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December 14, 1962
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Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY DOS REVIEW COMPLETE COPY NO. 76 OCI NO. 0447/62 14 December 1962 NGA Review Complete CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE P Ivt.ka.S.Y ~rC+y RL ,Xaocy SECRET GROUP 1 Excluded from automatic downgrading and declassification Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 25X1 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 14 December 19102 T H E W E E K I N B R I E F (Information as of 1200 EST 13 Dee) CUBA . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1 Activity at the four Soviet armored group encampments in Cuba is continuing, with no evidence that preparations for withdrawing these forces are under way. The function of the installation at Mayari Arriba in eastern Cuba re- mains unestablished; it may serve as a storage or sup- port facility for cruise missiles. Recent public statements suggest that Cuba is considering giving greater support than before the crisis to Latin American insurrectionary movements. The recent nationalization of small- and medium- size businesses by the Castro regime may further increase domestic disenchantment with the regime. SOVIET FOREIGN POLICY :DEVELOPMENTS . . . . . . . . . . . . Page 3 Khrushchev's 12 December speech to the Supreme Soviet was intended as a definitive interpretation of his actions in the Cuban crisis. His account of the crisis was aimed primarily at establishing the point that the USSR had "con- firmed its agreement" to withdraw offensive weapons only after a public statement by President Kennedy that--in Khrushchev's words--the "US would not attack Cuba and would restrain its allies from such an action." The speech con- veyed no sense of urgency regarding a Berlin settlement and implied that Soviet domestic problems will be given priority over foreign policy in the period immediately ahead. Khrushchev's thinLy veiled attack on the Chinese Com- munists will undoubtedly produce a vigorous response from Peiping. These exchanges will increase the momentum of the dispute and make it more difficult to avoid a formal break in party relations. In contrast to the deepening Sino-Soviet rift, the growing rapprochement between Moscow and Belgrade was symbolized by Marshal Tito's presence on the platform when Khrushchev addressed the Supreme Soviet and by the fact that Tito himself addressed that body the following day. An address by a foreigner to the Supreme Soviet is highly unusual, if not unprecedented. At Geneva, the Soviet delegate formally introduced Mos- cow's proposal for using unmanned seismic stations to police a nuclear test ban. The USSR's next move may be to declare another unilateral moratorium on Soviet testing to take ef- fect on 1 January. THE SINO-INDIAN DISPUTE: . . . . . . . . . . . . . . . . . Page 8 Increasingly strident Chinese pronouncements and Nehru's formal rejection of Peiping's key proposals for mutual with- drawal and negotiation have moved the border dispute a bit closer to a resumption of fighting. The cease-fire along the frontier is now three weeks old and Chinese withdrawals, at least in the northeast, are apparently continuing at a SECRET i BRIEFS Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET ~Wi CURRENT INTELLIGENCE WEEKLY SUMMARY slow pace. The conference of six nonaligned nations in Colombo, which concluded on 12 December, seemed agreed only that the two adversaries should negotiate rather than fight. Ceylonese Prime Minister Bandaranaike's projected visit to New Delhi and Peiping with the conference proposals will serve to provide both sides with additional time for maneuver. 1963 SOVIET PLAN AND BUDGET . . . . . . . . . . . . . . . Page 11 The USSR's 1963 plan and budget show no change in Soviet planners' emphasis on heavy industry; only modest improve- ments are scheduled for agriculture and consumer goods pro- duction. Military spending is scheduled to increase only slightly. Most growth rates for 1963 are shaded downward from the 1962 plan, apparently reflecting mounting difficulties in the allocation of resources. CZECHOSLOVAK PARTY CONGRESS . . . . . . . . . . . . . . . . Page 14 The recent 12th congress--postponed for two months to enable party boss Novotny to silence his opponents--was used to demonstrate his renewed authority. He continued his re- fusal to institute de-Stalinization in Czechoslovakia, but nevertheless reaffirmed his fealty to Moscow by identifying his regime with Khrushchev's anti-Stalinist policies on such issues as China and Yugoslavia. Specific solutions to the country's economic problems, a cause of party and popular disaffection were postponed until the new seven- year plan is completed in 1963. 25X1 ULBRICHT PREPARES FOR PARTY CONGRESS . . . . . . . . . . . Page 16 As the time approaches for the sixth party congress-- scheduled for mid-January--Ulbricht is attempting to recast the image of himself and the party in the light of current Soviet positions on peaceful coexistence and de-Stalinization. He is bringing his party's position into line with Moscow's by de-emphasizing the Berlin issue, and he has belatedly taken some limited measures against Stalinist practices in the domestic apparatus. Major changes in the economic ap- paratus are likely. Despite Ulbricht's efforts, Moscow may consider his Stalinist background a handicap and use the congress as a means of paving: the way for his retirement. SECRET ii BRIEFS Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 THE MACMILLAN - DE GAULLE MEETING . . . . . . . . ... . . Page 20 Macmillan's 15-16 December visit to Paris coincides with the movement of the UK-EEC talks in Brussels into the decisive phase and with increased :European preoccupa- tion with the future course of European-American ties. Macmillan, who asked for the meeting, is increasingly anxious for domestic political reasons to see the UK-EEC talks brought to an early conclusion. There is new specula- tion in London and Paris that he may be tempted to offer De Gaulle closer military cooperation in return for. some concession that he can represent in Britain as progress. THE BRUNEI REVOLT . . . . . . . . . . . . . . . . . . . . Page 22 The short-lived revolt in Brunei 'brought into the open foreign and Bornean opposition to the projected federation of Malaysia. Substantial British forces were used to sup- press the rebellion, pointing up the degree to which the federation's stability will depend on continued outside military support. Malayan Prime Minister Rahman's annoyance with Philippine sympathy for the rebels was turned against Djakarta when President Sukarno publicly intimated his support for the insurgents. TENSIONS CONTINUE IN LAOS . . . . . . . . . . . . . . . . Page 23 Factional tensions continue to impede even nominal prog- ress toward national renunification. Souvanna's control over his neutralist military forces has evidently been seriously eroded, and the further estrangement of his foreign minister, Quinim Pholsena, attests to his loss of significant neutralist support. Meanwhile, the Pathet Lao continue to block effective inspection procedures by the International Control Commission. Phoumi returned to Laos from Moscow and Peiping with substantial aid com- mitments. FIGHTING IN YEMEN INCONCLUSIVE . . . . . . . . . . . . . . Page 24 Fighting between royalist tribesmen and Egyptian and Yemeni revolutionary forces in northern and eastern Yemen is still inconclusive. The Yemeni royalists in an effort to stave off US recognition of the revolutionary regime, have made exaggerated claims of successes. However, the royalists control approximately the same area they have controlled since the revolution began. INSTABILITY IN TURKEY . . . . . . . . . . .. . . . . . . . Page 25 Political stability in Turkey is again threatened by recurrent factionalism both in the governing political party and in the air force. Premier Inonu.has moved swiftly SECRET iii BRIEFS Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 s ERE 1 I i4wo CURRENT INTELLIGENCE WEEKLY SUMMARY 14 December 1962 against his critics in the Republican Peoples Party, but a major split in the party may occur at its 14-16 December national con ress or sY-ortl afterward. CONGO . . . . . . . . . . . . . . . . . . . . . . . . . . Page 26 Adoula's opposition in Parliament appears to be moving toward another showdown with him. The government is in disarray 25X1 UN officials meanwhile have begun to mount a new pressure campaign on Tshombe to induce him to implement the UN plan. There are signs that if the West fails to support U Thant's intended call for a copper embargo, the UN envisages new moves in Katanga involving the use of troops. ALGERIAN REGIME MODERATES NEUTRALIST STANCE . . . . . . . Page 28 The Ben Bella government is taking a more balanced line in foreign affairs. Although Ben Bella still seeks aid from any quarter, his regime apparently believes that its best hope of survival lies in economic cooperation with the West. Paris has agreed to provide interim financial assistance and will negotiate for broader aid arrangements. 25X1 Meanwhile, the UAR has announced a $24,000,000 loan. ARGENTINA . . . . . . . . . . . . . . . . . . . . . . . . Page 29 The team headed by new Minister of the Economy Mendez Delfino must contend with serious economic deterioration in Argentina and is unlikely to achieve quick results. With- out such results, the political situation could again become explosive. 25X1 BRAZILIAN - SOVIET BLOC TRADE . . . . . . . . . . . . . . Page 30 Some expansion in Brazilian - Soviet bloc trade is likely to result from a new pact with Moscow to be signed this month; such trade now accounts for about 5 percent of Brazil's total trade. It is not yet clear whether this agreement will pro- vide for economic development credits as did a recent Brazilian-Polish agreement. ELECTIONS IN THE DOMINICAN REPUBLIC . . . . . . . . . . . Page 31 Presidential and congressional elections are scheduled for 20 December. SECRET iv BRIEFS Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET The two main political parties have been conducting a vicious campaign THANT AND THE UN SECRETARIAT . . . . . . . . . . . . . . . Page 1 During the past year as acting secretary general, Thant has shown a capacity for delicate diplomacy but seems to have defined his and the Secretariat's role within narrow limits. He has shown neither the will to nor the intention of expanding the influence of the office as did his more forceful predecessors, Trygve Lie and Dag Hammarskjold. Thant delegates responsibility more widely than Hammarskjold, and the oven-all effectiveness of the UNf during his full term as secretary general will thus depend largely on the capabilities of the eight principal advisers he has chosen to represent the major membership groupings in the UN. TANGANYIKA A YEAR AFTER INDEPENDENCE . . . . . . . . . . . Page 4 During Tanganyika's first year of independence, moderate leader Julius Nyerere and his associates consolidated their control of this former British trust territory. Elected last month by a near-unanimous vote to the newly created presidency, Nyerere seems to have a secure hold for the pres- ent, despite the influence of a few radicals in key positions such as Interior Minister Kambona. Nyerere has not been able, however, to overcome Tanganyika's many economic and social handicaps, and the impoverished country has been weakened by the departure of hundreds of non-African managers and specialists. During the year, Tanganyika became a cen- ter for African nationalist activity directed at other east and south African territories. SECRET Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY 25X1 CUBA Cuba reveals that activity s continuing at the four Soviet armored group encampments on the island with no sign that preparations for their with- drawal are under way. It was the encampment near Artemisa that ten buildings have been constructed there and another 19 are presently being built . The recent spate of public addresses by leading Cuban officials on the necessity for insurrection in other Latin American countries reflects a more aggressive stance than prior to the "missile crisis" and suggests that a decision to step up Cuban support for sub- versive groups in other Latin American countries may be un- der, consideration. 25X1 Che Guevara and Education Minister Armando Hart have been in the forefront since late November in publicly ex- pressing the view that the only road to the "liberation" of the Latin American peoples is the road of insurrection. Fidel Castro's earlier line denying Cuban "export" of the revolution to Latin America and claiming that the Cuban SECRET 14 Dec 0-" W t'VT V ArVTT`W Page 1 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 CURRENT INTELLIGENCE WEEKLY SUMMARY "example" is sufficient, was given only perfunctory atten- tion in the recent Guevara and Hart speeches. The line emerging in these speeches appears stronger than that espoused in the "Second Declaration of Havana" pro- mulgated last February, which suggested that in certain cir- cumstances Communist-dominated coalitions could come to power by peaceful means. The whole tenor of the recent speeches suggests that Cuba intends to provide every assistance with- Campo Flondo. Santo Craz HAVAN A Idol Norte ~Sigyanea Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 vfto~ SECRET CUBA AStF ! AS La s i orr - (Probably abandoned as .(3 December) SELECTED SOVIET FORCES AND INSTALLATIONS Armored group Unidentified ground headquarters ? Surface-to-Air Missile (SAM) site O SAM support and assembly area Cruise missile site "the humiliation of the with- drawal of the Russian missiles" by making renewed'efforts to "light revolutionary fires in neighboring countries." Cuban domestic propaganda media are playing up the "en- thusiastic" response of the populace to the 4 December pro- mulgation of a decree nation- alizing all small and medium- size Cuban businesses except those owned and operated by a single family. The new meas- ure may encourage further dis- enchantment with Castro among in its means to Latin American insurgents. The attention given in the controlled Cuban press to de- velopments in Venezuela in recent weeks strongly suggests that, if Cubans are not involved in the insurrectionary effort there, they are certainly fol- lowing it with special interest. The nationalization meas- ure may reflect the regime's increasing concern over con- tinuing deterioration in the domestic economy. Since the measure was invoked, Havana radio has featured stories of the uncovering of millions of dollars' worth of "essential" merchandise and cash that had been "concealed for specula- tive -purposes." SECRET 14 Dec 62 -- -- Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 *2W N"4 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY SOVIET FOREIGN POLICY DEVELOPMENTS Khrushchev's lengthy and wide-ranging speech to the Su- preme Soviet on 19 December was intended as the definitive in- terpretation of his conduct in the Cuban crisis. It provided further evidence that the Soviet leaders are going through a pe- riodof consolidation and reap- praisal of their foreign policy, complicated by the need to deal simultaneously with serious intra-bloc problems aggravated by Peiping's charges of Soviet appeasement on Cuba. Berlin and German Khrushchev's speech con- veyed no sense of urgency re- garding a new round of negotia- tions on Berlin and implied that domestic problems will be given priority over foreign policy in the period immediately ahead. "All our thoughts," he said, "are turned to creative construc- tion, to the building of Commu- nism. " Among the "top priority problems" which must be resolved, the Soviet premier placed the Berlin question in second posi- tion following disarmament. Khrushchev asserted that the main controversial issue which prevents a solution to the Berlin problem is the "status" of the Western forces in West Berlin and "under what flag these troops shall be there and for how long they will remain there." not mention any time limit on the presence of Western troops in West Berlin nor did he al- lude to any of the proposed variants--most recently advanced during Khrushchev's talk with the Canadian ambassador--by which the NATO forces could be altered. The Soviet premier again omitted any reference to a specific dead- line for a German peace treaty. Foreign Mint.Rter Gromyko, in his 13 December address be- fore the Supreme Soviet, main- tained that the exchange of views between Moscow and Wash- ington on Berlin and Germany "had not been completed and is to be continued." He went on to conclude that the USSR "shall not count by the pages of a cal- endar when this exchange of opinions must be concluded, but a settlement is sought." Soviet leaders seem to en- visage a hiatus in serious nego- tuitions with the West in the immediate future. Khrushchev's concern, however, to discourage the West from adopting a more demanding posture in dealing with Moscow during this period was evident in the warning in his speech that Western advo- cates of a "tough" policy should not assume the USSR will retreat or make concessions on other is- sues. He reiterated the claim that Soviet strategic weapons "are the best in the world." Cuba The Soviet leader maintained that Western troops should not "represent" NATO countries; that the NATO flag should be replaced with the UN flag; and that the UN should assume "specific in- ternational undertakings and functions there." Khrushchev did SECRET 14 Dec Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 Khrushchev's long account of the Cuban crisis was aimed primarily at establishing the point that the USSR had "con- firmed its agreement" to with- draw offensive weapons only after a public statement by President Kennedy that--in Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Khrushchev's words--the "US would not attack Cuba and would restrain its allies from such an action." The Soviet leader repeated the line that his actions had prevented a US invasion of Cuba, thwarted the desires of "rabid imperialists" to launch a nuclear war, and proved that the USSR and its allies "are in a posi- tion to impose peace on the protagonists of war." He ac- knowledged, however, that "lead- ing circles in the US" had dis- played a "sober approach" and that both sides had made con- cessions. The Soviet premier tried to put the best face possible on the USSR's strained relations with Cuba. He hailed Cuba's "glorious leaders headed by our great friend, Fidel Castro," and pledged that the Soviet Union will continue to help the Cubans and never leave them defenseless. He said he would "firmly adhere" to his agreement with President Kennedy as long as the US car- ries out its pledges, but the USSR would "take such actions as would be required in the cir- cumstances" if the US does not respect its commitments. Khrushchev went over to the offensive in countering Chi- nese attacks on his handling of the Cuban crisis. He denounced "irresponsible charges" by people who "call themselves Marxist- Leninists." He defended the correctness of his actions in light of the "time, place, and circumstances" of the Cuban crisis. For the first time in the Sino-Soviet dispute, Khrushchev confronted the Chinese with their failure to expel the "colonial- ists" from Hong Kong and Macao. He underscored the parallel with his behavior on Cuba by saying "it would be wrong to push China into some action which it re- gards as untimely." Although Khrushchev con- tinued to avoid a direct attack on the Chinese, he made it clear that they were the real target by referring to "those who are pushing" the Albanians into de- nouncing Soviet actions in Cuba. His personal intervention with such a thinly veiled attack will undoubtedly produce a vigorous Chinese response; this will in- crease the momentum of the dis- pute and make it more difficult to avoid a formal break in party relations. Sino-Soviet Dispute Khrushchev's speech quick- ened the pace of developments in the two major trends in bloc political affairs--the increasing estrangement of Moscow and Pei- ping and the growing rapproche- ment between Moscow and Belgrade. The increasingly open nature of the exchanges between the USSR and China reflected a consider- able hardening of the divergent molds in which they fit their views and policies. The USSR is demonstrating clearly that it has no inten- tion of allowing Peiping to influence its future policies. The Chinese, despite their grave domestic problems, have continued their vigorous resistance to Soviet pressures to compel them to recognize Moscow's leader- ship of the world Communist move- ment. Neither side, however, appears willing to face up to the consequences of an open break along the lines of the Soviet-Yugoslav rupture in 1948. Peiping probably believes such a break would seriously jeopard- ize its prospects in the strug- gle for leadership. Both parties seem to anticipate a prolonged conflict in which the disad- vantages of a definitive break will continue to outweigh pos- sible gains for the foreseeable future. SECRET 14 Dec 62 WEEKLY REVIEW Page 4 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEER:LY SUMMARY Within the limits imposed by this concept both sides con- tinue their ideological ping- ponggame. The series of re- cently concluded party congresses has forced both sides to defend their positions, and the cumula- tive effect has been to heighten the tensions between them. Nevertheless, both sides con- tinue to move with some caution. The USSR has not yet orig- inated any comment specifically naming the Chinese as the object of its attacks. The thinly veiled attacks in Khrushchev's speech and Pravda's reproduction on 10 December of the speeches of Italian Communist leader Togliatti and Czech party leader Novotny to their respective party congresses--speeches which do attack China directl3r--leave no doubt, however, that the Chi- nese are the intended targets of Soviet strictures against the dogmatists in the international Communist movement. This is not the first time the Soviet Union has reprinted material originated by other Communist parties criticizing the Chinese for their support of the Albanian party. When the dispute had reached a par- ticularly high point of ten- sion after the Soviet 22nd party congress, Pravda reprinted criticism by a -number of bloc parties decrying the Chinese support for the Albanians. Moscow even reprinted some broader attacks on the Chinese, but by less important foreign parties. Nevertheless, Pravda's current use of the speeches of major international Communist figures and sharply pointed language of Khrushchev's speech does move the dispute into a new phase. Sino-Indian Border Khrushchev's implicit allo- cation of equal blame to both sides for the Sino-Indian fight- ing is but a further affront to Peiping. Although he expressed pleasure at the cease-fire an- nouncement, Khrushchev withheld support for the Chinese proposals to end the conflict, and merely reminded both sides, and thus particularly the Chinese, that it would have been better if neither side had resorted to arms. Moreover, Khrushchev's im- plication that the USSR had an equal interest in the preserva- tion of good relations with both "fraternal" China and "friendly" India could only be intended as a new warning to Peiping that Moscow continues to oppose any action that might force India to abandon its unaligned status and to look to the West. Soviet-Yugoslav Relations While Sino-Soviet party relations are being strained to the breaking point, Moscow's political relations with Yugo- slavia are rapidly mending. The growing rapprochement be- tween the two countries was symbolized by the presence of Tito on the platform while Khru- shchev spoke to the Supreme So- viet and Tito's address the next day to the same body. An address by a foreigner to the Supreme Soviet is highly un- usual, if not unprecedented. In his speech Khrushchev stressed the efforts that the USSR was making to overcome the remaining ideological divergen- cies with the Yugoslavs. Con- trasting the behavior of the Albanian party, and by implica- tion the Chinese, Khrushchev noted that the Yugoslav position on Cuba, and on other interna- tional issues, was wholly cor- rect., To justify his recent moves to bring Yugoslavia closer into the bloc, Khrushchev re- rived the concept of separate roads to socialism. SECRET 14 Dec 62 WEEKLY REVIEW Pace 5 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Tito replied the next day, adding his pledge to work to eliminate the remaining differ- ences. He noted that the Yugo- slavs "mainly agree" with what Khrushchev had said concerning relations between their countries. His remarks, added to the rather lengthy and significant review of relations by Khrushchev, in- dicate that mutually satisfac- tory arrangements have been worked out in the talks the two leaders have been having. There had been earlier in- dications that the question of party relations figured strongly in Tito's visit to the USSR. The nature of the negotiating teams in the 5-7 December talks between the Yugoslavs and the Russians suggested that these relations were a significant item on the agenda. Pravda and Izvestia have been giv -ng precedence to party rather than government titles of both Khrushchev and Tito in their announcements concerning the bilateral discussions. A further indication of the im- portance which both sides are giving to the question of party relations is the presence of Yuri Andropov, the Soviet party central secretary for bloc party relations, among those who ac- companied Tito on his 7-11 De- cemberside trip to Volgograd. Chinese Positions The Soviet-Yugoslav rap- prochement has led the Chinese into violent condemnation of Yugoslavia. At the Italian party congress the Chinese dele- gate went so far as to claim that Tito "and his clique" have turned Yugoslavia into a "100- percent capitalist state." Denunciations of Tito by the Chinese are accompanied by expressions of firm support for the Albanians. In the latest issue of the party journal Red Flair, Chinese politburo member Li Hsien-nien avowed that China wou'Ld fight forever, shoulder to shoulder with Albania. He. claimed that the Albanians had been stigmatized as dogmatists, sectarians, adventurists, belli- cose elements, and opponents of peaceful coexistence only be- cause of their "unswerving loyalty to Marxism-Leninism." Although the Chinese recog- nize that they cannot deflect Khrushchev from his present poli- cies, they have not given up their efforts to tie his hands as much as possible. According to the Italian Communist newspaper L'Unita, the Chinese proposed a new meeting of Communist parties in a letter react by Novotny at the Czech party congress. At such a meeting, Pei- ping; would adopt the strategy it used at the similar meetings in 1957 and 1960--i.e,, to make Chi- nese signature to a declaration of principles contingent on concessions to Chinese viewpoints. The USSR, unwilling to sub- ject itself again to such a Chinese veto, has taken the posi- tion that the many party congresses held since 1960 in effect consti- tuted consultations among the Com- munist parties. Speaking for the Chinese, the North Korean delegate to the Czech party congress re- jected this view when he said in his speech that the Czech con- gress was not equivalent to a formal consultative meeting of the international Communist move- ment. Moscow, however, is not likely to pay much attention to this disavowal. SECRET 14 Dec C - Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 6 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 NNW Sam$ SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Outer Space Moscow has hailed the 5 De- cember announcement of the US- Soviet agreement on joint coop- eration in peaceful development of outer space. The agreement, negotiated during bilateral talks earlier this year resulting from an exchange of letters between the President and Khrushchev, provides for US-Soviet coopera- tion in the fields of meteorology, a world geomagnetic survey, and satellite. telecommunications. Moscow propaganda has termed the agreement "the first big step toward a beginning" in the joint peaceful exploitation of outer space by "the two great powers." Moscow has not yet re- affirmed the line put forth by Khrushchev last spring that ex- tensive cooperation in space de- pends on solution of the disarma- ment problem. Disarmament and Nuclear Test Ban In his Supreme Soviet speech Khrushchev listed disarmament as the first item on the list of "top priority problems" whose solution "brooks no delay." He deprecated the lack of progress in disarma- ment negotiations over the past three years, but promised that the USSR's "entire foreign polit- ical activity" will be directed toward reaching a disarmament agreement. He referred only briefly to the test ban problem, noting that if the US and Britain "show wis- dom," an agreement can be reached. He accused the Western powers of "standing still." At the 10 December session of the Geneva disarmament con- ference, the Soviet delegate sur- faced Moscow's proposal for using unmanned, automatic seismic stations ("black boxes'') to police a nuclear test ban. The proposal had been given initially to Am- bassador Dean by First Deputy Foreign Minister Kuznetsov during a private conversation of 7 No- vember in New York. Tsarapkin announced publicly for the first time three seismic areas in the USSR where the "black boxes" might be placed. He sug- gested Kokchetav in Central Asia, Bodaibo in the Altai zone, and Yakutsk in the Far East. The Soviet leaders may be preparing to declare another unilateral moratorium on Soviet testing to go into effect at the first of the year. They will probably delay such an announcement until the current Soviet series is completed. SECRET 14 Dec 6-Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 7 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 NOO SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Peiping's demand for an end to Indian stalling on Chinese proposals for negotiations and Nehru's prompt response reject- ing Peiping's key provision for mutual withdrawal coincided with the opening of the six non- aligned nations' conference in Colombo on 10 December. The exchange between the two ad- versaries and Peiping's re- current charges of renewed Indian provocation have moved the dispute one notch closer to a resumption of fighting. The strident tones of Peiping's Foreign Ministry statement of 8 December and its memorandum to the Indian Govern- ment on the following clay appear to have been calculated to convey to the Colombo meeting and to the nervous Indians the impres- sionthat Chinese patience is wearing thin. The Chinese de- manded an early positive re- sponse to their oft-repeated proposals, reminding New Delhi that Indian agreement to disen- gagement and acceptance of the 1959 "line of control" as de- fined by Peiping was the "key issue" for termination of the border conflict and a resump- tion of negotiations. New Delhi is advised to take "the proper measure of itself" fol- lowing the "heavy blows" dealt by Peiping's armed forces. In his reply on 10 December Nehru read a carefully prepared statement to Parliament--an unusual procedure for him. He told his listeners in the chamber as well as in Colombo and Peiping that, while New Delhi had "accepted" the cease- fire, it was a unilateral Chinese gesture which required no Indian "agreement." He further stated that Peiping's mutual withdrawal proposals based on China's rendition of its line of control of November 1959 were unacceptable to India and that negotiations under the present circumstances would serve no useful purpose. He reiterated the Indian call for a pullout by the Chinese from all positions occupied by them since they initiated this military phase of the border conflict on 8 September 1962. The principal advantages to India of this demand are that it would restore Indian presence in about 2,000 square miles of Ladakh, would bring Indian forces back to the Indian version of the McMahon line in the north- east (differing only marginally from the Chinese variation), and would not require India to demilitarize a 12.5-mile-wide strip on its side of the whole border, even those portions where no fighting has occurred this year. The Colombo meeting, to which both sides gave considerable attention, adjourned on 12 December, apparently without accomplishing much. The principals conducted them- selves essentially in accordance with their advance billing, and none showed any interest in dealing with the substantive issues of the Sino-Indian dis- pute. Rather they seemed most intent on ensuring that the cease-fire not break down and that negotiations on any basis acceptable to the adversaries be initiated. Ceylonese Prime Minister Bandaranaike, hostess for the gathering, will visit both New Delhi and Peiping to convey the conference's pro- posals. SECRET 14 Dec 62 WEEKLY REVIEW Page 8 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 P hankot Thoise 1 Y4 I R Leh r P (Status to d pu e e21571 zrood~ Y~'v 1, S C an,, AFG IRAN PANGONI A? og-r C7LI/1&IbTT Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 CURRENT INTELLIGENCE WEEKLY SUMMARY 77'' _ SECRET EASTERN SINO-INDIAN BORDE:R AREA w E S Boundary shown on most US and Western maps -..- Demarcated X- Delimited only Indefinite Boundary shown on. recent Chinese and Indian maps (where differing from US and Western maps) Chinese Indian Airfield Road W Pass Major caravan route .25645 Spot height or trail (in feet) Ghn a~ *cs t j9napur ~t ,--- ?'?- 'USA SIR`I RJA ?l A(M EItG Zir@@ng [ Jc-F~p -. 4 3 l .+ l 50 100 Miles I 1 50 100 Kilometers 14 Dec 62 WEEKLY REVIEW Page 9 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 STAT Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Some Indian officials have expressed apprehension that Peiping will renew its military offensive as a result of Nehru's rejection of the Chinese pro- posals. Pqiping's initial re- action to Nehru's statement, while the Colombo conference was under way, was not to interpret it as a flat rejection but rather to play up Indian ac- ceptan of the cease-fire and Indiaigreement to the concept, at least, of disengagement. While the Chinese also took note of the negative aspects of Nehru's remarks, they implied that Indian actions so far had not gone far enough to warrant calling off the cease-fire and troop withdrawal. At the same time, the Chinese continue building a case for themselves should the cease- fire break down. Peiping has highlighted the second stage of its phased withdrawal, which got under way on 9 December. The Chinese are pulling back from :Bomdila and other points in the North East Frontier Agency (:NEFA). There is still no confirmation of Chinese troop withdrawal in the Ladakh area, although the Chinese on 8 December announced that Demchhog and several other positions would be abandoned. Peiping has yet to indicate when the entire withdrawal from positions overrun in its "self- defense strikeback" will be completed. On the other hand, the Chinese have demanded an "im- mediate" end to alleged provo- cations by Indian troops and pla]aes. A sharp Chinese pro- test note on 11 December charged the Indians with renewed air in- trusions over Chinese territory. The Chinese also claimed that Indian troops had "repeatedly" pressed forward against Chinese forces and crossed the line Peiping insists should be used to estab- lish a demilitarized zone. Implicit in Peiping's re- cent statements is the warning that the Chinese might have to reconsider their unilateral commitment to a cease-fire and pullback. Some recent Chinese remarks on NEFA could be read as suggesting that territory claimed by the Chinese there might25X1 be seized and held in its entirety if Peiping is pushed too far. SECRET 14 Dec Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 .0 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY The USSR's 1963 plan and budget announced on 10 December in the Supreme Soviet show no change in Soviet planners' em- phasis on heavy industry. The program also gave considerable lip service to the needs of agriculture and the consumer but provided for, at best, onl modest improvements in 1963. The planners apparently adopted a cautious approach to the formulation of most, 1963 industrial targets. There are few major policy shifts, and most growth rates are shaded downward from the 1962 plan. This apparent caution may re- flect mounting difficulties in the allocation of resources. The budgetary presentation appears to be fairly routine. Since the Soviet budget is the principal accounting document for much of the economy, its over-allincreases year by year reflect the growth of the econ- omy. In the Soviet Union, each new budget is larger than that of the preceding year. Military Expenditures The usual sparse informa- tion in the budget on defense spending indicates no extra- ordinary effort in that direc- tion. Explicit military expend- itures are only slightly higher (4 percent) than last year, al- though military-related, items continue to be hidden in budget categories other than "defense. There is no budgetary indica- tion, however, that Khrushchev has responded to the Cuban de- velopments by sharply stepping up military outlays. Finance Minister Garbuzov characterized the current atti- tude with: "These appropria- tions insure the maintenance of Soviet armed forces on a proper level." Industry The most interesting indus- trial production target is that for crude steel, which is to in- crease at the lowest rate of any year since the start of the Seven-Year Plan in 1959. This, together with the probable under- fulfillment of the 1962 goal, raises some doubt that the Seven-Year Plan steel objective will be met. Soviet planners may have decided on this course in re- sponseto Khrushchev's recent SOVIET BUDGET (PLANNED) Turnover Tax 2.5 33;8 profit Deductions 23.2 26.0- State Taxes on the Population 6.3 6.3 6.3 Stole Taxes on Organizations 1.3 N.A. State Loans 1.1 1,1" Social Insurance Receipts Other Total 13,3 N.A. EXPENDITURES ExplicitDefense 9.25/12.40ae 13.4 13,.9 Administration Financing the National Economy Industry 16,1 14.9 N. A. Agriculture, 4.2 5.1 N.A. Transport and Communications 2.5" 2.5 Residual 11.1? 10.1 N.A Social- Cultural Measures (Includes science) 31.0 Estimates Including the additlonbi allocation referred to by Khrushchev on 8 July 1961. According to calculations based on Soviet data, the actual 1961 explicit defense expenditure was 11,86 billion rubles. s2 iliac - - - SECRET 14 Dec 62 WEEKLY REVIEW Pin an 11 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY INDUSTRIAL PRODUCTION IN THE USSR (PERCENT OF INCREASE OVER PRECEDING YEAR) '.. 1958 1959 1960 1961 1962 1963 OFFICIAL SOVIET ANNOUNCEMENTS Plan 7.6 7.7 8.1 8.8 8.1 8.0 Actual 10.0 11.4 9.6 9.2 9+ - CIA ESTIMATE OF ACTUAL INCREASE 8.6 10.4 6.9 7.6 It Is believed that the official Soviet plan figure for gross value of Industrial output Is almllar In concept and coverage to the CIA estimate and does not reflect the usual blame of the official Index of actual industrial growth. These biases result from the inclusion of activity other than the output of finished goods--semifabrlcates, unfinished production, and capitol repair. Biases also result from overpricing of n w products, and a strong Inclination In the industrial hierarchy to exaggerate the level of output. USSR: SELECTED INDUSTRIAL PRODUCTION 1961 1962 1963 1965 PERCENTAGE INCREASE PLAN . ACTUAL PLAN ACTUAL PLAN TARGET 1961/1960 1962/1961 PIG IRON (million metric loos) 51.2 50.9 56 55 * 59+ 72-73 8.7 8 STEEL 71.3 70.8 76.9 76 * 80 95-97 8.2 7.5 OIL 164 166.1 185.0 186 * 205 240+ 12.2 12.3 ELECTRICITY (bllllon kllawait hours) 327+ 327.6 366.0 367 * 408 525* 12 12 MINERAL FERTILIZER (million metric tons) 15,3 15.3 17.2 17.2 20 37.7 10.0 12 TRACTORS (thousand units) 268.0 263.6 294.2? 288 * 325 450 10.7 9 25X1 ?d 621212 . call for reduced emphasis on steel in favor of chemical sub- stitutes. The steel growth-rate reduction may also mean--as long implied by Khrushchev-?-that the forced growth of the steel in- dustry is no longer necessary for expanding the military es- tablishment. A major concern of the Soviet plan report was the lag- ging chemical industry, but there was little to suggest that major improvements would be forthcoming. The 19621 increase planned for the output: of chem- icals--17 percent--is about the same as expected 1962 peform- ance and well above that of earlier years of the Seven-Year Plan. It is, however, inade- quate in terms of the plan's goals. Individual chemical produc- tion plans for 1963--for fibers, 1963 PLAN 7.2 S 10 II 16 plastics and resins, and mineral fertilizers--appear feasible but well below rates needed to meet 1965 goals. Investment for the chemical industry is planned to increase by nearly one third, but judging by per- formances of the past several years the plan will probably not be met. Plans concerning the con- sumer portend little change in the present trend of continuing but slight improvement in the standard of living. Production of consumer goods is to increase at the lowest rate since 1959, although only slightly below last year's target. The rapid development of additional capacities in light industry is presented in the plan as a major objective, but this does not mean very much. Past plans have carried similar ambitions which in practice have not been achieved. Probably the greatest single disappointment in the plan for the Soviet public is the goal for urban housing-- since World War II,, a pressing need. The very modest housing plan for 1963 in the face of substantial underfulfillment of annual goals since 1959 in- dicates that the Soviets have virtually abandoned their Seven-Year Plan goal for housing That plan now can be fulfilled only if the Soviets should re- vert in 1963-65 to the high economic priority which was ac- corded to housing during 1957-59. SECRET 14 Dec Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 e 12 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY STAT SOVIET URBAN HOUSING CONSTRUCTION (MILLIONS OF SQUARE METERS) 1958 59 60 61 62 63 64 65 - Planned, as implied by Seven-Year Plan and earlier decree Actual 1958-1961; Forecast 1962; Planned 1963 Required in 1964 and 1965 If Seven-Year Plan is to be achieved Agriculture representing any real increase in total agricultural invest- ment. Competition for Resources Soviet planners appear still to be grappling with the problems generated by the grow- ing competition among the con- sumer, investment, and the military establishment for re- sources. Space and new-weapons programs have taken an increas- ingly large share of the output of the machine building indus- tries, with a parallel drain on scientific, engineering, and technical manpower of the high- est quality. Many of these same resources are needed for modernization and technological improvement in industry, and for a higher output of equip- ment and chemical products. The resulting competition has led to an increase in sup- ply problems and to what seems Data on agricultural invest- to be a rather sharp drop in ment in the reports is sketchy the growth rate of investment but it appears that no major since 1960, Investment in 1963 increase in support for agri- may recover somewhat, but the culture is planned. The an- presently available plan and nounced increase in state in budget data are too incomplete vestment--18 percent--will do to be conclusive. Khrushchev's little more than provide for recent reorganization :)f the ann d i -__-_... J f ounce a L the r(ovem- system, which has been expand- ber central committee plenum, ina ran1d1v throu h the g rro oblle e msw ` ?'to ease znese Sion of collective farms to p"roble"ms""" . In 1958 collective farms comprised over two thirds of total sown acreage,while in 1962 their share had been re duced to about one half. Col- lective farms invest from their own earnings and are not ac- counted for in the state budget. Thus their conversion to state farms places an additional bur- den on state financing without The answer embodied in the 1963 plan and budget--judging from the very limited informa- tion revealed publicly--appears to be a slowing of the rate of expansion of consumer programs and a concurrent attempt to carry the heavy industrial de- velopment and military programs forward at acceptable rates SECRET 14 Dec 6" Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 3 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET ~ftw CURRENT INTELLIGENCE WEEKLY SUMMARY CZECHOSLOVAK PARTY CONGRESS The C?echoslovak party's 12th congress--postponed for two months to enable dogmatic first secretary Novotny to si- lence his opposition--was held from 4 to 8 December and. was used by Novotny to demonstrate his renewed authority. He con- tinued his refusal to institute de-Stalinization in Czechoslo- vakia, but nevertheless reaf- firmed his fealty to Moscow by identifying his regime with Khrushchev's "anti-Stalinist" policies on such issues as China and Yugoslavia. Specific solu- tions to the country's economic problems, also a cause of party and popular disaffection, were postponed until the new Seven- Year Plan is completed in 1963, a decision that can only serve to exacerbate the disaffection. Novotny has been particu- larly sensitive to criticism from certain party elements of his conduct of internal affairs since the 22nd Soviet party con- gress in November 1961. He ad- mitted at the Czech congress that "not a few comrades" in the Czech central committee had objected to his whitewash of Stalinist practices at that time and to his placing the blame on deceased leaders Slansky and Gottwald. un- like the situation at the recent Bulgarian and Hungarian congresses, no move was made in Prague to institute a meaningful de- Stalinization program. The few changes in leadership at the congress (see chart) are sym- bolic of Novotny's determination to maintain the status quo. While this gives the appearance of solidity around Novotny and will do much to restore his public image as an unchallenge- able leader, it also means he has made no meaningful concession to those in the party who oppose him. In what appears to be Novotny's maximum sop to those seeking redress of past injustices, Prior to Opening of Decsmber Congress Karol Bacilek ...... .,.,s ......... Bacilek Pavel David Joromir Dolonsky............................ .......... Dolansky Zdenek F erlinger ...... ......... ....... .. Fierltnger Jiri Hendrych ....................... .... ......... Hendrych Antonin Novotny .....:. ......... .......... Novotny Otakar Simunek ....; ... Simunek Viliam Siroky ........ Stroky * Drahomir Kolder * Josef Lenart Since then, Novotny has managed to convince most of his critics that for the time being there is no alternative to his course, and has intimi- dated others by jailing the leader of a potential opposition group, former Interior Minister Barak. As a result of these steps his political prestige suffered immensely, as is illus- trated by constant country-wide rumors of his impending down- fall. Jan Hlina Ludrrila Jankovcova: ....... .......... Jankovcova Drahomir Kolder Bruno Koehler * Alexander Dubcek * Antonin Kopek Antonin Novotny......... First Secretary........ Novotny Alexander Dubcek....... Secretary Jiri Hendrych ......... Secretary .......... Hendrych Brunc Koehler ..........Secretary .......... Koehler Vladimir Koucky.......... Secretary ... Koucky Vaclov Slavik .......... Secretary ......... Slavik * Drahomir Kolder +Forrnerly Politburo *Newly elected SECRET 14 Dec F Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 ge 14 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY the congress approved. a review within the next four months of all the 1949-1954 political trials except "Slansky's and some others." The congress also decided to re-examine the cases of 20 former party functionaries who had appealed their expul- sion. Barak's case will not be included. The congress served as a now-familiar battleground for polemics between the Chinese and. most of the parties repre- sented. The Czech leaders' support of Khrushchev appears designed in part to quiet fre- quent reports of clandestine support for Chinese policies within the Czech party. Novotny admitted to the congress that his ambitious program for rapid industrial growth had suffered serious set- backs, and he made no mention of his earlier proposals for vast institutional changes in agriculture that would, have made collective farms operate like huge state-owned farms. The economic speeches :Lacked the buoyancy and optimism usually expressed at party con- gresses. Proposed. solutions to problems were discussed only in general terms, even though the speakers were obviously concerned. with the growing economic diffi- culties of the past two years-- caused by unrealistic planning, inadequate coordination of sup- plies in industry, and a poor performance in agriculture. The party's decision to reinstitute centralization of economic management and control will greatly increase the re- sponsibilities of the industrial ministries over investments and the distribution of. materials. A larger role was prescribed, for the party in the administration of agriculture. The need to increase agri- cultural production was stressed, but no positive steps were pro- posed to improve farmers' in- centives nor is there any indi- catiLon that agriculture will re- ceive a high priority in the distribution of investments. The congress resolutions followed last; July's central committee proposals for the adoption of more realistic plans for in- dustry through decreases in the annual rates of growth for production and. fixed investments. Consumers were promised no relief in the next year or two and only a small improvement in the standard of living by 1970 SECRET 14 Dec 62 WEEKLY REVIEW Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 -- "1 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 SECRET' ~Md CURRENT INTELLIGENCE WEEKLY SUMMARY ULBRICHT PREPARES FOR PARTY CONGRESS As the time approaches for East Germany's sixth party congress--scheduled for mid- January--party leader Ulbricht is attempting to recast the image of himself and his party in the light of current Soviet positions on peaceful coexist- ence and de-Stalinization. It is clear, however, that his efforts to impress on hard-line party functionaries that tacti- cal retreats--- "compromises "-- such as those on Berlin and Cuba are necessary under cer- tain circumstances are con- strained by fear that such statements may encourage the population to demand :Further relaxation of controls. During the past two weeks, district organizations of his Socialist Unity Party (SED) have been electing delegates to the congress. Ulbricht has attended two of these sessions-- at Cottbus on 2 December and Leipzig on the 9th--arid warned party officials that they must avoid "dogmatic and sectarian" procedures which create public hostility and jeopardize the fulfillment of economic objec- tives. At Cottbus--where the district leadership has con- fessed publicly to "sectarian" acts of an undisclosed nature-- Ulbricht lectured officials on the evils of intransigent po- sitions on international prob- lems, in answer to criticism of Soviet policy on Cuba and Berlin. It is clear that many hard- line party elements favor the uncompromising Chinese Commu- nist approach on both issues. In connection with recent Com- munist Party congresses, the East Germans have avoided tak- ing any explicit public position on the issues, but the regime press has quoted condemnations voiced by Soviet and other Communists. Even the important 12 December Neues Deutschland article by Ulbricht's henchman, Hermann Axen, while aligning the SEI) squarely with Khrushchev,men- tioned neither the Chinese nor the Albanians by name, but criticized the views of "certain dogmatists" and "sectarians" who have questioned Soviet policy. Axen's argument, like Ulbricht's, is directed at proving that, just as compromises were needed in Cuba, "so also the struggle for peaceful coexistence between both German states and for a German peace treaty indispu- tably requires compromises which correspond to the correla- tion of forces and the interests of peace." Ulbricht is personally taking the lead in a de-Stalin- ization campaign, closely con- trolled to prevent any loss of party authority. As chairman of the State Council, he re- cently introduced a draft de- cree designed to end certain judicial abuses, which he blamed on "the Stalinist personality cult." The draft is to be sub- mitted to public discussion, with a report due to the State Coun- cil?--i.e.,? Ulbricht--by 15 March. His remarks may be intended to set the stage for the removal or retirement of judicial offi- cials, perhaps including Minis- ter of Justice "Red" Hilde Benjamin. In agriculture, party of- ficials have been warned to give their main attention to food SECRET 14 Dec 62 WFF.KT.V RF.VTFW T,- -?- 16 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET *MO production and avoid "dogmatist" emphasis on legalistic changes in organization of collective farms. The problem of securing food production may lead to high-level personnel changes. Major changes planned in the regime's economic apparatus will probably be reflected at the congress. The changes, which pro ably will resemble those now being made in the USSR, doubtless will also involve ex- tensive personnel shifts and pro- vide an opportunity to make scape- goats of unpopular or inept of- ficials. Neues Deutschland recently began calling for new approaches to economic problems in line with Ulbricht's suggestion in October that East Germans should study Soviet ideas on the subject. Econ- omists and technicians met in East Berlin on 6-7 December in an attempt to find new answers. TOP LEADERSHIP OF THE EAST GERMAN SOCIALIST UNITY PARTY AND GOVERNMENT STAT POLITBURO SECRETARIAT COUNCIL OF MINISTERS' PRESIDIUM (11 members) (8 secretaries) (13 members) ULBRICHT* ------------- ULBRICHT GROTEWOHL-------------------.----- GROTEWOHL (premier) STOPH------------------------- STOPH (first deputy premier) EBERT HONECKER------------ HONECKER LEUSCHNER-------------------_ ---- LEUSCHNER MATERN MUECKENBERGER NEUMANN---------- -- NEUMANN-------NEUMANN NORDEN---------- - -NORDEN** WARN KE APEL --------- --------------APEL BAUMANN-------_-_-- BAUMANN ERMISCH FROEHLICH GRUENEBERG ---------- GRUENEBERG----- ---GRUENEBERG HAGER----------_--- HAGER KURELLA MEWIS------------ --------- ---- MEWIS PISNIK VERNER-------------VERNER * Ulbricht, while no longer a member of the council of ministers, is chief of state as chairman of the State Council. ** Although Norden remains a member of the secretariat, Neues Deutschland editor Hermann Axen has assumed an increasingly important role ira recent months. SECRET 14 Dec 62 wwrl" v DL'V TL'LT 7 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 SECRET ~Nw Neues Deutschland even front- page a picture-of Fritz Behrens, an economist who had been accused of "revisionism" in connection with the fall of Ulbricht's lead- ing opponents Schirdewan and Oelssner in 1958. These indications of change have caused uneasy stirrings among party members. Neues Deutschland last month went out of its way to answer a question posed by certain party members concerning a provision for "party democracy" in the new SED draft statute. This section had been lifted from the Soviet party statutes but without the clause calling for systematic rotation of the membership of party organs. Neues Deutschland explained the omission in terms of the greater experience of the Soviet party, stressing that the East German draft for the first time guar- antees party members the right to discuss "all questions of party policy openly and soberly in party organization meetings." These recent developments taken in toto suggest that there may be major changes in the party at the forthcoming con- gress, possibly even including steps to pave the way for Ul- bricht's retirement. Moscow, for example, may consider that his Stalinist background is a liability to its efforts to gain recognition for his regime and may insist that he give up his position as party first secre- tary while letting him continue as chairman of the State Council. Ulbricht's activities in build- ing up his image as de-Stalinizer and party theoretician may have been calculated to establish his character as an elder statesman with this in mind. The appointment of Petr Abrasimov as Soviet ambassador last week suggests that the USSR wishes to have an emissary of proven flexibility in Pankow at a time when changes in the party leadership and tactics are in progress. Abrasimov's experience as Soviet ambassador in Warsaw during the critical early years of Gomulka's return to power would appear to be an excellent preparation. Foremost among those thought to be contenders for Ulbricht's post as first secre- tary: is Erich Honecker, the only man so far publicly designated for an important role at the congress. One of the founders of the Communist youth organ- ization, the Moscow-trained Honecker has been central com- mittee secretary for security matters since February 1958. SECRET 14 Dec 62 wi'rwT.V P VTT W "^ -- 18 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 " 25X6 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 *WW SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY THE MACMILLAN - DE GAULLE MEETING Macmillan'.s two-day visit to Paris beginning on 15 Decem- ber coincides with the deci- sive phase of the UK-EEC talks in Brussels and with increased European preoccupation with the future course of European- American ties. will be hoping to return from Paris and from his subsequent talks with President Kennedy with a strengthened hand. De Gaulle probably sees the talks as another opportunity to re- cord his view that, despite a relative respite in East-West relations, the fundamental Soviet position on important international issues remains unchanged and that Western strength and patience remain the best way of dealing with the USSR. He may also take the opportunity to tell Mac- millan that France would not be bound by US-UK agreements reached on these issues without French participation. Ithe view that the accession talks have reached the point where a "pack- age deal" could be put together if the "political will" to do so existed. This view tends to slight the fact that the technical issues in Brussels involve major national interests, as is evident in the rigidities on both sides over Britain's agriculture and its commitments to the Outer Seven. Moreover, while France has taken the toughest line with Britain, it has been able to do so only when the other EEC members were also convinced that "community integrity" was at stake. These circumstances are in part the source for renewed speculation in both countries that Macmillan may be tempted to offer France "something" outside the EEC framework--e.g., SECRET 14 Dec 62 WEEKLY REVIEW Page 20 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 VW SECRET ``0~ CURRENT INTELLIGENCE WEEKLY SUMMARY 25X6 closer cooperation in defense in general and in nuclear wea - ons in particular. the 1JK enters the EEC, "the US is prepared to help create a multilateral European nuclear force, controlled by European powers and linked in some form with the American deterrent." While it is doubtful that either London or Paris has thought very far ahead about the military implications of Although De Gaulle would Britain's entry into the European probably approve an extension community, there are other reasons of French-British military for believing this may prove a cooperation, his views on the more current topic than it did need to maintain national con- in June. In reviewing, as they trol of the French nuclear force are firm, and he would probably not be receptive to proposals leading toward either a joint French-British force or inclu- sion of French weapons in a European force. However, indicative of how far speculation along such lines has now gone, the London Times declared in a feature article on 7 December that it "can be said with certainty" that if apparently intend to do, the Cuban crisis and the Sino-Indian conf7!_ict, Macmillan and De Gaulle will be more aware than ever of the limited power of European nations individually. SECRET 14 Dec 62 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 *1W %00 SECRET The revolt of the "North Borneo National Army," launched on 8 December to establish an independent state outside the proposed Federation of Malaysia, collapsed after a few days of disturbances in the British protectorate of Brunei. The revolt exposed foreign involvement with the opponents of federation. Indonesia trained and supported the rebels; the Philippines provided asylum and, a public rostrum for the absen- tee rebel leader, Azahhari; and Singapore's Barisan Sosialis Party and Malaya's Pan-Malay Islamic Party offered moral support. Azahari's claims of wide Bornean popular support fizzled. The Sultan of Brunei immediately denied that he sponsored the movement, as Azahari had an- nounced. Sarawak and North Borneo leaders who he hoped would join him in a delegation backed out,and at the outbreak of the revolt denounced Azahari's use of force. Azahari's own visit to the UN has been jeop- ardized., as the British have canceled his passport. The British have attempted to treat the whole affair as a police, rather than a military, action. The necessity to use military force, however, under- scores the difficulties which may beset the future federation, and indicated the degree to which its stability will depend. upon the continued presence. of British units after its estab- lishment--now set for 31 August 1963. At the outset, Malayan Prime Minister Rahman was par- ticularly angry at the Philip- pine Government for its appar- ent backing of Azahari. A break in diplomatic relations was threatened. On 11 December, however, he publicly absolved both President Macapagal and Philippine Foreign Minister Pelaez of duplicity and directed his anger against Djakarta. The day before, President Sukarno had publicly implied his support for the rebellion. He stated that the rebellion in Brunei "has something to do with new emerging forces and the movement will come out as victor." SECRET 14 Dec Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001_8 77 of z, Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 %10 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY TENSIONS CONTINUE IN LAOS Despite the recent agree- ment among Laos' rival factions on military and police integra- tion and signs of increased bloc support for the coalition government, factional tensions continue to impede progress to- ward national reunification. A serious threat to the coalition is the continued erosion of Premier Souvanna's strength among the neutralists. His failure to discipline left- wing neutralists who shot down a US-chartered aircraft resup- plying neutralist forces on the Plaine des Jarres showed his lack of effective control over these elements. Souvanna also appears to be encountering the active opposition of Quinim Pholsena, his "neutralist" foreign minis- ter, whose left-wing inclinations have become increasingly evi- dent. Quinim recently charged Souvanna with abandoning neu- tralism and joining the rightists. The loss of Quinim's nom- inal support could hurt Souvanna. While Quinim is not popular with the masses, he commands signif- icant backing from important student and religious groups. Pathet Lao leader Souphannou- vong stated on 3 December that Quinim now is really with the Pathet Lao and will stay with them. The Pathet Lao appear determined to prevent any effective investigation by International Control Commission teams of charges of foreign troops remaining in Laos. Al- though the Pathet Lao have agreed to the inspection of two sites where violations had been alleged--one near Ban Houei Sai and the other close to Sam Neua town--they have insisted that the inspections not last longer than 24 hours, and that the teams operate only within a two-kilometer radius of the designated inspection site. The rightists recently have given indications that they were prepared to acquiesce--at least in major part--to the Pathet Lao demands. They had been pressing for a five-day inspection period, with the right to conduct in- vestigations within a radius of ten kilometers. Both the USSR and Communist China have moved to assist the coalition government. In Moscow, General Phoumi concluded a two- million-dollar trade pact, re- ceived assurances that long- term credits would'be forthcoming for the construction of a hydro- electric station, and was promised a gift hospital and radio station for Vientiane. In early December the USSR delivered ten aircraft-- nine transports and a helicopter-- to the Souvanna government, together with crews and neces- sary maintenance personnel. Peiping-, for its part, granted long-term credits for industrial construction and promised to consider a Laotian request for further road con- struction in northwest Laos. SECRET 14 Dec 6~Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 : of 31 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 .W SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY FIGHTING IN YEMEN INCONCLUSIVE Inconclusive fighting be- tween royalist tribesmen and Egyptian and Yemeni revolution- ary forces in northern and east- ern Yemen is continuing. A num- ber of villages and military posts have changed hands, but neither side appears to have sig- nificantly altered its position. ~llxlPU J1,11 4 KAMARAN (U.K.) ;,- Pro-rebel forces made gains during the past few days in the area north of Sadah, and they have somewhat strengthened their position in the al-Javvf area, east of the Sana-Sadah road. How- ever, they have lost to the roy- alists the mountain fortress of Washha, southeast of Farad. Al H"uda d ADEN +--.-,~ OF A!JAN 32858 Royalist elements, in an ef- forrt to stave off US recognition of the revolutionary regime, have been making exaggerated claims of military successes. However, the royalists control approxi- mately the same area they have controlled since the revolt be- gan--a narrow band of territory in the north along the Saudi border and a wider band extend- ing roughly from the Saudi bor- der south of Najran through part of the al-Jawf area, and the vil- lage of Marib, to the Aden pro- tectorate border. In addition they hold a number of pockets in the mountains north and north- west of the town of Sadah. They have also been able, by temporary incursions, to. put pressure on the revolutionaries in the area south of .Sadah and have on sev- eral occasions interfered with land communications between Sana and Sadah. The UAR is continuing its substantial assistance to the revolutionary regime. STAT SECRET Major road Q'Flt~@r?`road or track -,{t-67 .1~ ML.LE$ { IQo 14 Dec A0-0 TIT?? pproved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 24 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 tow SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY INSTABILITY IN TURKEY Political stability in Turkey is again threatened by recurrent factionalism both in the governing political party and in the air force. Premier Inonu's Republican Peoples Party (RPP), the major one in the coalition government, appears badly split on the eve of its national party congress from 14 to 16 December. Anti- Inonu activity was evident at local RPP congresses held ear- lier this fall. Inonu's lead- ing opponents in the party, former RPP secretary general Kasim Gulek and former cabinet ministers Nihat Erim and Avni Dogan, were united under Gulek's leadership. Spokesmen of this group criticized both :[nonu's party leadership and the gov- ernment's policies. Although Inonp had in the past been rather tolerant of intraparty criticism of his actions, he saw the present movement as a threat. On 9 December the RPP's disci- plinary council suspended Gulek, Erim, and Dogan from all polit- ical activity for a year for "violating party statutes." Inonu's tactics will de- pend on whether he can retain control of the RPP's 40-man governing board, which is to be elected during the congress. With national elections still more than two years away Inonu may feel that now is the best time to meet the challenge to his party leadership. The situation within the air force appears outwardly to have returned to normal following the sudden removal of 11 senior officers from their posts by air force commander Tansel on 3 De- cember. erate policies. Opposition to Tansel with- in the air force may be due in part to his strong support of Inonu and the government's mod- SECRET 14 Dec "Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 '"W 14W-0 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY CONGO Adoula's parliamentary op- ponents appear to be moving rapidly to a showdown with the government. On 7 December they censured Adoula's minister of justice. They also introduced a motion, yet to be voted on, to "suspend"the UN plan for Katangan .reintegration, appar- ently believing this may force Adoula to resign. Ambassador Gullion believes that it is only a question of Adoula's close supporters continue to express concern that he will be overthrown and to ta:Lk in terms of mounting a pre- ventive coup to maintain him and themselves in power. Ap-. 25X1 parently they are uncertain as to what to do or when,to act, 'however. time before a new motion of cen- are mounting a strong pressure sure is introduced against the campaign against Tshombd with government. More opposition I implied threats of deputies are returning to Leo- straying him if he does not im- poldville. . plement the UN plan soon. In The opposition attacks have produced confusion in government ranks. J Gullion describes the governmen as like a bird watching a snake, paralyzed into inaction and. getting weaker with each vote against it. a letter of 1.0 December, UN Congo chief Gardiner informed the Katanga leader that the UN regarded him as primarily re- sponsible for nonimplementation of the UN plan and that'U Thant would therefore move on to more drastic measures. Gardiner denied the UN would engage in offensive mili- tary action, but stated that the UN forces would insist on com- plete freedom of movement through- out Katanga. The letter called on Tshombd to halt his bombings of Congo Army forces in North Katanga, to lift his blockade of UN supplies at the border towns of Sakania and Dilolo, and to remove all Katangan road- blocks iq the Elisabethville area. Thant, in New York, is now appealing to Western Euro- pean governments and to Washing- ton for an embargo on Katangan copper and cobalt, for Union SECRET 14 Dec 6' Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 I of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 VW *400 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Miniere to stop its mineral ex- I and that the grounds for such port tax payments to Tshombd, and for countries bordering on Katanga to ban transit of Ka- tangan mineral shipments through their territories. A reliable UN source told US Consul Dean in Elisabethville that the recent meeting of the UN military command at Kamina was to "review the final plans for military action in Katanga," action would be Tshombd's re- fusal to permit freedom of move- ment to UN forces in Katanga. This-source indicated that moves in this direction would be under- taken when the UN force received bridging and other equipment it now lacks. Tshombd has continued to defy suggestions that he imple- ment the UN plan. He is ready- ing himself for any UN moves, building up his troop and equipment strength. He has reinforced the rail exit point at Sakania and probably also at Dilolo. A senior UN official claims that the Katangans are using airfields in eastern Angola, and that Dilolo has now become Katanga's main supply base. SECRET 14 Dec 6 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 s- 27 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 VW V%W CURRENT INTELLIGENCE WEEKLY SUMMARY ALGERIAN REGIME MODERATES NEUTRALIST STANCE The Ben. Bella government in Algeria is assuming a more balanced posture in foreign affairs. It apparently has concluded that its best hope of survival lies in collabora- tion with the West, although its bid for economic aid from any quarter still stands. Foreign Minister Khemistild amicable consultations in Paris late last month secured interim financial assistance covering the rest of this year and paved the way for negotiations on French financial, cultural, and technical assistance agreements. Simultaneously, the government has moved to silence potential critics of this Westward trend, most notably by banning the Com- munist Party and its official press. Belkacem Krim, Ben Bella's most powerful opponent, has endorsed the regime's ef- forts to obtain Western assist- ance. Algerian leaders, partic- ularly Khemisti and even Ben Bella himself, have indicated acute embarrassment over .the premier's visit to Havana in October and have toned down their extravagant praise of Castro and Communist China. These officials have become aware of popular disinterest in Cuba and of a widespread belief that support for Castro succeeded only in distracting Algeria's leaders from attempts to solve their. own country's problems. French and American of- ficials. were the only foreign guests invited to the opening of the Oran medical school, even though there are many Bulgarian and Polish doctors in the country. The UAR is acting to main- tain its influence with Ben Bella. On 6 December Cairo announced 'the grant of a $24 million interest-free loan re- payable over .a 12-year period. This loan is to be used to purchase goods and services in Egypt. Ben Bella has taken steps to cut administrative expend- itures, beginning with official salaries. He also has told the American ambassador-desig- nate that he intends to reduce the army from its present 100,000 men to an elite corps of 25,000. He will not do this soon, how- ever,.in view of the continuing high rate of unemployment, the tenuous security: situation, , and the prevailing dissatisfac 25X1 tionamong local officials with the regime's performance to date. SECRET 14 Dec 69 Wt STTTT %7 TfTf7T 7T ?. Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 8 of 31 SECRET Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY The economic team headed by new Minister of the Economy Mendez Delfino must contend with serious economic deteri- oration in Argentina and is unlikely to achieve quick results in stemming the long and worsening downward trend in key sectors of the economy. Without such results the political situation could again become explosive. Mendez De.lfino is an ortho- dox economist with considerable experience in public office and private industry. He has served as governor of the International Monetary Fund, secretary of the Treasury,. president of the Central Bank, and twice as presi- dent of the stock exchange. Foreign Minister Muniz has said that the new economic team will be the most skilled and, dedicated Argentina has had for years. Argentines in general, however, have become irritated with eco- nomic difficulties and will be looking for immediate concrete results. The causes of the business recession lie in long-standing economic disorders, aggravated by political instability. The government is severely hampered by the lack of liquidity in the economy, reflected in its short- age of both pesos and foreign exchange. This has aggravated the difficulties of private business, reducing earnings and tax receipts. The govern- ment has adhered to its restric- tive credit policy in line with its economic stabilization pro- gram and agreement with the In- ternational Monetary Fund. Bankruptcies in Argentina reached an all-time high during November. In this month alone, 205 firms failed, with total liabilities ten times as great as the total for firms which failed in November 1961, and 20 times those failing two years ago. Most categories of business and manufacturing have suffered, but the metallurgical and tex- tile industries have been particularly hard hit. Business sources estimate that industrial production in 1962 will be at least, 15 per- cent below last year, and re- tail sales have dropped even further. According to the official index of physical volume of sales,,sales,in Septem- ber were only 62.3 percent of the 1958 average. Unemployment has increased with the business recession. An estimated 270,000-325,000-- 15 to 18 percent of the in- dustrial labor force of 1.8 million--are unemployed, and an additional 7-10'percent are working a short week. Living costs rose 28.4 percent during the first ten months of 1962, causing further reduction in real wages. Both civilian and military officials fear that continued widening of the wage gap will increase labor un- rest and create an explosive situation. Along with these problems, military plotting against Presi- dent Guido's government continues. The,ll-12 December coup attempt by -cashiered air force generals Alsina and Oliva, however, was quashed by quick government action aided by'other air force personnel. President Guido relieved Alsina and Oliva of their commands in response to a demand by a group of senior air force officers that the two be dismissed be- cause of their continued efforts to overthrow the government. The firing of these generals, to- gether with changes in naval com- mands, may strengthen the mili- tary faction favoring continuance 25X1 of the Guido government now and the holding of elections next June. SECRET 14 Dec (') W1 TT.V D VT''1V 1)n cro 29 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY The pattern of Brazil's trade with the Soviet bloc is changing. The USSR now leads Czechoslovak4a, East Germany, and Poland as Brazil's prin- cipal trading partner in the bloc. Trade with the bloc now accounts for about 5 percent of Brazil's total trade. Its imports from bloc countries for the first half of 1962 de- clined to 3.36 percent of total imports. Exports to the bloc, however, rose to 7.25 percent of total exports and consider- ably exceeded the levels set in recent years. Exports to the USSR--of which three fifths were coffee and cacao---account for the increase. Soviet supplies to Brazil in the first half of ].962 were limited almost exclusively to 100,000 tons of wheat and 350j- 000 barrels of oil. Wheat and oil are Brazil's major imports but these quantities make up BRAZILIAN TRADE WITH SINO-SOVIET BLOC (in thousands of dollars for the first six months) IMPORTS (CIF) EXPORTS (FOB) 1960 1961 1962 1960 1961 1962 707 2,438 8,001 0.3 2,231 25,097 Czechoslovakia 8,152 8,360 5,566 6,904 9,007 3,568 East Germany 4,455 7,776 4,360 5,595 6,189 5,059 Hungary 2,453 982 611 3,262 2,308 2,477 Poland 15,588 10,066 2,944 12,176 8,575 1,958 Rumania 229 110 850 767 811 1,919 Communist China 6 9 154 Others - - 2 56 0.3 520 TOTALS r 31,590 29,741 22,488 28,835 29,121 40,598 SECRET only about 5 and 0.4 percent respectively of the country's annual import requirements. A new Brazilian-Soviet trade pact scheduled to be signed this month is likely to provide -Oor an expansion of trade. The USSR has displayed some interest in assisting the construction of a shale oil gas plant near Sao Paulo. There is no firm indication,.however, that Moscow will offer to pro- vide economic development cred- its in connection with the trade agreement, as did the re- cent Brazilian-Polish agree- ment. STAT 14 Dec Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 30 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 r *00 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY IN THE DOMINICAN REPUBLIC The belief is widespread that the National Civic Union (UC:N) will lose the election to presidential candidate Juan Bosch and his Dominican Revolu- tionary Party (PRD). The UCN is charging that Bosch's party is Communist-infiltrated, and both parties accuse each other of the intention to commit fraud. The elections are scheduled for 20 December, and the transfer of power to the democratically ap- proved regime is slated for 27 February. Bosch, a 53-year-old writer, has been a profes- sional revolutionary since the early thirties, when he was exiled for anti- Trujillo activities as a student leader. He has long been associated with other revolutionary lead- ers, including Venezuelan President Romulo Betancourt, Costa Rican ex-president Jose Figueres, and Peruvian political leader. Haya de la Torre. Since his return to the Dominican Republic, Bosch has warned that gradual reforms are neces- sary in order to avoid pre- cipitating a chaotic situa- tion vulnerable to Castro and the Communists. SECRET 14 Dec 6 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 31 of 31 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 r I%e SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY SPECIAL ARTICLES The appointment of U Thant to a full term as UN secretary general has given one of the world's more in- fluential positions to a man who is still in some important respects an unknown quantity. He has vigorously defended the right of other newly emerging nations to occupy a neutral position between East and West, and has been a persistent ad- vocate of Communist China's admission to the UN. According to the UN Charter, the secretary general is "the chief administrative officer of the organization." By force of circumstance and personality, however, both of Thant's predecessors--Trygve Lie and especially Dag Hammar- skjold--converted the secretary generalship into an executive office with real if limited powers, and became in -their own right leading world statesmen. Thant will have similar opportunities in the next four years to extend the influence of his office, but during the year in which he has served in an acting capacity, he has shown neither the will to nor the intention of doing so. Thant is a well-groomed, suave man of 52, equally pleasant to those he likes and those he dislikes. Prior to his appoint- ment as acting secretary general last year, he had been Burma's permanent representative at the United Nations since 1957. A close friend of former Prime Minister Nu, Thant was regarded as one of Burma's more able public servants. He sup- ported Burma's neutralist for- eign policies, but within this orientation was broadly pro- Western in outlook and, accord- ing to the American Embassy in Rangoon, a strong anti-Communist. As Acting Secretary General Hammarskjold's death in September 1961 led to a pro- tracted and bitter wrangle over the choice of a successor. The USSR, which had become increas- ingly angry at the forceful and decisive Hammarskj old, demanded that the office of a single sec- retary general be replaced by some version of the "troika"-- a triumvirate representing the Communist bloc, Western nations, and the neutrals. UN members generally op- posed this demand. They agreed, however, that the secretary general would have to come from the neutral Afro-Asian bloc, and the view was widespread that he would need to be of a somewhat more compliant disposition than Hammarskjold had been. When Thant's nomination as acting secretary general was finally approved on 3 November 1961, he publicly took account of the controversy over his office by promising that he would consult closely with an unspecified number of "principal advisers" representing various areas of the -world. Since November 1961, Thant has ;,proceeded cautiously in in- terpreting his role as secretary general. When faced with dif- ferences of opinion, he seems to try to bring the other side around by persuasion, although he has not hesitated to differ with Soviet UN delegates in SECRET 14 Dec 62 SPECTAT, ARTTCT.RG *'-- 1 of 7 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 w 1W SECRET private conversation and, ac- cording to a Canadian delegate, has urged Zorin to be more "ob- jective." Several long-time Sec- retariat officials believe Thant has "taken tough decisions once adequate information was avail- able." Thant seems to reserve his decisiveness, however, for matters he personally considers important rather than those so regarded by leading member na- tions. He took a strong line on the UN bond issue, for ex- ample, but has felt that nothing vital is to be lost by making extensive concessions in per- sonnel matters. In the Dutch-Indonesian dispute over West New Guinea, he largely confined his role to transmitting notes between the disputants and to public appeals to both parties to refrain from using force. He has refused to enter personally into the Laotian problem and now is phasing out the UN "presence" in Laos-- which, despite vigorous Soviet protests, Hammarskjold estab- lished in 1959 as a political observation post and a psychologi- cal deterrent to Vietnamese in- tervention. On Congo matters Thant has consulted closely with his Congo Advisory Committee--composed of countries which now have or have had troops in the Conc. This consultation has been so de- tailed as to result on occasion in release to the public of plans in which the element of surprise has been a vital factor. In the Cuban crisis Thant played a relatively passive role. His trip to Havana never- theless had the result of giving Castro a propaganda advantage. Principal Advisers Thant has appointed eight undersecretaries as his principal advisers--two from the Soviet bloc, two from NATO? countries, one from Latin America, and three from Asian-African neu- trals. The large number of close assistants--Hammarskjold usually had only three--repre- sents an effort by Thant to ac- commodate the various factions in the UN which demanded repre- sentation at the undersecretary level, and to some extent re- flects the Soviet troika con- cept. The highest ranking Soviet member of the Secretariat is Eugeny D. Kiselev, undersecretary in charge of political and Security Council affairs, who assumed of- fice early this year. It is not known how closely Thant actually consults with him. Jiri Nosek of Czechoslovakia is the undersecretary in charge of conference services. He has represented his government at the UN since 1947, and has in the past been a strong candi- date for the presidency of the General Assembly. He is gen- erally regarded at the UN as a competent and relatively im- partial presiding officer, and has been called "the most West- ern of the Eastern delegates." The best known Western representative on the Secretariat is Ralph Hunche of the United States. As undersecretary for special political affairs, Bunche has been Thant's chief adviser on Congo affairs--despite the fact that Godfrey Amachree of Nigeria is designated as the undersecretary in charge of civilian operations in the Congo. SECRET 14 Dec (9 :n:VTAT. APTTPT . Dnu- 2 of 7 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 v %we SECRET The undersecretary in charge of economic and social affairs, Philippe de Seynes of France, held the same post under Hammarskjold. De Seynes, described by the US delegation as "intelligent, hard-working, and cooperative with the US," has been with the UN since 1950. The French UN delegation was informed by Thant prior to his own appointment that he intended to choose de Seynes as one of his principal advisers to rep- resent Western Europe. The appointment of Omar Lautfi as a second under- secretary for special political affairs probably represents a personal choice by Thant. The former UAR permanent represent- ative and Thant are old friends and associates. Loutfi represents the secretary general at the 18-nation disarmament committee meetings in Geneva. Thant's most controversial appointment was that of C. V. Narasimhan of India as chef de cabinet and officer in charge of General Assembly affairs. Several members of the UN Secretariat have reported that Narasimhan is extremely ambitious, and that he is deliberately ex- ploiting his influential posi- tion to cultivate the major groups, particularly the Soviet bloc, in order to build up sup- port for eventual appointment as secretary general. One of Narasimhan's functions is to advise the president of the General As- sembly on procedural matters. With the present strong presi- dent Zafrullah Khan of Pakistan, Narasimhan's reported penchant for "running the show to suit himself" has been held in check, but future presidents of the Assembly may not have Zafrullah's experience or strong legal training. Latin America is represented by Hernane Tavares de Sa of Brazil, undersecretary for pub- lic information. Tavares de Sa was the senior Latin American official in the Secretariat at the time of Thant's appointment and presumably was chosen for this reason. The choice, how- ever, raised some objections among Latin Americans to having their group represented by a "Portuguese-speaking Latin." These objections were partially met by the appointment "within one hour" of long-time UN civil servant Rolz Bennett Guatemala to another high T' post which seems to have been created particularly for his benefit. Because Thant delegates responsibility widely, the abilities of his principal ad- visers and their capacity to work together will probably be a major factor in the over-all effectiveness of the UN during his tenure as secretary general. The policies which he has adopted and applied in such different situations as the Congo, the bond issue, and West New Guinea show a capacity for delicate diplomacy. Thant comnands the respect of most Secretariat employees and all speak highly of his integrity. It may be that Than.t's quiet approach will in the next four years result in some definite progress toward his expressed goal. of "bridging the gulf be- tween the major powers." How- ever, Thant's observations of the effect on the UN of Hammar- skjold's fight with the USSR, added to his own experience as a neutralist representative, will, probably incline him to avoid a direct confrontation with the USSR on a matter of policy. SECRET 14 Dec Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 )f 7 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 : V4rrP SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY TANGANYIKA A YEAR AFTER ]INDEPENDENCE Completion of Tanganyika's first year of independence was marked on 9 December by the for- mal move to republic status within the British Commonwealth and the inauguration of Julius Nyerere as president. Nyerere, a moderate nation- alist and leader of the smoothly operating Tanganyika African Na- tional Union (TANU), was the greatest asset of this impover- ished former German colony and British trust territory when it achieved independence. Its ag- riculture-based economy suffered from an inadequate transporta- tion system, a tsetse fly in- festation, and depressed world prices for its two principal export crops. The country had only a bare cadre of Africans trained to administer the exist- ing government machinery or any development plans. Despite a substantial increase in educa- tional facilities over the last five years, from a population of 9.5 million only 360 graduated from secondary schools in 1960 and only 20 from colleges last year. The critics--largely within TANTJ--pointed out that independ- ence had not brought real eco- nomic or social change. Europeans and Asians remained in senior government posts and continued to enjoy segregated clubs. The press featured incidents of racial discrimination, and at least five. offenders were ex- pelled. Last January, after a bitter opposition attack on his nonracial policies, Nyerere resigned as prime minister, although he was able to name as his successor the moderate Rashidi Kawawa. In the cabinet reshuffle, however, the British finance minister was dropped and radical Oscar Kambona was named minister of home af- fairs in control of the police. Kawawa sought to pacify the government's critics by appoint- ing one of their principal spokes- men to head a new commission for planning the complete Africaniza- Lion of the civil service. He also dismissed the British police commissioner and the British civil service chief. During the nation's first year, Nyerere and his close as- sociates consolidated their con- trol, but did little to overcome Tanganyika's many handicaps. Hundreds of non-African managers and specialists left the coun- try, and it became a center for African nationalist activity directed at other east and south African territories. Before independence, Tan- ganyika's Africans appeared to enjoy unusually harmonious re- lations with the country's Asian merchant class and its few European settlers. With independence, however, they started demanding that Asian influence in commerce and in- dustry be reduced, and Nyerere's nascent opposition tended to express its frustration in racial terms. In all, some 700 expatriate officials have left Tanganyika. Africans hold about one third of senior and middle-grade civil service positions--but about a quarter of all posts are vacant. The contracts of the remaining expatriate permanent secretaries of ministries may soon be termi- nated. "One-Party Democracy" After resigning as prime minister, Nyerere, still TANU's leader, devoted his energies to tightening the party organization and completing its domination of the country. His proclaimed goal is "one-party democracy." Shaken by the dispute over racial policy, Nyerere realized that he had become separated from his party, and that the organiza- tion, stripped of its ablest leaders to man the ministries, SECRET 14 Dec 62 SPECIAL ARTICLES Page 4 of 7 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY was slowly disintegrating. He believed that a nation of such meager talent could not afford the "luxury" of political de- bate and parliamentary opposi- tion. Nyerere therefore sought to identify the mass of the people more closely with the party and the government. The Africanization program formed one part of his campaign, and he worked closely with Kawawa in tightening governmental con- trol. Expatriate provincial commissioners were renamed "ad- ministrative secretaries" and made responsible to African regional commissioners--all TANU men--whose principal task was to build close links through the party between the central government and the ordinary vil- lager. The authority to permit political meetings was trans- ferred from the police to these regional commissioners. The government has also undermined the authority of the tribal chiefs. It has deprived them of their administrative functions and confined them to ceremonial duties. TANGANYIKA Nyerere has brought another power center, the trade union movement, under close govern- ment control. The Tanganyika Federation of Labor (TFL), al- though allied with TANU in the drive for independence, after- ward opposed many of Nyerere's policies. Last January the gov- ernment averted a clash by ap- pointing one TFL leader as high commissioner in London and an- other as minister of health and labor. Their successors announced that TFL would cooperate fully with TANU on "all matters concern- ing the nation." Last June, aided by growing public dissatisfaction with wild- cat strikes, the government pushed through several bills which made all strikes illegal and gave the government sweeping powers to enforce settlement of industrial disputes. All unions were re- quired to join the officially rec- ognized TFL or be dissolved. Preventive Detention Perhaps the clearest example of the government's intention to build a strong central executive was the adoption of a preventive MOZAMBIQUE (PORT.) INDIAN OCEAN MALAGASY REPUBLIC rd I STAT SECRET 14 Dec 62 SPECIAL ARTICLES Llamc of 7 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY detention law iii September. The National Assembly passed without debate an "urgent" government bill allowing the minister of home affairs to detain. any per- son threatening the stability and security of the state. There is no appeal in any court and no limit to the term of deten- tion. In justifying the bill, government spokesmen cited in- ternal disorders in other newly independent countries and in- sisted that extraordinary meas- ures were necessary to pro- tect Tanganyika's government against overthrow by undemo- cratic means. Foreign Affairs Even more than most newly independent African states, Tanganyika has sought to avoid involvement in the cold war. Its representatives rarely speak on international issues in forums such as the UN General Assembly. It has sent few representatives abroad and has restricted the size of both bloc and Western missions in Dar es Salaam, the Tanganyika capital. It has avoided taking sides between the rival Casa- blanca and Monrovia groupings of African nations. Nevertheless Dar ess Salaam is replacing Cairo as a main center of political action op- erations into the countries of south and east Africa. It is the transit point for African nationalists going abroad for study and the home of numerous refugee groups. Those from Mozambique, the Rhodesias, and South Africa are particularly in evidence, and Tanganyika will probably play an important role in the nationalist effort against the Portuguese regime in Mozam- bique. The refugee leaders usually meet weekly under the chairman- ship of a senior official' . in the Tanganyikan Ministry of Home Affairs. Bloc diplomats--par- ticularly Soviet and Chinese Communist--are in active contact with opposition leaders from neighboring countries. The Soviets in Tanganyika have focused their efforts on labor leaders. The TFL, which they reportedly consider one of Africa's more important labor movements, has accepted 30 scholarships for study in the Soviet Union. The Tangan- yika Government has accepted an additional 60 Soviet scholar- ships provided the students at- tend! some university other than Lumumba University in Moscow, which is the usual training spot for Africans. Economic Prospects The most pressing problem facing Nyerere's republican government is accelerating the slow pace of economic development. The per capita income, equiva- lent to $60 a year, is low even for Africa; the budget deficit amounted to some $30 million in fiscal 1962; and monetary reserves are slender. There is little local capital avail- able for development, and the country's dependence on agri- cultural products--mainly sisal and coffee--for some 60 percent of its gross domestic production at a time of depressed world prices limits its opportunity for earning foreign exchange. A three-year development plan envisages an expenditure of $71) million by June 1964, devoted largely to road construc- tion, agriculture, and educa- tion. Rural development is being emphasized to discourage migration to the cities and an increase in urban unemployment and security problems. This "people's plan" encourages villages to build their own roads, houses, and schools in a communal effort, and it appears to be gathering momentum. Nyerere has talked in terms of a socialist economy but he SECRET 14 Dec 62 SPECIAL ARTICLES n.,,,.,. 0 _r Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 MW ?%v SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY has said that he will welcome private investment capital from abroad. Both Nyerere and Kawawa recognize the critical need for receiving foreign advice. Nyerere has emphasized the need to continue overseas recruitment of advisers sympathetic with his country's needs. He is setting up a "brain trust" of five foreign nationals who would re- port directly to him through an alien director of planning. US aid and Peace Corps pro- grams are welcomed. Outlook Tanganyika's future depends largely on the continued leader- ship of 39-year-old Nyerere. For the immediate future, he is bolstered by the resounding 98 percent of the popular vote he received last month in the presidential election. While Nyerere can be ex- pected to continue his moderate course in international affairs, they growing strength of the executive at the expense of legislative, judicial, and labor organizations will prob- ably bring a further erosion in the meager substance of democracy--if less abruptly than has occurred in Ghana. Any successor such as Interior Minister Kambona could complete the destruction of representa- tive government and orient the country more toward the bloc. SECRET 14 Dec 62 SPECIAL ARTICLES Approved For Release 2008/06/20: CIA-RDP79-00927A003800130001-8 25X1 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8 Approved For Release 2008/06/20: CIA-RDP79-00927AO03800130001-8