WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004100050001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 32
• Document Creation Date: December 21, 2016
• Document Release Date: June 4, 2008
• Sequence Number: 1
• Publication Date: July 12, 1963
• Content Type: SUMMARY

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~, 1-~
12 J~.ly 1963
aCi No. p~88/63
Copy No . `~'
WEEKLY SUMMARY
OFFICE OF CURRENT INTELLIGENCE
State Dept. review completed
H.tJ`TUii1V 1'U t~~.;ur~~a ~.C,i~.arti
IMMEDIATELY AFTER USE
- - -~ -
GROUP I Excluded from automatic
downgrading and declassification
CENTRAL INTELLIGENCE AGENCY
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(Tnformatian as of 1200 EDT, 11 July 1963)
VISIT OF US STUDENTS TO CUBA
The group is receiving red-carpet treatment and
will probably remain for several mare weeks.
MOSCOW PREPARES FOR TEST-BAN TALKS
Moscow is making friendly gestures toward the West
an the eve of the talks. Soviet sources have not
made clear whether Khrushchev's offer of a partial
test-ban agreement is contingent on a NATO - Warsaw
Pact nonaggression treaty.
BITTER ATMOSPHERE SURROUNDS SING-SOVIET TALKS
The USSR and China clearly expect their secret
talks in Moscow to result in a further dis-
integration of relations.
USSR AND IRAQ HEIGHTEN ATTACKS ON ONE ANOTHER.
The Soviet Union has taken a series of diplomatic
actions and Iraq has been conducting a heavy
anti-Soviet propaganda campaign.
GOMULKA'S DIFFICULTIES WITH PARTY FACTIONALISM
Factionalism probably forced the postpone-
ment of the party congress until 1964, but Gomulka
seems to have thwarted at least temporarily a drive
for power by a group of hard-line nationalists.
PEIPING STRUGGLES WITH UNEMPLOYMENT PROBLEM
The regime has had little success in resettling
the surplus urban population, and there is prospect
of worsening morale problems if this summer's
harvest is poor, as seems likely.
ASIA-AFRICA
12 July 63
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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ASIA-AFRICA (continued)
FURTHER NEUTRALIST RETRENCHMENT IN LAOS
The Communists are maintaining pressure at several
points, and efforts to arrange talks between Premier
Souvanna and Prince Souphannouvong remain stalled.
PAKISTAN'S "INDEPENDENT" FOREIGN POLICY
Recent accommodations with Communist China show a
continued shift away from close alignment with US
policy.
AREA NOTES
Malaysia, Yemen, Syria
THE DE GAULLE - ADENAUER MEETING
In their 4-5 July meeting the two leaders made
little or no progress toward resolving any
major issue.
AGRICULTURAL DISCONTENT IN FRANCE
Farm leaders have generally endorsed recent govern-
ment concessions but local groups and individual
farmers are still not entirely satisfied.
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12 July 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
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EUROPE (continued ) Page
ITALY'S NEW PREMIER
As head of an administrative government, Leone is
expected to assume responsibility only far the con-
duct of routine business. He has announced his
intention to serve only through October.
PORTUGAL UNDER ANTICOLONIALIST PRESSURE
Expected African demands for UN sanctions will
probably revive Portugal's threats to leave the
UN and may lead to a further hardening of its
position on renewing the Azores base agreement.
WESTERN HEMISPHERE
BRAZILIAN FINANCIAL POLICY
Brazil's new finance minister is seeking to formulate
a financial policy predicated on close cooperation
with the United States.
BRITISH GUIANA DEVELOPMENTS
The Jagan regime has emerged from the 11-week
strike which ended on 8 July more firmly entrenched
in off ice than it was before the walkout began.
ARGENTINE ELECTION RESULTS
The 7 July elections marked the strengthening of
the center-oriented parties at the expense of the
Peronists and showed a strong preference for
constitutional government.
VENEZUELAN PRESIDENTIAI, CANDIDATE
The Democratic Action party has nominated Raul
Leoni as its candidate in the elections tenta-
tively scheduled for November.
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VISIT OF US STUDENTS TO CUBA
The group of 59 US students
now visiting Cuba has been receiv-
ing red-carpet treatment ever since
its arrival from Prague two weeks
ago.
Beginning with personal con-
ferences with Fidel Castro and his
brother Raul, the students have
been continually lionized by the
regime's leaders. Included among
their hosts have been such stal-
wart Communists as Blas Roca,
director of the newspaper Hoy,
Carlos Rafael Rodriguez, head of
the government's agrarian reform
office, and. Lazaro Pena, secretary
general of its labor organization.
In addition the students' move-
ments and. activities have been
minutely covered by the press and
radio.
Indications are that the stu-
dents will be in Cuba for several
more weeks; they are reported now
on an extended tour that will take
them from one end of the island to
the other. For as long as the
visit lasts, the Castro regime can
be expected. to continue publiciz-
ing statements at:~ributed to the
Americans that are: favorable to
Cuba and critical of the US.
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`'~ SECRET The~Communist World
MOSCOW PREPARES FOR TEST-BAN TALKS
On the eve of the 15 July
three-power talks on a nuclear
test ban, Moscow has made a
number of gestures toward the
West calculated to create a
favorable atmosphere for the
beginning of the talks. This
contrasts with the exchange of
broadsides with Peiping immedi-
ately prior to and even during
the early stages of the Sino-
Soviet talks.
During his visit to the
US Embassy for the Independence
Day reception, Mikoyan praised
the policy of peaceful coexist-
ence and stressed the need for
an end to the Cold War. In
marked contrast with last year's
treatment, President Kennedy's
telegram thanking Khrushchev
and Brezhnev for their 4 July
congratulatory message was
published in full in Izvestia
and Pravda. The Soviet press
on 7Tu'~y-carried an article
by P. T. Gobets, a Soviet par-
ticipant in the Geneva "hot
line" talks. The article noted
that US and Soviet experts had
begun work on resolving "complex
technical problems" connected
with setting up the "hot line"
between "the White House and
the Kremlin." Moscow announced
on 10 July that the line would
go into operation on 1 September.
Khrushchev's primary move
to indicate to the West his
interest in the forthcoming
talks was his invitation to
Belgian Foreign Minister Spaak
to visit the USSR for an ex-
change of views. TASS charac-
terized their $ July meeting
in Kiev as "marked by an at-
mosphere of sincerity and mutual
understanding." Moscow TV
promptly carried films showing
the two leaders in friendly con-
versation.
The substance of their
conversation has not yet been
reported. The former NATO
secretary general, however, is
well known as an advocate of
some type of NATO - Warsaw Pact
nonaggression treaty. The in-
vitation to Spaak at this time
reflects considerable Soviet
interest in the nonaggression
issue, which Khrushchev linked
with a partial test-ban treaty
in his 2 July speech in East
Berlin.
Moscow has evaded clarify-
ing whether Khrushchev's latest
proposal for a partial nuclear
test-ban agreement is contingent
on Western acceptance of a
NATO - Warsaw Pact nonaggression
treaty. Moscow broadcasts have
widely repeated Khrushchev's
2 July proposals but provide no
indication of the exact rela-
tionship of a nonaggression
treaty with a test ban.
Mikoyan and Deputy Foreign
Minister Zorin, responding to
Western press queries at the
US Embassy reception of 4 July
in Moscow, seemed purposefully
vague on the Soviet position
for the three-power test-ban
talks. Mikoyan said that Khru-
shchev's 2 July speech "directly"'
called for a "connection" be=
tween a partial test-ban agree-
ment and a nonaggression treaty.
Zorin, however, stated that the
nonaggression treaty is not a
condition for a test-ban agree-
ment--but then said. it is "part
of the whole."
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12 July 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
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In a brief conversation
with Ambassador Kohler at the
reception, Miltoyan was generally
noncommittal on the details of
the test-ban offer. He made
the routine complaints over
the US rejection of the Soviet
offer to permit two or three
on-site inspections to police
a ban on underground testing,
but would not say whether the
demand for a moratorium on
such testing had been dropped.
A possible indication of
Moscow's serious interest in
the three-power talks is its
refusal to grant visas to US
and British newsmen to cover
the talks. The Soviet embas-
sies in Washington and London
have so far refused to grant
such visas on the grounds that
there is a firm three-power
understanding that the talks
would be "secret" and that
there would be no press brief-
ings. After the US Embassy
informed the Soviet Foreign
Ministry on 5 July that the US
had no objection to the is-
suance of Soviet visas to US
newsmen, a Soviet official took
note of the statement but gave
no indication that the USSR is
changing its p~.~sition.
Zorin's presence during
the Khrushchev-Spaak meeting
suggests that he may have been
tapped to represent the USSR at
the talks.
Denial of Soviet Testing
Soviet journalist Yuri
Zhukov, who is often used as
an unofficial spokesman for the
Soviet leadership, has denied
US press speculation on pos-
sible recent Soviet nuclear
testing. He told a US Embassy
official on 1 July that the
rumored explosions were "earth-
quakes, as announced by the
Soviet press."
Zhukov expressed the hope
that the US Government now
shared the view of "certain
Western observers" that the
xislt of an "isolated" one-kilo-
ton test is "nothing" compared
to the danger if additional
countries gain a nuclear capa-
bility.
His remarks suggest that
the Soviet leaders wish to
prevent such press speculation
from having adverse repercus-
sions on the test-ban talks.
Following Zhukov's private
denial, a few Soviet broadcasts
~.lso denied that the USSR had
ir.ecently tested, and ridiculed
the AEC's comments on the pos-
sibility of Soviet testing.
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12 July ~3 CUii,iiEP1T INTELLIGENCE ~YEEI~LY SU141PwIAl1Y
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The Communist World
BITTER ATMOSPHERE SURROUNDS SING-SOVIET TALKS
The USSR and China clearly
expect their secret talks in Mos-
cow to result in a further disin-
tegration of relations. They do
not appear interested in finding
a formula that would allow for
a gradual subsidence of their
bitter contest, but rather each
hopes to turn this tactical
phase of their deepening conflict
to advantage. With an eye to
the mast interested audience and
the major prize to be won--the
world Communist parties--each
side is attempting to pin respon-
sibility for the ever widening
split on the other while posing
as the only party interested in
re-establishing unity.
This was the intent of the
Soviet central committee state-
ment published in Pravda on 9
July. The statemen~laimed
that two firm and important
agreements--to cease polemics
and to hold the tallss--had been
reached. It accused China, how-
ever, of engaging in actions
breaking the first agreement and
thus making it impossible for
the talks 4o succeed.
While charging that the
Chinese are carrying an a "de-
liberate campaign" to worsen
Sino-Soviet relations, with a
disregard far the "dangerous
consequences of such a policy,'}
the statement disingenuously pro-
claimed Soviet good faith by
insisting that the Soviet party,
"despite such unfriendly actions,"
will continue to strive to
"overcome the difficulties."
The immediate pretext for
this Soviet tactical protest was
a rally held in Peiping on 7
July in honor of the five Chinese
thrown out of Moscow for dis-
tributing polemical literature.
The rally, attended by over 7,000
Chinese officials and addressed
by Foreign Minister Chen Yi
and other high officials, was
designed to justify the Chinese
action and, in turn, blame the
Soviets for their "'unreasonable"
behavior.
The Chinese Communist party
made its bid for the sympathy
of the world Communist parties
in a statement issued on 10
July. As has frequently happened
in the past, the Chinese re-
versed the roles that the two
parties were playing and in the
face of the provocative Soviet
attack. posed as the innocent
_,__.
CHRQNt3L4GY ~, ~~~y~-,~~~fiET =T~1,L~5
-=~~MO;~bYt' T1M6)-~
5 July 1430
1b3D - 1830
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lODO ~ L3Q0_
15DD -.'jZt}D
12 July ~3 CURREId3.' INTELLIGENCE WEEKLY SUPJlMARY
Chinese arrive Vnukovo Airport
Preliminary meeting
uay's discussions opened
Length of sessions undeterm
Talks resume
Substantive issues rumored to have been discussed
for the first time
ncurrent meeting between lower level assistants
'd day-long recess taken
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inj~.~red party. Their relatively
temperate rep~?y, cast in tone~~
of regret and sorrow, was de-
signed to nullify the Soviet
attempt to ].ay responsibility
on China': doorstep and in turn
to pin the blame on the Soviet
Union.
The statement dismisses
the ;soviet charges as "ground-
less" and reiterates a charge
of "unreasonable behavior" an
the part of the Soviet Union,
but reliew~ more on a rather
subtly phrased series of rhetor-
ical. questions to make its
points. 13y contrasting their
own righteous behavior--re-
printing Soviet letters and
statements and allowing Soviet
personnel in China to distribute
them--with the ;soviet failure
to do similarly, the Chine;~e
attempt to present a picture of
tYremselves as a mature and re-
sponsible party, worthy of
leadership,
Feigning bewilderment that
the Soviet Union should find
something objectionable in the
rally liel.d for the fi~~e expe'_ted
Chinese, the statement inno-
cently asks if the Soviet Union
wants them declared personae
non gratae in China as well
as in the UaSR. The statement
insists that true "solidarity"
between equals cannot be at-
tained by adopting such a
'"dictatorial attitude,"
To drive home the con-
trast betvreen their own be-
havior and that of the soviet
Union more strongly, the Chi-
nese published the Soviet 9 July
statement in People's Daily on
the same day ey ma e~ieir Uv~n
statement. They also published
anti-Chinese selections from
Pravda editorials, the editorials
c.f vaxious other Soviet newspapers,
and excerpts from Khrushchev's
2l June speech to the ;soviet
central committee plenum. Ta
buttres;:~ their charges of Soviet
anti-Chinese behavior, they al:~o
published a report from their
Moscow correspondent cataloguing
the aeries of regional meetings an
the Sino-Soviet di:~pute. Most
members of the ;soviet hierarchy
have fanned out from Moscow to
address these n~eetistgs, apparently
condemning the Chinese and ex-
plaining the Soviet plans for
meeting the challenge.
ether soviet actians reflect
the bitterness and tension that
must exist in the secret meetings.
Khru,hchev ostentatiously left Mos-
cow far Kiev on 5 July, the day the
Chinese arrived and the tall~.s
opened. while there he mat with
Helgian Foreign Minister Spaak,
in a "cordial." exchange. ri'he Soviet
radio has replaced its Ru:;sian-
)_anguage program taped in Peiping
with one prepared by the Cuban
Radio Institute in Havana for
;soviet listeners. l;ntitled '{Cuba
Today," this program is apparently
to be a regular feature, as the
Chinese program had been.
Thus the uoviets have given
ample evidence that they have no
intention oz compromising their
policies as desired by Peiping,
but intend to pursue them with
even greater vigor. The Chinese
have :indicated that they intend
to continue their str~~g~;1e against
the ;soviet party, not least in the
bilateral. ta11~s. The actions b,y
both parties and their preparations
to b lame the other for the failure
of the talks, .even while they are
in progrv:~s, point up the hollow
nat..re of the charade being played
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12 Ju1.y a3
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The USSR continues to in-
tensify its attacks on the Iraqi
Government's campaign against
the Kurds. The 9 July Soviet
note to the Baghdad government
repeated earlier charges of
"bloody outrages" against the
Kurds, and at the same time
sought to make the repression
of the Kurds an international
issue by claiming "interference"
by the CENTO powers and Syria.
This allegation, developed
in greater detail in identical
notes of the same date to Syria,
Iran, and Turkey, appears to
be intended to refute Baghdad's
clam that the Kurdish problem
is strictly an internal Iraqi
affair. The UN Economic and
Social Council, now meeting in
Geneva, has granted a Soviet
request to cansider Moscow's
charge of genocide against
Iraq, and Soviet UN Ambassador
Fedorenko stated on 10 July that
the USSR may request a meeting
of the Security Council to con-
sider the Kurdish issue.
Moscow may also intend to
use these charges to revive its
1957 proposals for a great-
power declaration renouncing
the use of force in the Middle
East and banning interference
in the internal affairs of the
area. Renewed proposals along
these lines presumbaly would
be aimed at testing Western
reaction to including general
East-West issues in the three-
power discussions which begin
in Moscow on 15 July.
The Soviet statement made
no reference to a previous
threat to terminate aid to Iraq.
Soviet economic aid programs
are continuing on a reduced scale,
but arms deliveries have been
suspended.
Iraqi propaganda media
have conducted a heavy anti-
communist, anti-Soviet campaign
for the past month. Baghdad
television has carried personal
attacks on Khrushchev, and has
run and re-run films of the
Soviet repression of the Hungar-
ian revolution in 1956 and
the East German uprising in
1953, as well as Khrushchev's
shoe-pounding at the UN. News-
casters have read open letters
to Khrushchev from Iraqi citi-
zens asking the USSR to stop
interfering in Iraqi internal
affairs. The press during the
past week has called the Soviet
Union a "Dr. Jekyll and Mr.
Hyde" which is "pitied, hated,
and contemptible," and has
described Marxist ideology as
a mixture .of blasphemy and apos-
tasy. Baghdad has also accused
Moscow of seeking to placate
Peiping with its pro-Kurdish
policy. On 9 July Baghdad
radio accused the Soviet Union
of "bestial suppressive methods
and extermination of thousands"
of its citizens for rejecting
Communism.
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12 July 63 CURRENT INTELLIGENCE Z~EEKLY SUMPltARY
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FIGURES IN
POLISH PARTY
FACTIONALISM
Left to right:
S. Jedrychowski , E . Ochab,
Z. Kliszko, M. Spychalski,
A. Zawadzki, W. Gomulka,
E . Gi erek, J . Cyranki ewi cz,
A. Rapacki, R. Zambrowski ,
J. Morawski, I. Loga-Sowinski .
Party first secretary Gomulka
surrounded by members of the politburo.
ZENON KLISZKO:
Gomu I ka's right hand
man and staunchest
supporter, Party
politburo and secretariat,
RYSZARD STRZELECKI:
Leading member of the
hard-line nationalists,
sometimes called Partisans
Party secretariat but
not yet politburo.
ARTUR STAREWICZ:
Up-and-coming moderate
from ranks of those who
generally but not always
support Gomu I ka .
Party secretariat.
JOSEF CYRANKIEWICZ:
Leading member of the
group of ex-socialists
scattered throughout the
central committee who
generally but not always
support Gomu I ka . Party
politburo and secretariat.
ROMAN NOWAK:
One of the few
pro-Moscow hard-I i Hers,
known as the Natoli n
group, remaining in a
high position.
Politburo and secretariat
WLADYSLAW MATWIN:
One of the few remaining
revisionists brought in
with Gomulka in 1956.
Politburo and secretariat.
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GOMULKA'S DIFFICULTIES WITH PARTY FACTIONALISM
Factionalism in the Polish
Communist Party is causing dif-
ficulties for Gomulka and has
probably forced the postpone-
ment of the party congress un-
til the first half of 1964,
However, Gomulka seems to have
thwarted at least temporarily
a drive for power by a group
of hard-line nationalists.
There are two groups of
hard-liners within the Palish
party, a pro-Moscow group op-
posed to Gomulka's return in
1950 and an increasingly in-
fluential group of nationalist
anti-Semitic hard-liners whose
chief spokesman appears to be
Ryszard Strzelecki. In addi-
tion there are several loose
groupings of moderates and
liberals varying in political
coloration and support of
Gomulka. Infighting among all
these factions and the dilemma
created by struggling against
revisionism at home and dog-
matism in the international
movement have apparently pre-
vented Gomulka from holding
the congress scheduled by
party statute for this year.
At the 4-6 July central
committee plenum Gomulka moved
to placate the various factions.
In an apparent concession to
the hard-liners, Roman Zambrow-
ski, a traditional hard-liner,
recently disowned by the Strze-
lecki faction because he is a
Jew, resigned his position in
the party politburo and secre-
tariat. At the same time, how-
ever, Gomulka promoted Jewish
party press chief Starewicz
and Polish ambassador to Mos-
cow Jaszczuk--both unsympa-
thetic to Strzelecki's fac-
tion--to the party secretariat.
Moreover,5trzelecki was
not promoted to the politburo
as his followers had reportedly
expected. Although he is
generally believed to have
masterminded the hard-line
cultLtral policy laid down at
the plenum, the commission to
direct and assure adherence to
this new policy will reportedly
be headed by two moderates who`
support Gomulka.
The personnel changes at
the plenum probably were in-
sufficient to improve Gomulka's
control over the factions and
at best were a holding action.
He will probably have to under-
take a decisive shake-up of
personnel in the higher levels
of the party to assure some
degree of unity prior to
holding a part congress.
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~ SEC'RET ""~
Recent reports of wide-
spread industrial unemployment
and continued attempts to re-
locate surplus urban population
indicate that Peiping has failed
to realize its hopes for eco-
nomic improvement in 1963. In-
dustry appears to be in better
balance than last year, but
job appartunities remain scarce
and the total employed may even
have declined because of the
reduction in surplus workers
required by the current economy
campaign. While productivity
statistics may have risen
slightly because of this re-
trenchment, production appar-
ently has not benefited and the
depressed economy is proving in-
capable of absorbing the laid-
off workers.
The regime has had little
success in its attempt to re-
settle this surplus urban pop-
ulation in rural areas. Many
urban residents have evaded re-
settlement orders, many evacuees
have returned to urban areas,
and additional rural residents
have infiltrated into the cities.
Although migration data are not
available, the regime reportedly
believes that some 30 million
people moved into the cities
during the 1958-60 period of
the "leap: forward." This entire
increment is presumably now
surplus since regime authorities
have said that 30 million people
should be moved to the country-
side.
Rural residents have been
resentful of the influx of urban
evacuees and uncooperative in
sharing their limited food. sup-
plies with the newcomers. In
same cases peasants have re-
fused to accept evacuees and
have forced them to move on.
Already overpopulated, China's
rural areas need such things
as chemical fertilizer, not
more labor.
Mast of the refugees who
poured into Hong Kong from the
mainland last summer were un-
employed city dwellers threat-
ened with resettlement in farm
areas. While tighter border
controls make such an exodus
unliltely this year, the dis-
satisfaction and resentment
that motivated-last year's
mass migration are still prev-
alent.. If this summer's
harvest is worse than last
year's poor crop--which now
seems likely--the resulting
food situation could. seriously
exacerbate morale problems
in China's cities. i
SECRET
12 July 63 CURREPTT INTELLIGENCE WEEKLY SUMMARY
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cHrr~A
~ ciong Yo
Meng<
Auong~+ L
Sing; ~ds.~~~
Muang Soui ~,,..~?'r'
'~~NEUTRALI57
HEADQUARTER
No~~~
Luang
Prabang
---~?-? R c a d
----- Track cr tail
Airfield
HONG SALY aien ~
F `"1 / `
~ ~
.tea ~ ~
ti
1i ~
?9~,. ~o ~~ Sam Neua
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~?~ K 55~
Vaq~ Vieng
j~.g~~
? VIENTIANE }Pak 1~~
Cf a
Ban Hin .off"ic~~"' Sane V(am
Heup 12 ~V _ ~o,. ~LL~
~:
TNA/L ANL3
Oheu
7'henen9
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F J ~
ng Net
udrt
Sav nnakhet
Thant
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SAVAN NAF~{ 1 ET
~yTchep e
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SECRET
Asia-Africa
FURTHER NEUTRALIST RETRENCHMENT IN LAOS
Military activity in Laos
remains at a low level, but
Communist pressures and the
Zack of food and ammunition have
forced further neutralist re-
trenchment.
There are no indications
that the Communists will attempt
at this time to take Thakhek--
a key town an the Mekong--and
thereby risk a further escala-
tion in the fighting.
Farther south, increased
Pathet Lao guerrilla and probing
activities near Savannakhet,
Saravane and pakse suggest the
passible initiation of larger
scale Communist military activity
in this sector. At Attopeu,
where the Lao Army garrison is
surrounded by Pathet Lao units,
the situation has been quiet.
Preliminary talks are being
held in Vientiane between
neutralist and Pathet Lao of-
ficials in regard to security
arrangements for the proposed
meetings between Souvanna and
Prince Souphannozzvong at the
Plaine des Jarres. The Pathet
Lao have proposed that rightist
forces be withdrawn from the
Plaine des Jarres airfield
SECRET
12 July 63 CURRENT INTELLIGENCE 4YEEKLY SUMP~IARY
sufficiently far that they can-
not "sabotage the talks even
by artillery." Meanwhile,
Pathet Lao propaganda continues
to urge Souvanna to put an end
to alleged acts of provocation
by Phoumi and Kong Le forces
and to create a "favorable
atmosphere" for talks.
Relations between Vientiane
and the "independent neutralist"
General Khamouane in Phong Saly
Although the takeover of
the former French airbase at
Seno by phaumi's troops in late
June initially generated a
violent reaction from the French,
they have been more or less
pacified by Souvanna. However,
Souvanna's statement that
Phoumi's action was taken on
behalf of the coalition govern-
ment is cited by the Pathet
Lao as another example of
Souvanna 's increasing subser-
vience -ho ri Mist and US
influence.
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`~ SECRET ~
PAKISTAN'S "INDEPENDENT" FOREIGN POLICY
In recent months the course
of Pakistan's foreign policy has
shifted a few more degrees from
the west toward the .independent po-
sition first charted bythe A.yubgov~
ernment some two years ago. Moves
in this direction include a pre-
liminary civil air agreement
with Peiping and a demand that
SEATO formally recognize the
"threat" against Pakistan posed
by India's military buildup.
The trend toward a limited
accommodation with the bloc
which began in 1960 was intended
primarily to appease growing
neutralist sentiment in Pakistan
and to put the US on notice that
Pakistan's cooperation should
not be taken for granted. A
number of top officials, taking
the view held by many intel-
lectuals and large sections of
the public, began to question
the value of a rigid commit-
ment to the West through member-
ship in the CENTO and SEATO
pacts. They argued that some
neutralist countries seemed to
gain as much or more by exploit-
ing the competing interests of
the major power blocs.
As Western efforts to help
bring about a solution of the
Kashmir dispute were renewed
in 1961-62, the. more independent
line was geared to the narrower
but nationally vital interests
of Pakistan's relationship with
India. The radical change in
India's relations with the West
which followed the Chinese
Communist border attack last
fall focused Pakistani concern
even more intensively on the
subcontinent.
Still further impetus was
provided recently by the Anglo-
American declaration--as ex-
pressed in the Kennedy-Macmillan
communiqud of 30 June--that
military aid to India would
continue beyond the "emergency"
phase. This reinforced the
conviction of nearly all Paki-
stanis that the "balance of
power" in the subcontinent, under
which they felt India's pre-
ponderant military power had
been offset by Pakistan's arms
pact with the US, was being
drastically altered to Pakistan's
disadvantage.
Expansionist "Indian
Hinduism" remains the prime
security problem for Pakistan,
as a senior Foreign Ministry
official recently put it, and
his country's present foreign
policy is designed to achieve
greater flexibility and maneu-
verability. While privately
claiming that Pakistani author-
ities have no illusions about
the long-range intentions of
Communist China and the USSR,
he said that his government is
exploiting all available op-
portunities to improve Pakistan's
position against India.
The official recognized
that current Pakistani policy
regarding China runs counter
to US global strategy and ob-
served that this was something
the US would have to learn to
live with. President Ayub
currently is stressing the need
for closer relations with Pei-
ping and ma be considerin
new ties.
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12 July 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 11
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'PROPOSED FEDERATION
OF MALAYSIA
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Malaysia: The agreement
signs in London on 9 July by
representatives of Malaya,
Singapore, Sarawak, and North
Borneo largely settles terms for
internal arrangements of the
Malaysian federation; which is
scheduled to be formally inau-
gurated on 31 August. It is
likely that Brunei also will be
included, although the Sultan is
still holding out for better
terms.
Indonesia reacted by stat-
ing that it would not x?ecognize
Malaysia and may withdraw from
the Indonesia-Malaya-Philippines
heads-of-state conference sched-
uled for 30 July. In a public
address on 10 July, President
Sultarno claimed that by signing
the London agreement, Malayan
Prime Minister Rahman had broken
a promise that a referendum would
be conducted in the Borneo
territories before Malaysia was
formed. On 9 July Foreign Min-
ister Subandrio had stated that
Indonesia would resume "active
confrontation" of Malaysia if
the Borneo territories "are
forced into Malaysia" without
being permitted the right of
self-determination.
Indonesia had dropped its
overt opposition to Malaysia
Yemen; Intense fighting
between Yemeni royalists and
Egyptian-republican forces is
continuing in northern Yemen.
There are still no indications
that Cairo is preparing to
withdraw any troops. ~
Syria: The Baathist re-
gime scored another victory over
its opponents with its ouster
of Chief of Staff Hariri on S
July. The chief of staff, who
had considerable support among
civilian and army elements,
apparently was lured to army.
headquarters where he was ar-
rested, forced to hand in his
resignation, and put on a
plane far Europe almost imme-
diately.-. Hariri's departure,
however, is not likely to put
an end to the power struggle be-
tween Baathist and anti-Baathist
elements, some of which are pro-
Nasir and some hostile to hirn.
SECRET
12 July G3 CLTIZRETZT INTELLIGENCE V~EEKLY STJMMAItY
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~ SECRET `'"~
The 4-5 July meeting in
Bonn between De Gaulle and
Adenauer made little or no
headway toward resolving any
ma ~r issue .
the two leaders did
not reach any understandings
beyond those listed in the of-
ficial communiqud.
In the military field, the
two governments agreed to place
an unspecified number of com-
pany-size units in each others'
armed forces by the end of the
year, and to undertake joint
development of a vertical take-
off plane. There is no evi-
dence that either side raised
the question of cooperating
in the development of nuclear
weapons. Among the various
cultural and educational agree-
ments concluded, the most far-
reaching is an ambitious youth
exchange program.
Discussions aimed at find-
ing a compromise between the
high German and low French
grain prices apparently made
little progress. In the end,
both sides settled for return-
ing the problem to the EEC
Council of Ministers for further
study. Efforts to find a
mutually acceptable formula
for UK consultations with the
EEC were equally unproductive.
Probably the most important
accomplishments of the. talks
were the precedent set for
future heads-of-state meetings
under the Franco-German treaty
and the initiation of Chancellor-
designate Erhard into the
pattern of face-to-face meetings
favored by De Gaulle and
Adenauer. Although their first
session seems not to have been
completely cordial, both
De Gaulle and Erhard came
away professing confidence of
their ability to work together
in the future.
There has, however, been
some reason to suspect that
with the approaching end of
the Adenauer era, De Gaulle
might play down somewhat the
bilateral relationship with
Germany in favor of an attempt
to promote closer European con-
federation within the framework
of the EEC. An indication of
this is an official French ap-
proach to Italy just before the
Bann conference in which Rome
was urged to take the initiative
in strengthening EEC institutions
as a prerequisite to closer
political integration.
u De Gaulle has scheduled a 25X1
press conference for 29 July
at which time he may s eak out
on the subject.
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12 July 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
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Europe
Recent government concessions
aimed at placating farmers' dis-
content have been generally en-
dorsed by the leaders of national
farm organizations, but local
groups and individual farmers have
not been altogether appeased. A1-
thaugh antigovernment demonstra-
tions have subsided lately, these
are likely to pick up again if
prices far farm products do not
rise appreciably. Plans for a
nationwide demonstration appear
to have been set aside for the
moment.
Underneath the current rural
unrest are the steadily lower
prices being received for local
fruits, vegetables, grains, wines
and dairy products as a result of
overproduction and competition
from imports. The government has
sought to alleviate the situation
by raising the price of wheat,
suspending the importation of
12 July 63
Algerian wine and selected fruits
and vegetables, and increasing some
subsidies. These are, at best,
stopgap measures falling far short
of a long aver due revamping of the
government's over-all farm policy.
French farm interests have
also suffered from Paris' moves in
the EEC, notably De Gaulle's ex-
clusion of the UK, a major food
importer. other factors hurting
the farmers are the impasse over
regulations far trade in certain
commodities under the EEC's agri-
cultural program and failure to re-
solve the grain price problem at
the recent De Gaulle -Adenauer meet-
ing. With labor unrest growing
apace in recent months, all this
promises a severe strain on the
government's efforts to hold the
line against inflation and to
maintain a satisfactory rate of
national economic growth.
CURRENT INTELLIGENCE WEEKLY SUMMARY Page 14
25X1
25X6
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ITALY'S NEW PREMIER
Giovanni Leone, premier of
Italy's all -Christian Democrat
administrative government, was
probably asked to form a cabinet
because his reputation as a
neutral in political outlook
made him acceptable as a care-
taker to all of the center-left
parties. He has announced. that
he expects to serve only through
October, that is, until after
the Socialist Party congress
that month decides on the party's
attitude toward a new center-left
government. Leone is expected
to assume responsibility only
for the conduct of routine gov-
ernment business and not initiate
decisive long-range policies .
Prior to his appointment
to the premiership, the 54-
year-old Leone was president
of the Chamber of Deputies--
a position he had held since
1955. He served as a lieu-
tenant colonel in the Italian
army during World War II, and
afterward played a prominent
part in drawing up the sections
of the constitution pertaining
to the judiciary and constitu-
t ional court. He has been a
deputy from Naples since 1946.
His one previous try at form-
ing a government, in the turbu-
lent days of early 1960, ended
in failure.
Leone has never been
prominent in the policy-making
circles of the Christian Demo-
cratic Party nor are his views
on the socio-economic reform
program as represented by the
center-left formula known.
He appears, rather,to have
built a reputation on his
ability to maintain a neutral
position when critical political
issues arise. While this seems
to have gained him some respect
12 July 63
Europe
as a moderator between factions
of his party, it also appears
to indicate a lack of strong
political and social convictions.
In the US Embassy's view he is
not generally well liked by
colleagues. The embassy also
characterizes him as a "color-
less" figure who, as president
of the Chamber, gave an "unin-
spired. and pro. forma" performance.
As head of an administra-
tive government, Leone is
responsible, among other routine
matters, for steering the budget
through parliament against a
31 October deadline. This
period will give the center-
left parties a breathing space
in which to negotiate their
differences and open the way
for them to farm a majority
LEONE
government. Leone in his
1 July investiture speech ex-
pressed the hope that such
negotiations would be resumed,
but it seems unlikely that he
will play a major role in any
behind-the-scenes talks that
take place.
SECRET
CUFRENT INTELLIGENCE WEEKLY SUMb~3.RY
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Europe
Recent moves by anti-
colonialist countries to embar-
rass Portugal, together with the
certainty of a demand by the
African bloc later this month
that the UN impose political and
economic sanctions, are likely
to revive Portuguese threats to
pull out of the world organiza-
tion. Lisbon will probably blame
the US for much of its trouble
with the African states and may
further harden its position on
renewing the Azores bases agree-
ment.
As a result of anticolonial-
ist resolutions taken at the
Addis Ababa conference in late
May, the UAR-and Ethiopia have
broken diplomatic relations
with Portugal and others are
likely to follow suit soon. In
the absence of diplomatic ties
to break, Algeria, Senegal and
reportedly Cameroon have an-
nounced their sympathy for this
course of action. In Latin
America, Bolivia announced a
severance of relations on 5
July.
At the UN the African bloc
has requested a meeting of the
Security Council late this
month at which time it will
press for a "hard-line" resolu-
tion against Portugal embodying
mandatory sanctions and possibly
calling for its expulsion. It
SECRET
12 July 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
is most unlikely that Portugal
will make any meaningful con-
cessions, least of all public
acknowledgment'of the right of
self-determination for its
African territories. Under the
circumstances, the stage would
be set for a Portuguese walkout,
perhaps for good.
Meanwhile, the latest
irritant contributing to Portu-
gal's steadily deteriorating
relations with the Congo is
Premier Adoula's recent public
recognition of Holden Roberto's
Angolan government-in-exile.
"Retaliatory action" could in-
clude a diplomatic., break as a
minimum and might be extended
to blocking the mouth of the
Congo River and interdicting
use of the Benguela railroad.,
which carries Katanga ore to
the coast.
If the Portuguese extended
"retaliatory action" to Washing-
ton, they might threaten to deny
the Azores bases to the US.
Under the present state of the
Azores agreement, the US posi-
tion there is unchallenged during
1963, but if negotiations for an
extension of the agreement reach
an impasse, the Portuguese can
demand that the US begin the
evacuation process not later
than 1 Januar 1964.
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Western Hemisphere
Brazil's new finance min-
ister, Carvalho Pinto, is seek-
ing to formulate a financia_1
policy predicated on close
cooperation with the United
States. He hopes to work out
a program that will at least
slow down inflation and--in
view of Brazil's tight foreign
exchange situation--ta reschedule
repayments of the government's
foreign debt.
Pinto's objective will be
hard to attain. His predeces-
sor's anti-inflation program,
aimed at keeping the cost of
living from rising more than
25 percent this year over the
1962 level,has already failed.
By the end of June, prices had
risen 3p percent over those
for December 1962, and the
end is not in sight.
Complicating Pinto's task
are the sluggishness in some
areas of Brazil's economy and
the consequent rise in pressure
for governmental relaxation of
credit restrictions. Even be-
fore he assumed office, expan-
sive wheat and petroleum sub-
sidies, removed earlier in the
year, had been reinstated.
Pinto himself , perhaps mindful.
that his home state of Sao
Paulo has been hard hit by the
restrictions, has acknowledged
the need for such financial.
measures to assist lagging
sectors of the economy.
To combat Brazil's for-
eign exchange crisis, Pinto
apparently hopes to cut back
the outflow of capital by
reducing remittances of profits,
dividends, royalties, and
patents while at the same
time attracting more "produc-
tive" foreign investment.
Brazil is also anxious to do
something about rescheduling
its foreign debt payments which,
during the .1963-65 period, will
reach $1,8 billion, or 43
percent of estimated export
earnings. For a breathing
spell, it is seeking postpone-
ment of a $25_million payment
due to the US Treasury on
24 July.
In connection with the
long-standing problem of the
Brazilian Government's commit-
ment to purchase the properties
of American and Foreign Power
Corporation in Brazil, President
Goulart has stated his inten-
tion to carry out the pur-
chase and not resort to ex-
propriation. The negotia-
tion of an understanding
between the new minister of
mines and the company is
likely, however, to result
in still further delays.
SE C'RET
12 July 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
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Western Hemisphere
BRITISH GUIANA DEVELOPMENTS
The Jagan regime has
emerged from the 11-week strike
which ended on 8 July more
firmly entrenched in office
than it was before the wall~out
began. The strike; moreover,
has aggravated racial animosity
between Negroes and East Indians
and deepened the country's
economic problems. It also gave
the regime an excuse to develop
closer ties with Cuba and the
Communist bloc.
Although Jagan's opponents
will probably try to continue
antigovernment activities, they
are discouraged by their fail-
ure to topple the government.
In addition, there is little
sense of satisfaction among
workers returning to their jobs
under an agreement which, at
best, is only a partial victory.
There are, moreover, indications
that the Trades Union Congress,
which spearheaded the strike,
may be corning apart at the
seams. For example, approxi-
mately a fifth of the sugar
workers (one-half of organized
lobar) have indicated an inten-
tion to pull vut of their TUC-
affiliated union, apparently to
join one that is government-
sponsored.
Although the government
has agreed to drop the labor
legislation which caused the
strike, it apparently will pur-
sue efforts to dominate the un-
ions. An indication of this
appeared in a story carried in
the 8 July issue of Jagan's
party's newspaper which flatly
asserted that the government
intended to reintroduce some
form of labor legislation.
Despite the strike settle=
ment, there has been only a
slight letup in the incidence
of racial violence, now occurring
particularly in the countryside.
where both East Indians and
Negroes have begun to move out
of communities in which they
are in the minority, The recent
arrival of British Army re-
inforcements will help preserve
law and order, but they are
unlikely to prevent the autbrealc
of sporadic disturbances.
The regime, meanwhile, has
moved to regularize its trade
arrangements with Cuba and the
bloc by promulgating new
licensing procedures t,a cover
the importation of the sub-
stantial quantities of food and
petroleum products now on order
from these sources. Under the
system, regular importers con-
ceivably could be forced out
of business and the public re-
quired to purchase bloc products
imported by the government's
trading organization.
More deals with Cuba may
be pending, judging by the pro-
longed presence in Georgetown
of two representatives of the
Cuban Ministry of Trade. In
any event, a colonial office
ruling which permits Jagan to
accept advance payments for
Guianese goods to be delivered
to Cuba and the bloc at a later
date, such as the 45,000 tons
of rice recently contracted
for by Cuba, could help un-
scramble the financial mess into
which the government has gotten
itself .
SE C'RET
12 July 63 CURRENT INTELLIGENCE VTEEKLY SUMMARY
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'Western Hemisphere
The 7 July elections
marked the strengthening of the
center-oriented parties at the
expense of the Peronists and
showed a strong preference for
constitutional government.
The two leading parties--
both slightly left of center
in a field of 69--are Dr. Arturo
Illia's people's Radical Civic
Union (UCRP) and the Intransi-
gent Radical Civic Union (UCRI)
headed by Dr. Oscar Alende.
A new center party led by
retired General Pedro Aramburu
ran a strong third. Despite
the call of bath Peron and ex-
President Frondizi for the
casting of blank ballots, only
15.9 percent of the voters did
so compared to 25 percent in
1960.
Since no candidate received
a majority of the total 476
electoral votes, there will be
considerable political trading
before the electoral college
meets on 31 July. The strong
ARGENTINE ELECTIONS
UNOFFICIAL RETURNS'w
PARTY
-UCRP
POPULAR
VC?TE t?lo)
2,318,777
"(25.9)
UCRI
1,497,639
(1b.7)
ARAMBURU
1,312,255
(14.7)
wwgLANIC
1,402,694
(15.9)
"The official count bean on -
11 July; and will :vary slightly
from these early .returns.
"* Mainly: Peronistbut includes
usual 3=5% bland vot?. ~ _
ELECTORAL
VOTE
-.162
i o0
Bl
showing by the three top candi-
dates, however, has probab ly
reduced the possibility of a dark
horse being elected president.
The trading will also involve the
senators to be chosen by the
provincial legislatures on 29
July and the 22 governors to be
selected by provincial electors
on 26 August.
In the direct election of
national deputies, the UCRP and
UCRI made even stronger showings,
winning 76 and 38 seats respec-
tively in the 192-man chamber.
The Aramburu and Conservative
parties-won a total of 39 seats,
while Peronist and neo-Peronist
parties won 18. The weak blank
vote has caused deep divisions
within the Peronist movement and
probably the bankruptcy of its
leadership.
The upsurge of the UCRP from
its position as Argentina's third
largest party in 1962 ref lects
new votes from same former f ol-
lowers of Peron and Frondizi.
Illia and the UCRP campaigned on
a more nationalistic platform
than the UCRI. They particularly
called for annulment of the con-
tracts with foreign oil com-
panies--mainly US--which the
Frondizi government negotiated
to help develop Argentina's
petroleum resources.
Illia, a 62-year-old physi-
cian and politician from central
Cordoba Province, has vowed to up-
hold his campaign statements. He
is anti-Communist but believes
the Communists should be allowed
legal status. He :has long advo-
cated reuniting the UCRP and UCRI,
which split in 1957 over Frondizi's
leadership; a reunion, however,
would depend on ironing out dif-
ferences ~n party platforms
SECRET
12 July 63
CURRENT INTELLIGENCE WEEKLY SUMMARY
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Western Hemisphere
President Betancourt's
Democratic Action party (AD)
last week nominated Raul Leoni
as its presidential candidate
in the elections now tentatively
scheduled for November. He was
chosen largely out of respect
for his position as party presi-
dent and the strong labor support
he commands.
His unanimous nomination
by the AD convention reflects
the party's?confidence that it
can win despite Leoni's appar-
ent lack of support among inde-
pendents and the large Social
Christian Party (COPED , which
now belongs to the governing
coalition. This confidence may
be unfounded, however, as in-
formed opinion believes that
COPEI support is essential to
guarantee any AD candidate a
clear-cut electoral victory.
On present form COPEI, suspicious
that Leoni will not give it the
same degree of participation
in the government that Betan-
court has, may refuse to back
him.
The nomination was. a mild
setback for Betancourt, who had
preferred that his allies be
permitted a voice in the selec-
tion of his successor. It is
possible, however, that Betan-
court, with a view tb perpetu-
ating the present coalition,
will at a later date attempt
to persuade his party to re-
place Leoni with a candidate
less likely to alienate COPEI
and the nonaligned voters.
Betancourt's moves will
be governed somewhat by the
success of the major opposi-
tion groups in uniting behind
a rival candidate. At this
point, the Democratic Republican
Union--Venezuela's largest op-
position party--is negotiating
with other parties to form a
united opposition front.
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