WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004300100002-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 33
• Document Creation Date: December 21, 2016
• Document Release Date: April 28, 2008
• Sequence Number: 2
• Publication Date: January 31, 1964
• Content Type: SUMMARY

OFFICE OF CURRENT INTELLI
State Dept. review completed to
Y US
t
1t
.
-
>
SECRET
CENTRAL INTELLIGENCE AGENCY
Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
 25X1 Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
 Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
SECRET 9"'`
(Information as of 1200 EST, 30 January 1964)
FRANCE AND THE CHINA QUESTION
The actions taken by the Chinese Communists and the
French in the past week strongly suggest that, under-
lying their joint statement of recognition was an
understanding that the French would, if necessary,
force the Nationalist Government to break relations.
RECENT SOVIET STATEMENTS ON TROOP REDUCTIONS
There has been no formal announcement, but Soviet
statements and propaganda imply that a reduction
of forces is under way.
SOVIET TRADE MANEUVERS
Despite Western Europe's strong desire for expanded
export markets, there- is still a measure of caution
in its reaction to Moscow's continuing search for
longer term credits.
1963 SOVIET ECONOMIC REPORT REVEALS DIFFICULTIES
The report just released, blurred but revealing,
shows that 1963 performance was the poorest of
the Khrushchev era.
USSR'S NINTH ANTARCTIC EXPEDITION ARRIVES
This year's group is the largest since the Interna-
tional Geophysical Year program in 1957-58.. Foreign
participation in the Soviet expedition this year is
the largest ever.
SOVIET BLOC JAMMING OF WESTERN BROADCASTS
Poland, Rumania, and for the most part, the USSR
have stopped jamming operations, but there is no
indication that Bulgaria, Czechoslovakia, and Fast
Germany intend to follow suit.
NEW GROUP SEIZES POWER IN SOUTH VIETNAM
Maj. Gen. Nguyen Khanh, who claims that he moved to
avert a neutralist trend in the previous government,
appears to be in complete control.
INDONESIA SHIFTS TACTICS AGAINST MALAYSIA
Despite Sukarno's cease-fire order to Indonesian
forces in Borneo, Djakarta is trying to improve its
positions there.
Page
1
SECRET
31 Jan 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page i
Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
 Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
SECRET
ASIA-AFRICA (continued) Page
TROUBLES MOUNT FOR SYRIAN REGIME
The,Baathist military regime is internally divided,
unpopular, and increasingly isolated from Syria's
Arab nei hbors
LIBYAN RIOTING BRINGS CHANGE OF PREMIERS
In ousting Premier Fikini, who associated himself
with some of the demonstrators' demands, the King
turned some of the public feeling against himself.
CYPRUS CRISIS CONTINUES
Intensive diplomatic maneuvering continues in an at-
tempt to prevent the deadlock at the London confer-
ence from leading to new violence on the island.
EAST AFRICAN INSTABILITY
British troops have brought outward calm to Tangan-
yika, Kenya, and Uganda, but the unstable situation
in Zanzibar may be leading to an outright Communist
takeover.
CONGO TERRORIST OUTBREAKS SPREADING
After an initially sluggish response,Leopoldville
seems to be moving to quell the Kwilu rebellion, but
other dissidents may provoke outbreaks elsewhere.
PRESSURES ON BRITAIN'S MILITARY ESTABLISHMENT
Britain's military manpower problem is under review
as a result of the rapidly growing strain on its
limited resources imposed by events in Africa, Cy-
prus, and Malaysia.
WESTERN HEMISPHERI
PANAMANIAN IMPASSE CONTINUES
The Chiari regime, convinced that any retreat would
mean its overthrow, has remained inflexible and has
stepped up efforts to win international backing for
its stand. The surface calm inside Panama could
give way to new violence at any time.
SECRET
31 Jan 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page .ii
Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
 Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
Nk.w~ ow
SECRET
WESTERN HEMISPHERE (continued) Page
CASTRO REPORTS ON TRIP TO USSR 17
His speech gave the impression that the purpose of
the trip was largely economic and failed to mention
concessions to Khrushchev on political issues.
MILITARY DEVELOPMENTS IN CUBA 18
Preparations continue for transfer of the air defense
system to Cuban control. Other recent developments
include the arrival of three SO-1 subchasers and the
installation of coastal radar observation posts.
MILITARY SHAKEUP IN THE DOMINICAN REPUBLIC 19
The civilian triumvirate ostensibly asserted author-
ity over the military by replacing the three armed
services chiefs, but it needed the help of other mil-
itary leaders to pull off the move.
LEFTIST POLITICAL MANEUVERING IN BRAZIL 20
Maneuvering among the extreme left, including the
Communists, suggests an effort to mobilize forces
to extract maximum concessions from President Gou-
lart, who appears prepared to bargain for the sup-
port he needs to enact his reform program.
OUTLOOK FOR POLITICAL STABILITY IN BOLIVIA 21
The ruling party's expulsion of left-wing leader
Juan Lechin may lead him now to try to defeat Presi-
dent Paz at the polls by uniting the opposition, or
to remove him by coup or assassination.
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY Page iii
31 Jan 63
Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
 Approved For Release 2008/04/28: CIA-RDP79-00927A004300100002-4
NOW
SECRET
FRANCE AND THE CHINA QUESTION
The actions taken by the
Chinese Communists and the
French in the past week strongly
suggest that underlying their
joint statement of recognition
was an understanding that the
French would, if necessary,
force the Chinese Nationalist
Government to break relations.
The French, however, apparently
did not expect they would have
to follow through. Paris had
hoped that the announcement of
recognition, following its in-
creasing coolness to Chiang
Kai-shek, would be enough to
make the Nationalists break.
It was also caught by surprise
by the speed and starkness with
which the Chinese Communists
set the record straight.
Peiping's peremptory re-
minder that it will under no
circumstances tolerate a "two
Chinas situation" has apparently
forced France to move faster
than it desired in downgrading
the Nationalist position. It
still hopes to escape responsi-
bility for initiating the break
in relations, but has had to
make its actual intentions
clearer.
Peiping's official state-
ment on 28 January declared
flatly that it had entered ne-
gotiations with Paris and
reached agreement as sole legal
government of China, and cited
established international prac-
tice to argue that, in recogniz-
ing the Communist regime, the
French Government agreed that
Taipei's diplomats in Paris
could no longer be regarded as
representing China. The state-
ment implied that agreement
with the French on recognition
and the exchange of ambassadors
was based on this understanding.
A harsh restatement of Peiping's
claim to sovereignty over Tai-
wan was intended to slam the
door on the possibility that
Paris could evade the two Chinas
dilemma by recognizing the
Chiang regime as the government
of Taiwan.
Confronted by Peiping's
demand for action, Paris has
stepped up efforts to convince
Taipei that an attempt to hang
on can only end in defeat and
humiliation. Official state-
ments and information leaks
have been calculated to show
that the French will go as far
as necessary to induce the Na-
tionalists to withdraw. In a
comment to reporters on Peiping's
28 January statement, a French
Foreign Ministry spokesman re-
ferred to the Nationalist Gov-
ernment as the government in
control of Formosa.
The semiofficial French
news service on 29 January quoted
Foreign Ministry sources as say-
ing that "two Chinas" makes no
sense in international law, that
SECRET
31 Jan 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 1
Approved For Release 2008/04/28: CIA-RDP79-00927A004300100002-4
 Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
SECRET
there can be only one Chinese
embassy in Paris, that there
can be no question of recogniz-
ing a Formosan state, and that
if the Nationalists do not ac-
cept French recognition of Pei-
ping as the government of China
there is nothing to prevent
them from recalling their chargd
from Paris.
Confusion produced by the
Chinese Nationalist decision
to stand fast in Paris and un-
certainty about the final out-
come has caused free world
countries to take a cautious
stand. No Western government
has indicated that it will fol-
low the French lead, but most
of the criticism from Western
Europe has been aimed at France's
unilateral approach rather than
its action. Canada is holding
off for a time on recognition
but is actively considering
supporting Peiping at the next
UN General Assembly session.
In Africa, only Ethiopia
is clearly moving toward an
early establishment of formal
relations. Leaders of most of
the moderate, French-speaking
African countries have specif-
ically confirmed that they do
not now plan to follow De Gaulle's
lead.
Similarly, the
expression of joy" over the
French decision by Dahomey ap-
pears merely to have reflected
a hope that France had found
a way to maintain diplomatic
relations with both Chinas.
Suspicions that Peiping is in-
volved in the East African
troubles have also discouraged
some states--notably Nigeria--
from allowing the Chinese Com-
munists to establish diplomatic
missions.
Prime Minister Ikeda indi-
cated on 29 January that Japan
would not be stampeded into a
rash act on the recognition is-
sue. Failure to respcnd to in-
creasing domestic pressures for
closer relations with Peiping,
however, would not only play
into the hands of Ikeda's con-
servative rivals but also would
benefit the leftist opposition.
Strongest Asian opposition to
the French move has come from
South Korea and South Vietnam,
although French officials claim
Paris has no intention of ex-
tending recognition to either
Hanoi or Pyongyang.
SECRET
31 Jan 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Page 2
Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
 Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
SECRET
Although Khrushchev's state- ment for a more opportune moment
ment to the central committee in the exchange of correspond-
plenum on 13 December that "we ence with foreign leaders which
are studying the possibility" Khrushchev initiated on 31 De-
of reducing the armed forces has cember or in the Geneva disarma-
not been followed by a formal an- ment talks.
nouncement, subsequent Soviet
statements and propaganda have
strongly implied that a definite
decision has been made and that
reductions are already under way.
In discussing unilateral
Soviet force reductions in an
interview with a US correspond-
ent on 30 December, Khrushchev
said "this we are already doing."
Party Secretary Ponomarev told
the Swedish Communist Party con-
gress on 4 January that the USSR
had taken a decision to reduce
its forces. The nine-point dis-
armament proposal submitted by
Soviet delegate Tsarapkin at
Geneva on 28 January asserted
that the USSR has "set about to
further reduce the numerical
strength of its armed forces."
He stated that although the So-
viet Government is prepared to
make "still further reductions,"
this would be contingent on West-
ern reciprocity.
Tsarapkin's proviso, com-
bined with Khrushchev's emphasis
on "a policy of mutual example,"
suggests that the Soviet leaders
conceive of force reductions
primarily as a political and dip-
lomatic instrument. They may
be withholding a formal announce-
Khrushchev's announcement
in January 1960 of a one-third
cut in armed forces (1.2 mil-
lion men) was timed to place
the USSR in a favorable posi-
tion in disarmament negotiations
and at the summit meeting sched-
uled for May. At that time, Mos-
cow portrayed the announcement
as an earnest of its good inten-
tions and called on the West to
follow suit. Current Soviet
propaganda is hailing the de-
cisions to reduce the Soviet
military budget and forces as
a contribution to further "de-
tente" and disarmament.
Although recent press arti-
cles by Soviet military leaders
such as Marshals Grechko, Biryu-
zov, and Chuykov have endorsed
Khrushchev's chemical program
and the reduction in the de-
fense budget, they have made no
comment on a troop cut. This
omission may simply be due to
the fact that no formal announce-
ment has been made. In any
event, it is unlikely that the
marshals' silence was an oblique
sign of effective military re-
sistance to such a step.
SECRET
Page 3
Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
 Approved For Release 2008/04/28: CIA-RDP79-00927A004300100002-4
SECRET
The Communist World
In view of Khrushchev's
great sensitivity to the USSR's
power position, particularly
since the failure of his Cuban
missile venture, he would not
contemplate extensive reductions
which would adversely affect the
USSR's defense posture or en-
counter strong military opposi-
tion. Even if the Soviet pre-
mier plans reductions on the 1960
SOVIET TRADE MANEUVERS
The USSR continues to work
on the governments and financial
communities on Western industrial
countries to secure 7- to 15-
year credits in place of present
five-year terms.
The French finance minister
has just returned from a visit
to Moscow made at Soviet request,
and an officer of a large govern-
ment-controlled Italian financial
institution has been talking in
Moscow with Soviet officials.
Attempting also to establish a
credit relationship with the US,
the USSR has requested a ruling
from the US Export-Import Bank
concerning guarantee of a short-
term commercial credit for over
$50 million worth of wheat.
Moscow presumably believes
that commercial considerations
will loom large in West European
governmental decisions on credits.
It is aware that the French,
Italian, and British governments
are seeking expanded export mar-
kets and that influential compa-
nieswant to supply some of the
chemical plants it needs. The
Soviet's international credit
rating remains good
The British Government has con-
firmed its willingness to extend
long-term credit guarantees.
scale, savings in the resources
and skilled manpower needed in
the chemical industries would
be relatively minor. From the
domestic viewpoint, therefore,
limited force reductions probably
are intended primarily as a sym-
bol of the regime's determination
to overcome economic difficulties
and fulfill its commitments to
the Soviet people.
There nevertheless has been
a measure of caution in responses
to the USSR. Both French and
Italian officials have suggested
that, as a precondition for in-
creased credit guarantees, the
USSR pay cash for all plant ex-
ports up to an amount equivalent
to its estimated earnings in
these countries. Italian offi-
cials in Moscow have intimated,
however, that seven-year terms
might be made available for some
plant purchases beyond quotas
already stipulated in the trade
pact to be signed in Rome shortly.
The USSR's request for ex-
tension until 1965 of its 1963
trade agreement with West Germany
is in part related to Bonn's un-
compromising opposition to
guaranteeing credits for sales
to the USSR. Among other things,
Moscow may have wished to avoid
at this time any official dis-
cussion of current practices of
some German banks and local gov-
ernment agencies which now are
extending credits for exports
to the USSR without federal gov-
ernment guarantees. Furthermore,
the Soviet Union already appears
to have reached understandings
with some German firms on chemi-
cal equipment to be supplied in
1964.
SECRET
31 Jan 64 CURRENT INTELLIGENCE. WEEKLY SUMMARY
Page 4
Approved For Release 2008/04/28: CIA-RDP79-00927A004300100002-4
 Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
INVESTMENT
(accomplished under state plan only)
FERROUS METALLURGY
OIL AND GAS
MACHINE BUILDING
LIGHT AND FOOD
TOTAL
SOVIET
ECONOMIC
PERFORMANCE
PERCENTAGE INCREASE
1962 ^ ^ 1963
based on official Soviet data
PRODUCTION
GROSS OUTPUT
OF INDUSTRY
^^^^9.5
8.5
HEAVY
INDUSTRY
^^^^^10
10
LIGHT & FOOD
INDUSTRY
CHEMICAL
P^^^^^^^15
INDUSTRY
mWINOWNEW 16
STEEL
^^^^8
5
OIL
CEMENT
^^^^^^13
6.5
FERTILIZER
^^^^9
TRACTORS
13.2
^3
SHOES
1
COTTON
I
FABRICS
3
^^^^^^^^^^22
9
Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
 Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
SECRET
Soviet economic performance
in 1963 was the poorest of the
Khrushchev era. The statisti-
cal report just released pro-
vides a blurred but revealing
view of economic difficulties
and, despite considerable edi-
torial gloss and several con-
spicuous omissions, does little
to support the public optimism
of the Soviet Leadership.
While heavy industry as a whole
(including military hardware
production) continued to in-
crease fairly rapidly, consumer
goods did no more than keep
pace with population growth,
and most farm output was well
below average.
For the first time in
many years, no information was
released on national income.
This statistic measures over-all
economic growth--both industry
and agriculture--and might have
shown an increase of as little
as 3 percent, judging from in-
formation in a single Soviet
newspaper early this month.
Instead, the report claimed a
5-percent increase for "gross
social production," a concept
which contains considerable
double-counting and is not com-
parable with the US concept
of gross national product. For
the first time in many years,
no figures were reported for
crop production and seeded
acreage.
The "traditional" heavy
industries which appeared at
mid-year to be giving way in
favor of a more rapid chemical
development continued to reg-
ister only slow growth. The 5-
percent increase for crude
steel is the lowest since World
War II. The goal for cement
was reduced during the year,
apparently in response to
lowered targets for the con-
struction program.
Investments, too, favored
the chemical industry, although
the 24-percent increase for that
industry is far lower than
planned and well below the
growth scheduled for 1964 and
1965. However, there are signs
that the economy during the
second half of 1963 was being
refocused to support the chem-
ical program. The output of
both metallurgical and oil equip-
ment dropped somewhat, suggest-
ing a shift in production lines
to chemical equipment.
No over-all investment sta-
tistic was released, but the 6-
percent increase claimed for in-
vestment accomplished under the
state plan--about three quarters
of total--is very small. In
1962, state-planned investment
increased 9 percent while the
total increased only about 5
percent.
Agriculture, unquestionably
the number-one economic concern
of Soviet leaders last year,
received only sketchy coverage
in the report. The usual pro-
duction figure for grain was
missing. Grain purchased by
the state for distribution
through its own channels was
the smallest amount since 1957.
The preliminary CIA estimate of
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY Page 5
Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
 Approved For Release 2008/04/28: CIA-RDP79-00927AO04300100002-4
190 n0 In 110 1 s0 N 10 60 50 40
a t, AR E14TINA
N CHILE
SOVIET ANTARCTIC A
ACTIVITIES
c
.j K I
1963.64 n
39
? Existing USSR station a
''
150
s
^ Polish station
Area of mapping and
~ sou
IE
TiaH s i'
/
4' ~}
p o
R
e
geophysical surveys
s
~snu*
Scientific Traverses f
' s 0EO 0iA
Soviet &PETER 1 IS,
P