allega-
tions of American lack of real-
ism and highhandedness have
vanished from the local
press. However, in conferences
with the chiefs of two delta
provinces south of Saigon
last week, Diem's :brother, Ngo
Dinh Nhu--architect of the
short-lived official press
campaign against the US--is
reported to have told the of-
ficials that the Vietnamese
Government would have to plan
the defense of the country
without reference to the Amer-
icans, who, he said, could
not be trusted over the long
pull. Nhu reiterated his
favorite theme,tthe need for
a "social revolution" to
overcome Vietnam's three
principal enemies--under-
development, Communism, and
"divisive forces." He
placed the United States
casualties in the past several
months, South Vietnam's casual-
ties for the entire year are pro-
jected to reach about 13,000,
nearly double last year's total;
in the last category.
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N=W1 SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
BLOC RELATIONS WITH MOROCCO
Morocco sent a military
delegation to the USSR on 11
December to discuss Moscow's
recently renewed offer to pro-
vide military assistance. The
delegation has specific instruc-
tions only to "look and listen"
and has no authority to make
commitments on behalf of the
King.
Moscow's original offer of
arms, made in late 1960, was
solicited by then Crown Prince
Hassan. A Moroccan delegation
went to Moscow to investigate
..t, but the only result was
a gift of 14 MIG jet aircraft,
delivered early in 1961. No
.ormal agreement was reported,
and four subsequent arms de-
"Liveries to Morocco apparently
were destined for the Algerian
rebels.
The USSR now. has indicated
willingness to provide additional
aircraft, a wide range of land
armaments, and small naval craft.
Morocco now is ruled by Hassan,
who may be more inclined than
his late father to accept an
attractive offer of arms aid.
as proof that he is living up
to the policy of nonalignment.
To date, the bloc has had
only limited success in develop-
ing economic relations with
Morocco. Trade agreements have
been signed and commerce has in-
:increased in recent years, but
it still has not exceeded 5 per-
cent of Morocco's total trade.
During the first half of 1961,
trade with the bloc--particu-
larly Communist China` and the
USSR--reached about $19,700,000
compared with $16,500,000 in
the comparable 1960 period.
The trade balance was in
Morocco's favor,. the heavy,
deficit in trade with China
being more than offset by a
surplus with the USSR. The
favorable balance with the
USSR prompted Morocco in Sep-
tember to suspend imports of
refined petroleum products
from the franc zone in order
to fulfill its quota of im-
ports from the USSR. Unhappy
about the large deficit in trade
with China, Morocco is seek-
ing suitable products to ex-
port to China and may again
sell strategic items such as
cobalt.
An economic, scientific,
and technical cooperation agree-
ment was concluded with Czecho-
slovakia in May--Morocco's first
with any bloc country--paving
the way for the extension of
Czech credits. The Moroccan
minister of economy and finance
has indicated that Czechoslovakia
has agreed to provide machinery
for a sugar refinery, a textile
factory, and a mineral process-
ing plant "under very advan-
tageous conditions both as to
repayment and as to interest."
The bloc has so far pro-
vided little technical assist-
ance to Morocco; the only
bloc economic technicians now
in Morocco are four from Czecho-
slovakia who are preparing sur-
veys for the sugar refinery
and four from the USSR who
are preparing plans for the
construction of the Tangier
shipyard. Previous information
that construction of this ship-
yard would be undertaken by
the USSR was corrected by the
president of the Tangier Chamber
of Commerce, who stated that
the Soviet role thus far
is limited to providing the
technicians to prepare a
survey. (Pre-
pared by ORR)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The appearance of open dis-
agreement within the interna-
tional Communist movement in re-
cent weeks has not improved the
Yugoslav party's relations with
blot.parties . Since the Soviet
22nd party congress, both the
Bulgarian and Czechoslovak party
first secretaries have specifi-
cally ruled out resumption of
relations'with the Yugoslav
League of Communists. Recent
plenums of'East European party
central committees have reaf-'
firmed that "Yugoslav revision-
ism" is "the main danger" to
international Communism. Even
diatribes against the Albanian
"dogmatists" have contained un-
favorabl,e,references to the
Yugoslav party. The real danger
of Albania's "dogmatism,". it is
suggested, is that it leads to
isolatioh'from the movement and.
thereby makes possible a drift
into "revisionism."
Nevertheless, Yugoslavia's
relations with the Soviet bloc
governments have been-improving
for more than a year, and most
bloc leaders have been calling
for, increased cooperation with
the Yugoslav state on the basis
of mutual economic interests
and similar foreign policies.
Trade protocols between Yugo-
slavia and Soviet bloc countries
for 1962 are being negotiated
with no public evidence of any
serious problems of a political
nature. Soviet Foreign Minister
Gromyko is expected to pay an
official visit to Belgrade, al-
though no date has been announced.
The bloc attitude falls
short of granting Belgrade any
special privileges, however.
Yugoslav bids for observer sta-
tus in the Council for Mutual
Economic Assistance (CEMA) have
gone unheeded, and the bloc has
not recently offered develop-
mental loans.
Yugoslavia is deliberately
holding its commerce with the bloc
to less than a third of its total
foreign trade. It has piled up
substantial credit balances with
several bloc states, and little
progress is being made toward
liquidating these balances. It
may have to discount bloc cur-
rencies in order to encourage im-
ports from the Communist coun-
tries in debt to Yugoslavia.
Generally isolated from the
international Communist movement
and preoccupied 'with =their re-
lations with nonaligned states,
the Yugoslavs have remained rel-
atively aloof from recent develop-
ments in the Communist world.
Yugoslav efforts to influence
bloc developments have been large-
ly confined to suggestions that
Moscow and other Communist capi-
tals are moving steadily toward
Belgrade's long-standing internal
and foreign policies, and that
leaders in the invective against
Tito, such as the Czechoslovak
and French party bosses, are
"Stalinists."
Despite its attitude';of
relative aloofness, Belgrade has
welcomed the trend of events in
the Communist movement, particu-
larly those in the Italian Com-
munist party (PCI).. Relations
between the Yugoslav and Italian
parties have been unusually cor-
dial for some months. The Yugo-
slavs appear to hope that the
bloc parties will follow the
lead of the Italian Communists,
who are working for greater
independence for individual
patties within the Communist
world and for closer ties with
the Yugoslav party.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
THE POLITICAL TREND IN POLAND
The Polish party, at its
21-23 November central commit-
tee plenum, apparently decided
that it should consider more
liberal internal policies in
addition to supporting Khru-
shchev's renewal of de-Stalini-
zation. Very little, if any,
of the debate at the plenum
was devoted to the accepted
merits of de-Stalinization; ap-
parently there developed instead
a discussion of the lengths to
which liberalization should be
pursued. Although some propos-
als have been proffered, the
party nas not defined the scope
of the new program.
The December issue of the
party central committee's theo-
retical journal, Nowe Drogi,
said that it is "not sufficient'"
to avoid ? ;;'?:;e more embarrassing
errors of the Stalin era, but
that Stalin's "entire system"
must be condemned and liquidated
and the "whole truth" stated.
There is opposition to these
ideas, however,within the central
committee. During the November
plenum, for instance, Julian
Tokarski, a "reconstructed"
Stalinist,omitted any reference
to liberalization in his speech
and, in contrast to the rest
of the speakers, abstained from
attacking Stalin. It is probable
that Tokarski's remarks reflected
the stand of other hard-liners
who have been brought into the
Gomulka regime.
Speakers at the plenum who
sought to suggest a framework
for future activity included
Oskar Lange, a former revision-
ist, who stressed that Khru-
shchev's policies demanded many
changes in methods of operation
and called for the abolition
of conservative practices and
traditionalism. A party his-
torian said it was time to docu-
ment Stalin's liquidation of
the pre-war Polish Communist
party and--with a view to mak-
ing a fresh start--to study
and condemn on a world-wide
basis all such "tragic chapters"
of the Communist movement. On
10 December, a candidate central
committee member said over the
state.radio that radical changes
must be made in Poland's politi-
cal, economic, cultural, and
moral life. Implying that re-
habilitation of the unjustly
condemned is not enough, he
called for a vigorous program
calculated to restore confidence
and to install vigor into the
Polish nation.
Similar proposals, implying
the necessity for greater per-
sonal liberties, have been ad-
vanced even more forcibly by
intellectuals. Their statements
have been reported by party and
non-party papers, periodicals,
and even the official radio.
In a thinly veiled allegorical
dissertation on freedom of
scientific expression published
on 26 October, for example, the
president of the Polish Academy
of Sciences maintained that free-
dom of speech should "be a matter
of course, while its limitation
should be supported by special
justification.""
The growing intensity of
the public debate on freedom ap-
parently has alarmed some party
officials who, probably in an
effort to restrict the discussion
to manageable proportions, re-
portedly caused the resignation
of the chief editor and first
deputy editor of Nowa Kultura,
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Nor
the central committee cultural
weekly. This paper has pub-
lished a number of articles on
the subject of freedom, apparent-
ly with the approval of the
central committee's censor.
The deposed chief editor is a
close personal friend of Gomulka's
and he still holds a number of
responsible positions, including
membership in the central com-
mittee.
Demands for liberalization
in Poland will probably contin-
ue. Party First Secretary Go-
mulka gave no indication to the
central committee of just how
far liberalization can go and
urged caution. Already, insist-
ence on a positive program to
replace eventually the negative
process of de-Stalinization ap-
pears to have gone further in
Poland than in any other bloc
country. Rather than attempt
to suppress these growing de-
mands, the Polish regime appar-
ently intends to capitalize on
the widespread desire for lib-
eralization in hopes of counter-
ing the political apathy among
party members and the public.
The intensity of the longing
for freedom as expressed in
statements of Polish party
members and intellectuals
during the past few weeks,
however, indicates the com-
plexity of the problems the
regime will face.
THE POLISH ECONOMIC PLAN FOR 1962
The Polish economic plan
for 1962, currently under dis-
cussion in the Sejm, reflects
an optimistic short-term outlook
on the part of the Gomulka re-
gime. A continued rapid ex-
pansion of the national product
is anticipated, although at a
somewhat slower rate than that
achieved in 1961. Foreign trade
is expected to be a major prob-
lem area; plans for a substan-
tial reduction next year in the
trade deficit will entail a slow-
down in the growth of domestic
expenditures, especially for
personal consumption. Over the
long term, the regime is also
concerned with its inability
thus far to speed up the com-
pletion of industrial projects.
Polish economic growth in
1961 was the most rapid since
1957, but official claims of a
10.3-percent increase in indus-
trial output and an 8.3-percent
increase in agricultural produc-
tion are probably somewhat in-
flated. For 1962 an 8.3-percent
increase in industrial production
is projected as a minimum target,
but a rise in excess of 10 per-
cent is actually anticipated.
However, continued delays in in-
vestment deliveries may force
a slowdown in the rate of growth
of industry during 1962.
In view of the unusually
high growth of agricultural pro-
duction in 1961--due in large
measure to favorable weather--
the 1.7-percent increase planned
for agriculture in 1962 probably
is a maximum target. The out-
look for fodder supplies appears
to be somewhat improved in
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CURRENT INTELLIGENCE WEEKLY SUMMARY
comparison with a year ago, es-
pecially with the recent comple-
tion of a US credit agreement,
and most of the 1962 growth in
agriculture is expected to be
in livestock production. How-
ever, even with increased avail-
ability of agricultural machin-
ery, fertilizer, and other
production inputs, crop yields
may decline from 1961 totals
if weather is no better than
average.
Although investment out-
lays in 1961 exceeded the planned
amount, few projects were com-
pleted on schedule. Of the 37
priority industrial projects
scheduled for completion during
the first half of 1961, onlyand
19 were completed by 1 July
an additional 10 by 1
For 1962, plans call for a 9.5-
percent increase in gross cap-
ital investment, approximately
the rate of growth obtained in
1961 in real terms. Emphasis
in 1962 is to be on improved
controls and incentives for
speeding up investments.
Budgeted defense expendi-
tures for 1962 are to be 13
percent above the level of 1961
and are to v.otal 19.5 billion
zlotys ($500-800 million).
This is probably a reflection
of the current world situation.,
especially the Berlin crisis.
Foreign trade has for some
time been a major problem of the
Polish economy. The foreign
trade deficit in 1961 rose by
nearly 30 percent over 1960--
well above the planned level.
However, part of the 1961 im-
port surplus resulted from the
stockpiling of grains and in-
dustrial raw materials during
the fourth quarter of 1961
for use in 1962.
Plans for 1962 call for
a 40-percent reduction in the
foreign trade deficit (to ap-
proximately $140 million) by
means of an increase of 9.perrp-
cent in exports but only P
cent in imports--even though
US credit deliveries somewhat
offset the necessity for re-
ducing imports. In any case,
the projected limitation on
imports will be difficult in
a rapidly expanding economy.
In 1961 difficulties
were encountered in expand-
ing machinery exports, but
this was more than compensated
for by above-plan sales of
agricultural products. In
1962, the emphasis is once
again to be on increased ma-
chinery exports, and only a
limited growth of agricultural
exports is anticipated. Despite
improved economic incentives
for high-quality export produc-
tion, it will continue to be
Personal consumption in
1962 is to increase by 4 per-
cent, compared with 6.7 percent
in 1961. The average growth
for the two years is the rate
scheduled under the Five-Year
Plan; if this rate is maintained,
there should be a noticeable
improvement in living condi-
tions by 1965. In 1962 the
regime will attempt to impose
tighter controls over wage
expenditures and intends to
continue introducing technically
based work norms in industry.
Little labor trouble is antici-
pated, however, because average
wages are expected to rise
slightly and the regime will
probably continue the extreme
caution displayed in its 1961
program of raising work norms.
difficult to expand mac
extorts as rapidly as planned.
ORR)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
South Korea's ruling mili-
tary leaders are preparing to
maintain their influence beyond
mid-1963, when General Pak
Chong-hui, chairman,of the
ruling Supreme Council for
National Reconstruction, has
pledged to return the govern-
ment to civilian authority.
Pak and his associates appear
to favor a form of "guided
democracy" to keep unacceptable
politicians from gaining power.
The junta has sent observers
to Turkey to determine whether
its revolutionary experience
is adaptable to'South Korea's
needs.
For the general elections
accompanying the re-establish-
ment of civilian government,
the junta probably intends to
control the,nomination of candi-
dates and avoid blatant fraud
and coercion of voters, tactics
that led to the ouster of
President Rhee. Security
forces have been ordered,to
undertake an intensive in-
vestigation of all former civil-
ian politicians who might be
candidates.
There also is some indi-
cation that factional differences
in the military regime may cause
individual junta members to'seek
alliances with leading civilian
political figures. In this event
the military factions might find
themselves vying for the support
of the same civilian political
group. Such maneuvering. could
aggravate tensions within the
junta leadership and impede an
orderly transfer to civilian
administration.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
DOMINICAN REPUBLIC
The agreement announced
on 17 December among the Balaguer
:regime, the military, and the
principal opposition party--
-the National Civic Union (UCN)
--has improved the prospects for
a peaceful transition to demo-
cratic government in the Domin-
ican Republic. The agreement
provides for the creation of a
seven-man "Council of State"
to replace the executive and
legislative branches until an
elected government is inaugu-
rated early in 1963. The Domin-
ican Congress has started work
on the constitutional revisions
necessary to dissolve the old
:regime and to legalize the in-
vestiture of the new; this task
is not expected to be completed
before 27 December.
Under the agreement Presi-
dent Balaguer will serve tempo-
rarily as head of the council.
He has promised to resign by
27 February, but not before the
Organization of American States
tiOAS) lifts the diplomatic and
economic sanctions imposed on
the country last year and the
country's normal quota in the
US sugar market is reste-ed.
The prospective vice presi-
dent of the council, who is in
line to succeed Balaguer as
council head and as commander
in chief of the armed forces,
is Rafael Bonelly, a 56-year-old
lawyer and member of the UCN
who in the past served as the
secretary of justice and labor
and in other cabinet posts under
Trujillo. Bonelly appears, how-
ever, to have the confidence of
both military and opposition
,_eaders--elements who have been
deeply suspicious of each other
in the negotiations thus far.
He also appears to be friendly
to the United States. The re.
mainder of the proposed coun-
cil includes a Roman Catholic
prelate, some moderate business
and professional leaders, and
the two surviving leaders of
the Trujillo assassination
group who took the lead in
the negotiations which pro-
duced the agreement for an
interim government.
Various difficulties still
threaten'the implementation of
the agreement. Although the
two smaller opposition groups--
the Dominican Revolutionary
and the "14th of June" parties
--have given indications of
support or acquiescence, com-
plications are already arising
because they refuse to collab-
orate with the UCN in forming
the interim government. They
presumably hope to capitalize,
in next year's election, on
any decline in popularity suf-
fered by the interim govern-
ment. The UCN gave only
guarded approval in its public
acceptance of the agreement.
Moreover, in an indicative
move later countermanded by
the party leadership, its rep-
resentative in WashiLgton urged
the OAS on 19 December to
maintain sanctions until after
Balaguer resigns.
Although the armed forces
have publicly endorsed the
agreement, they remain deeply
concerned over their future
status and almost surely would
subsequently veto the plan if
convinced that opposition
leaders were planning retalia-
tory measures against officers
for acts they committed under
orders during the dictatorship.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SALVADORAN ELECTIONS
The governing directorate's
National Coalition party (PCN)
won an overwhelming victory in
El Salvador's elections on 17
December for a constituent as-
sembly after campaigning on its
progress in socio-economic re-
forms, in which it has goals
similar to those of the Alliance
for Progress. The elections
were the most free and honest
in many years. Even the opposi-
tion Union of Democratic parties
(UPD) could find little fault
with the electoral guarantees;
its chief complaint was against
the use of official vehicles
to transport voters to the polls.
The elections are the first
step in the scheduled restora-
tion of constitutional govern-
ment, which was broken with the
ouster of an elected government
in October 1960. The constituent
assembly is to name an interim
president to serve until next
September; it will function dur-
ing the period as the national
legislature. Colonel Julio
Rivera, PCN head, seems assured
of becoming president for a
regular term in elections next
spring.
Austria's application for
association with the Common
Market (EEC)--where its major
markets lie--was filed on 15
December after many months of
The clear PCN victory strength-
ens the political mandate of the
directorate to push its reform
program. Two new laws, setting
up a rural credit program and
an irrigation and drainage author-
ity with enforcement powers, were
signed on 14 December but evi-
dently not publicized until af-
ter the elections.
Conservative elements
headed by members of the power-
ful "fourteen families" remain
bitterly opposed to the reform
program and may try to enlist
support from disgruntled mili-
tary officers Who resent the
power of the officer group
prominent in the directorate.
During the election campaign,
newspaper ads attacking the gov-
ernment and its reforms appealed
to "authentic Salvadorans" in
the armed forces who "cannot
agree with pres
their country."
e events in
governmental hesitation and
considerable pressure from the
USSR against such a move. Evi-
dently with Soviet objections
in mind, Vienna stated that it
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CURRENT INTELLIGENCE WEEKLY SUMMARY
was applying for an "economic
arrangement" rather than asso-
ciation.
The most recent Soviet
"warning" was a moderately
worded aide-memoire on 12 De-
cember reiterating Moscow's
position that the Common Market
is the economic arm of'NATO and
that Austria's participation
would be regarded as a viola-"
tion of its neutrality and of
the State Treaty provisions
against political or. economic
union with Germany. Foreign
Minister Kreisky told US Ambas-
sador Matthews on 7 December
that he expected Soviet counter-
measures following the actual
application. Vienna has feared
that the Soviet-Austrian trade
talks which began on 1 December
would be used to apply pressure,
since approximately 15 percent
of Austrian trade is with the
Soviet bloc. No such pressure
has yet been reported, however,
beyond a strong statement made
by the chief Soviet negotiator
at the initial session reiterat-
ing the language of the 12 De-
cember vote.
Chancellor Gorbach, of the
People's party, is reported to
have been reluctant to stand
up to Soviet pressures on the
Common Market issue and even
wished to postpone application
for association. Gorbach, when
he assumed leadership of the
People's party - Socialist coali-
tion in April 1961, was expected
to be more firmly pro-Western
than his predecessor, Julius
Raab, and his present attitude
coincides with speculation that
he may retire after the next
national elections. These
are not mandatory until the
spring of 1963, but are being
talked of for the autumn of 1962.
Finance Minister Josef
Klaus, who from 1949 to 1961 was
provincial governor of Salzburg,
is being considered in People's
party circles as a likely candi-
date for chancellor. Klaus in-
creased his prestige in the party
by his stand during last October's
budget crisis when he scored a
victory over some of the Social-
ist members of the coalition on
the issue of monetary stability
versus wage demands.
Dissension within the gov-
ernment on this issue., as well
as regarding Austria's tactics
on the long-lived South Tirol
dispute with Italy, has sub-
sided in recent weeks. Spokes-
men of both parties have re-
flected qualified satisfaction
with the UN debate in November
on the South Tirol, which re-
sulted in a resolution recom-
mending that Italy and Austria
try further bilateral talks to
resolve the issue. At present,
Vienna does not anticipate
reopening talks, pending the 25X1
report of a commission of in-
quiry appointed by Italian
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SPECIAL ARTICLES
USSR BUDGET AND PLAN
The USSR's 1962 budget,
read to the Supreme Soviet on
6 December by Finance Minister
Garbuzov, contains only small
increases over 1961 in total
revenues and expenditures, but
the stated appropriation for
the military forces has in-
creased to 13,41 billion rubles,
45 percent greater than the
corresponding 1961 appropria-
tion and about 8 percent above
the revised total announced by
Khrushchev last July. In pre-
vious budgets, the explicitly
stated military budget, however,
was calculated to represent
only about 60 percent of total
Soviet military spending,
It is estimated from non-
budgetary information that there
will be increases in 1962 out-
lays for strategic attack, air
defense, research and develop-
ment, and, as a result of the
recent nuclear test series,
the manufacture of new nuclear
weapons. In addition, military
personnel levels will average
higher than in 1961, These
programs alone could more than
account for the 8 percent by
which the 1962 budget exceeds
the revised 1961 expenditure.
It is extremely unlikely, how-
ever, that the sum of these
measures would have accounted
for an increase of 45 percent
over the original 1961 appro-
priation.
The increase in the orig-
inal 1961 appropriation is con-
sidered to have been primarily
a propaganda device achieved
by transferring into the ex-
plicit military account mili-
tary or quasi-military expendi-
tures from parts of the budget
not previously admitted to con-
tain defense expenditures.
Khrushchev's statement in July
was made in a propagandistic
context, closely following a
US increase of $3.5 billion
for defense-.-an amount equiv-
alent at the official exchange
rate to the figure announced
by Khrushchav.
SOVIET BUDGET REVENUES
(PLANNED)
BILLIONS OF NEW RUBLES
1961
Social Insurance Receipts
(3.8)
(4.1)
State Loans
(.9)
(.9)
Taxes on Enterprises and Organizations
(1.8)
(1,8)
Taxes on the Population
5.5
Profit Deduction
20.5
Turnover lax
32.5
Other
(14.0)
SOVIET BUDGET EXPENDITURES
(PLANNED)
1962
9.25/12.40*
13.41
1.1
1.07
Social-Cultural Measures
(Includes Science)
27.1
28.7
Financing the National Economy
Industry
16.1 14.
8
Agricultural
4.2 (5.
2)
Transportation and Communications
(2.6) 2.
5
Residual
(11.0) (9.9
)
Total
General Expenditure Residual
TOTAL
"Including the additional allocation referred to by Khrushchev on
8 July. According to calculations based on recent Soviet data, the
actual 1961 explicit defense expenditure is 11.86 billion rubles.
( ) estimated
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The Soviet budget is on a
cash basis--that is, expendi-
tures must be made during the
year covered by the budget. It
would therefore have been im-
possible for the Soviets use-
fully to double the rate of ex-
penditures for the last five
months of 1961, as implied by
Khrushchev. There was no evi-
dence of modification on a
major scale of any significant
procurement program capable of
absorbing such funds. In fact,
total budgetary expenditures
made in 1961 were reported to
be slightly below the original
plan, an unlikely occurrence
if the military expenses had
actually increased as Khru-
shchev announced.
Much of the increase in
military outlays for 1962--re-
gardless of whether it is pri-
marily a bookkeeping transac-
tion or a redirection of na-
tional resources--seems to have
come from the budgetary cate-
gories believed to contain hid-
den expenditures supporting the
military establishment as this
term is used in the West. For
example, the defense increase
is offset in part by reduction
of 1.4 billion rubles in the
general expenditure residual,
and by a reduction of 1.1 bil-
lion rubles in the residual of
the category "Financing the
National Economy." In addition,
there is a reduction of 1.3
billion rubles in the planned
expenditures for industry. As
a result of accounting changes
implied by these data, a much
larger part of the total mil-
itary expenditure now appears
to be contained in the explicit
military category.
It is believed unlikely,
therefore, that the Soviet
government, having recently
made such a major change, would
revert to the pre-July 1961
budgetary account system, at
least while the Berlin problem
remains.
The appropriation to sci-
ence, which contains funds for
research and development, was
not affected and continued its
recent rapid growth. The 1961
outlay was about 15 percent
above that for 1960, and in
1962 it is planned to increase
another 12 percent.
The economic plan for 1962--
presented at the same session
of the Supreme Soviet by V. N.
Novikov, chief of the State
Planning Committee (Gosplan)--
continues to place major em-
phasis on a high rate of growth
for heavy industry at the ex-
pense of the consumer. Beyond
the optimism embodied in next
year's goals, however, there
emerge. many signs that the
rapid expansion is being ac-
companied by planning and sup-
ply difficulties.
The growth rate for indus-
trial production as a whole is
to be 8.1 percent; a rate of
"more than 9 percent" was
claimed for 1961, and an 8.6-
percent average annual increase
is called for in the Seven-Year
Plan (1959-65). Production of
heavy industry (which Soviet
planners refer to as "Group A")
is to grow 8.8 percent over 1961,
while output of the light and
food industry ("Group B'") is to
increase 6.6 percent, Only last
spring Khrushchev had promised
greater priority for "Group B,1'
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CURRENT INTELLIGENCE WEEKLY SUMMARY
USSR: SELECTED INDUSTRIAL PRODUCTION
1961
Plan Actual*
Pig Iron (million metric tons) 51.2 51.1
Steel (million metric tons) 71.3 71
Oil (million metric tons) 164 166
Gas (billion cubic meters) 59.7 59.5
Electricity (billion kilowatt-hours 327 327
Cement (million metric tons) 51 50.7
Mineral Fertilizer (million metric tons) 15.3 15.3
1962 Percentage Increase
Plan 1962 over 1961
Annual Average Increase
Needed to Meet Revised
Seven-Year Plan Goals
(1962-65)
71.2 19.6
366 11.9
57+ 11+
17.2 12
1960
Percentage Increases Plan Actual
Gross Industrial Production
Group A (heavy industry)
Group B (light industry)
Labor Productivity (Industry)
but the traditional low pri-
ority for consumer goods--reaf-
firmed in the 20-year party
program (1961-1980) presented
in October at the 22nd party
congress--will prevail in 1962,
The investment increase planned
next year for light industry
would raise its share of total
investment from about 6 per-
cent in 1961 to about 7 percent.
Possibly to offset the im-
plications of these goals for
the Soviet consumer, the 1962
plan refers to a "forced growth"
of 17 percent in output of
heavy industrial goods for the
light and food industry--an
increase claimed to be in re-
sponse to the call in the 22nd
party congress resolution for
bringing the rates of growth of
light and heavy industry closer
together. However, it will
mean very little for the con-
sumer and once again postpones
any hope of significant improve-
ments in consumer welfare. The
17-percent increase will prob-
ably suffice only to provide
machinery and equipment in sup-
port of the supplemental in-
crease in light industrial in-
vestment announced by Khrushchev
more than a year and a half ago.
Production increases sched-
uled for basic industries such
as .steel and petroleum are
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1961 1962
Plan Actual Plan
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CURRENT INTELLIGENCE WEEKLY SUMMARY
generally consistent with the
revised Seven-Year Plan goals
announced by Khrushchev at the
October party congress. How-
ever, the cement target for
1962 appears to be low and it
is unlikely that the revised
1965 goal will be met. Prob-
lems in the gas program--short-
ages of consuming equipment,
pipe, and storage facilities--
have hampered production, which
as presently programmed is not
adequate to meet the 1965 goal.
Investment
Cpital investment is
scheduled to increase 8.1 per-
cent in 1962. This is slightly
lower than the average annual
rate of 8.5 percent needed for
the Seven-Year Plan and the
average of approximately 10
percent needed for the 20-Year
Plan. Because the Seven-Year
Plan rate was exceeded during
the period 1959-61, however,
the 1965 goals are not yet
threatened.
In 1961, capital invest-
ment grew by 10 percent, more
than required to meet the an-
nual increase called for by
the seven-Year Plan but below
the 12.6-percent rise sched-
uled in the annual plan and be-
low the achievements of the
past several years. This un-
derfulfillment appears to have
been caused principally by in-
adequacies in the supply of
machinery and equipment to the
construction sites.
Problems in the invest-
ment and construction programs
have commanded the increasing
attention of the Soviet leader-
ship over the past year and a
USSR: CAPITAL INVESTMENTS IN
SELECTED INDUSTRIES
(PERCENTAGE INCREASES)
Plan
Actual
Plan Actual
_
Plan
Ferrous Metallurgy
26
12
31
10.6
Machine Building
30
23
40
111 c
25X1
* Shortfalls in 1961 have been announced but no data.
half. In May 1960, difficulties
in the construction program were
discussed at length in Khru-
shchev's speech to the Supreme
Soviet. In June 1961, problems
of industrial construction, par-
ticularly in the chemical in-
dustry, had apparently become
serious enough in at least t'r 'ee
major areas of the Soviet Un:L:saa---
Kuybyshev, Saratov, and zKe,,,erovo
oblasts--to require the, di ect
intervention of A. N. Kosygin,
one of Moscow's top economic
troubleshooters..-.The growth
rates in investment revealed
in Novikov's speech indicate
that the problems have not been
solved.
These problems are varied
and complex but spring basically
from the fact that the regime
is trying to do too much with
too few resources. Investment
is spread over too many proj-
ects,with the result that com-
pletions lag and funds are tied
up over long periods while no
new productive capacity is
created. Problems of supply
can cause delays while at the
same time large amounts of
equipment are held in storage
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pending basic construction.
Overlapping authority at the
center causes problems of im-
plementation as well as of
planning.
At the 22nd party congress,
Khrushchev directed attention
once again to these problems
And "suggested" that no new
construction projects be start-
ed "for perhaps a year." Kosy-
gin also proposed some new
measures to increase the effi-
ciency of the program: with-
holding of payment for equip-
ment until after installation,
and a transition from budgetary
financing of capital investment
to long-term credits, with the
implication that interest will
be charged to stimulate rapid
completions. Since the congress,
a decree has been enacted which
lowers the investment levels re-
quiring approval from the center
and provides that all construc-
tion projects which have been
started be reviewed monthly by
the USSR Council of Ministers.
The lowered rates of in-
crease in capital investment
planned for 1962 both for total
and for major industrial cate-
gories reflect an attempt to
riake plans conform to reality
and perhaps to concentrate on
the completion of the most im-
portant projects. A possible
contributing factor may be the
diversion of resources to mil-
itary requirements, but there
is no direct evidence of this.
Garbuzov's speech reiterated
the old saws about concentra-
tion of resources on important
projects and improvement of tech-
nical supply but cast little new
light on how these are to be ac-
complished.
Manpower
The reported 2.5-million-
nan increase in the state labor
force planned for 1962 is much
higher than scheduled in the
original Seven-Year Plan. How-
ever, the 1965 state labor force
goal of 12 million has report-
edly been revised upward to 22
million. The industrial labor
productivity plan for 1962--
calling for an increase of 5.6
;percent--puts that schedule
back in line with Seven-Year re-
quirements. The plan was not
fulfilled in 1960 and at midyear.
1961 was considerably under tar-
get, apparently largely as a
result of the large shift of
state workers to a shorter work-
week, but also because of indus-
tries' difficulties in achieving
expected improvements in tech-
nology,
Agriculture
Despite Khrushchev's con-
tinuing promises to improve
Soviet food supplies signifi-
cantly, the scheduled state
investment for 1962, even if
achieved, is far too small to
do the job and probably rep-
resents only a small net addi-
tion in view of the large num-
ber of collective farms which
have been converted to state
farms and now require state fi-
nancing. Lower rates of increase
for the chemical industry and
agricultural machinery industry,
as well as failure to plan an
increase in chemical fertiliz-
ers -in_ any way sufficient to
meet the Seven-Y?jar Plan commit-
ment; suggest that agriculture's
priority has been raised very
little if any for 1962.
Housing
The urban housing goal of
one billion square feet for 1962
is slightly lower than the 1961
goal, but significantly high-
er than the actual volume an-
ticipated for 1961. The achieve-
ment of the 1962 goal is subject
to question because of difficul-
ties in the supply of construc-
tion materials. (Pre-
pared by ORR; concurred in by
OSI)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
UNREST IN EAST GERMANY
Prior to the sealing 'off of
West Berlin on 13 August, the
East German population was in
ferment and the party apparatus
was confused as a result of
mounting, international tension
and numerous indications that
the regime intended to revert
to harsher economic and political
policies. These conditions
were reflected in the steadily
mounting flow of refugees.
'i'6There were more than 33,000
escapes in July and 47,000 in
August, bning-.h ; the total for
the first eight months of 1961
to more than 154,000--compared
with just under 200,000 in the
whole of 1960 and less than
.144,000 in 1959. Escapees
included hundreds of doctors,
engineers, and intellectuals--
men whose skills?were badly
needed if economic plans were
to be fulf ; led. Many of the
stanchest anti-regime elements
were among the refugees.
l3 . Augus t
The ruthless efficiency
of the operation to seal off
,West Berlin, on 13 August and
subsequent measures to prevent
escapes to the West dismayed
and cowed the East German popu-
lation. A mood of depression
and helplessness appears to
have set in as the population
observed deportations from
border areas and forced re-
cruiting of youths for the armed
and security services. Some
intellectuals, hitherto pro-
Western., were reported to have
turned against the West in dis-
appointment and frustration.
Youths, however, continued to
reflect a spirit of' open defiance.
In contrast, party leaders
were openly jubilant. East
German propaganda concentrated
on;the forthcoming signature
of a separate Soviet - East
German peace treaty which would
remove the last restrictions
on the regime's sovereignty.
Local party officials in con-.,
tact with,. the populace, however,
betrayed signs of worry and
uncertainty in the face of
deep-seated,,piallic hatred. Some
privately--or in some cases
publicly--condemned the move
against Berlin. Rank-'arid-file..
party members frequently ex-
pressed the same anti-regime
sentiments as the populace.
Increased Pressures
In September and October,
war fears, sporadic food short-
ages, and the austerity campaign
set off recurrent waves of panic-
,buying throughout East Germany.
Moves to reduce dependence on
West German imports made matters
worse; for example, the Ministry
of Health announced in October
that no medications were to be
imported from West Germany,
nor were gift parcels. to be
permitted. A "production
drive" designed to step up out-
put without equivalent wage
increases was announced. Ad-
ditional police pressures and
a ban--enforced by party toughs--
on listening to Western radio
or television were put into
effect.
In response, the public
attitude became more defiant.
Industrial workers openly criti-
cized and quietly resisted the
production drive. Medical men
condemned the interruption of
imports. Students resorted
to anti-regime agitation and
minor demonstrations, and their
teachers ~Pbviously shared their
critical attitude.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
t~,'. ct 1~ Soviet Congress
In this troubled atm _--
phere, Khrushchev announced
at the Soviet 22nd party con-
gress that he would waive his
31 December deadline for sign-
ing a German peace treaty if
the Western powers showed will-
ingness to negotiate. Middle-
and low-level party and state
officials, unprepared for such
a move, were thrown into con-
fusion. Many East Germans
gloated at the discomf it?> e
of the regime. Party and non-
party elements interpreted
the statement as a personal
setback for party boss Ulbricht.
Khrushchev's renewal of
his de-Stalinization campaign
brought into the open public
hatred and contempt of many
for Walter Ulbricht and aroused
hopes that he had been repu-
diated by the Kremlin Some
teachers, for example, removed
Ulbricht's portrait from their
schools. Again, party officials
had not been alerted to such
a development and could not
respond to pointed questions
which came from party members
and the public alike concerning
Ulbricht's weakened position.
At first, the regime
sought to cope with this fer-
ment by reprinting all impor-
tant Soviet speeches on the sub-
ject and avoiding direct com-
ment. When this only sparked
public delight and party irri-
tation, the regime finally in
mid-November issued an authorta-
tive statement based on the
position that Ulbricht had been
identified with Khrushchev since
the Soviet 20th party congress.
Party Plenum
Ulbricht's move to reassert
his authority at the central
committee meeting from 23 to 26
November did much to silence
public comment and reassure
party officials that, for the
moment at least, there would be
no sweeping changes in the party
leadership. The East German
leaders made a great show of
"collective leadership." At
the same time, they issued the
harshest criticism in many
months of Karl Schirdewan, former
leading moderate opponent to
Ulbricht who was eliminated
from the party leadership in
February 1958. They also made
bitter attacks on dogmatism
and sectarianism.
Reports by Ulbricht and
other leaders to the central
committee underline the re-
gime's concern with the prob-
lem of public discontent and
the failure of the party and
state apparatus to master it.
Ulbricht complained that work-
ers did not understand the need
for a change in work norms--
implicitly admitting the set-
back of the production drive.
He also disclosed the exist-
ence of peasant passive re-
sistance,which has cut food
production, and confirmed the
regime's failure to win over
youth, admitting that "antago-
nisms...obsolete ideologies,
and hostile influences are
still effective."
Other speeches at the
plenum give further details
concerning difficulties within
the universities. Kurt Hager,
central committee secretary in
charge of scientific affairs,
noted that "some older scientists"
at Halle University had criticized
the regime's measures since 1131
August, while Paul Froehlich,
who is party leader in Leipzig
District, complained that a
student cabaret had been operat-
ing in the journalism department
of Karl Marx University. Called
"the council of mockers," the
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cabaret presented programs
which lampooned the party and
its leadership.
Certain references in the
report by Karl Mewis, who was
installed as chairman of the
State Planning Commission in
July, suggest that the old
tensions between hard-line
economic planners from the
party and economic realists
continue within the Planning
Commission. Mewis told the
central committee, "Many staff
members ...have not been trained
to solve the tasks in accord-
ance with the principle of
unity between politics and
economy; they still understand
their work as a task of adminis-
trative decisions or adhere
to the principles of obsolete
liberalism." He added that
some problems had not been
worked out correctly, as "not
all comrades" agreed with the
party line calling for drastic
steps to make the regime free
of dependence on West Germany
and to intensify links between
the USSR and East Germany. Hard-
line planners carried the day
at the plenum.
Hard-line Program
Party leaders are not
attempting to placate popular
discontent by concessions, as
they did last year, but in-
stead announced at the plenum
a program of increased austerity,
stepped-up pressures on workers
without compensating pay in-
creases, ever-mounting Communist
indoctrination of all classes
designed to complete "socialist
building" by 1965, unbending
imposition of "socialist realism"
on intellectuals and artists,
and harsh police measures to
curb such "enemies" as Protestant
churchmen and youths. They
also declared that regime of-
ficials would be held strictly
accountable for carrying out
this program.
There have since been
drastic shakeups in the state
apparatus in three districts
and in one major industrial
center. In Magdeburg the city
party leader was dismissed for
tolerating "liberal" tendencies.
In Potsdam District, party
leaders in several major in-
dustrial centers near Berlin
were purged for failing to
defend the regime's policy
on Berlin.
Although the regime is making
no concessions to improve the
standard of living, it is seek-
ing to maintain the present
level. Restrictions on coal,
butter, and potatoes have been
enforced for some time. Short-
ages of food and raw materials
may force the regime to insti-
tute more severe forms of ration-
ing during the winter.
Present Situation
Ulbricht appears to have
reasserted his authority over
the party, and it now presents
its customary appearance of
monolithic unity. There is
no evidence of an organized
opposition in the top leader-
ship similar to the Schirdewan
group of 1955-58. There are
many indications, however, of
weakness and uncertainty in
the second level of leadership.
The state apparatus appears
to be under control and the de-
fense and security forces general-
ly reliable despite the recent
induction of many unwilling
recruits. The strengthening
of the Central Commission for
State Control suggests greater
activity on the part of state--
as opposed to party--officials.
Further development of such
state agencies--a characteristic
of the Stalinist period--might
promote party-state tension.
Unrest among industrial
workers is a matter of great
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concern. Ulbricht has long
handled relations with workers
with kid gloves and has been
notably reluctant to announce
any general increase in work
norms such as sparked the East
German uprising of 17 June
1953. His statements at the
plenum, however, suggest that
significant increases in work
norms are being considered.
Ulbricht, however, may feel
that the provisions of the new
labor code adopted in July and
a later decree imposing strict
controls on workers will enable
him to cope with resulting dis-
content.
Farmers also present a
major problem. Since the all-
out collectivization drive of
1960--followed by a mass exodus
of farmers to the West--the re-
gime has sought to consolidate
its position by various organi-
zational changes and is seek-
ing to tighten controls over
peasants.
Farmers to some extent hold
the whip hand. Farm labor is
short-and agricultural produc-
tion is urgently needed. Regime
officials are aware that attempts
to tighten controls too drasti-
cally would increase discontent.
Nevertheless, Ulbricht has di-
rected that "liberalist" atti-
tudes are to be avoided, although
tact is to be used in dealing
with farmers.
Ferment among youths, in-
cluding children of party mem-
bers, presents a more difficult
problem which officials are
attempting to control by
stepped-up indoctrination,
punitive measures, and transfer
of reliable members of the
Communist Youth Organization
to critical spots. Similar
measures are being used against
teachers.
Tensions between intel-
lectual and professional cir-
cles and the regime probably
will continue. However, the
regime's need for trained men--
especially engineers--to enable
it to carry out its economic
policies has acted as a deter-
rent upon officials. Many of
the leaders of the intelligentsia
had escaped by 13 August, and
admissions at the plenum show
that those who remained are
critical of the regime's meas-
ures. In the past,. Ulbricht
has made piecemeal political
concessions to such elements;
his present program affords
no such relief.
No centrally organized
resistance force is known to
exist. Nevertheless, tension
is such that any sharp increase
in regime pressures or alter-
natively any evidence of seri-
ous weakness at the top level
could set off sporadic out-
breaks of violence in various
parts of East Germany--es-
pecially such industrial
centers as Dresden or Magdeburg.
Such outbreaks could easily
assume major proportions, in
view of the popular mood and
the possibility of even harder
living conditions during the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The Syrian revolt, the
recent parliamentary elections,
and the election of a Presi-
dent have thrust a number of
the country's established
political, figures back into
the limelight and have brought
forward some hitherto unknowns.
While political parties were
prohibited from campaigning
for the elections, politicians
rani as party members in much
the same fashion as in the past.
The Parlia:..ont
Although Syria's new
parliament has an apparent con-
servative ccloration, its
politics will be more to the
left than is generally rec-
ognized. Western concepts of
a parliamentary left and right
are not applicable in Syria,
where deputies are not greatly
influenced by ideologies but
by the exigencies of the moment.
Members of the old-line con-
servative Populist and National-
ist parties hold only about
30 percent of the 172 seats,
and nominally conservative
independents about 60 percent.
The socialistic, Arab national-
ist Baath party has almost all
of the remaining seats. Thus,
the independents hold the
balance of power; many, accord-
ing to political custom, are
available to the highest bidder.
Past experience has shown
that strong personal and
interparty rivalries make it
impossible for conservative
forces to cooperate for any
length of time. In addition,
the Populist and Nationalist
parties are themselves split
into conservative and liberal
factions. This background and
the heterogeneous composition
of the new parliament, with no
majority for any party, make it
doubtful that conservative
elements will dominate the
,scene for long.
Fifty of the new deputies
served in the 1954 parliament,
and another 25 have had parlia-
mentary experience. In some
cases a relative of a former
deputy ran and won this time--
in accord with a practice often
followed when the chances of
one member of the family have
been temporarily dimmed by
changed political conditions.
The election of a number
of former army officers to par-
liament raises the specter of a
repetition of the pattern of
alliances between politicians
and army elements which was
prevalent in Syria before the
union with Egypt in February
1958. The present role of the
army's Syrian Arab Revolutionary
Command, which engineered the
coup in September, is unclear,
but it probably will continue
to exert substantial political
influence. Both the army and
parliament include proponents
both of radical pan-Arab nation-
alism and of traditional Syrian
nationalism.
Syria's political fortunes
over the next few months will
depend largely on the outlook
and actions of a few key per-
sonalities; some are in parlia-
ment, and some are not.
President Qudsi
Dr. Nazim al-Qudsi, a
political moderate, was
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CURRENT INTELLIGENCE WEEKLY SUMMARY
overwhelmingly elected President
of the Syrian Arab Republic on
14 December. Born in Aleppo
in 1905, Qudsi, a former Nation-
alist party leader, broke with
the party in 1949 and from
1944 to 1946 was ambassador in
Washington and a member of the
Syrian delegation to the United
Nations. He has been prime
minister and foreign minister
several times. He was educat-
ed. at the American University
of Beirut and holds a law
degree from the Syrian Univer-
sity and anLL.D.. from the
University of Geneva. He speaks
Arabic, Turkish, and English.
Relatively pro-Western
Qudsi is a man of integrity
and has consistently opposed
the army's intervention in
politics. He, as well as his
Populist party, has for years
proposed some sort of Iraqi-
Syrian Union. However, as
long as Qasim rules in Iraq,
there is little possibility
that Qudsi will press for union.
On taking the oath of office
he enunciated a policy of
neutralism.
Shukri al-Quwwatli
Quwwatli, Syria's last
president, is probably the
country's most astute politician.
Respected for his Moslem piety
and patriotism, Quwwatli is
not a member of parliament.
He may in the coming months
emerge as an elder statesman
and an arbiter among Syria's
political groupings, as well
as with the army factions.
Born into a prominent
Damascus family in 1891, Qu
wwatliwas educated at the Im-
perial Civil Service College
in Constantinople and served
as an Ottoman civil servant
before World War I. Long an
Arab nationalist, he was im-
prisoned by the Turks and
was exiled several times
during the French mandate. A
founding member of the National-
ist party, Syria's oldest
political grouping, he was
elected to the presidency in
1943 and re-elected in 1948.
His government, characterized
by large-scale corruption,
nepotism, graft, and general
mismanagement, was overthrown
in March 1949 in Syria's first
military coup, and he went
into exile in Alexandria, Egypt.
Returning to Syria in 1954,
Quwwatli again was elected
president, and it was under his
leadership that the country
adopted a pro-Egyptian, anti-
Western, pro-Soviet policy.
Quwwatli has the knack of
sensing public opinion early
in the process of formation
and is able to accommodate
himself to the public mood.
During the years 1955-58 he
was buffeted by Syria's right-
ist and leftist factions and
followed the path'of least
resistance. After the formation
of the UAR, Nasir gave him
the accolade of "First Arab
Citizen"; this soon was twisted
by wiseacres into "First Arab
Prisoner," in reference to
Syria's role under Egyptian
rule. Quwwatli was long the
recipient of Egyptian and Saudi
"largesse ."
Khalid al-Azm
Another member of the old
ruling group to reappear since
the revolt is Khalid al-Azm,
who was elected to parliament
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CURRENT INTELLIGENCE WEEKLY SUMMARY
with the highest vote in Syrian
history. Azm, 66 years old,
comes from a Turkish landholding
family long settled in Syria.
He is a clever man without con-
victions; his overweening ambi-
tion is to become president of
Syria.
Azm is adept at cooperating
with any group which he believes
is in. the ascendancy--the French,
the Arab nationalists, the
Baathists, the army, the Arab
Communists, or directly with
the Soviet Union. He is agile
and appeals to special interests
of various rival groups. He
was opposed to the Syrian-
Egyptian union, following which
he spent some time in the Soviet
bloc. Since the Syrian revolt
he has spent considerable sums
to further his 'political am-
bitions--funds which may have
come from the Soviet Embassy
in Damascus.
Azm has held many cabinet
positions, including that of
prime minister on three occa-
sions, and was prime minister
at the time of the first coup
in 1949. While apparently
persona non grata with the
present regime, Azm may make
common cause with the now-,sup-
pressed Communists, with the
Baathists if they become dis-
satisfied with the way things
are going, or with dissident
army officers. His skill at
intrique and his forcefulness
make him a man to be watched.
Akram al-Hawrani
Among the most prominent
and forceful of a somewhat
younger generation of politicians
who will play an important role
in the months ahead is Baathist
leader Akram al-Hawrani. He
was born in Hama in west-central
Syria in 1909 and is a law
graduate of the Syrian University.
Impulsive, erratic in his be-
havior, ambitious, and oppor-
tunistic to an extreme, Hawrani
is the prototype of the new
class of Syrian politician, the
man with a vision--that of
revolutionizing the social
structure.
As a socialist, Hawrani
has fought for the breakup of
the large estates, heavy tax-
ation of the rich, complete
secularization of the state,
and alleviation of the lot of
the poor. HE. has played a part
in every coup except that of
last September, and is the
classical Syrian example of
cooperation between the poli-
ticians and the military.
Mamun al-Kuzbari
Kuzbari, who was chief of
state and prime minister fol-
lowing the coup until he re-
signed to win a seat in par-
liament, has been elected speaker
of parliament, one of the most
influential positions in the
government. A seasoned poli-
tician in his forties, Kuzbari
is a professor of law and, as
speaker of parliament in Feb-
ruary 1954, succeeded to the
presidency for a day following
the overthrow of the Shishakli
regime. Since then he has been
head of the Arab Liberation
party, a conservative grouping
which was Shishakli's brain-
child.
Although Kuzbari did not
have a large political following,
he served as minister of edu-
cation and of justice and as
acting minister of labor at
various times during the 1955-58
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CURRENT INTELLIGENCE WEEKLY SUMMARY
period. He is said to have a
good grasp of economics as
well as law, and is married to
the daughter of one of Syria's
leading industrialists. Since
the revolt he has given the im-
pression of being a sober-minded
individual who feels that the
clock cannot be turned back and
that social measures taken
during the union will have to
be retained. He is anti-Com-
munist and considered pro-West-
ern.
Army Elements
Among the former military
officers elected to parliament
are Amin al-Nafuri, Mustafa
Hamdun, Abd al-Ghanni Qannut,
and Ahmad Abd al-Karim.
Nafuri, a thoroughgoing
opportunist, at one time had a
large following in the army
among the enlisted men and offi-
cers of rural origin. Through
unprincipled maneuvering he ';rye-
came a brigadier general aod
came to be assistant chief of
staff prior to the union with
Egypt and subsequently minister
of communications in the UAR
regional cabinet for Syria.
Qannut, a Baathist sup-
porter,. commanded an armored
battalion and was instrumental
in bringing about t- formation
of the UAR. Like Nafuri a
cabinet minister during the UAR
period, Qannut left the regional
government along with several
other Syrian ministers in May
1960 after disagreement with
Nasir over policies in Syria.
Must of a Hamdun, a close rela-
tive of Hawrani, was chief of
personnel of the Syrian Army
and came to be minister of social
affairs in Syria under the UAR
regime. He, too, broke with
Nasir. Ahmad Abd al-Karim, also
a. former chief of personnel in
the army, was a Baathist sup-
porter before the Syrian-Egyp.
tian union.
All of these former of-
ficers were members of the
"Little Revolutionary Command
Council" which controlled the
army in the years 1954-58 and
cooperated with civilian poli-
ticians, especially members of
Hawrani's Baath. In view of
their past proclivities for
intrigue, the activities of
these former officers will be
of special interest.
Other Key Personalities
Maruf al-Dawalibi, a left-
wing Populist, has a long record
of cooperation with radical
elements. Several times a mem-
ber of parliament from Aleppo,
he was prime minister for a
day in December 1949, when his
open opposition to army in-
fluence in the government
sparked a coup by then chief of
staff Shishakli. Despite his
frequent past alliances with
leftists, Dawalibi is a leader
of the reactionary Moslem Broth-
erhood. His cooperation with
left-wingers stems in large
part from his anti-Westernism
and violent Arab nationalism.
Because of his hatred and fear
of Israel, he was a.strong advo-
cate of closer Syrian relations
with the USSR and of arms and
economic agreements with the
Soviet bloc prior to the union
with Egypt.
Among the younger National-
ist party leaders is Sabri al-
Asa],i, an aggressive, ambitious,
and opportunistic politician.
In the past his political allies
have been drawn from the entire
spectrum of Syrian politics. He
cooperated with the anti-Western
Baathists during the 1955-58
period and was' in,truD.iental in
bringing about union with Egypt.
However, he is not personally
ill-disposed toward the West,
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