CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A003800010001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 38
• Document Creation Date: December 21, 2016
• Document Release Date: May 12, 2008
• Sequence Number: 1
• Publication Date: September 21, 1962
• Content Type: SUMMARY

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CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO, _ 79
OCI NO. 0435/62
21 Sept 62
CENTRAL INTELLIGENCE AGENCY
1 11 OFFICE OF CURRENT INTELLIGENCE
SECRET
F P _, 3
State Dept. review completed
GROUP 1
Excluded from automatic
downgrading and
declassification
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CURRENT INTELLIGENCE WEEKLY SUMMARY
21 September 1962
T H E W E E K I N B R I E F
(Information as of 1200 EDT 20 Sept)
SOVIET FOREIGN POLICY DEVELOPMENTS . . . . . . . . . . . Page 1
Although the USSR has declared a "pause" in Berlin talks,
the Soviet leaders took steps last week to make it clear
they have not retreated from their commitment to a unilateral
settlement if negotiations later this year fail to produce
results. Despite hints that contacts with US leaders during
the next two months will be the final opportunity to negotiate a
Berlin settlement, Khrushchev has kept open a number of alter=
native courses and thus does not yet appear firmly committed to
a separate treaty in the period immediately following the
US congressional elections in November.
The Soviet delegation probably will renew efforts to
reorganize UN bodies on the "troika" principle. The Soviets
apparently plan to use Iran's declaration banning foreign
missile bases on its territory to support their charges of
US "provocations" staged from overseas military bases,.
Although propaganda on Cuba continues to charge the-
US with aggressive plans, Moscow welcomed President Kennedy's
"realistic" statements in his 13 September press conference.
SOVIET INTERPLANETARY PROBE FAILURES . . . . . . . . . . . Page 4
The USSR has apparently failed in three attempts in
less than three weeks to send an inter: planetary probe toward
Venus. In the most recent launching, on 12 September, the
space vehicle was put into orbit, but the payload failed
to eject from the vehicle. Of seven Soviet attempts at
interplanetary probes since 1960, six are considered fail-
ures and one only a partial success.
CHINESE COMMUNISTS INTENSIFY U-2 PROPAGANDA . . . . . . . Page 5
After a slow start Peiping has stepped up its exploita-
tion of the 9 September U-2 incident and is weaving charges
of US responsibility for the overflight into a general attack
on US "war preparations." In their treatment of the incident
the Chinese Communists are also implying that the Soviet
Union has "unrealistic illusions about US imperialism."
Domestically, the regime is attempting to rally popular sup-
port by spurring public gnation over the incident
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CURRENT INTELLIGENCE WEEKLY SUMMARY
21 September 1902
SOVIET MILITARY ACTIVITY IN CUBA . . . . . . . . . . . . . Page 7
The Soviet Union evidently intends to provide Cuba with
a coastal defense system employing short-range missiles as
well as a missile-equipped air defense system. One coastal
defense cruise-missile site has been installed near Banes
in Oriente Province, and similar sites probably are being
or will be set up to defend other important ports and
coastal areas.
SOVIET MILITARY ASSISTANCE TO IRAQ . . . . . . . . . . . . Page 8
Under the terms of an agreement concluded last October,
the USSR is committed to provide Iraq with such advanced
weapons as surface-to-air missiles, jet bomber and fighter
aircraft, and antitank guided missiles. Some of this equip-
ment is being delivered this year, and the rest is sched-
uled for delivery during 1963 and 1964. Soviet military
contracts with Iraq since 1958 amount to as much as $350
million.
SYRIA . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10
A new cabinet has been formed under Khalid al-Azm, an
astute politician: and forceful executive. Its 21 members
are so different in political orientation, however, that
their ability to work together is questionable. Army
leaders, who have long distrusted Azm, probably retain a
veto over cabinet,,decisions; the army commander in chief is
still in the cabinet as minister of defense. The govern-
ment has promised to hold new elections within a year. The
regime meanwhile will rule by decree.
ALGERIA .. . . . . . . . . . . . . . . . . . . . . . . . . Page 11
Ben Bella's political bureau commands a substantial
majority in the Algerian assembly elected on 20 September.
Regional interests are likely to gain strength in the as-
sembly, however, after the first flush of enthusiasm for
Ben Bella wears off. The National Liberation Front, the
erstwhile rebel organization, is to be reorganized as a
political party. The military forces of the six wilayas
are to be amalgamated with the former Army of National
Liberation to form a smaller regular army.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
21 September 1962
CONGO . . . . . . . . . . . . . . . . . . . . . . . . . . Page
Preliminary.steps to implement the UN plan for Katanga's
reintegration with the Congo are under way despite con-
tinuing evidence that Adoula's and Tshomb6's mutual sus-
picions may thwart the plan and bring serious armed clashes.
Adoula has voiced fear that the Congolese parliament may
be "out to get him" and that it will not ratify the UN-
drafted constitution he wants completed by the end of
September. Minor clashes have recently occurred in North
Katanga. Leopoldville has apparently dropped for the moment
an effort to invade South Kasai to prevent Kalonji, the escaped
Kasai secessionst from . 'ning forces with Tshomb6.
12
AFRO-MALAGASY UNION . . . . . . . . . . . . . . . . . . . Page 14
The Afro-Malagasy Union--the organization of twelve
African states which retain some political and strong econom-
ic and cultural ties with France--is becoming more active
in inter-African and international affairs. Despite the
group's relatively conservative outlook, a recent conference
of the heads of its member states endorsed a program of sup-
port for militant African nationalists, including rebels
against Portuguese and Spanish colonial authorities. Other
African states showed considerable interest in this meeting,
and Congo (Leopoldville), Rwanda, and ]Burundi may join the
union during the next year.
LAOS . . . . . . . . . . . . . . . . . . . . . . . . . Page 15
North Vietnamese troops apparently remain in key areas
in northern and eastern Laos. South Vietnam has recalled its
ambassador from Laos in protest against the establishment of
relations between Laos and North Vietnam, and formal sever-
ance of relations appears imminent.
SOUTH VIETNAM . . . . . . . . . . . . . . . . . . . . . . Page 16.
The vigorous military effort against the Viet Cong is
contributing to a growing sense of confidence among South
Vietnamese officials. Communist guerrilla activity has not
slackened, however, and Saigon still faces widespread peas-
ant resistance to its programs. Increased peasant partici-
pation in rural security measures has resulted partly from
coercion. The low quality of some of the local leadership
implementing the programs contributes to peasant disaffec-
tion.
WEST NEW GUINEA . . . . . . . . . . . . . . . . . . . . . Page 17
The Indonesian Government, concerned that a separatist
movement could develop in West New Guinea, is making in-
tensive preparations to ensure its control of the area.
President Sukarno has implied that he will use stern measures
if propaganda and economic concessions during the next six
years fail to win over the native Papuans. The Dutch-Indo-
nesian agreement of 15 August provides for self-determination
of West New Guinea before the end of 1969.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
21 September 1962
THE NETHERLANDS . . . . . . . . . . . . . . . . . . , . Page l8
Parliament's recent debate on the West New Guinea settle-
ment featured some expressions of bitterness over the US
role in the agreement. Approval of the settlement, however,
has removed a potentially disruptive political issue and
has refocused foreign policy interest on European integra-
tion. The dominant Catholic People's Party and the op-
position Labor Party appear to be laying the groundwork
for resuming cabinet coo eration after the national elections
next spring.
EREAUff MILITARY MANEUVERS . . . . . . . . . . . . . . . . Page 20
France will hold its largest military exercise since
1939 during the first half of October. Some 50,000 army
personnel, 1,100 aircraft, and at least 60 warships, will
be involved. Designed in part to retrain returnees from
Algeria in large-unit operations, the exercise reportedly
was personally ordered by De Gaulle. It may be intended
to furnish support for his theories on the feasibilit 11, of
national rather than NATO defense of France.
BRAZIL . . . . ,
. . . . . . . . . . . Page 21
President Goulart and Congress have again compromised
their differences over the locus of power, thus providing
a breathing spell until the 6 January plebiscite on Brazil's
constitutional system. Attention now is focused on the 7
October elections. Gubernatorial races in three states
provide a test for left-wing forces, particularly in Pernam-
buco, key state of the impoverished northeast in which pro-
Communist Miguel Arraes is a leading contender.
CHILE . . . . . . . . . . Page 22
. . . . . . . . . . . . . . .
President Alessandri has apparently decided to delay
currency devaluation until mid-October. In return the
Radical Party, which is about to leave his coalition, may
take an independent position rather than unite with the
opposition. The Communist-dominated opposition continues
to gain public support, and Chile's dispute with Bolivia
over the Lauca River waters remains at an impasse.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
21 September 1962
SPECIAL ARTICLES
THE EUROPEAN COMMON MARKET'S ENERGY POLICY . . . . . . . . Page 1
Ministerial representatives from the six European Com-
mon Market (EEC) countries will meet on 5 October to discuss
a common energy policy--one of the major fields where agree-
ment has not yet been reached on measures necessary to
achieve an economic union by 1970. Agreement has hitherto
been blocked by conflicting national interests--notably
West Germany's coal industry, France's investments in Saharan
oil. development, and Italy's desire for cheap fuel. A com-
mon policy is not likely to be reached on 5 October, but
some progress toward this goal has recently been evident.
Present proposals envisage an energy policy less protection-
ist than those of most of the individual EEC countries which,
if adopted, could benefit US oil and coal exporters. Brit=-
atn has indicated it will participate in formulating and
implementing a common energy policy if it joins the EEC.
"BANTUSTANS" IN SOUTH AFRICA . . . . . . . . . . . . . . . Page 9
The government of South Africa is stepping up the develop-
ment of "Bantustans"--areas into which the country's Africans
are supposed to be segregated and theoretically allowed to
develop along their own lines. One such area has already
received a measure of autonomy, and Prime Minister Verwoerd
has said that all of them may someday become independent.
These developments are designed mainly to impress the
country's whites and to make the policy of apartheid more
acceptable to its overseas critics. Verwoerd will be hard
pressed to control the pressures among the Africans which
the idea of "Bantustan" independence is bringing to the
surface.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
WEEKLY REVIEW
SOVIET FOREIGN POLICY DEVELOPMENTS
Although the USSR has de-
clared a "pause" in Berlin
talks,.the Soviet leaders took
steps last week to make it
clear they have not retreated
from their commitment to a'uni-
lateral settlement if negotia-
tions later this year fail to
produce results. Moscow the
week before had observed that
it would be "difficult" for
Washington'to negotiate during
the campaign for the US con-
gressional elections this No-
vember. Despite hints of a
fixed timetable with a firm
deadline, Khrushchev has kept
open a number of alternative
courses which suggest that he
.is not yet committed to a .
separate treaty in. the immedi-
ate postelection period.
The TASS statement of 18
September denouncing alleged
'.,collusion" between President
de.Gaulle.and Chancellor Adenauer
to block a Berlin settlement
strongly suggests that Khru-
shchev sees little possibility
of arranging a four-power con-
ference to work out a Berlin
settlement prior to the signa-
ture of a separate peace treaty.
With this statement, Moscow
abandoned its previous restraint
toward De Gaulle and bluntly
charged that the "Bonn-Paris
axis" is planning "all kinds
of adventures" against the So-
viet bloc. TASS accused De
Gaulle of encouraging West Ger-
man "revanchigts and militarists"
and supporting Bonn's opposition
to it "normalization" of the Ber-
lin situation. The statement re-
affirmed Moscow's intention to
sign a separate peace treaty,
"with all the ensuing conse-
quences."
Moscow also issued a TASS
statement on 17 September re-
affirming its position that
the quadripartite status of
Ber:Lin ended in. 1948 when the
four-power Allied Kommandatura
"ceased to operate through the
fault of the three Western
powers." The statement was
in response to the Western
communique of 23 August which
stated that'the abolition of
the Soviet commandant's office
in East Berlin could have no
effect on either Allied-rights
or Soviet responsibilities in
Berlin. Moscow' denied the
West's contention that Berlin
remains a "single city" and re-
newed charges that West Berlin
has been converted into a "NATO
base" and that the Western com-
mandants' offices "are in ef-
fect NATO Kommandaturas."
Soviet authorities in
East Germany complied last week
with a second Western demand
regarding Soviet access to the
war memorial in West Berlin.
On :L4 September, ten days after
they agreed to. shift from the
Friedrichstrasse entry point
in the US sector to the Sandkrug
Bridge in the British sector,
they heeded Western instructions
to revert to buses instead of
armored personnel carriers for
transporting their guards to
and from the war memorial. These
decisions not to contest Western
instructions provide further
evidence of Moscow's desire to.
maintain its presence in West
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Berlin, at least for the time
being, and to avoid actions
which might lead to a Western
denial of Soviet access to West
Berlin prior to probable future
East German moves to block Allied
military entry into East Berlin.
UN Tactics
Soviet propaganda on the
eve of the General Assembly
session which opened on 18
September reflected Moscow's
intention to press a vigorous
attack on alleged US "provoca-
tions" and "'aggressive inten-
tions" throughout the world.
The basic themes were set forth
in the 11 September statement
alleging US plans to attack
Cuba. Moscow radio asserted
that the General Assembly has
never met in such a "tense. and
complex" atmosphere created
by US "provocative activities."
Although Soviet propaganda
has stressed general and complete
disarmament and the abolition
of colonialism as the "two key
problems" before the Assembly,
.Moscow has also listed as major
agenda items the seating of
Communist China,'an atom-free
zone in Africa, an international
conference on world trade, with-
drawal of foreign troops from
South Korea, and an improvement
in UN mechanisms.
There is no clear evidence
that the Soviet'delegation will
revive Khrushchev's demand at
the 1960 session that the office
of the secretary general be
replaced by a three-man "troika"
executive organ. The USSR,
however,.probably will press
for..changes-in the structure
and composition of the Sec-
retariat and other UN organs
which will reflect the three
basic groups in the UN--Western,
neutralist, and Communist bloc.
The USSR has taken no
position thus far on the re-
election of UThant to a full
term as secretary general.
Since the Russians recognize
that they can expect-no non-Com
munist .support for their "troika"
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scheme, they may revive last
year's proposals for a single
secretary general subject to
the guidance of three deputies
with veto powers representing
the three blocs in the UN. They
may also press for reorganizing
the Security Council, ECOSOC,
the international court, and
other subsidiary UN bodies
in order to give the three blocs
equal rights and representation.
Propaganda Attacks on
US Military Bases
Iran's declaration of 15
September that it will not ac-
cord any foreign state the right
to have rocket bases on its ter-
ritory provides Moscow with a
valuable weapon for pressing
its campaign against US bases
abroad. Moscow also obtained
a public reaffirmation of pre-
vious statements by the Shah
that his government "will never
permit Iran to become an instru-
ment of aggression against the
territory of the Soviet Union.'
the USSR was prepare to
accept a unilateral.Iranian
pledge, first offered in Septem-
ber 1959, to prohibit foreign
missile bases of all kinds.
Agreement on this issue had
been blocked in previous nego-
tiations by Moscow's insistence
on a bilateral agreement, rather
than a unilateral Iranian commit-
ment, and by Soviet demands for
an additional ban on all foreign
military bases and troops. Mos-
cow's concession on these points was
timed to lend support and credi-
bility to its warnings, in the UN
and elsewhere, of the dangers facing
countries which grant military
bases to the US.
Moscow now is giving heavy
publicity to Iran's statement,.
stressing that it has great
importance not only for Soviet-
Iranian relations,.but also on
a "broader international plane."
Pravda stated on 17 September
that Iran's example ' "'indicates
to other countries. allied with
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CURRENT INTELLIGENCE WEEKLY SUMMARY
the,US a right. way of safe-
guarding their security and
peace." A broadcast to Japan
called on the Tokyo government
to emulate Iran's example.
Although Soviet propaganda
continues to warn that US prepa-
rations for aggression against
Cuba have not ceased, Moscow
acknowledged that President
Kennedy made a number of "realis-
tic" statements On 13 September.
Its press welcomed "sober voices"
in the US and said public opinion
"noted with satisfaction" the
president's statement that mili-
tary intervention could not be
justified at the' present time.
Pravda contrasted the "white-
Tot-atmosphere" on Capitol Hill
with the "cool atmosphere" at
the President's press conference.
Moscow, however, criticized
the President's statement that
the US will continue to support
Cuban refugee groups and charged
that the meeting of OAS foreign
ministers requested by Secretary
Rusk will be aimed at adopting
.harsher sanctions against Cuba.
Moscow has reported workers'
meetings in various cities in
the USSR to express approval. of
the 11 September statement on
Cuba. Residents of ;Sakhalin
were reported as ready to re-
spond if the Soviet Government
requests volunteers "to protect
heroic Cuba."
Disarmament. and
Nuclear Test Ban
At the two sessions of
the Big Three test ban subcom-
mittee held-since the Geneva
disarmament conference went in-
to recess, Soviet delegate
Tsarapkin reiterated Moscow's
standard positions. He contended
that the current arms race and
Western military preparations
precluded any possibility of
agreement on the basis of ob-
ligatory international controls
because in the present situation
such control and inspection on
a state's territory -could be
used for gathering intelligence.
He claimed agreement was pos-
sible only through utilization
of existing national detection
means. and alleged that this ap-
proach, as proposed by the So-
viets in November 1961, bad
been recognized by the eight
nonaligned powers and recorded
in their memorandum of last
April.
Tsarapkin stressed that
only the cessation of all tests
can check the proliferation of
nuclear weapons to additional
states. In a private conversa-
tion with a US delegate after
the :L4 September session, he
argued that the US should think
seriously about the proliferation
problem because the exclusion
of any environment from a test
ban would almost inevitably
lead "very soon" to an increase
in the number-of nuclear nations
by ten or fifteen. He cited no
countries byname.
Two days earlier the Pei-
ping People's Daily appeared
to rejecT t any test-ban agree-
ment which precludes Communist
China's achievement of a nuclear
capability.. The article severe-
ly criticized the Western draft
treaties for a comprehensive
or partial agreement and failed
to mention the Soviet draft
treaty of November 1961. It
argued that the US objective
is to "tie China's hands in
developing nuclear weapons"
and make it. easier for Wash-
ington to use nuclear black-
mail "if it~can prevent China
and other socialist countries
from possessing nuclear weapons."
The article concluded by point-
ing out that a test cessation
should be the "first step" to-
ward a complete banning of
nuclear weapons; only a com-
plete ban and the unconditional
destruction of all existing
nuclear weapons, People's
Daily argued can revent
nuc +ar war
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SOVIET INTERPLANETARY PROBE FAILURES
The USSR has apparently
failed in three attempts in
less than three weeks to send
an interplanetary probe toward
Venus. In the most recent .
launching, on 12 September, the
space vehicle was placed into
orbit around the earth but the
payload failed to eject from
the vehicle. Of seven attempts
by the. Soviet Union to launch'
interplanetary probes, six are
considered failures and one only
a partial success..
The first attempt, which
occurred on 10 October 1960
while Premier Khrushchev was
attending the UN General As-
sembly in New York, was probably
-a Mars probe. Both it and a
similar operation four days
later.were failures. The So-
viets were probably prepared
to make propaganda use of these
operations had they succeeded.
No reference was made to the
failures.
matic interplanetary space
station into orbit.
On 12 February 1961 the
Soviets launched another Venus
probe, again using the parking
orbit technique. 25X1
Some 18 hours after
launch they announced that a
Venus probe was on its way.
Prior to the 12 September
1962 operation, the Soviets
attempted Venus probes on 25
'August and 1 September. Both
of these failed in the same
fashion when the payload was
not ejected from the orbit-
ing space vehicle.
The third attempt was
on 4 February 1961. Launch
time indicated that the opera-
tion was a.'Venus probe. The
payload was not ejected from
the orbiting space vehicle
which remained'in orbit. When
the Soviets concluded that
the ejection operation had
failed, they announced that
they had placed a. heavy satel-
lite into orbit as a prelimin-
aryr test for sending an auto-
Between mid-October and
mid-November 1962, Mars will
be in a favorable position for
the launching of a probe.
Although the USSR has thus
far had little success in
interplanetary probes, it is
likely that it will make addi-
tional attempts, probably
during this eriod.
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After a slow start Peiping
late last week stepped up its
exploitation of the 9 September
U-2 incident, weaving charges
of US responsibility for the
overflight into a general ?ca:i-
paign against "intensified US
aggressive and war dispositions"
throughout the world. A 14
September ;statement, which the
Chinese termed "a formal pro-
test" over the incident, charged
that "war danger" exists
wherever the U-2 goes. It
characterized the flight over
the mainland as a "criminal
act of mad aggression" against
China. The statement was ac-
companied by a salvo of docu-
mentary broadcasts tracing US
development and use of the U-2
for "spy" activities.
The overflight, Peiping
further charged, demonstrated
that US assurances that it
would not allow Chiang Kai-shek
to invade the mainland were
nothing but a "hoax." On the
contrary, the Chinese declared,
the flight. showed that the US
is "inciting and encouraging"
a Chiang invasion. Peiping
has also attempted to spur
popular indignation over the
episode, apparently. hoping
to rally the public's flagging
support for the Communist re-
gime. The Chinese domestic press
has focused-on the incident,
and ;;popular rallies have
been held throughout the country,
all of which hit hard at the theme
of. US "culpability."
Probably piqued at Moscow's
failure to offer.more than token
propaganda support on the issue,
Peiping used the flight as the
excuse to repeat many of its
arguments on points in dispute
with the USSR. According to the
Chinese, the incident should
be a lesson for people who retain
".unrealistic illusions about.US
imperialism:" Only by resolutely
repulsing the '.'US aggressors,"
the statement declared, can the
"wartlike activities of the impe-
rial:Estd' be stopped and the inde-
pendence of nations and world
peace defended.
Peiping apparently intends
to press its attack on the US
over the U-2 flight in the Sino-
US ambassadorial talks in Warsaw.
The Chinese.ambassador has asked
for a special meeting, at'which
he will probably expand on
Peiping's. 14 September protest.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SOVIET MILITARY ACTIVITY IN CUBA
The Soviet Union evidently
intends to provide Cuba with a
coastal defense system employing
short-range missiles as. well as
a missile-equipped air defense
network.
One coastal defense cruise-
missile site has been installed
near Banes.in Oriente Province,
probably to defend. the important
ports and military and industrial
facilities in the Nipe Bay Area.
The site has two revetted 35-
foot rail launchers, each con-
nected to a tracking radar.
Although the range of this
missile-system has not been
established, it is.believed to
be approximately 30 nautical
miles.
Similar sites probably
are being or will be set up to
defend other key ports and
coastal areas. A series of such
sites, in conjunction with the
Komar guided-missile boats
..recently delivered by the USSR,
would greatly strengthen Cuba's
ability to cope with sea-borne
intruders.
Possible SAM site, exact location unknown
Support facility for processing equipment
Airfield with MIG aircraft
Probable coastal defense cruise-missile site
~-~ Effective air defense perimeter (estimated
radius 20-25 nautical miles)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SOVIET MILITARY ASSISTANCE TO IRAQ
Under the terms of an agree-
ment concluded'la.st October,
the USSR; is committed to pro-
vide Iraq with such advanced
weapons as surface.-to-air mis-
siles (SAMs), antitank guided
missiles, and combat jet air-
craft--TU-16 (Badger) medium
bombers and MIG-21 (Fishbed)
interceptor fighters. Some of
this equipment is being deliv-
ered this year, and the rest is
scheduled for delivery during
1963 and 1964. The three Soviet
military contracts signed, with
Iraq since 1958 amount to as
much as $350 million.
In addition to these more
advanced Soviet weapons, the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
October agreement also provides
for the delivery of additional
land. armaments including T-54
tanks, and. field and antiair-
craft artillery and. ammunition,
as well as transportation, con-
struction, and other military-
related equipment.
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Despite army opposition to
thechange, Syria's Bashir al-
Azmah cabinet has been forced
out by pressure from civilian
political leaders. The new
prime minister, Khalid al-Azm,
is one of Syria's most astute
politicians and a forceful ex-
ecutive. He is also a man
whom even Syrians regard as
without principles.
In French pay,as long as it
was politically profitable, Azm
nimbly climbed on the pro-Soviet
bandwagon in 1956. He was
largely. instrumental in con-
summating the first Syrian arms
contract with the Soviet bloc
and negotiated a large economic
agreement in 1957. He joined
the Communists in attempting
to block the union with Egypt
in February 1958. When the
union was formed, he left the
country and visited Czechosio-
vakia.
The wealthy Azm, however,
is one of the country's largest
landowners. He does not appear
to be personally sympathetic to
Communism, and his maneuvers
seem designed simply to further
his own political fortunes.
The 21-man "national front"
cabinet appears too large and
includes elements from such a
wide political suectrum that it
will have difficulty working
together.
On the left are four
supporters of Akram al-Hawrani's
socialistic-Baath Party, plus
at least two other individuals
With socialistic outlook. On
the extreme right are three
members of the reactionary
Muslim Brotherhood. President
Qudsi's moderate Populist Party
holds five portfolios. The
key Ministry of Defense post has
been retained by Army Commander
in Chief General Zahr al-Din.
The remaining cabinet mem-
bers are technicians, with the
exception of former Prime Min-
ister Azmah, a moderate social-
ist;, who has become deputy prime
minister. Six members of the
new cabinet are holdovers..
Army opposition to the
change of government evidently
was overcome only after pro-
longed negotiations. Parliament
--which has been prorogued since
the army coup last April--agreed
as part of the final deal to
amend the constitution to allow
itself to be dissolved legally.
In return, the government has
promised new elections sometime.
within the next year. Mean-
while, Azm and President Qudsi
will rule by decree.
The upshot of the affair
seems to be that. the army has
relieved itself of the embar-
rassment of the constitutional
violation committed when it
closed down the parliament.
At the same time the army has.
relieved the country of a
legislative body which did
not represent the public's
present political mood. The
military are almost certain,
however, to.keep a tight
rein on Azm, whom the re-
gard with suspicion.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The election on 20 Septem-
ber of an Algerian assembly--
from an unopposed list of 196
candidates picked by Ben Bella's
political bureau--was designed
to produce a 70-percent majority
supporting the political bureau.
However,-the list was allowed
to include a few persons oppos-
ing Ben Bella, of whom Belkacem
Krim is the most prominent.
This fact and-the tendency of
many delegates to favor regional
interests--especially in the
Constantine and Kabylie areas--
will encourage new divisions.
Ben Bella has said that the
assembly is faced with a three-
fold task: the creation of a
new state, formation of a politi-
cal party which will be a policy
guide for the new nation, and
unification of the army for de-
fense and "civic action." He
sees the establishment of se-
curity as the principal immedi-
ate job of the administration in
the postelection period.
The National Liberation
Front, the erstwhile rebel or-
ganization, is to be reorganized
as a political party. As the
first step in-Ben Bella's program
the political. bureau is to con-
voke a party congress to form
a central committee and national
council. A new political bureau
will also be named at this time.
Simultaneous membership in both
the political bureau and the
government will be allowed but,
according to Ben Bella, this
will be "limited."
On 30 September the Na-
tional Council of the Algerian
Revolution (CNRA)--the parlia-
mentary body which formally di-
recited the rebellion--will meet,
but,, again according to Ben
Bella, the political bureau
does not need the CNRA's en-
dorsement of its actions.
A new military council is
to replace the army. general
staff. The council's purpose
is to form a new regular army
by amalgamating the semi-guer-
ril]'.a. forces of the six wilayas
and Col. Boumedienne's "frontier
army"--the former Army of Na-
tional Liberation, now called
the National Popular Army. In
the process, the total number
of-troops would be reduced to
35,000 from about 130,000. The
council will include Boumedienne
but not his subordinates. The
army is also to drop the politi-
cal activities it carried on dur-
ing the war.
uation.
The government is expected to
draw heavily on the army to get
its public works program going.
Some 70 percent of the Algerian
labor force is unemployed, and
this program appears to be the
principal means the government
has in mind for.relieving the sit-
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CURRENT INTELLIGENCE WEEK]LY SUMMARY
Preliminary steps to imple-
ment the UN plan for Katanga's
reintegration with the Congo
are under way despite continu-
ing evidence of mutual suspicion
between Adoula and Tshomb6 that
may thwart the plan and bring
serious armed clashes.
Adoula has issued decrees
relating to the payment of for-
eign exchange to the central
government and to the establish-
ment of a unified system of cur-
rency. A delegation of UN
aides and of representatives
appointed by Adoula to serve
on the financial and military
commissions has arrived in .
Elisabethville to begin discus-
sions. Tshomb? has not yet
appointed his representatives,
but an early response is ex-
pected.
Tshombb's
s a ements give increasing
evidence that he will stall on
military and financial integra-
tion pending the production of
what he considers an acceptable
constitution. He has emphasized
that he accepted the UN plan
only because it promised a fed-
eral. constitution--which he says
must be very flexible.
Adoula has invited the
provinces to submit their views
on the-constitution, but has
angrily rejected Tshombe's sug-
gestion that a Katangan consti-
tutional specialist meet with
the UN experts drafting the doc-
ument. Insisting that Katanga
could not have preferential
treatment, Adoula has expressed
fear that Tshomb6 might succeed
in having each step toward in-
tegration depend on prior dis-
cussion, agreement, and even
ratification of every one of
the 220 articles in the current
constitution draft.
Adoula for the first time
has expressed to UN Chief Rep-
resentative Gardiner his doubts
that he can get the constitu-
tion through Parliament, which
he considers "out to get him."
The premier now is considering
the device of first presenting
the draft to the provinces.
He has asked the UN experts to
complete their work by the end
of September.
Belgian and British offi-
cials, meanwhile, have voiced
concern that the UN is press-
ing ahead much too rapidly with
its integration plans. They
fear that Tshomb6 may be given
plausible pretexts for not co-
operating. Belgian Foreign
Minister Spaak told Ambassador
MacArthur that "forceful action"
by the UN at the present "most
critical period" might precip-
itate a resumption. of hostili-
ties which would be disastrous
for UN and Western policy.
Tshomb6 has sought to in-
terpret the 12 September clash
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CURRENT INTELLIGENCE /WEEI:CLY SUMMARY
between a UN patrol and Katan-
gan gendarmes near Elisabeth-
ville airport as a demonstra-
tion of the UN's "bad faith."
The circumstances indicate that
both sides bear responsibility.
Gardiner has told Ambassador
Gullion that the UN has no in-
tention of agreeing to limit
the freedom of UN patrols in
Elisabethville or around the
airport--which is vital to the
UN position.
Limited clashes between
Katangan and central government
units in the Kongolo area of
North Katanga have occurred re-
cently.-? Tshomb6's charge
that a major Congolese Army of-
fensive is under way in the area
is not confirmed; however, he
may hope that his charge will
head off such a move. He.has
sent mercenaries?and Katangan
forces northward to block any
Congolese Army move to the south.
Military action is also
possible in South Kasai as
a consequence of Adoula's
anger at "King" Albert Ka-
lonji's escape from jail and
his fear that Kalonji will
join up with Tshomb6. Adoula
ordered the occupation of
Bakwanga, Kalonji's capital,
but army commander Mobutu
favors concentrating on the Ka-
tangan problem and has vacil-
lated on executing the order.
Foreign Minister Bomboko
indicated on 18 September
that Adoula had dropped the
plan. Later reports indi-
cate, however, that some
military preparations were
still going on.
If Tshomb6 does in
fact attempt a rapproche-
ment with Kalonji--as he
is reported to be planning
--Leopoldville may still
feel it must act. F
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Developments at the con-
ference of the heads of state
of the 12-member Afro-Malagasy
Union (UAM), held at Libreville,
Gabon, 10-13 September indicate
that this group is likely to
play an . increasing, role in
African affairs. The UAM states--
commonly called the Brazzaville
group--have retained strong ties
with France since they became
independent two years ago; they
founded their union in 1961.at
Tananarive, capital of the
Malagasy Republic. Their con-
cern for such "safe" subjects
as developing common'cultural
and economic%institutions and
.improving defense cooperation
accords with the emphasis of
the "Monrovia powers" group, of
which they form the core.
The recent conference, how-
ever, took a strong political
line. Its communiqud urged sup-
port of rebel movements in Portu-
guese and Spanish African ter-
ritories, called for the expul-
sion of Portugal and South Africa
from the UN, and asked that the
UN General Assembly discuss the
problems of Angola 'and other
Portuguese and Spanish dependen-
cies. Although some UAM leaders
have sympathized with Katanga,
u the group derive its reme 1,.m a conference
hetd by the 12 French p king. crag or B eerille
in December 1960, They pressed 1 identity
of modest Vie s Smpli ty pp nB radical Arob
noi onolem or the mihtent pan Afncen~sm of Nkrumeh
these 12 t tes ellbin C oen,aF er UN trust
tearlfory, rwere French colonies became independent
at various times in 1460 and hone mointocnad close
political and economic ties with Paris.
REPUBLIC Re NBA
OP THE CONGO
the conference endorsed the
Adoula government and, accord-
ing: to Congolese Foreign Minister
Bommboko, approved the International
Court decision that all states
should pay the special UN Congo
assessment.
This line is probably in-
tended to steal'some of the
thunder from the "Casablanca
group" of radical African na-
tionalists; it would seem to
indicate that the UAM's 12. UN
votes will go to radical proposals
when colonial issues are dis-
cussed in this session of the
General Assembly. On other is-
sues such as the admission of
Communist China, the UAM ap-
parently will take a pro-
Western stand, even though some
individual states favor a more
neutralist course.
The emphasis of the con-
ference, however, was economic.
Several joint economic projects
were ratified, and it was de-
cided that, in negotiations be-
tween the UAM and the European
Common Market, the UAM would
continue to demand $810 million
in economic assistance over a
five-year period rather than
accept the $700 million offered
by EEC. 'Futhermore, the UAM,
whose agricultural exports. to
France are subsidized by Paris,
wants a higher ratio of price
support to development assistance
money that EEC has proposed.
The conference also approved
creation of an inter-African
development bank and an African
institute of-scientific research.
Other African states% some
of which have been hostile to
the UAM, showed considerable
interest in the meeting. Most
of the Casablanca group sent
cordial "greetings" and Guinea's
Sekou Tours sent an observer.
The three former Belgian dependen-
cies sent high-ranking officials
and. seem likely to join the UAM. 25X1
Rwanda reportedly will join this
year, followed later by Burundi
and Congo (Leopoldville)
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CURRENT INTELLIGENCE WEEKLY SUMMARY
There are continuing in-
dications that North Vietnamese
troops remain in key areas of
northern and eastern Laos.
Souphannouvong, who privately
concedes the presence of "some"
North Vietnamese personnel
within Laos, has told an Ameri-
can official that they would
be withdrawn "before the end
of this month." Irrespective
of the withdrawal deadline of
7 October, however, so-,ie North
Vietnamese troops probably will
be integrated directly into
Soupha.nnovong's Pathet Lao
forces.- Premier Souva.nna. Phouma
has admitted that some North
Vietnamese personnel are seeking
to conceal. themselves among the
Pa.thet Lao.
South Vietnam has . reca.l.led
its ambassador from Vientiane
in protest against the estab-
lishment of diplomatic relations
between Laos., and North Vietnam
and. formal sverance of rela-
tions appears imminent. On 1.8
September, Souva.nna told Ambas-
sador Unger that the King has
approved agreement for the North
Vietnamese ambassador and
expressed his belief that
Hanoi's representative would
arrive in a week's time.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The vigorous military ef-
fort being pressed against the
Viet Cong is contributing to
a growing sense of confidence
among South Vietnamese offi-
cials. The mobility of South
Vietnamese forces is helping to
overcome the obstacles presented
by the wide dispersal of Viet
Cong elements and their tactic
of avoiding major combat.
While the government has
scored several tactical suc-
cesses,-widespread guerrilla
activity continues. The number
of hostile actions has actually
increased in recent weeks.
Peasant resistance con-
tinues to be a major obstacle
to the government's programs.
Officials admit that at the
village level there is wide-
spread dislike of Saigon's proj-
ects, particularly the Self-
Defense Corps--orginally in-
tended to be the backbone of
rural defense. Bombardment of
civilian areas by government
forces during operations against
the Viet'Cong is also a source
of resentment.
more popular support, especially
among mountain tribesmen of cen-
tral Vietnam, and peasants are
participating more in programs
for achieving rural security.
Nevertheless, the extent of
voluntary commitment to Saigon's
cause is uncertain, and coercion
has been necessary for at least
part of the expansion of the
strategic hamlet program and
"clear and hold" operations--
province rehabilitation proj-
ects.
The wide scope of these
programs, moreover, is taxing
the central government's capa-
bility, and implementation de-
pends largely on local leader-
ship., In some areas this leader-
ship is of low quality and con-
tributes to peasant disaffection.
While the outspoken dis-
satisfaction with the Diem re-
gime of last year has disap
pearEed, criticism by non-Com-
munist Vietnamese continues to
be heard.
The government has made
considerable effort to gain
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CURRENT INTELLIGENCE WEEKLY SUMMARY
The Indonesian Government
is concerned that a separatist
movement could develop in West
New Guinea which would demand
either independence or a special
autonomous status within In-
donesia. Djakarta accordingly
is making intensive preparations
to ensure its permanent control
of the territory. The Dutch-
Indonesian agreement of 15 Au-
gust provides for self-determi-
nation of West New Guinea before
the end of 1969.
Djakarta hopes to assert
considerable influence in West
New Guinea starting on 1 October,
when the UN administration be-
gins, even though Indonesia is
not scheduled to administer the
area until 1 May. Under the
lugust agreement, the UN has
authority to employ personnel
provided by Indonesia, and
Djakarta will probably make
available individuals in a
variety of fields for UN con-
sideration. Sukarno also plans
to take advantage of the fact
that, as of 1 October, civilian
traffic to and from New Guinea
will be unrestricted.
Foreign Minister Subandrio,
who is coordinator for West
New Guinea affairs, announced
in mid-September that basic
Indonesian plans for the "ex-
tensive development" of West
New Guinea had been completed
and only awaited implementation.
Sukarno has called for 2,500
teacher volunteers whom he
wants to send to the territory
as soon as possible. Sukarno
is also counting on settling
large numbers of Javanese in
West New Guinea over a five-
year period in order to over-
whelm native sentiment for
autonomy.
To the surprise of Indo-
nesian soldiers who infiltrated
New Guinea last spring, the
native Papuans did not welcome
them and for the most part
turned them over to the Dutch.
Of the eight miniscule political
parties in West New Guinea, only
one is willing to see the terri-
tory merged with Indonesia.
Papuan leaders residing outside
New Guinea, Whom Djakarta has
cultivated over the years, are
strong advocates of autonomy
and are in contact with Papuan
nationalists within the territory.
Indonesian officials probably are
also worried over the provision
in the August agreement that the
local New Guinea Council, elected
in March 1961, is to be consulted
during the UN administration be-
fore the issuance or amendment
of any laws or regulations.
Sukarno hopes to win pre-
ponderant Papuan loyalty, how-
ever, through propaganda and
economic development and wants
to have made significant progress
b 1 :Ma
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CURRENT INTELLIGENCE WEEKLY SUMMARY
THE NETHERLANDS
The Dutch Parliament's
approval of the accord with
Indonesia settling the dispute
over West New Guinea removed
a potentially disruptive po-
litical.issue. Although the
government was never directly
threatened by the issue, there
was always the possibility
that ministers advocating a
harder line toward Djakarta--
notably Foreign Minister Luns
and Defense Minister Visser--
might resign and force a re-
construction of the cabinet--
now made up of four right-of-
center parties of which De
Quey's Catholic People's
Party (KVP) is dominant.
During the parliamentary
debate earlier this month,
there were sharp attacks against
the US by representatives of
the government parties bitter
over the US role in the ne-
gotiated settlement. While
this resentment is not ex-
pected to damage US-Dutch re-
lations, certain Dutch officials
may on occasion prove to be
less cooperative than in the
past on problems of.mutual con-
cern.
The Hague has already ad-
vised UN Acting Secretary Gen-
eral Thant of its willingness
to continue economic aid to
West New Guinea and has offered
to contribute $10 million an-
nually for the next three years
for this purpose. The settle-
ment also paves the way for an
eventual restoration of diplo-
matic relations with Indonesia
--broken off in 1960. Dutch
economic interests believe that
once this step. has been achieved,
it will. facilitate an expansion
of trade and investment, as
well as a'settlement of claims
for property seized by Indo-
nesia--estimated to total $2
billion.
With the settlement of the
West New Guinea dispute, which
A factor in Labor's desire
to regain cabinet representa-
tion is the realization that its
general postwar success and ac-
ceptance by approximately one
third of the Dutch electorate
is directly'related to its past
record as a government party.
During the past three years it
has discovered that the role
of opposition party is not an
easy one. when its views on most
major problems coincide with
those of the government,_
SECRET
has preoccupied the government
and public opinion for the past
year or more, European integra-
tion questions have again come
to,the fore. The Dutch are par-
ticularly anxious to assure
Britain's broad participation
in steps toward economic and
political union and, like the
other Benelux countries, are
uneasy about the prospect of
a united Europe dominated by
France and West Germany. Dutch
public opinion has strongly
supported the government in its
opposition to separating the
goals of an economic and po-
litical union.
On the domestic front, the
government 'parties and the
opposition Labor Party are
maneuvering in preparation for
the national elections next
spring. Although it appears
that the present four-party
coalition will serve out its
normal term, both the KVP and
Labor seem to be preparing the
ground for resuming their pre-
1959 cabinet, cooperation.
Labor, as a middle-of-the-
road socialist party strongly
supporting the Netherlands' NATO
and Western ties, is in basic
agreement with the KVP on.foreign
policy and defense matters.
They are often at odds on a
number of specific domestic
issues such as wage policy and
the scope of social. welfare, but
even here there.is a wide com-
munity of views.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
France will hold its largest
military. exercise since 1939
during the first half of October.
Some.50.,000 army personnel,
1,100 aircraft, and at'least. 60
warships of the French Mediter-
ranean Squadron will be involved.
Designed in part to retrain
returnees from Algeria in large
unit operations.,' the exercise
reportedly was personally ordered
by De Gaulle.. It may be intended
to furnish support for his
theories on the-feasibility of
national, rather than NATO, de-
fense of'France.
Three major parts of'the
exercises are identified in an
Armed Forces Ministry communique.
In eastern France 30,000 men
and .800 combat aircraft will
maneuver under simulated nuclear
warfare conditions in large
units with modern equipment.
Another 20,000 men and 300 air-
craft will practice interior
defense against guerrilla forces
and airborne invaders in the
Massif Central region. A naval-
air exercise in the Mediterranean
will test maintenance of over-
seas lines: of communication,
primarily against submarine
attack.
A few reserve units will
join active duty.forces in the
maneuvers, and civil authorities
are to play an important role
in.'the.interior defense phase.
General Norstad has agreed to
.the withdrawal-of one mechanized
brigade of about 8,000 men from
Germany during the exercise
period. No Allied military per-
sonnel will take-part, but
foreign observers will be al-
lowed to attend.
Nearly 200,000 men have
been brought 'back from' Algeria
since March. Many of these were
draftees who have already been
released from active duty as
the government moves to cut army
strength from more than 700,000
to 450,000 by 1970. A consider-
able number,. however, are pro-
fessional soldiers who have had
little recent experience outside
of the guerrilla. operations of
Indochina and Algeria. The
maneuvers are designed to mix
returnees with units already
well trained in techniques of
combat in Europe. De Gaulle
probably expects the maneuvers
also will prove useful in build-
ing military confidence and re-
orienting the returnees to their
new "European" task.
The maneuvers may also.
have broader political ramifi-
cations.' Gen. Jean Le Comte,
the senior French military .of-
ficer at SHAPE, told a US
Embassy officer. that the ex-
ercise is intended to demon-
strate the feasibility of de-
fending territory after the
NATO line of defense in Ger-
many had been breached by a
Soviet attack. Le Comte said
he expected the results of
the exercise will be.used,by
De Gaulle to support his con-
cept of the defense of France.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
Recent political compro-
mises in Brazil have strength-
ened President Goulart's politi-
cal position for the next sev-
eral months. On 15 September
the Congress set 6 January as
the date for a plebiscite on
the parliamentary system adopted
to curb Goulart's power when
he took office a year ago.
Congress also empowered him
to name a provisional cabinet
without parliamentary approval,
an arrangement which allowed
the' legislators to resume cam-
paigning for the 7 October
elections.
The plebiscite is generally
expected to result in restora-
tion of a strong presidency.
Political attention now is
focused on the balloting for
two thirds of the Senate, the
entire Chamber of Deputies.,
eleven state governors, and a
number of lesser state and
municipal offices.
The elections are expected
to result in some diminution
of the archconservative majority
in the legislature. Extreme
leftists, who have some 20 per-
cent of the. seats in the Cham-
ber, are likely to make some
gains. Goulart's anti-US
brother-in-law, state governor
Leonel Brizola, who aspires to
leadership of the leftist na-
tionalist forces in Brazil, is
likely to be-elected as federal
deputy. The Brazilian politi-
cal system, however, has built-
in resistance to sharp swings
of the political pendulum,
and there is little chance
that the leftists will win a
majority in.either house of
Congress.
The three most important
gubernatorial races are in Gou-
lart's home state of Rio Grande
do Sul, the industrial state of
Sao Paulo, and in Pernambuco,
the key state in the impoverished
northeast. In Rio Grande do Sul
the race is among three candi-
dates, each'of whom is less left-
ist than incumbent Governor
Brizola. Goulart's Labor Party
candidate Michaelson appears to
be trailing both the conserva-
tive candidate and a non-Commu-
nist reformer.
In Sao Paulo, the race ap-
pears to be very.close between
corrupt machine politician Ad-
hemar de Barros and erratic for-
mer President Quadros. In Per-
nambuco, pro-Communist Miguel
Arraes appears to be losing
ground to his strongly conserva-
tive opponent.
If Michaelson, Quadros,and
Arraes all are defeated, the left-
wing threat--which has appeared
increasingly menacing during the
past year--will recede, and mod-
erate pro-US-former President
Kubitschek believes it will then be
possible to remove Communist in- 25X1
filtrators from many of the of-
fices where they now are installed.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
President Alessandri of
Chile appears to have decided
on one more month of delay be-
fore currency devaluation, in
spite of the repeated recommen-
dations by a committee of the
International Monetary Fund for
immediate action..
After eight months of de-
bate and maneuvering over the,
unpalatable but necessary step,
the government last week ap-
peared ready to devalue but
stopped short when the four
cabinet members who represent
the Radical Party (PR) in the
coalition. submitted their resig-
nations in protest.
The PR holds its national
convention in mid-October, and
is expected to vote to withdraw
from the coalition at that time.
Alessandri has been informed by
PR leaders that they will feel
forced to join the opposition
if their withdrawal is precip-
itated by devaluation, which
the PR has adamantly opposed.
The underlying motivation for
withdrawal, however, is to gain
freedom of action with a view
to the next round of elections.
PR leaders have implied that
if their move is not obviously
in protest over Alessandri's
policy, the party will be able
to maintain an independent and
uncommitted position permitting
a measure-of legislative cooper-
ation with the President.
The PR favors legislation
to raise wages, which commands
a majority in Parliament. even
without PR support. Alessandri
has vetoed such bills as infla-
tionary, and would probably
welcome any agreement under
which the PR will continue to
abstain from moves to override
his vetoes.
Chile's precarious economic
situation was underscored by
two developments during the past
week. The government; increased.
duties on imports in an effort
to conserve foreign exchange,
and also entered into a barter
agreement with Hungary for the
importation of sugar in exchange
for Chilean agricultural goods.
The governing coalition
was heartened. somewhat by its
candidate's victory in the 2
September by-election in San-
tiago to replace a deceased
congressman, but the Communist-
dominated Revolutionary Front
(FRAP) made significant gains
over its showing in previous
elections in the same district.
The FRAP's presidential candi-
date, Socialist Senator Salva-
dor Allende, gave Alessandri
a, close race for the. presidency
in 1958, and appears to feel
confident of victory in 1964.
If the process of d.isintegra-
tion in the governing coalition
is not reversed before the
1964 campaign begins, a FRAP
victory is almost assured.
The Chilean ,Foreign
Ministry has been under some
pressure from other members
of the Organization of American
States (OAS) to be more flex-
ible in its dispute with
Bolivia about the use of the
waters of the Rio Lauca. Bolivia,
which is making no use of the.
water but wants a Chilean
guarantee of free access to
the Pacific, insists that
the dispute be submitted to
arbitration and that diver-
sion of the'water be stopped
pending a decision. Chile
is willing to take the case
to the International Court
of Justice, but will not sus-
pend its Lauca operations in
the meantime. Early in Sep-
tember, Bolivia suspended
participation "in the OAS when
that body did not support Boliv-
ia's case. Chile had threatened
the same move earlier in the
year.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
SPECIAL ARTICLES
THE EUROPEAN COMMON MARKET's ENERGY POLICY
Ministerial representatives
from the six European Common
Market,(EEC) countries will meet
on 5 October to try to reach
agreement.on the basic outline
of a common energy policy. Since
1957, agreement has been blocked
by conflicting national interests
--notably West Germany's coal
industry, France's investments
in Saharan oil development,
and Italy's desire for cheap
fuel, including Soviet crude
oil. Development of a common
policy would be a major step
toward the economic union planned
by the EEC. Final agreement is
not likely to be achieved at the
5 October meeting, but there is
a general consensus that progress
must be made soon in view of the
accelerated implementation of the
EEC in other respects..
Problems Involved
Great Britain's application
to join the Coal-Steel Community
(CSC) and EURATOM as well as the
EEC has increased both the urgency
and the difficulty of working
out a common energy policy.
.Britain produces almost as much
coal as all the present EEC.
countries together. British
companies also control a substan-
tial portion of the oil output
of the Middle East, which fur=
nishes an increasing share of
Europe's energy needs.
The Continental energy pro-
ducers are apprehensive over
the increased competition which
would result from British entry,,
but hope that a common policy can
be devised which would keep this
within acceptable limits. Britain
has indicated it will participate
in formulating and implementing
a common energy policy if it
joins the EEC.
Imported petroleum in re-.
cent years has become the least
expensive source of energy in the
EEC countries. Hydroelectric
power contributes a substantial
portion of energy resources only
in Italy and France, and produc-
tion is expected to remain roughly
at present levels until at least
1970. Coal, still the main source
of energy and available in quan-
tity domestically in Western
Europe, has become relatively
more expensive than fuel oil.
Coal industries and labor
unions in the major producing
countries, however, have long
held political influence and have
pressed protectionist policies
on their governments. The pro-
tectionists have clashed head-
on with advocates of "cheap
energy," who argue that, for the
EEC to remain competitive with
other trading areas of the world,
fuel costs--an element in the
production of almost all goods--
must be kept low.
Another difficulty in
working out a common energy
policy has been organizational.
Responsibility for energy,mat-
ters is split among the three
European communities. The Coal-
Steel Community (CSC), the first
of the six-nation organizations,
was established in 1952. With
its jurisdiction in the energy
field limited to coal, it has a
natural vested interest in the
future of the coal industry
and some of its officials have
shown strong protectionist tend-
encies.
Atomic energy is under
EURATOM. Set up in 1957 when
the Suez crisis had suggested
the need for a crash atomic
energy. program; EURATOM at pres-
ent plays only a minor role in
European energy problems. Its
importance will increase after
1970 as atomic power begins to
develop.
Oil and oil products fall
under the jurisdiction of the
EEC, whose officials have tended
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CURRENT INTELLIGENCE WEEKLY SUMMARY
to emphasize the benefits the
six nations' combined economies
can expect from a "cheap energy"
policy.
Slow Progress 1957-1961
In 1957 the Common Market
countries set up an interexecu-
tive Energy Working Group to
work out a common energy policy.
It is chaired by a representa-
tive of the CSC's High Authority,
and has members from the EEC
Commission and from EURATOM.
Until early 1962 the Work-
ing Group made little progress.
West German and. Belgian interests
fought to protect their high-
cost coal production. France
insisted that any agreement
should assure a market within
the EEC for France's developing
oil industry in. the Sahara, even
if Saharan oil were more expen-
sive than Middle East oil. Italy
opposed any proposals which
would restrict the import of low-
priced Soviet oil.
A measure of the disagree-
ment is the difficulty in reach-
ing tariff agreement on petroleum
products. Of the 30 categories
of goods listed in the original
EEC Rome Treaty of 1957 on which
a common external tariff was to
be decided by later negotiation
(the List G), petroleum products
other than crude oil are the
only category still not nego-
tiated.
In early 1962 the tempo of
progress toward a common energy
policy began to increase. This
has resulted in part from gen-
eral realization that greater
progress was essential if agree-
ment was. to be reached within the
EEC's 12-15-year transition
period. There was also concern
that British entry would create
a whole new series of problems.
The faster pace also re-
flects the personal influence
of EEC Commissioner and Vice
President Robert Marjolin. The
US Mission to the Economic Com-
munities comments that he is be-
coming the "Mr. Energy" of the
communities, and that his activ-
ities.have contributed to the
EUROPEAN ECONOMIC COMMUNITY ENERGY CONSUMPTION
1960 - 1962
(MILLION METRIC TONS OF HARD- COAL EQUIVALENT)
1962
Hard Coal
West Germany
France
Italy
Belgium
Netherlands
Luxemburg
Lignite
251.3
128.5
67.5
10.9
24.6
15,5
4.4
35.2
246.8
124.0
67.8
11.1
24.1
15.4
4.4
36.4
(ESTIMATED)
242.5
120.0
68.9
10.9
23.2
15.4
4.1
36.5
West Germany
33.0
33.7
33.7
France
1.4
1.7
1.8
Italy
0.6
0.6
0.6
Belgium
0.1
0.1
0.1
Netherlands
0.2
0.2
0.2
Luxemburg
011
0.1
0.1
West Germany
42.1
51.9
60.0
France
36.2
39.8
44.2
Italy
28.7
32.9
37.3
Belgium
9.9
11.0
12.2
Netherlands
15.2
16.2
17.6
Luxemburg
0.3
0.4
0.4
West Germany
0.9
1.0
1.2
France
4.0
5.6
6.5
Italy
8.3
8.5
8.9
Belgium
0.1
0
0
Netherlands
0.4
0.5
0.5
Luxemburg
0
0
0
Hydroelectric power
42.3
42.4
43.4
West Germany
6.8
7.5
7.7
France
16.2
15.5
15.2
Italy
19.1
19.4
20.4
Belgium
0.1
0
0
Netherlands
0.1
0
0
Luxemburg
0
0
weakening of the CSC's protection-
ist views on coal.
After working through the
spring, the Interexecutive Energy
Working Group reached agreement
in June on a proposal setting
forth the basis for a common
energy policy and listing the
transitional measures necessary
to achieve a common policy by
1970. The proposal reflects ac
reptance by the Working Group
ai most of Marjolin's "cheap
3rer~;y"' views.
The proposal was discussed
briefly and noncommittally at'
one meeting of CSC ministerial
representatives in July and will
be considered in detail by the.
ministers on 5 October. What-
ever common energy policy is'
finally agreed upon is likely
to resemble this proposal, but
some concessions to protection-
ist interests may be included.
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MILLION METRIC
TONS OF
HARD ' COAL
EQUIVALENT
TRENDS IN ENERGY CONSUMPTION
1950-1970
* Includes natural gas, lignite, and hydroelectric power.
The estimates for natural gas do not take into account 300
recent discoveries of large natural gas deposits in
northern Netherlands, which between now and 1970
will probably increase the share of natural gas in the
EEC's fuel balance. This chart also includes no data
on atomic energy, the amount of which is expected
to be insignificant until 1970.
Present Proposal
Energy consumption in the
EEC countries is expected to rise
by 60 percent between 1960 and
1970. The basic premise. of
the Working Group proposal is
that this increase must be met
primarily by expanded oil imports.
Low-cost energy is the goal, and
after the transition period there
should be free movement of energy
within the community.. Coal pro-
duction is not expected to in
crease,.and it may slowly de-
crease; the proposal does not
specify the precise level of
coal production to be maintained
for the future.
Imports of both oil and
coal into the EEC would be tariff-
free, with direct subsidies being
given to coal producers to assure
the desired level of domestic
coal production. The rationale
here is that subsidies would
allow the price of domestic coal
to be lowered to that of the
cheapest fuel--imported oil or
US coal. This is considered pref-
erable to restricting imports
of fuels--a policy which would
force the basic energy price up
to that of the least efficient
European. coal producer.
On the question of security
of supply in wartime, the Working
Group's proposal tries to counter
the arguments of coal protection-
ists by pointing out that in a
general conflict, the community's
coal mines would be. as vulnerable
as imported supplies. The only
security hazards for which plans
can be made are political troubles
in certain oil--producing areas
such as the Middle East, or an
artificially arranged rise in
oil prices. The Working Group
recommends diversification of
oil supply sources as the main
answer to these threats.
While conceding that subsi-
dized coal production will remain
one element in supply security,
the Working Group also foresees
that some assistance might be
given to oil sources such as the
Sahara, which from a security
standpoint may be more reliable,
although more expensive, than
the Middle East. In addition,
recent discoveries of large
natural gas deposits in Europe,
particularly in northern Nether-
lands, are expected to improve
long-range supply security.
Under the present proposal
there would be community-wide
quotas on imports of oil and
coal from the Soviet bloc, to
ensure that such imports would
not rise to a level which would
place the.EEC in a position of
dependence on the. bloc. The
size of the quotas would be
fixed each year by agreement
among the Six.
Present and Future Problems
Agreement on the proposed
common energy policy and the
transitional measures to be
undertaken during the next six
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to seven years may be as difficult
to reach as was the agreement at
the start of 1962 on the EEC's
common agricultural policy.
Both West Germany and Bel-
gium have expressed concern that
the Working Group's plan would
sacrifice their coal mines "on
the altar of cheap energy," and
the whole plan. could founder
in disagreement over the level
of coal production to be main-
tained. The Working Group fore-
sees an eventual annual produc-
tion total for the six present
EEC members of somewhere between
100 million metric tons and
the 1961 level of nearly 250
million tons. If the coal in-
terests are successful in press-
ing for a level at the upper,
end of this range, the economic
benefits of cheap energy would
be partially offset by the ex-
pense of government subsidies.
The CSC High Authority has re-
cently estimated that if the com-
munity wishes to maintain coal
production. at 200 million tons
a year, it would cost approxi-
mately one billion dollars a
year in subsidies.
France's insistence on a
favored position for its Saha-
ran oil may be satisfied by the
Working Group's proposals. Brit-
ain's prospective membership
complicates this issue, however,
since London sees no reason why
Saharan oil--merely because it
comes from former French terri-
tory--should be favored over
oil-from British companies in
the Middle East. Dutch and
other international oil interests
can be expected to support
Britain.
various protectionist groups
may join forces in an.effort to
scuttle plans for a meaningful
energy policy.- In return for
support on Saharan oil, France
might support the German coal
industry's, claims for protec-
tion. or again, a three-way
deal among Britain, France, and
West Germany has been suggested,
whereby all three countries
would support Britain's desire
to continue excluding cheap US
coal imports, France's desire to
keep British coal out of French
coastal regions, and West Ger-
many's desire to weaken or elim-
inate the present anti-trust
regulations of the CSC.
Italy's National Hydrocar-
bons Agency (ENI) and its chief,
Enrico Mattei, also pose a con-
tinuing problem for the pro-
jected common energy policy.
Mattel appears unwilling to sub-
mit to any community-wide con-
trols on oil imports from the
Soviet'bloc, and his influence
in the Italian Government is
so great that he for practical
purposes determines Italy's
oi:L policies.
None of these problems is
insurmountable-as long as the
basic desire among the Six to
make the Common Market work con-
tinues. The technique of keep-
in?e negotiations in session un-
til agreement is reached has
been developed to a fine degree
by the EEC Commission and min-
isters. Unless a major rift
develops within the Common
Market on such questions as
British accession or political
union, the basic desire for
agreement will continue and
a common energy policy may be
worked out, following hard
bargaining, within the next
year..
Effect on the US
A Common Market energy policy.
similar to that-now under discus-
sion would probably be less pro-
tectionist than the national poli-
cies of the six EEC. members. Ex
ports of US coal and, of American-
owned oil companies should have
greater access to the West European
market than they have at present.
It is likely, however, that the
compromises made in the negotia-
tions on a common energy policy
-will be in the direction of greater
protectionism. Such compromises 25X1
would correspondingly reduce the
prospects for-an expansion of US
exports.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
"BANTUSTANS" IN SOUTH AFRICA
In its efforts to make its
apartheid policy as credible as
possible, the South African Gov-
ernment is stepping up the
development of "Bantustans"--
areas into which the country's
Africans are supposed to be segre-
gated.and theoretically allowed
to develop politically along their
own lines. The. apartheid program
of South Africa's Afrikaners has
always been a mixture of logic
and irrationality, and the Ban-
tustan idea is no exception.
Apartheid
The motivating force of
apartheid is the fear of the
narrow, ingrown Afrikaner com-
munity that it will be swamped
by the other cultures surround-
ing it. According to the program,
the only way to keep from being
overrun is to put each race in
its own "national homeland"
and discourage uncontrolled
inter-area contacts--in other
words, to extend to the other
races the life which the
Afrikaner community holds as
its own ideal.
Not all Afrikaners view
apartheid simply as a mechanism
for perpetuating white rule.
To many, the policy is the only
possible way to solve South
Africa's racial problems. The
strength of their support for
the government is partly de-
termined by their estimate of
the success with which apartheid
is being implemented.
The program was developed
in the 1940s, when the Afrikanerg
Nationalist Party was still in
the opposition. Since coming
to power. in 1948 the Afrikaners
have been wrestling with the
social and economic obstacles
to its implementation.
For example ,between 80 and
90-percent of the land in the
country is reserved for Europeans,
who actively work most of the
productive part of their acreage.
Two thirds of the Africans--or
"Bantu" in South African par-
lance--live on the farms or in
the cities of these European
areas. The government cannot
enlarge and consolidate the
"Bantu national homelands" at
the expense of the whites with-
out being voted out of office;
nor can it move large numbers
of Africans back to the exist-
ing, Bantu areas without dis-
rupting both the white economy
and the crowded African re-
serves.
The apartheid policy, more-
over., has had no real success
in dealing with the colored
(mixed-blood) and Indian com-
munities, which have no separate
"national homelands" but still
have few rights in the white
areas.
The "Bantustan" Program
Economic and social develop-
merit under apartheid would be
slow and very expensive at best.
Nevertheless, the Verwoerd gov-
ernment must. appear to be making
rapid enough prcgress to main-
tain Afrikaner self-confidence
at home and also make apartheid
slightly more palatable abroad.
To do this,.Verwoerd, a con-
summate politician and ded-
icated proponent of apartheid,
is concentrating on the political
development of the African areas.
There are to be seven of
these "Bantustans," each with
a pyramid of local and regional
African "authoritiesl"or gov-
ernments. At. the apex of each
pyramid there will be a'"ter-
ritorial authority" which is
to be turned into a legislature
as the territory assumes a
greater degree of self-govern-
merit. Not shrinking from the
logical implications of this
development, Verwoerd has said
that the "Bantustans" may some-
day become independent, linked
Commonwealth-fashion with white
South Africa.
So far two territorial
authorities have been set up,
and another is to be established
next year. Of these, the
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CURRENT INTELLIGENCE WEEKLY SUMMARY
25X1
"'REPUBLIC OF SOUTH AFRICA
SOUTH-WEST
AFRICA
7Durban;
INDIAN OCEAN
African "homelands"
0 STATUTE MILES 500
32670
Transkei Territorial Authority
is by far the most advanced.
This year the government granted
it a severely limited measure
of autonomy. Verwoerd apparently
plans to use this territory,
the only one of the "Bantustans"
which has any geographic homo-
geneity, as the show window for
apartheid.
The Transkei
The Transkei is a pastoral
and agricultural territory
16,500 square miles in area,
inhabited by more than 1.3 million
Africans and a scattering of
other races. The soil, unlike
that in some of the other African
"homelands," is fairly well
watered by South African stand-
ards, but it is losing its
fertility under the impact of
years of primitive farming. Its
productivity could be improved
if the Africans could be per-
suaded to cull their herds and
improve their farming methods;
however, retraining projects
have met considerable resistance.
The government also hopes
to encourage African capitalists
to set up factories within the
territory and is trying to at-
tract white capital to neighbor-
ing European areas. These ef-
forts have not been particularly
successful so far, however, and
the territory's main source of
income remains the wages?earned
by African men in the European-
run mines near Johannesburg and
in South Africa's cities.
Under the new constitution
the territorial assembly will
have 109 members: 64 chiefs and
paramount chiefs, and 45 members
elected under what amounts to
universal adult African suffrage.
It will be competent in the
fields of justice, interior,
agriculture, and education, among
others. The South African Gov-
ernment, however, retains
jurisdiction in a formidable
array of fields: defense, ex-
ternal affairs, internal security,
posts and telegraph, railways,
national roads, harbors, im-
migration, currency, public laws,
customs, and excise.
The chiefs who will dominate
the assembly are salaried gov-
ernment servants. White civil
servants will exercise real
authority in most Transkeian
departments. All of the author-
ity's legislation is subject
to the veto of the.South African
President. The body competent
to modify the, Transkeian constitu-
tion is the South African
Legislature, not the territorial
assembly.
When these facts are com-
bined with the territory's com-
plete financial dependence on
white South Africa, it becomes
evident that the Transkei's
"autonomy" is designed mainly
to impress the country's whites
and its overseas critics.
This is not the way the
Transkei Africans view the gov-
ernment's pronouncements, how-
ever.
the inhabitants are
sp X nto two schools of
thought: those who oppose the
"Bantustan" idea for a variety
of reasons ranging from national-
ism to traditionalism; and those
who accept it because they be-
lieve it is the best way of ob-
taining independence.
Among the former is an in-
fluential minority of chiefs led
by the highly respected paramount
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chief of the largest tribe in
the Transkei, who despite his
dependence on a government
salary has repeatedly condemned
the plan.
Among the latter is Chief
Kaiser Matanzima, who will prob-
ably be the territory's first
chief. minister. Matanzima has
stated that he regards the "Ban-
tustan".idea as the quickest
way of getting the white man out
of the Transkei.. He wants.
Africans to take over the ter-
ritory's commerce, and he wants
the Transkei,which borders the
Indian Ocean, to- have its own
deepwater port. Verwoerd at
present is not willling to
grant either demand. As chief
executive of a show-window ter-
ritory, however, Matanzima might
have enough leverage to force
the pace of development beyond
what the European government
deems advisable.
Thus even-the supporters
Of the Transkei program are
likely to.prove hard to handle.
The government has been having
trouble with its opponents,
on the other hand, for two years.
The eastern part of the ter-
ritory has been governed under
emergency regulations since
October 1960, when there was
an outbreak of violence aimed
at chiefs who support the gov-
ernment.
The violence was partly a
result of long-standing African
resentment at government ef-
forts to'change primitive farm-
ing methods. However, it
stemmed mainly from the gov-
ernment's having shipped African
nationalists and hoodlums back
to the Transkei from the cities
following the outbreaks in the
spring of 1960. These dis-
ruptive elements apparently
are still present,-some of them
operating from safe havens in
nearby British-administered.
Basutoland.
If the government is to
impa`t an aura of reality to
its show window, it must also
get the support of at least
some of the Transkei's better
educated Africans. The ter-
ritory's African population
is fairly well educated by
standards elsewhere on the
continent; there are eight
times as many college graduates
as there are in Nyasaland.
Unfortunately for Verwoerd,
few of these have identified
themselves with the "Bantustan"
plan.
Further opposition is
likely to come from the Transkei
Africans in the cities, who
apparently are to be allowed
to vote for the territorial
assembly's 45 elected members.
These Africans are relatively
sophisticated, and many of them
are caught up in nationalist
activity. If they participate
in the election and if their
votes are given full weight,
they might be able to fill some
of the seats, with Africans who
oppose the "Bantustan" idea.
These might then ally with the
chiefs who share their opinions.
If the government tries to rig
the elections, it runs the risk
of making itself look ridiculous.
It seems likely that the
government will persist in its
efforts to make the "Bantustans"
as credible as possible, if only
because the morale of'a good part
of Afrikanerdom would be endangered
if it did otherwise. The only field
in which the necessary rate of prog-
ress can be maintained, however,
is that of politics, and it will
take all of Verwoerd's ability to
control the pressures among the
Africans which the idea of "Ban-
tustan" independence brings to the
surface.
Given the overwhelming power
of the South African security forces,
organized violence on a large scale 25X1
is unlikely. Nevertheless, the
Africans are not completely with-
out leverage, and it seems possible
that the "Bantustans" will evolve 25X1
in a direction which is not par-
ticularly palatable'to the govern-
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