WEEKLY SUMMARY OFFICE OF CURRENT INTELLIGENCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004300020001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 37
• Document Creation Date: December 21, 2016
• Document Release Date: June 11, 2008
• Sequence Number: 1
• Publication Date: December 6, 1963
• Content Type: SUMMARY

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6 December 1963
OCI No. 0309/63
Copy No . -~ 7
WEEKLY SUMMARY
OFFICE OF CURRENT INTELLIGENCE
On file Department of Agriculture release
instructions apply.
CENTRAL INTELLIGENCE AGENCY
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(Informati.on as of 1200 EST, 5 December 1963)
Page
THE COMMUNIST WORLD
STATUS OF COMMUNIST WHEAT DEALS
During the period of stalemated Soviet negotiations
for 2.5 million tons of US wheat, other Communist
countries have moved ahead with new purchases.
THE AGING AND AI~I,ING SOVIET PARTY PRESIDIUM
Almost half the members of this top policy-making
body are ill, aged, or seemingly in disfavor, and
some move to revitalize its membership may be made
at the central committee plenum opening 9 December,
CZECHOSLOVAK LEADER NOVOTNY STILL IN TROUBLE
Circumstances surrounding his recent trip to Moscow
and the low-key propaganda treatment it received
suggest that he is no longer in good standing with
the Soviet leadership.
PEIPING LAUNCHES NEW CAMPAIGN IN AFRICA
Premier Chou En-lai and Foreign Minister Chen Yi
will begin an unprecedented tour of Africa in mid-
December to drum up support for Peiping's hard-line
programs and promote a second Bandung conference,
HANOI REVIVES NEUTRALITY SCHEME FOR SOUTH VIETNAM 8
The North Vietnamese are again pushing the idea of
a "neutralized" South Vietnam, apparently in the
hope of generating free world pressure for a nego-
tiated settlement of the Vietnamese war.
AREA NOTES
On Laos and Turkey
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6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY Page i
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ASIA-AFRICA (continued) Page
CYPRUS FACES CONSTITUTIONAL CRISIS
President Makarios has formally proposed constitu-
tional changes which would diminish the rights of
the Turkish minority.
POWER STRUGGLE CONTINUES IN IRAQ AND SYRIA
Baathist inf luence is being reduced in the Iraqi
regime, and the Baathist premier of Syria seems
on the verge of breaking with party extremists.
YEMENI DISENGAGEMENT PLAN IN TROUBLE
Egypt has made no net reduction in its troop
strength in Yemen
EGYPTIAN ECONOMIC POLICY MAY BE CHANGING
Cairo appears to be adopting austerity measures
in order to obtain continued Western aid for its
development projects.
BRAZZAVILLE GOVERNMENT TO HOLD ELECTIONS
Prominent leftists are on the unopposed slate for
Congo's 8 December legislative elections, and, they
probably will strongly influence the government
that is formed.
ZANZIBAR FACES INCREASING COMMUNIST ACTIVITY
The Arab-dominated government of this British pro-
tectorate which becomes independent on 10 December
has done little to oppose the growth of contacts
with the Communist bloc, but its leaders now show
signs of a decreasing compladency in this regard.
GOVERNMENT FORMED IN ITALY
A center-left cabinet--bringing the Socialists into
the government--has been formed by Christian Dem-
ocrat Aldo Moro and is expected to seek a vote of
confidence within the next few days.
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6 Dec 63 CURRENT INTELLIGEiiCE WEEKLY SUMMARY Page ii
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EUROPE (continued) Page
FRENCH-ALGERIAN DISPUTE OVER SAHARAiQ OIL CONCESSIONS 17
Algeria wants a larger share of profits and control
but hesitates to push its interference to the point
of provo'~ing withdrawal of French economic aid.
RENEWED DISCUSSION OF EUROPEAN POLITICAL Ui1ION 18
A revival of interest--sparked by a new initiative
from I;elgium's Spaak--has been evident among EEC
members, but the obstac'es to agreement on the form
of political .unity remain formidable .
AREA NOTES
On the Coal-Steel Community and on Greece
WESTERN HEMISPHERE
POSTELECTION PROSPECTS IN VENEZUELA
President-elect Leoni's major problems are to
contain Communist terrorism--or risk military in-
tervention--and, since no party has a majority in
Congress, to pull together an effective coalition.
NEW POLITICAL TENSIONS IN THE DOMINICAN REPUBLIC
Tensions have been heightened by recent moves by
the military-installed provisional regime against
pro-Castroites and by reaction to the regime's
plans for a return to constitutional government.
AREA NOTES
On Surinam
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i During the period of stale-
mated Soviet negotiations for
2.5 million tons of US wheat,
other Communist countries have
moved ahead with new purchases.
The East European countries are
concluding three- to five-year
purchase agreements with Canada,
and Communist China has made its
first purchases for 1964 de-
livery from Western countries.
In addition to the 8 mil-
lion tons of wheat the USSR has
under coxitract from Canada and
Australia, Moscow has bought
about 400,000 tons of wheat flour
in Western Europe, is importing
400,000 tons of wheat on loan
from Rumania, and is purchasing
smaller quantities of grain other
tYian wheat .
The European satellites
have contracted for the delivery
during'1964 of approximately 1,8
million tons of free world wheat
and smaller quantities of other
grain. These relatively large
purchases are necessary to off-
set sYiortfalls in imports of
Soviet grain during 1963-64.
The USSR had supplied 2.7 mil-
lion tons of wheat annually in
1961 and 1962. Hungary has
asked for additional amounts of
US wheat, and the Czechs seek
financing of over 200,000 tons
of American wheat. Bulgaria has
approached US officials con-
cerning prospective grain im-
ports, and Poland has requested
900,000 tons of American wheat
under PL-480. The satellites
also are negotiating with West
European brokers for smaller
quantities of grain.
Agreements with Canada for
a total of over 2 million tons
of wheat covering deliveries be-
yond 1964 have been signed by
Poland, Czechoslovakia, and
Bulgaria. Ottawa also expects
to conclude similar agreements
with Hungary and East Germany.
Satellite long-term interest in
Western grain reflects acknowl-
edgment of Soviet agricultural
problems and the inability of
the satellites to meet their
growing needs for grain from
domestic production.
Communist China's first big
wheat purchase for 1964 delivery
was for 1.1 million tons from Aus-
tralia. Peiping also is buying 25X1
at least 300,000 tons from Ar-
gentina and apparently as much
from Mexico.
Smaller purchases may be
ma a elsewhere, as Peiping ap-
parently will need more than the
5.5 million tons of grain it im-
ported this year to maintain per
capita consumption at the same
level.
Most of the Soviet grain
imports are being paid for in
cash. The large Canadian deal
contains credit terms ~
T e sate i es,
with fewer cash resources, are
seeking to defer payment as long
as possible. Peiping has bought
on credit where available, but
is prepaying its grain debts.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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Full Members
Age
Positions
Probable Areas of Responsibility
(Not Necessarily Complete)
Khrushchev
69
Party First Secretary
Premier
Chairman, RSFSR Party
Bureau
Party and government head
Brezhnev
57
Party Secretary
Titular head of state
Party second-in-command
Voronov
52
RSFSR Premier
Government affairs of the
Russian Republic
Kirilenko
57
First Deputy Chairman,
RSFSR Party Bureau
RSFSR party-industrial affairs
Kozlov
55
Party Second Secretary
Incapacitated
Kosygin
59
First Deputy Premier
Domestic economic affairs
Kuusinen
82
Party Secretary
CPSU relations with foreign
Communist parties
Mikoyan
68
First Deputy Premier
Senior adviser to Khrushchev,
particularly in fields of
foreign affairs and foreign
trade
Podgorny
60
Party Secretary
CPSU relations with foreign
Communist parties (?)
Polyansky
45
Deputy Premier
Government agricultural affairs
Suslov
61
Party Secretary
CPSU relations with foreign
Communist parties
Coordination of world Communist
movement
Shvernik
75
Chairman, Party
Commission
Heads trial board concerned with
infractions of party discipline
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The Soviet Union's policy-
making body, the party presidium,
appears increasingly in need of
revitalization, and some move in
this direction may be made at
the central committee plenum
scheduled to open on 9 December.
In contrast to the numerous
appointments made to tYie secre-
tariat since the 22nd party
congress in 1961, the presidium
membership has remained unusually
stable although almost half
the members are ill, aged, or
seemingly in some disfavor.
Perhaps the most pressing
problem is to select an even-
tual successor to Khrushckiev.
Leonid Brezhnev, since his ap-
pointment to the secretariat
in June, has been acting as
party second-in-command in place
of Frol Kozlov and has emerged
as the most likely candidate.
He continues to hold tYie position
of president of the Soviet Union
in addition to his new post of
party secretary. However, if
Khrushchev, in fact, intends to
groom him as his successor,
Brezhnev would certainly give
up the presidency and devote full
time to building his position in
tree party apparatus.
Illness has incapacitated
several of the 12 full members
of the presidium for consider-
able periods during the past
year. Former heir apparent
Kozlov, although formally re-
taining his rank as the party's
number-two man, is still parti-
ally paralyzed from the stroke
he suffered in April. First
Deputy Premier Aleksey Kosygin
told Ambassador Kohler on 7 No_
vember that Kozlov is in bad
shape and implied that his mind
is affected.
Kosygin also admitted that
he himself had been sick for a
considerable period last summer
and US Embassy observers have
commented that, in contrast to
other top leaders, he has aged
noticeably in the past two years
and has a decidedly unhealthy
appearance. Anastas Mikoyan told
Ambassador Kohler recently that
he is under doctor's orders for
two more months, although he
has recovered from the series of
illnesses and operations that have
affected him since April.
A report in October that
Mikhail Suslov was sick with
kidney trouble was confirmed
recently by an official public
lecturer in Moscow. He stated
that Suslov had been seriously
ill and was recuperating on the
Black Sea. Some questions about
his political status, however,
were raised by the arrangement
of the por-trai~t displays for
the 7 November celebration.
'The position of his portrait
in some of the displays put him
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well below his customary rank
of fourth after Khrushchev.
There are other signs that
Khrushchev may not be wholly
satisfied with his party theo-
reticians charged with super-
vising relations with foreign
Communist parties, some of whom
seem to be rigidly doctrinaire
in their outlook. In addition
to Suslov, this group includes
Otto Kuusinen and party sec-
retaries Boris Ponomarev and
Yury Andropov.
On the basis of his meet-
ing with top Soviet leaders,
Mollet was impressed by Pod-
gorny's political standi. ~
and his close relationship with
Khrushchev.. Podgorny, one of
the most outspokenly loyal
Khrushchevites, was transferred
from his post of Ukranian
party boss to the secretariat
last June and has apparently
been filling in for the ail-
ing Suslov in handling visiting
foreign Communist and left-
wing party delegations. He is
a tough and eminently practical
party administrator and can
be expected to reflect as
closely as anyone Rhrushchev's
views and style of leadership
in dealings with Communists
abroad. His assignment, if
it is to be mare than temporary,
may portend a shake-up in the
staff of theoreticians.
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CURRENT INTELLIGENCE WEEKLY SUMMARY Page 5.
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Circumstances surrounding
Czechoslovak party boss Novotny's
recent trip to Moscow and the
low-key propaganda treatment
it received suggest that he is
no longer in good standing with
the Soviet leadership. Whatever
the reason for his trip, Novotny
did not receive the public en-
dorsement from Khrushchev usually
accorded a favored leader of
Novotny's rank. Novotny partic-
ularly needs open Soviet back-
ing at this time as he struggles
to maintain control over dis-
sident elements in the Czecho-
slovak party.
The official party-state
delegation--the first from
Prague to Moscow since 1958--
consisted of the new premier,
Jozef Lenart, and several high-
level economic officia:Ls. Led
by Novotny, it left Prague se-
cretly on 25 November, accom-
panied by Soviet Ambassador
Zimyanin' and was met in Mos-
cow byKhrushchev, Brezhnev,
and Kosygin. There was none of
the advance press build-up
usually given such official
delegations.
The presidential flag con-
tinued to fly from Hradcany
Castle on 25 and 26 November
despite Novotny's absence, and
late on 25 November--even after
Prague's announcement of the
visit--a senior Foreign Ministry
official denied any knowledge
of the trip. Zimyanin, ap-
parently under some injunction
to maintain secrecy, had told
the US ambassador two days
earlier that he was planning
to go to Moscow for a few days
but made no mention of the
delegation.
The official business of
the delegation apparently was
primarily economic, as several
economic agreements were signed--
none of which was important
enough to warrant Novotny's
presence. However, the delega-
tion also signed a 20-year exten-
sion of the Soviet-Czechoslovak
Friendship and Mutual Assistance
Pact, and this event probably
was arranged to provide an ex-
cuse for Novotn~'s presence. The
pact would technically have
expired on 12 December, but its
self-renewing clause would have
extended it another five years
automatically and precluded any
real need to sign new documents.
Soviet reporting on No-
votny's quick trip--he left
the delegation in Moscow and
returned to Prague with Ambas-
sador Zimyanin on 28 November--
was considerably less than that
given the Czech leader's 1958
visit and still less than that
given the visit by Hungary's
Kadar in July. A joint com-
muniqu~ issued on 28 November
contained none of the standard
praise for Czechoslovakia's
"pz?ogress" or the party's leader-
ship abilities.
It seems likely that No-
votny was summoned to Moscow
because of his inept handling
of the challenge to his power
which has developed within his
party during past months.
Khrushchev" sfailure to give
him public backing is likely
to be interpreted by the opposi-
tion in Prague as tacit support
for its efforts to unseat the
Czechoslovak leader.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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NIGERIA
Passible Stops on Forthcoming Tour
of Communist China's
Chou En-lai and Chen Yi
Recognizes Communist China
Recognizes Nationalist China
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PEIPING LAUNCHES NEW CAMPAIGN IN AFRICA
Communl.st China's Premier Chou
En-lai and Foreign Minister Chen
Yi will begin an unprecedented tour
of Africa in mid-December designed
to drum up support for Peiping's
hard-line programs and to promote
a second Bandung Conference. No
other major world power has ever
sent two such high-ranking offi-
cials on a grand tour of the con-
tinent.
For the Chinese, too far away
for effective military meddling and
unable to afford a large-scale eco-
nomic assistance program for
Africa, a barnstorming expedition
by Peiping's suavest and most ad-
roit leaders would seem the only
way of rallying Afro-Asian support.
Chou and Chen can be expected to
argue persuasively for a second
Bandung Conference and to attempt
to gain support for a militant
race-oriented struggle against "co-
lonialism" and "US imperialism."
The two-month trip will re-
portedly include visits to Guinea,
Ghana, Mali, Algeria, Tanganyika,
the Somali Republic, and the UAR.
They, may also visit the other Afri-
can countries with which Peiping
has diplomatic relations--Morocco,
Uganda, and the Sudan. A stay in
Albania. is apparently scheduled,
and an ai'ficial visit to Pakistan
on the wag home is probable,
Chen is apparently scheduled
to reach Africa first. He will
attend the independence celebra-
tions in Kenya on 12 December and
possibly those in Zanzibar two
days earlier. -Like other former
British colonies in East Africa,
both these countries are expected
to recognize Peiping, and the Chi-
nese foreign minister's presence
would probably expedite such ac-
tion.
Chou En-lai will ostensibly
be returning state visits by nu -
merous African leaders to Peiping
in recent years, and a general
aura of high-powered public rela-
tions will surround much of his
activity in this area where Pei-
ping has been competing with the
Soviet Union for influence. He
will arrive in Cairo on 14 December
at the head of a 50-man delegation.
Chen Yi will probably meet Chou
here to take part in serious sub-
stantive discussions which are
likely to center on the continuing
Sino-Indian border impasse. The
UAR was one of India's stanchest
supporters during the Colombo con-
ference mediation efforts late,
last year. Chinese efforts to
get backing for a second Afro-
Asian meeting on the Bandung pat-
tern are likely to be parried by
Nasir who, with Tito, has been a
leading proponent of a nonaligned
summit conference even brohder than
the 1961 Belgrade meeting.
Another stop of major impor- 25X1
tanee will probably be Algeria.
In recent months the Chinese have
made ~ big play for closer'~contacts
with the Ben Bella regime. Fiye
separate Chinese delegations at-
tended Algerian National Day cele-
brations this fall, and the Chi- 25X1
nese recently granted the Algerians
a $50-million interest-free loan.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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HANOI REVIVES NEUTRALITY SCHEME FOR SOUTH VIETNAM
The North Vietnamese are
again pushing the idea of a
"neutralized" South Vietnam,
apparently in the hope of gen-
erating free world pressure for
a negotiated settlement of the
Vietnamese war. Hanoi probably
estimates that such pressure
would eventually force the US
to reconsider its policy of full
military support for the anti-
communist forces in South Viet-
nam. The last such North Viet-
namese campaign occurred early
in 1962 when Hanoi sought to
broaden international sentiment
for a settlement of the Vietnam-
ese war along lines then being
proposed for Laos.
There is no indication
that Hanoi is as yet willing
to make any meaningful conces-
sion in its oft-proposed terms
for a settlement. It continues
to maintain, for example, that
all US forces must be withdrawn
from South Vietnam before even
a cease-fire. It has also
declared that a "coalition" gov-
ernment--in its view, one open
to Communist domination--must
be formed prior to any neutrali-
zation arrangement.
The latest North Vietnamese
neutrality proposals have been
directed primarily at Laos Cam-
bodia and France.
Hanoi also voiced swift ap-
15roval of Prince Sihanouk's re-
cent proposal for new discussions
aimed at guaranteeing Cambodia's
neutrality by the signatories
of the Geneva Accords. The Com-
munists probably hope to use
such a conclave as a sounding
board for discussing South Viet-
namese neutralization--a propos-
al Sihanouk has frequently en-
dorsed.
For the first time in over
a year, moreover, the Hanoi-
controlled National Front for
the Liberation of South Vietnam
has publicly reiterated its
supportofathree-country neutral-
ity plan similar to that pro-
posed by Sihanouk. The Front's
proposal promptly received
official North Vietnamese en-
dorsement.
Hanoi has allegedly stressed
the importance of a change in
US policy toward South Vietnam
in connection with its willing-
ness to "negotiate" a s~ttl.ement
of the war.
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THAILAND
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O STATUTE MILES 700
Kam
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CAMBODIA
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25X1
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Laos: Right-wing and neu-
tralis~'-forces are continuing to
exert pressure on Pathet Lao
units in central and northern
Laos. Neutralist forces which
recently captured Vang Vieng have
advanced 16 miles farther north
and now control strategic Route
13 from the capital to this point.
In central Laos rightist troops
have captured Kam Keut, a Pathet
Lao strong point at the western
end of Route $. These forces,
reinforced by an airborne bat-
talion from Savannakhet, have ad-
vanced toward Lak Sao, a depot on
the Communists' supply route to
the Nhommarath region. Right-
wing regular and guerrilla forces
on the Plaine des Jarres are con-
tinuing to subject nearby Xieng
Khouang town to heavy artillery
bombardment, but the Pathet Lao
and dissident neutralist troops
apparently are holding their
positions.
Turkey: A substantial vic-
tory y ie opposition Justice
party (JP) in last month's lo-
cal elections dealt the final
blow to Turkish Prime Minister
Inonu's coalition government.
Both the minor coalition parties
decided to withdraw, in the be-
lief that their association with
Inonu had cut deeply into their
popular support, and Inonu re-
signed on 2 December.
The JP, heir to the ousted
Menderes regime and distrusted
by Turkish military leaders, now
appears likely to re-enter the
government. This will involve
SECRET
6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
their choosing.
itary initiatives at a time of
Pathet Lao propaganda has
strongly protested these mili-
tary moves. On 30 November,
General Singkapo, the Communist
military commander, charged that
the US and the rightists were
attempting to sabotage current
neutralist - Pathet Lao negotia-
tions and warned that the right-
ists would be held "fully re-
sponsible for the consequences."
The latest talks, on 3 December,
between neutralist commander
Kong Le and Singkapo ended in
an angry exchange of recrimina-
tions. Nevertheless the Pathet
Lao thus far have not attempted
major military counteraction,
and still seem interested in
arranging talks between Premier
Souvanna and their leader Sou-
phannouvong. In view of contin-
uing reports of supply convoys
moving into Laos from North
Vietnam, however, the Communists
clearly are at least retaining
their capability for major mil-
some compromise between JP lead-
ers, many of whom prefer to con-
tinue to build their strength
on the outside, and the military,
who, despite their anti-JP feel-
ings, are reluctant to take over
the government.
There remains the possibil-
ity, however, that the JP will
press its political advantage
beyond acceptable limits and
precipitate an army take-over.
In any event, a period of in-
tense political maneuvering lies
ahead, which may bring in some
less controversial figure than
Inonu as head of the government.
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CYPRUS FACES CONSTITUTIONAL CRISIS
The three-year-old dispu*.e
between Greek and Turkish Cypriots
over interpretation and implemen-
tation of their republic's con-
stitution has entered a new phase
which has sharply increased ten-
sion between the two communities.
On 30 November Greek Cypriot
President Makarios presented Turk-
ish Cypriot Vice President Kuchuk
with a 22-page memorandum con-
taining 13 suggested changes in
the constitution, which would
have the over-all effect of dimin-
ishing the rights of the Turkish
minority. Among the proposals
were elimination of the presiden-
tial and vice presidential veto
powers, abolition of the provi-
sions requiring separate majori-
ties by Greek and Turkish Cypriots
for enactment of certain laws,
establishment of unified munici-
palities, unification of the ad-
ministration of justice, and mod-
ification of the provisions now
calling for a 70:30 ratio between
Greek and Turkish Cypriots in the
civil service to reflect the ac-
tual (approximately 80:20) ratio
between the two ethnic groups.
Acting on the advice of the
Turkish Government, Kuchuk ac-
cepted the memorandum--and indi-
cated that he would need a week
or more to prepare an answer,
possibly in the form of counter-
proposals.
The reaction in Ankara, how-
ever, will largely determine the
final attitude of the Turkish
Cypriot leadership. Turkish Gov-
ernment leaders have been ada-
mantly opposed to any fundamental
change in the Cypriot constitu-
tion. The current political
crisis in Ankara makes major con-
cessions on Cyprus at this time
highly unlikely.
The Greek Cypriots are about
to solicit diplomatic support from
London, Washington, and Athens.
On 8 December Kyprianou will have
conversations with the Greek Gov-
ernment. He then goes to Paris,
where the annual tripartite
Treaty of Alliance meeting will
bring him into conversations
with the Turkish as well as the
Greek foreign minister.
Reports continue to stress
that Makarios, convinced the
present constitution is unwork-
able, is determined to secure
changes. Should the Turkish
Cypriots eventually reject his
memorandum, or present unaccept-
able counterproposals, he has
warned that he will act unilat-
erally, if necessary, to void
those provisions he regards as
harmful..
lence.
Well-trained paramilitary
organizations reportedly exist
in both communities. While lead-
ers of these organizations have
indicated their reluctance to
initiate hostilities, these well-
armed irregular forces might be
brought into action, if discipline
among the integrated police and
gendarmerie forces breaks down in
the face of isolated acts of vio-
6 Dec 63
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY Page 10
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_J
SECRET
POWER STRUGGLE CONTINUES IN IRAQ AND SYRIA
Political alignments in
both Syria and Iraq continue to
shift rapidly as contending
factions compete for power, and
sudden upheavals are possible
in both countries. Reactions
in either country to events
across the border are likely
to complicate the picture fur-
ther.
In Iraq, anti-Baathist of-
ficers and members of the govern-
ment have begun to eliminate
Baathist influence in the re-
gime. The minister of communi-
cations, a leader of the moder-
ate faction of the Baath Party,
has been eased out of office
and exiled to Beirut with sev-
eral associates. Baathist Vice
President Bakr is also said to
be leaving the country. Hardan
Tikriti, a strong Baathist who
heads the Defense Ministry, has
requested a British visa.
Pressures for a move against
Baathists still holding posi-
tions of power have been grow-
ing among "Arab nationalist
army officers and government
officials desiring closer rela-
tions with Cairo. President
Arif has apparently acquiesced
in the action against the
Baath, but his role in the
is not yet clear.
The anti-Baathist faction
now appears to have the upper
hand, but the fate of 4th Divi-
sion Commander Nasrat, a dedi-
cated Baathist, is not certain.
He reportedly has surrounded
Baghdad with troops in the ex-
pectation of a showdown. If he
still retains his command, he
may attempt to redress the
present situation.
A decay of the Baathist
position in Iraq is almost cer-
tain to undermine further the
position of the party in Syria,
where Premier Hafiz, a military
member of the Baath international
command, appears on the verge
of breaking with party extrem-
ists. He reportedly has halted
the activities of the national
guard--the Baath's paramilitary
wing--and is casting about for
support from traditional Syrian
political elements, as well as
from the military. Several con-
servative politicians have been
freed from custody in the past
few days.
While Hafiz' actions are
reported to have infuriated
doctrinaire Baathist Major Gen-
eral Umran, who is deputy pre-
mier, Interior Minister Atasi,
a long-time party member, is
said to have resigned and to
have denounced Umran as well as
Hafiz as opportunists. Umran
has not been seen for several
days, and there are rumors that
Hafiz is attempting to remove
him from his position. Baath'
Party founders Aflaq and Bitar
have asked for visas to go
abroad, and the US Embassy
believes that a coup is develop-
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Page 11
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SECRET
YEMENI DISENGAGEMENT PLAN IN TROUBLE
The disengagement plan for
Yemen is threatening to break
down on 4 January, the date the
latest extension of the UN ob-
servation mission there expires.
In the five months the
plan has been in effect, Nasir
has failed to make any net re-
duction in Egyptian troop
strength in Yemen. In late Oc-
tober he indicated to Ambassador
Badeau that he would attempt to
withdraw 5,000 troops by 31 De-
cember. However, over-all
strength remains between 30,-
000 and 32,000. Nasir would
presumably like to reduce his
commitment in Yemen--which has
Cost him an estimated .?a50 mil-
lion--but is afraid the repub-
lican regime would collapse
without heavy Egyptian support.
Efforts to broaden the
base of the Yemeni republican
regime have not moved forward,
primarily because Nasir is ap-
parently not yet ready to make
the compromises necessary for
a resolution of the stalemate.
(Cairo is apparently
fearful that a broadened Yemeni
government would mean a reduc-
tion or even elimination of
Egyptian influence, since many
of those republican leaders
who command any significant
following tend to be anti-
Egyptian.
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY Page 12
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r.~ ~,.++
EGYPT'S DEVELOPING DOMESTIC DEBT
1959 1960 1961 1962
FISCAL YEARS (ENDING 30 JUNE)
EGYPTIAN OUTPUT, CONSUMPTION, AND
PRICE INDICATORS
160
GROSS DOMESTIC PRODUCT
'
i
i~
110::. _ ~~, CONSUMPTION
K
c 100
WHOLESALE PRICES
"~ ,, ~ ~_ _ _ COST OF LIVING
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~.;
SECRET
EGYPTIAN ECONOMIC POLICY MAY BE CHANGING
Economic realities may be
forcing Egypt to modify its long-
standing policy of improving
living standards while keeping
prices and taxes at minimum
levels.
Although actual changes
have been slight, Egyptian budget
data suggest that more extensive
innovations-are planned in what
is probably a reluctant response
to the severe strains affecting
the Egyptian economy. The pat-
tern of change appears also to
conform at least in part to rec-
ommendations made by Western
lending institutions and, al-
though the shifts may be intended
as stopgap measures, the long-
range requirements for foreign
money could. make them longer
lasting.
In recent years Egypt has
greatly increased personal in-
comes and kept personal taxes
l.ow while using subsidies to
maintain price ;;stability. This
policy has resulted in a con-
tinuing foreign trade deficit
and a ballooning domestic debt.
The budget for the current
fiscal year suggests that Egypt
is shifting its approach. Allo-
cations for consumer subsidies
have dropped by more than 10
percent, instead of increasing
as in recent years. Budgeted
tax yields, almost unchanged in
the recent past, are programed
to increase almost 12 percent;
the income and property tax
category shows a jump of almost
20 percent.
A series of articles in a
semiof f is is 1 Egyptian newspaper
has underscored the economic
drain caused by heavy consump-
tion. The reader was exhorted
to understand that imports must
be cut and. consumption of domes=
tic products reduced so that
more could be exported. In mid-
November, a government-sponsored
conference adopted resolutions
urging that development projects
be f financed through such media
as social insurance payments
and price adjustments. These
press reports appear to presage
even stricter import controls,
higher prices, and enactment of
some form of social security tax
to supplement government revenues.
Inasmuch as Egyptian foreign
currency reserves are neg~'1ronzo Reale (PRI)
Luigi Gui (CD Center)
Giovanni Pieraccini (PSI)
Mario Ferrari-Aggradi (CD Left Wing)
Angelo Jervolino (CD Center)
Carlo Russo (CD Center)
Giuseppe Medici (CD Center)
Giacinto Bosco {CD Left. Wing)
Bernardo Mattarella (CD Center)
Giovanni 5pagnolli (CD Center)
Giorgio Bo (CD Left Wing)
Giacomo Mancini (PSI)
Achille Corona (PSI)
Attilio Piccioni (CD Right Wing)
Giulio Pastore (CD Left Wing).
Luigi Preti {PSDI)
Umberto Delle Fave (CD Center)
Carlo Arnaudi (PSI)
631205 4
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SECRET
GOVERNMENT FORMED IN ITALY
A center-left cabinet--bring-
ing the Socialist Party into the
government--has been formed in
Italy by Christian Democrat Aldo
Moro after nearly a month of dif-
ficult negotiations. It is ex-
pected to seek a vote of confi-
dence within the next few days.
The major part of the govern-
ment program is concerned with
economic reforms. Nevertheless,
the short-range program appears
to have been aimed partly at re-
assuring conservative business
interests, which have been fearful
that a center-left government would
concede too much to the "Marxist"
viewpoints of the Socialists. The
four parties making up the coali-
tion, it is stipulated, "do not
foresee nationalization measures."
Much emphasis is placed on
the need to develop economic plan-
ning. In the foreseeable future,
however, this planning is appar-
ently not to go beyond the methods
followed in a capitalist society
such as France. That is, it seems
not to envisage subjecting individ-
ual business firms to compulsion,
but rather implementing the na-
tional plan by means of government
initiatives in such areas as pub-
lic investments, loans, subsidies,
and tax exemptions.
To curb inflation, the coali-
tion agreement envisages such
measures as a temporary freeze on
new public expenditures and an ef-
fort to hold wage increases roughly
in line with productivity gains.
The agreement carefully avoids,
however, any appearance of oppasi-
tion to "fair" wage demands, and
it suggests that credit restric-
tions will not be applied so
strongly as to curb "productive"
investments. It implies that
upper-income groups will be ex-
pected to take on a greater share
of the nation's tax burden, but
there are no overtones of a soak-
the-rich program. The agreement
thus shows the hand both of those
regarding inflationary pressures
as the primary economic concern
and those seeing them as second-
ary to reforms cif Italy's eco-
nomic structure. Hence the out-
look is for considerable friction
within the coalition when it tries
to translate general principles
into specific implementation,
Moro's announcement of a
cabinet list had been postponed
several times, largely as a re-
sult of differences over who
would fill the economic ministries.
The Socialists had been threatened
with a revolt by the important
Lombardi faction unless the party
was given one of the three major
economic posts. This problem was
resolved by alloting the Budget
Ministry to a Lombardi associate.
A Social Democrat was given the
Finance post,. and Treasury went to
a Christiana Democrat. Continuation
of Giulio Andreotti in the Defense
Ministry gives a certain vested in-
terest in the government to the
right wing of the Christian Demo-
cratic Party, which has generally
apposed the party's center-left
policy. Social Democrat Giuseppe
Saragat, who became foreign minis-
ter, is generally considered one
of Italy' ost ro-US olitical
leaders.
25X1
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ALGERIA
Major Centers for Oil
and Gas Production
~ Oilfield
- Gasfield
PIPELINES
- Crude oil
- Natural gas
- Natural gas liquids
MOROCCO
.`
??
MAURIT,gNIA
\
lr ?\ \
if
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SECRET
Europe
FRENCH-ALGERIAN DISPUTE OVER SAHARAN OIL CONCESSIONS
Recent negotiations be-
tween France and Algeria cast
doubt on the future of France's
Saharan oil and gas concessions
At issue are the questions of
Al,geria's share of oil conces-
sion profits, the transfer of
oil profits out of Algeria, and
the financing of transport fa-
cilities for petroleum. Presi-
dent Ben Bella has indicated
that, while he does not plan to
nationalize France's Saharan
concessions, he does want a re-
negotiation of the 1932 Evian
accords which ended the war in
Algeria and which govern French
oil activities there.
Paris' most recent concern
arises from the Algerian reac-
tion to a request by Trapal, an
international. consortium includ-
ing companies in which the French
Government has an interest, for
permission to build a $72-million
oil. pipeline from the Hassi-
Messaoud oil fields to Arzew on
the Mediterranean (which would
fol]_ow the route of an existing
gas and gas-liquids pipeline).
Algeria rejected the consortium's
offer of a 20-percent share in
the project and demanded 51 per-
cent,
Fearing that granting Al-
geria controlling interest in
this pipeline would jeopardize
French control of other oil trans-
portation facilities, Paris
vigorously opposed the Algerian
counterproposal and took steps
to nullify possible Algerian
overtures to other EEC countries
for financing. Algeria is ap-
parently determined nevertheless
to gain a controlling interest
and has already obtained agree-
ment from Kuwait to lend $26.8
SECRET
G Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
million. If A1_geria elects to
use these credits to start con-
struction of the pipeline, there
is little the consortium could
do to stop it. In this event,
France's chief concern would
be to see that the concession-
aires' right to transport oil
through the new pipeline is
protected. If an agreement on
rates cannot be reached, they
would have recourse to arbitra-.
tion under the provisions of
the Evian accords.
Algerian oil revenues are
expected to total $5) million
in 1963, and Ben Bella has indi-
cated that he wants a greater
share. In addition, Algeria
has instituted exchange controls
which may prevent the oil com-
panies from exporting their
earnings outside of Algeria.
France might grant Algeria a
larger share of oil revenues,
but is unlikely to accept the
exchange controls on earnings.
Paris has indicated that
its aid program hinges on nonin -
terference with the French-dom-
inated companies' exploitation
of Saharan oil and gas. Since
official French aid is expected
to total $260 million in 1964,.
the threat of a cutback is
likely to forestall nationali-
zation, but might not prevent
less drastic measures. Algeria
may also be disinclined to under-
cut the concessions because of its
hope to persuade France and
other Western European nations
to finance a trans-Mediterranean
gas pipeline. French officials
have suggested that a prerequi=
site to any such undertaking
would. be confirmation of re-
vious Saharan oil accords.
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SECRET
Europe
RENEWED DISCUSSION OF EUROPEAN POLITICAL UNION
A revival of interest in
European political union has
been evident among the Common
Market (EEC) countries in re-
cent weeks, but the obstacles
to agreement an any particular
form of organization continue
to be formidable.
Tn the face of appeals
from various quarters for new
initiatives toward palitical
integration, Belgian Foreign
Minister Spaak came up with a
concrete proposal on 19 November
f.ar a European political com-
mission. From Spaak's view-
point, such a commission--com-
parable to theexecutive com-
mission of the Common Market--
would provide a forum for a
"dialogue" among the national
governments on palitical, mil-
itary, and cultural problems.
It would represent, he feels,
a compromise between the con-
cept of a supranational European
federation--which he still
favors as an ultimate goal--
and a union of sovereign states.
Spaak first made this sug-
gestion in August 1962, and was
probably encouraged to reoffer
it now in the 'belief that the
French may have become more
accommodating in their views.
He is also convinced that eco~
nomic integration cannot proceed
much further without a parallel
palitical advance. In omitting
this time the reference usually
made by Benelux leaders to
Britain's participation in any
new negotiations, Spaak probably
felt that London's inability to
do so should not prevent an at-
tempt to move ahead now and to
take advantage of any new French
flexibility.
The responses to Spaak's
proposal have not been favorable.
The Dutch were displeased by
his failure to mention British
participatian
Despite the coolness toward
Spaak's specific proposal, the
subject of Europe's political
unity is likely to remain alive.
Erhard, for example, has talked
increasingly of the need. for
action although he has so far
advocated. no definite program.
A meeting of Christian democrat-
ic parties of the EEC countries
on 10 December is to discuss
possible initiatives on their
part toward political integration.
De Gaulle probably feels
that any new moves an his part- -
given the previous failure of
his plan for a loose political
grouping--would not be favorably
received by the rest of the com-
munity. The impression persists,
however, that France is not averse
to other EEC members taking the
lead, and may, indeed be encour-
aging them to do so. Moreover,
should the current EEC negoti-
ations on agriculture and the
"Kennedy tariff round" be suc-
cessful, the resulting atmos-
phere would be much mere con-
ducive to consideration of polit-
ical union proposals than has
been the case for more than a
year.
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
Page 18
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PARTY _ ~w _n~~ ~_
2 _ _ ___
138 ~_ _ '(ERE)
PROGRESSIVE
CENTER UNION (EK) _H ,_IZ'~~`~~A~~`A~`(~5t~
4TIC LEFT
(EDA)
GREEK CHAMBER OF DEPUTIES
631203 3 (Following 3 November 1963 Election)
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SECRET
CSC: The Council of 14Sin-
isters of the Coal-Steel Com-
munity postponed a formal deci-
sion to raise steel tariffs at
its 2 December meeting, but
left the way open for such an
increase a month hence. A ma-
jority of the six members--in-
cluding France and West Germany
--favored a Community-wide in-
crease to the Italian level,
which is the highest in the CSC;
but the required unanimity was
lacking because of strong Dutch
opposition and the inability of
the Italian delegate to take a
stand. The CSC president was
authorized to consult bilater-
ally with the US, the UK, Japan,
and other countries which would
be affected by a later decision
to raise tariffs. Some CSC and
French officials interpret Dutch
willingness to go along with
these consultations as a "deci-
sion in principle" ultimately
to approve a rise in tariffs.
In another move suggesting a
generally restrictionist outlook,
the ministers approved, subject to
consultation, a $10 per ton duty
on pig iron imports, replacing the
present ad valorem rates which are
lower. By approving supplement-
ary quotas on steel and pig iron,
they also agreed to continue to
restrict imports of these items
from the bloc.
Greece: Premier Papandreou
intends ~Eo call for new elec-
tions on 26 January should his
Center Union (EK) government
fail to win a vote of confidence
when parliament reconvenes on
16 December. The EK holds only
138 of the 300 parliamentary
seats. Papandreou has consist-
ently refused to accept support
from the 28 deputies of the
Communist-dominated United Demo-
cratic Left (EDA) in order to
achieve a majority. He must,
therefore, rely on defections
from the 132 representatives
of former Premier Karamanlis'
National Radical Union (ERE).
Papandreou has stated that he
would reject a vote of confi-
dence supported by the entire
ERE delegation, as the opposi-
tion could then bring down his
government at any time. His
calls for individual ERE dep-
SECRET
6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
uties to join the EK have been
without result, however.
Karamanlis does not want
early elections lest the psy-
chological momentum of Papan-
dreou's 3 November election
victory carry the EK to a solid
majority, but he has opposed
giving Papandreou a vote of
confidence in anticipation of
receiving the next mandate to
form a government. King Paul
also opposes new elections at
this time
ou d Papandreou insist on early
elections, however, his popular-
ity among the electorate is be-
lieved to be such that the palace
probably would agree to his de-
mands .
Page 19
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~..
RESULTS OF VENEZUELAN ELECTIONS,1 DECEMBER 1963
*Based on unofficial press service returns of about 90 percent of the
estimated total vote. Final tabulations probably will show lower figures
for Leoni and Caldera, but little significant change in the relative
standing of the four mayor candidates.
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SECRET
Western Hemisphere
POSTELECTION PROSPECTS IN VENEZUELA
Venezuela's new President-
elect Raul Leoni, standard bearer
of the Democratic Action (AD)
party, received only about one
third of the more than three
million votes cast in the 1 De-
cember election. Rafael Caldera,
of the progovernment Social
Christian Harty (COPE D , ended
up in second place with almost
24 percent. Thus, the COPEI-AD
coalition put together by Pres-
ident Betancourt has lost ground
since 1958, when the two parties
accounted for about 65 percent
of the vote.
In Venezuela, voting is com-
pulsory. The penalties for not
voting are severe, including a
fine of 5 percent of the income
tax of the preceding year and a
number of civic restrictions..
The voters in this election were
not intimidated by threats of
violence from the Communist-di-
rected Armed Forces of National
Liberation (FA,LN) or by anti-
Betancourt propaganda emanating
from Havana and Moscow. Theturn-
out of voters was about the same
as in 1958, when 93 percent of
the registrants cast ballots.
Leoni's difficulties before
his inauguration on 2 March are
likely to be substantial. Even
before the votes were counted,
the FALN threatened to react to
a Leoni victory by instigating
a "blood bath." A riew flurry
of terrorist incidents occurred
on 2 and 3 December, but on 5
December the FALN released
Colonel Chenault, deputy chief
of the US Military Mission,
who had been kidnaped the
week before.
Even the continuation of
terrorism, however, will focus
attention on another of Leoni's
problems--how to get along with
the military. Leoni has been
overshadowed by Betancourt dur-
ing their 35-year comradeship
in various revolutionary move-
ments, imprisonments, and ban-
ishments. One result of Leoni's
earlier self-effacement is that
he has failed to develop a reputa-
tion for decisive action, and
some military leaders fear that
he will not be sufficiently
forceful in repressing the FALN.
His election, therefore, may
renew threats of military inter-
ve nt ion .
Leoni's other major problems
have to do vrith congressional
relations and with formation of
his government. In congress,
no party will have a majority.
Moreover, the diverse elements
which make up the congressional
slate of each of the parties
may not respond to ordinary
pa rty discipline.
Leoni is also in for some
hard bargaining if he is to
have an effective coalition re-
gime ready by the time he takes
office. His efforts promise to
be especially complicated by
the fact that COPEI increased
its voting strength by one
third and will probably demand
greater representation in the
government. In addition, with
an apparent need to spread patron-
age more thinly than his predeces-
sor had to, Leoni will be running
a risk of stirring resentment
among his own party faithful.
SECRET
6 Dec 63 CURRENT INTELLIGENCE WEEKLY SUMMARY
Page 20
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' ~i.r" `~L~-'~l'l- astern Hemisphere
NEW POLITICAL TENSIONS IN THE DOMINICAN REPUBLIC
Political tensions in the
Dominican Republic have been
heightened by recent moves on the
part of the military-installed pro-
visional regime against pro-Castro-
ites and by reaction to the regime's
plans for a return to constitutional
government.
On 2 December, the government
outlawed the pro-Castro 24th of
June Political Group (APCJ), until
that time the only legal extreme
leftist party in the country. This
action was taken after police,
searching for arms caches in the
mountains near the northern coast,
reportedly encountered two bands
of guerrillas. According to a 1
December communique, the regime
claims to have captured several of
the rebels together with arms,
ammunition, and. Communist litera-
ture. The two bands, totaling
about 70 men, are said to be led by
the president of the APCJ and one
of his lieutenants.
Meanwhile, the regime's elec-
toral plans, which .entail four
elections for lesser offices--
beginning in September 1964--
prior to presidential balloting in
July 1965, have aroused little
enthusiasm outside government cir-
cles. The two moderate leftist
parties which won two thirds of the
vote in December 1962 have rejected
the formula, and. almost all leading
Surinam's two-week-long cabi-
net crisis was resolved in the last
week of November when Minister-
President Johan Pengel formed a new
coalition of three right-of-center
parties. This coalition, like its
predecessor, includes representatives
of the three principal ethnic groups
in this Dutch dependency's racially
diverse satiety--the Negro Creole,
the East Indians, and. the Javanese.
Although the dispute (over a baux-
ite mining contract with a US com-
pany) which touched off the crisis
newspapers have expressed doubts
about the plan.
Most prominent Dominicans
believe that popular elections
are the only way to end their
own political impasse and to
regain US recognition. How-
ever, some feel that the six
minority parties backing the
government will use their current
influence in an effort to per-
petuate themselves in power, while
others doubt that the opposition
parties will be allowed to com-
pete without official harass-
ment. Many observers, including
US Embassy officials, have
serious reservations about the
wisdom of holding five elections
within ten months in a country
with practically no experience
in democracy.
The current disarray among
pro- and antigovernment forces
and growing right wing influence
in the government and armed
forces are stimulating fears that
extreme rightists may eventually
gain control of the country. One
would-be strong man;, Luis Amiama
Tio, recently resigned his army
commission to form a new party
and is said. to be receiving
financial support for a pres-
idential bid from a wealthy
former supporter of ex-Dictator
Trujillo.
has also been settled, Surinam is
probably in far a period of in-
creasing ~Lnstability. Racial
tensions between the predominant
Creoles and the Asians may have
been exacerbated by the maneuver-
ing that preceded the formation of
the cabinet. Economic difficul=
ties are also in prospect because
proposed outlays for the govern-
ment's ambitious development pro-
grams exceed available resources.
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Bolivia; The activities
of a pro-Castro group in Bolivia
called the Committee of Anti-
Imperialist Struggle (CLA),
which apparently models itself
on the Venezuelan terrorist or-
ganization~ seem to be passing
from the organizational phase
to the operational. On 17 No-
vember several members of the
CLA were caught by the Bolivian
security service as they were
placing bombs near the homes of
the US ambassador and the com-
manding general of the Bolivian
Air Force. Thirteen ALA terror-
ists have been arrested so far,
and the police are searching
for the organization's leaders
who are still at large. Presi-
dent Victor Paz Estenssoro, who
thinks that much of the Venezue-
lan terrorism could have been
prevented if it had been dealt
with sternly in its incipient
stages, is said to be intent
on making examples of CLA mem-
bers already in custody.
The CLA is believed to
have been established in late
1962
Btill small, it is composed of
youths who formerly were asso-
ciated with the youth organiza-
tion of the governing National
Revolutionary Movement. These
activists presumably have be-
come disillusioned with what
they consider a shift to the
right in the policies of Presi-
dent Paz.
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