WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004400120001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 32
• Document Creation Date: December 21, 2016
• Sequence Number: 1
• Content Type: SUMMARY

OFFICE OF CURRENT
25X1 [State Dept. review completed
CENTRAL
SECRET
GROUP I g and from downgrading on d
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 25X1 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
ar-u1CL'l `v
(Information as of 1200 EDT, 14 May 1964)
THE COMMUNIST WORLD Page
SINO-SOVIET CONFLICT INTENSIFIES
At no time since the dispute broke into the open last
July has it appeared more irreconcilable.
KHRUSHCHEV'S VISIT TO EGYPT 2
Khrushchev is dramatically demonstrating Soviet support
for nationalist movements in the underdeveloped world
and, by contrasting Soviet deeds (like the Aswan Dam)
with Chinese words, also advancing Moscow's efforts to
counter Peiping's influence in the Afro-Asian world.
SOVIET CHEMICAL PLANT BUYING IN DOLDRUMS 3
Moscow has not made any significant chemical equipment
purchases since Khrushchev announced his program last
year. The delay stems from a scarcity of foreign ex-
change, a continuing need for extraordinary grain im-
ports, and probably indecision about the program itself.
NEW SOVIET MOBILE AIR DEFENSE MISSILES 4
The eight new twin-mounted missiles displayed on 1 May
in Moscow appear to be operational weapons intended for
a mobile air defense role in Soviet field forces. Their
range is probably at least 50 nautical miles.
INCREASE IN GSFG TACTICAL NUCLEAR MISSILE CAPABILITY 4
Recent increases observed in the number of launchers
assigned to the tactical surface-to-surface missile
units in the Group of Soviet Forces, Germany, have sig-
nificantly augmented the GSFG's nuclear fire support.
TREND TOWARD BILATERAL COORDINATION IN CEMA
Rumania's strong opposition to supranational planning
appears to be leading other members of the Council for
Mutual Economic Assistance to put greater emphasis on
national interests. As a result, bilateral coordina-
tion of economic plans and policies, rather than the
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page i
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
THE COMMUNIST WORLD (continued) Page
multilateral coordination Moscow prefers, remains
their principal form of cooperation.
IMPENDING CHANGES MAY WEAKEN CZECH PRESIDENT'S POSITION 6
New moves to reduce the prestige and authority of a
presidential office unique in the Communist world may
be part of a process which could lead eventually to
hard-liner Novotny's ouster as party boss as well.
CHINESE COMMUNIST RESETTLEMENT IN SINKIANG
Peiping is stepping up resettlement of people from East
China to Sinkiang, on the Soviet border, to strengthen
Chinese control in an area populated chiefly by Muslim
minorities traditionally hostile to Peiping's rule and
now susceptible to Soviet efforts to stir up trouble.
NORTH VIETNAMESE "NEW LANDS" PROGRAM
Hanoi is engaged in a five-year (1961-65) program to
resettle a million Vietnamese in the northern highlands
inhabited by potentially dissident minority peoples.
DEVELOPMENTS IN LAOS
The Communists have improved their military positions
east and north of the Plaine des Jarres and now are
warning Premier Souvanna, who is trying to work out a
solution to the government crisis, of the "unpredict-
able consequences" of further political moves without
their approval.
SOUTH KOREAN CABINET SHAKE-UP
The appointment of Chong I1-kwan as premier may calm the
country's political turbulence, at least temporarily.
MODERATES REGAIN UPPER HAND IN SYRIAN MILITARY REGIME 10
Salah al-Din Bitar, a moderate ousted last fall, has
been reappointed prime minister, and the current gov-
ernment reorganization will probably further decrease
the influence of the radicals. Strong man General
Hafiz retains real control.
ARAB REACTION TO FIRST ISRAELI TESTS OF JORDAN PROJECT 11
Israel is trying to play down the significance of this
first actual flow of water in order to reduce the impact
in the Arab world. Arab reaction thus far has been rel-
atively mild.
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page ii
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
SECRET %of
ASIA-AFRICA (continued) Page
THE UNITED NATIONS OPERATION IN CYPRUS
The 6,300-man force has been able so far to do little
more than keep violence from spreading. Its commander
considers his peace-keeping task "impossible." The UN
political mediator sees no solution in less than a year.
POSITION OF NON-GAULLIST POLITICAL PARTIES IN FRANCE
With municipal elections due this fall and a presidential
race in prospect before the end of 1965, France's old-line
parties are trying to reassert the influence they lost when
the Fifth Republic was formed. However, their efforts to es-
tablish a basis for united action against the Gaullists are
hampered by the same divisions which split them in the past.
(Published separately as Special Report OCI No. 0331/64B)
BONN'S RELATIONS WITH EAST GERMANY 13
The protracted pass negotiations between West Berlin and
East German representatives have been adjourned until 10
June. Bonn now seems inclined to be more flexible on
this and other issues with the Ulbricht regime.
THE SUCCESSION PROBLEM IN SPAIN
The Franco regime is cautiously divulging the broad
lines of its plans for the governmental leadership af-
ter Franco dies or steps down. Franco presumably will
not delegate his principal powers while he is in office.
NOTES ON LOCAL ELECTIONS 15
In Britain and Italy
WESTERN HEMISPHERE
ELECTION AFTERMATH IN PANAMA
The final official results will probably confirm the
apparent victory of government presidential candidate
Robles, although the two main opposition parties are
charging that illegal means were used to bring it about.
NEW BRAZILIAN GOVERNMENT'S POLICIES TAKING FORM
The Castello Branco administration's cautious and me-
thodical approach to Brazil's perplexing problems has
so far had a distinctly reformist character, with pri-
ority on achieving fiscal stability and on combating
corruption, Communism, and various forms of extremism.
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page iii
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
**Awl "or
WESTERN HEMISPHERE (continued) Page
ELECTORAL DEVELOPMENTS IN BOLIVIA
With elections set for 31 May, the political situation
has become more complex than ever.
AREA NOTE
On the Dominican Republic 19
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page iv
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
SECRET
Peiping's renewed offensive
against Moscow and sharp Russian
counterattacks have brought the
Sino-Soviet conflict to a new
pitch of intensity. At no time
since it broke into the open last
July has the struggle appeared
more irreconcilable.
Peiping's contemptuous open
letter of 7 May sets the tone for
the current phase. Accompanied by
the publication of secret corre-
spondence with the Soviet party--
to document charges of Russian du-
plicity--the letter reflects Chi-
nese confidence that the climate
in the world Communist movement is
such that Moscow cannot convene an
all-party meeting against China.
It argues cogently that any such
conference in the foreseeable fu-
ture would produce an open split--
for which the Russians would be
responsible.
The Chinese remind Moscow that
"many other fraternal parties, in-
cluding some which have ideological
differences with us," oppose any
attempt to move quickly. Noting
that some parties have already
split, with both parts claiming to
be the only true Marxists, the Chi-
nese raise the specter of inter-
minable wrangling over which group
should be invited to a meeting.
They point out further that there
now is no international Communist
organization with authority to call
meetings, and assert that a uni-
lateral call for a conference can-
not be justified.
Similar points have been made
implicitly by the Italian, Rumanian,
and other parties fearful of a
clean-cut division which might
subject them to the discipline of
one camp or the other.
Although Peiping's letter re-
peats earlier expressions of eager-
ness for a world conference, its
Fabian timetable for preparations
appears intended to put off a for-
mal trial of strength. Peiping
proposes May 1965 as the earliest
possible date for a bilateral
meeting with the Russians--which
would be only the first step in
preparing for an all-party con-
ference four, five, or even more
years away.
Moscow has mounted an in-
creasing barrage of anti-Chinese
articles concentrating on "ideo-
logical exposure" of Peiping's al-
leged subversive activities within
the bloc. An editorial in Kom-
munist on 6 May and a series of
Pravda articles beginning on 10
al4f y constitute the backbone of the
current Russian riposte.
contacts.
At the same time Moscow is at-
tempting to counter Chinese efforts
to build influence outside the Com-
munist world and has recently
launched a campaign to discredit
Peiping with the Afro-Asian move-
ment (see next article). Moscow's
major objective is to be invited
to the second Afro-Asian confer-
ence, scheduled for March 1965. At
the preparatory meeting at Dja-
karta in April the Chinese violently
opposed moves to invite Moscow and
the question was deferred. The Rus-
sians sent a formal government state-
ment to all African. and Asian states
on 4 May affirming the USSR's status
as an Asian power, and followed up
this move with an intensive effort
to influence Afro-Asian leaders
through diplomatic and informal
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page 1
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
Nwl'Woe
SECRET
KHRUSHCHEV'S VISIT TO EGYPT
Khrushchev's visit to
Egypt is dramatically demon-
strating Soviet support for
nationalist movements in the
underdeveloped world. This
event--like Algerian President
Ben Bella's visit to Moscow just
the week before--also advanced
Soviet efforts to counter Chi-
nese influence in Afro-Asian
countries. Moscow, increasingly
concerned about Peiping's at-
tempts to build "a Chinese wall"
between the Soviet Union and
the underdeveloped countries,
now is seeking to contrast
Chinese words with Soviet deeds.
In his speoches in Egypt,
Khrushchev has dwelt upon the
broad community of views and
interests linking Moscow and
Cairo. He has used the close
conformity of Soviet and Egyp-
tian anticolonial policies, as
well as the Aswan Dam, as a vis-
ible symbol of Soviet support
for the underdeveloped world,
to refute Chinese charges of
Soviet disregard of "national
liberation movements."
Khrushchev also has re-
minded his audiences of Soviet
support for Egypt during the
Suez crisis of 1956 and of the
continuing Soviet economic and
military aid. He has emphasized
Moscow's support for Arab and
African unity, for the Arabs
against Israel, and for the re-
moval. of Western bases from
The Communist World
Libya, Aden, and Cyprus. As
in the case of the Ben Bella
visit to Moscow, he has side-
stepped such divisive issues as
the suppression of local Commu-
nists by the Arab governments.
While the USSR has long
sought to expand its influence
in Africa and the Middle East
at the expense of the West, the
present activities appear to be
directed primarily against the
Chinese. Moscow clearly is con-
cerned over the Chou En-lai visit
to Africa early this year and
over Chinese attempts to dominate
front groups and to exclude the
USSR from the Afro-Asian confer-
ence to be held next year (see
preceding article).
To undercut these efforts,
Soviet officials accorded ex-
tremely flattering treatment to
Ben Bella during his visit and
gained his assent to a communiqud
giving wide support for Soviet
policies, particularly toward
the Afro-Asian world. While in
Egypt Khrushchev pointedly re-
marked that the USSR is an Asian
country, thus qualified to at-
tend an Afro-Asian conference.
He portrayed the Aswan Dam as
an example of "the cooperation
of Eastern peoples."
To give further impetus to
this campaign, Khrushchev may
visit Algeria after leaving
Egypt on 24 May.
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Page 2
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
IRWOINftwe
SECRET
The USSR has not made any
significant purchases of West-
ern chemical equipment since
the announcement late last year
of Khrushchev's chemical plant
import program. The delay is
due to a scarcity of foreign
exchange, the continuing need
for extraordinary outlays for
grain imports, and probably
some indecision on the makeup
of the chemical program itself.
Soviet delegations have
continued to inspect Western
facilities and engage in pre-
liminary negotiations. The
head of Russia's chemical im-
port corporation held long talks
in the UK in February, First
Deputy Premier Kosygin visited
Italian factories producing
chemical equipment in March,
and a large Soviet technical
mission arrived in West Germany
in late April. French, British,
West German, and Japanese dele-
gations of chemical equipment
producers, ready to conclude
deals, have again visited Mos-
cow. None is known to have con-
cluded a contract.
the USSR has divided its
chemical equipment orders into
two groups. The first represents
purchases planned before Khru-
shchev's announcement, and the
second--apparently still in a
formative stage--would comprise
additional equipment required
for the seven-year (1964-70)
chemicalization program.
LJfinal decisions under the
latter program will not be made
until late summer. The few con-
tracts which have been concluded
for chemical equipment in re-
cent months fall in the former
category.
Despite Moscow's growing
need for foreign exchange to
support stepped-up purchases,
there is little evidence that
Soviet exports are expanding
sufficiently to provide new
sources of hard currency. So-
viet officials recently have
talked of growing commodity
sales, but exports are rising
only moderately.
Meanwhile, the USSR con-
tinues to search for extensive
long-term credits. Thus far
it has not received any credit
other than medium term. While
the British Government has
agreed to guarantee a small por-
tion of the long-term loans Mos-
cow needs, government regula-
tions elsewhere in Western Eu-
rope limit the availability of
such credits.
The signing of purchase
contracts for chemical equip-
ment may be postponed in any
case until the size of grain
purchases later this year can
be estimated. By midsummer the
USSR probably will be able to
judge the success of its own
harvest. The $800 million worth
of grain purchases in 1963 and
early this year have reduced
the Soviet gold stockpile to
$1.3 billion. Additional wheat
purchases will further reduce
SECRET
15 May 64
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
SECRET NAW
The eight new twin-mounted
missiles displayed for the first
time in the Moscow May Day parade
appear to be operational weap-
ons intended for a mobile air
defense role in Soviet field
forces. They represent a de-
velopmental departure from pre-
viously deployed Soviet surface-
to-air (SAM) systems.
The new missiles should
have a range considerably greater
than that of the SA-2 SAM--prob-
ably at least 50 nautical miles,
a limit imposed only by the capa-
bility of their guidance radar.
For tracking targets, the new
mobile SAM system would require
long-range air surveillance
and tracking radars for maxi-
mum effectiveness.
To date, none of the new
missiles have been detected in
bloc field units. If they are
intended for widespread deploy-
ment to fulfill a mobile SAM de-
fensive role, it is doubtful that
any significant additional num-
bers of a mobile SA-2 (Guide-
line) will be deployed in an
area where large field forces
are located.
INCREASE IN GSFG TACTICAL NUCLEAR MISSILE CAPABILITY
Recent increases observed
in the number of launchers as-
signed to the tactical surface-
to-surface missile (SSM) units
in the Group of Soviet Forces,
Germany (GSFG) , have signifi-
cantly augmented the GSFG's nu-
clear fire support. The total
number of launchers now available
to the Soviet forces in East Ger-
many apparently is 50 percent
greater than the number initially
deployed. Such an increase would
be consistent with current So-
viet military doctrine which re-
gards nuclear firepower as the
most decisive factor in tactical
combat operations.
The free-rocket-over-ground
(FROG) battalion in each of the
20 GSFG divisions may have had
its FROG launcher strength aug-
mented by one, for the present
total of three. The battalions
are equipped with the FROG 3 and
FROG 4 models with ranges of
35,000 and 55,000 yards respec-
tively. Each of the six SSM
(Scud) brigades--one for each
GSFG army--may now comprise
three battalions containing
three Scud launchers apiece.
The Scud A is being replaced
with the newer B, which can de-
liver a nuclear warhead up to
150 nautical miles--twice the
range of the A.
The Scud A system has been
noted with increasing frequency
in satellite units. These mis-
siles were displayed publicly
in Rumania on 23 August 1963,
are known to be in Czech and
Polish ground forces, and are
believed to be in East German
Hunerarv and Bulgaria.
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Page 4
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
HIGHLIGHTS OF 1964 DEVELOPMENTS INVOLVING THE BLOC'S COUNCIL
FOR MUTUAL ECONOMIC ASSISTANCE (CEMA)
1 Jan The CEMA International Bank and the system for multilateral
settlement of accounts began operations, with a more limited
sphere of activity than desired by some CEMA participants.
22 Jan Delegation led by Soviet Deputy Premier Lesechko arrived in
Prague for the first meeting of the Soviet-Czechoslovak Inter-
governmental Commission for Economic, Scientific, and Tech-
nical Cooperation, established in November 1963.
5 Feb A similar Soviet-Hungarian Commission was established.
12 Feb Hungarian Vice Premier Apra revealed negotiations for estab-
lishment of a Czechoslovak-Polish-Hungarian metallurgical
association and plans of Hungary and Czechoslovakia to cre-
ate a joint enterprise to produce basic materials for agricul-
tural plant protectives.
19 Feb Bulgarian leader Zhivkov announced establishment of a Soviet-
Bulgarian Commission, similar to the first two established.
3 Apr Khrushchev, in his Budapest Opera speech, stated that all
CEMA countries have equal rights and that interests of indi-
vidual states must be taken into consideration. He stated
that countries must, however, coordinate short-term and long-
range economic plans, merge efforts, and perfect the entire
system of mutual relations.
13-15 Polish leaderGomulka visited Moscow and signed an agree-
Apr ment to create a Soviet-Polish Commission, similar to the
three already in existence.
22 Apr Rumania, in a central committee declaration, publicly an-
nounced its opposition to establishment of a CEMA organ with
supranational authority and to schemes for cooperative produc-
tion of raw materials and joint control/ownership of industry
as an infringement on national sovereignty. Rumania stated:
(1) it intends to pursue its national economic policy of indus-
trialization, and (2) CEMA should aim at equalizing the level
of economic development of member states, mainly by coor-
dinating economic plans.
Late Two meetings of CEMA specialists were apparently boycotted
Apr by Rumania.
Apr- Representatives to CEMA stated, on the occasion of the organ-
May ization's 15th anniversary, that bilateral ties will be strength-
ened and that this mechanism will be increasingly used by the
CEMA Executive Committee and in programs not directly relat-
ed to CEMA.
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
SECRET The Communist World
Rumania's strong opposition
to supranational planning ap-
pears to be leading the other
members of the Soviet bloc's
Council for Mutual Economic As-
sistance (CEMA) to put greater
emphasis on national interests.
As a result, bilateral coordi-
nation of economic plans and
policies continues to be their
principal form of cooperation.
The priority currently being
given to bilateral coordination
of five-year plans for the 1966-
70 period has sharply increased
the number of bilateral commis-
sions and meetings in recent
months.
CEMA members continue to
support such multilateral proj-
ects as the unified power grid
and the International Bank.
These, however, are largely
technical in nature and serve
the national interests of the
participants. Even Rumania,
the most outspokenly national-
istic CEMA member, joins in
these projects.
Meanwhile, differing views
on CEMA activities continue to
be expressed. Poland's CEMA
representative has indicated
that differences among member
countries dominated discussion
at the CEMA Executive Committee
meeting which ended 25 April.
On 3 April Khrushchev stated
that progress in multilateral
coordination of plans and other
areas of cooperation is not ad-
equate. On the other hand, Ru-
mania publicly declared in a
party statement on 22 April that
its own national interests will
be the sole determinant of its
participation in CEMA activities
Recent statements of several
CEMA representatives indicate
that other countries support
this Rumanian stand in various
degrees, and that their national
interests too will play a more
important role in determining
their future policies.
The CEMA representatives
of Poland, Hungary, Bulgaria,
and East Germany have indicated
that they expect bilateral bod-
ies will be used more extensively
to implement CEMA programs and
programs not directly related
to the organization itself.
Moscow's recent establishment
of bilateral economic commis-
sions with four of the European
satellites indicates that, to
this extent, the USSR accepts
this approach, which has been
gaining momentum since the July
1963 CEMA Council meeting. In
recent months there has been an
increase in meetings of previ-
ously existing intersatellite
bilateral economic commissions,
and new bilateral and trilateral
bodies have been created.
Bilateralism will continue
to be the principal form of CEMA
cooperation until after the co-
ordination of the 1966-70 plans.
The future of bilateralism will
depend on how effective it proves
to be, and whether the remaining
Eastern European countries, sev-
eral of which are currently re-
adjusting some phases of their
domestic economies, decide it
is to their advantage to support
Rumania's independent position
or to endorse the increased mul-
tilateralism which Moscow appar-
entlv still desires.
SECRET
15 May 64
Page 5
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
SECRET
IMPENDING CHANGES MAY WEAKEN CZECH PRESIDENT'S POSITION
New moves to reduce the
prestige and authority of Czech-
oslovakia's president and party
boss, Antonin Novotny, are prob-
ably in the offing. Hard-liner
Novotny for the past year has
been the target of party lib-
erals anxious to rid the Czech
regime of the Stalinist old
guard.
Within the next few weeks
the government will probably
announce changes in the struc-
ture and powers of its execu-
tive and legislative branches
which would reduce the impor-
tance of the presidency. A ref-
erence to such changes made by
Novotny himself in a March
speech suggests that the National
Assembly will be strengthened
so that, ultimately, the execu-
tive branch can be "assimilated"
by the presidium of the assembly.
15 May 64
Unlike the other Eastern Eu-
ropean countries, Czechoslovakia
has a strong executive and parlia-
mentary form of government--re-
tained from the days of its first
constitution under Masaryk be-
cause of the symbolic significance
it has for the Czechs. Although
the legislature exercises no real
power today, the Communists have
hesitated to destroy the prestige
and power embodied in the presi-
dency. Weakening the office,
however, would ease the problem of
finding a successor for Novotny
and provide a legal, face-saving
method for curbing his powers.
Downgrading the presidency
could also be the first move lead-
ing to his eventual ouster from
his other leading position--party
first secretary. Novotny in any
case has lost authority in the
party as a result of the past
year's power struggles. It was
the party presidium, of which
Novotny is a member, that recom-
mended the changes in the execu-
tive and legislative branches of
the government. Moreover,Novotnyis
failure to figure in, or in some
cases even attend, important
party conclaves in past months
suggests that he may even now be
little more than a figurehead
in party affairs.
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY Page 6
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
*11111.w
F7 r!NJC
GROUPS
See main
legend box/
ammu and Kashmir
din dispute)
wusu Shihhotzu
7tho'gthp oManass All
ooKuIdl4t(Ining) 8th QU UMCH1
Karasha
(Yenc~i,
WESTERN
SINO-SOVIET BORDER AREA
Migrants are being settled in state farms and
reclamation areas run by the Agricultural
Divisions subordinate to the Production and
Construction Army Group
0 h adquarters 8th AheadquarterDlvlsion
ETHNIC MAP SYMBOLS
Kazakh Uighur Mongol
Kirghiz
M
Tadzhik ? Uzbek
Han Chinese
T-Tatar S-Sibo D-Daghor H-Hui (Chinese Muslim)
0 100 200 300 Miles
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
Amr, SECRET 1"001
CHINESE COMMUNIST RESETTLEMENT IN SINKIANG
The Chinese Communists are
stepping up the resettlement of
people from East China to Sin-
kiang near the Soviet frontier,
apparently as an additional meas-
ure to strengthen Chinese con-
trol in an area populated chiefly
by traditionally hostile Muslim
minorities. These minorities are
ethnically related to groups liv-
ing on the Soviet side of the
border, and Peiping has become
extremely sensitive to the So-
viet potential for stirring up
trouble among them.
Since 1962, when tens of
thousands of Muslims crossed the
border to accept Soviet asylum
and riots ensued in the town of
Kuldja, the Chinese have closed
the Soviet consulates there and
in Urumchi, evacuated inhabitants
from a 20- to 25-mile strip of
the border, and reinforced bor-
der guards.
The present Peiping leader-
ship, like most previous Chinese
regimes, believes that the only
long-run solution lies in the
introduction of large numbers of
ethnic Chinese settlers who would
dominate Sinkiang's economic
and political life. Only about
a million of the 7 million people
in Sinkiang now are ethnic Chi-
nese, but present signs are that
this number will be increased,
perhaps substantially, over the
next few years.
The current drive to re-
settle people in Sinkiang at
first involved unemployed youth
in Shanghai who had become a ma-
jor social problem. It was later
extended, however, to rural
areas of East China. Available
information indicates that tens
of thousands of people will mi-
grate to Sinkiang from East
China during the first six months
of 1964 alone. The resettlement
scheme, run by the quasi-military
Sinkiang "Production and Construc-
tion Army Group," appears to be
well organized.
Peiping undoubtedly ex-
pects that the settlers will
eventually become economically
self-sufficient, but it realizes
that at first they will have to
be subsidized. Propaganda aimed
at inducing Shanghai youths to
join previous migrants in Sinkiang
emphasizes the healthy, creative
life they can expect there. Ap-
parently the regime recognizes
that the migrants must be reason-
ably well fed, clothed, and
housed lest they merely add to
the security problems in Sinkiang.
SECRET
.15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Page 7
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
SECRET Nme
North Vietnam claims that,
in the last six months, 170,000
of its people have been moved to
mountainous regions on its bor-
ders with China and Laos--areas
inhabited by minority peoples
whose loyalty Hanoi questions.
This forced migration is part of
a five-year program (1961-65) to
transfer a million people (300,000
workers and 700,000 dependents)
into the sparsely settled north.
As of the end of April, 340,000
Vietnamese had reportedly "vol-
unteered" to go there with the
largest portion assigned to the
autonomous regions of Tai Bac
and Viet Bac.
these remote highland areas pre-
vented the French from complet-
ing a similar program, and press
reports indicate that the Commu-
nist regime is experiencing the
same problem. The Communists,
emphasizing the development of
lumbering, orchards, livestock,
and industrial crops, have found
that delta peasants are not eager
to participate in a pioneering
effort which does not concentrate
on food production. During the
past year the regime, in order to
meet resettlement quotas, has
been forced to shift from farm
families to labor battalions of
youths.
Although the announced pur-
pose of this colonization is to
increase agricultural production
and exploit potential mineral
and forest resources,the politi-
cal and defense significance of
the program is the regime's pri-
mary concern. Aware of the dis-
sidence potential of the tradi-
tionally hostile minority peoples
in the highlands, the regime has
been extremely cautious in en-
forcing such unpopular programs
as forced procurement and social-
ization. Recent efforts to im-
prove the security of these areas
include a limited expansion of
the road network.
The reluctance of Vietnam-
ese rice farmers to resettle in
Despite these difficulties,
the program--reminiscent of
China's efforts to resettle its
minority-populated Sinkiang area
along the Soviet border--continues
to receive a high priority. The
regime may find it costly to
keep the migrants from infil-
trating back home and to feed,
clothe, and house them until
they can become economically self-
sufficient. Although the pro-
gram runs the risk of increasing
the friction between the minority
peoples and the encroaching set-
tlers, Hanoi apparently believes
on balance that it will strengthen 25X1
security--both internal and ex-
ternal--in these sensitive
border areas.
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
25X1
uong Kas'
VAg Weng
Ban Namone
VIETNAM
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
l4uong Kheung
ate';
Ban ongioc r Lad Bb rah
SOW Ay` PLEAT DU
A N N/N
,. ,sue ? iGngftet
Phou Ke +p n~hay
Muon anh r !N hang avan
O#S ARRES
s! r Dar`
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
ik~ SECRET `e''
DEVELOPMENTS IN LAOS
Communist military forces
in Laos have driven rightist
and neutralist forces out of
the mountainous areas south of
Route 7 and east of the Plaine
des Jarres. On 14 May, Pathet
Lao forces, reportedly supported
by North Vietnamese and dissi-
dent neutralist troops, were
attacking right-wing positions
at Tha Thom, a strategic vil-
lage controlling the northern
approaches to the Mekong valley.
In Vientiane, meanwhile,
Premier Souvanna is continuing
his efforts to work out a com-
promise solution to the govern-
ment crisis. He appears for
the moment to have eased pres-
sures from rightist leaders by
announcing his intention to re-
place two left-leaning neutral-
ist cabinet members now living
in Phnom Penh. He also has in-
dicated that he intends to ap-
point a successor to the Foreign
Ministry post held by the late
Quinim Pholsena. The Pathet
Lao, however, have sharply crit-
icized proposals for any reshuf-
fles made without their approval.
Pathet Lao chief Souphannouvong
on 9 May warned Souvanna not to
replace the two absent neutral-
ists, adding that the premier
would have to bear "all the se-
rious and unpredictable conse-
quences" of such an act.
On 12 May, Souvanna reor-
ganized the command structure of
the recently "merged" neutralist
and rightist military forces. The
key positions were assigned to
rightist officers, with General
Amkha--the only neutralist ap-
pointed--designated deputy in-
spector general, a post of sec-
ondary importance.
Neutralist military leaders,
including Amkha and Kong Le,
earlier had expressed disillusion-
ment over the new "national" army
and characterized so-called inte-
gration as "an enormous piece of
right-wing hypocrisy." The of-
ficers indicated that, in tact,
they now were more isolated than
ever.
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
Nage SECRET
SOUTH KOREAN CABINET SHAKE-UP
Changes in the South
Korean cabinet announced this
week should calm, at least
temporarily, the political
turbulence which has handi-
capped President Pak Chong-
hui's administration.
The new prime minister is
retired general Chong Il-kwan,
a former ambassador to the US
and army chief of staff during
the Rhee era. He retains the
foreign affairs portfolio be
held in the previous cabinet.
He is a popular figure with
support in both political and
military circles, and has been
relatively neutral in the fac-
tional struggle over strong
man Kim Chong-pil. His appoint-
ment thus could help repair the
breaches in the ruling Demo-
cratic-Republican Party.
As chairman of the party,
Kim apparently played a prominent
role in the selection of new
cabinet members. However,
since the new prime minister
is politically astute and is
known to covet a dominant power
position, he could become a
rival of Kim's.
Tokyo, however, early action
On balance the cabinet
appears to have been strength-
ened. Chong Ki-yong, the new
deputy prime minister and chair-
man of the key Economic Plan-
ning Board, has a reputation for
self-confidence and ability to
get things done. Better quali-
fied men also head other impor-
tant economic ministries. The
new education minister, a Kim
Chong-pil stalwart and secretary
general of the government party,
is the only one who appears to
have been named for purely
political reasons.
Prime Minister Chong has
emphasized that he will continue
to work for an early normaliza-
tion of relations with Japan.
The government's determination
to continue its policy in this
sensitive area appears borne out
by the selection of Yi Su-yong
as minister of public informa-
tion. As senior South Korean
observer at the UN, Yi has done
an outstanding job and the admin-
istration may feel his talents
now can be better used to sell a
Japanese settlement to a reluctant
South Korean public. In view of
the public emotions and political
uncertainties in both Seoul and
MODERATES REGAIN UPPER HAND IN SYRIAN MILITARY REGIME
Recent developments in
Syria indicate that moderate
Baathist leaders led by General
Amin al-Hafiz are gaining as-
cendancy, at least temporarily,
over radical elements within
the military regime. Salah
al-Din Bitar, a moderate who
had been ousted from the govern-
ment last October, was reappointed
prime minister on 10 May, re-
placing Hafiz, who retains real
control. The current government-
al reorganization will probably
SECRET
15 May 64
CURRENT INTELLIGENCE WEEKLY SUMMARY
Page 10
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
`"1 SECRET
further decrease the influence
of the radical group.
The regime's attempts to
implement doctrinaire socialist
measures in the Syrian economy
had met with intense opposition
from conservative groups. The
unusually harsh sentences imposed
on participants in the strikes
and disorders last month further
increased public hostility.
Hafiz has now commuted most of
the severe sentences, however,
and there have been no new
serious incidents. Bitar's
appointment is probably designed
to further appease opposition
elements by presenting at least
a facade of civilian participation
in the government.
In fact, however, power
remains in the hands of the
military. Bitar and his cabinet
will only advise a five-man
presidential council, to be
headed by Hafiz. The ruling
military group, the National
Council for Revolutionary Com-
mand, will continue to exercise
both executive and legislative
control.
Rumors of coup plotting
continue. Extremist government
leaders command considerable
support within the army and,
as they see their influence
dwindling, they might still
attempt a take-over.
ARAB REACTION TO FIRST ISRAELI TESTS OF JORDAN PROJECT
Israel announced on 5 May
that tests of its Jordan River
project had begun and that some
water was being discharged into
the main conduit. Similar tests
will continue for several weeks
along the line and, if no major
adjustments are required, the
project will go into operation
this summer.
The Israeli Government is
trying to play down this first
actual flow of water into the
system by pointing out that
tests have been under way for
some time. It hopes thereby
to reduce the impact of the an-
nouncement in the Arab world.
sponse reflects the fact that
the summit conference of Arab
leaders held there in January
had already taken this develop-
ment into account.
The Israeli announcement
has also received fairly routine
handling in Syria, where the
Baathist regime is preoccupied
with serious internal dissension
(see above). The Baathists did
seize the opportunity to align
Nasir with Zionism and American
"imperialism" as scapegoats for
Arab inaction. Cartoons ridi-
culed a cynical Nasir mouthing
pious statements while, in prac-
tice, ignoring the Arabs' cause.
Arab reaction thus far has
been relatively mild. In Cairo,
where Khrushchev lent public
support to Arab objections to
the project, the initial re-
Under the circumstances,
meaningful progress toward the
Arabs' objective of diverting
the Jordan's headwaters appears
doubtful.
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Page 11
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
SECRET
The UN operation in Cyprus,
jerry-built and slow in getting
organized, has so far been able
to do little more than keep
violence from spreading. Irish
troops from the UN force were
called on last week to prevent
possible widespread violence
in the eastern port city of
Famagusta after an exchange of
gunfire which killed two Greek
Army officers, a Greek Cypriot,
and a Turkish Cypriot. Mean-
while, the size of the Cana-
dian contingent in the moun-
tains along the north coast
has been tripled in anticipa-
tion of new fighting there.
The UN military force--
commanded by Indian General Gy-
ani, a capable officer with
considerable experience in the
UN Emergency Force in Palestine
--now totals about 6,360 men.
Some 950 Danes are due to arrive
in May and June to replace
British troops, which still
constitute the bulk of the
peace-keeping contingent. The
three-month mandate for the
force expires on 26 June, but
UN Secretary General Thant will
probably seek to have the Secu-
rity Council extend it for at
least another three months.
The UN military operations
officer in New York as of 5 May
was quite optimistic that the
UN force could keep things under
control, although he expressed
some concern about the future
actions of the 650-man Turkish
contingent, which he believes
would be the likely cause of
any major difficulties. Gyani,
on the other hand, recently
characterized his task as
"impossible," and is highly crit-
ical of the activities of the
Turkish Cypriots and the Turkish
Government. Presumably in an=
swer to criticism that Gyani is
overburdened with "political mat-
ters," Thant this week appointed
Galo Plaza of Ecuador as his spe-
cial representative to negotiate
directly with the opposing Cyp-
riot communities.
The UN mediator from Finland,
Sakari Tuomioja, estimates that
it will take two months to com-
plete his formal report to Thant
and probably a year to arrive at
"some sort of Cyprus solution."
Tuomioja presently envisages a
government based on the 1960 con-
stitution reinforcing Greek Cyp-
riot majority rule but with a
UN observer present to protect
the Turkish minority.
As in other peace-keeping
operations, the UN Secretariat
faced formidable difficulties
in mounting the Cyprus opera-
tion and then in finding
UN members willing to put up
money or men to accomplish the
objectives they themselves
supported. The Security Coun-
cil directives concerning use
of force and other military
matters have been imprecise.
Moreover, Thant's hesitancy
to act directly on his own
and his tendency to avoid
controversy serve to enhance
the Secretariat's difficulties.
Nevertheless, the UN operation
in Cyprus seems to be a going
concern and over the long
term will probably succeed in
keeping a damper on.
SECRET
15 May 64
Page 12.
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
l
SECRET
The protracted pass nego-
tiations between representatives
of the West Berlin Senat and
the East German regime have been
adjourned until 10 June. Bonn
now seems inclined to be more
flexible in its relations with
East Germany.
The negotiations for
another pass arrangement simi-
lar to the one allowing West
Berliners to visit East Berlin
last Christmas remain deadlocked
over the issue of again permit-
ting East German officials in
West Berlin to process applica-
tions. The stalemate results
to a considerable extent from
the political maneuvering in
preparation for next year's
West German elections. West
Berlin Mayor Willy Brandt's So-
cialists and Chancellor Erhard's
governing Christian Democrats
are both trying to derive po-
litical advantage from the pass
issue.
After the Christmas pass
operation, Erhard said he would
not again agree to the presence
of East German officials in West
Berlin to process passes. How-
ever, State Secretary Carstens'
recent statement that the gov-
ernment would not oppose some
form of "concealed" presence in-
dicates that Bonn's position is
softening.
Bonn now seems to be more
concerned about another aspect
of the pass issue. It fears
that the repeated co-signing of
official agreements by West Ber-
lin and East German authorities-
would not only convey a degree
of recognition to the East Ger-
man regime but also support the
Communist assertion that West
Berlin is a political entity
separate from the Federal Republic.
Bonn continues to restrain
Brandt from negotiating a new pass
arrangement which might be more
acceptable to the Senat than to
the Federal Republic. At the
same time, it is trying unsuccess-
fully to tempt Pankow into conces-
sions by holding out the prospect
of deliveries of fertilizer badly
needed by East Germany. The East
Germans strongly oppose linking
the pass issue with trade matters.
Furthermore, Bonn seems to
be taking a more liberal position
toward East German leader Ul-
bricht's proposal for a limited
exchange of newspapers with the
Federal Republic. The idea was
initially turned down because of
the legal and practical problems
involved. In the face of public
criticism, however, and the pro-
posal's evident attraction for
the Bundestag parties, the govern-
ment has since announced that the
offer is still under considera-
tion. Bonn officials, neverthe-
less, are uncertain how much of a
sale the East German Communist
newspaper, Neues Deutschland,
will have i-n-7ffe- Federal Re-public.
They are also skeptical that East
German authorities will permit 25X1
the unhindered circulation of West
German newspapers in the GDR.
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Page 13
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
SECRET
THE SUCCESSION PROBLEM IN SPAIN
The Franco regime is cau-
tiously divulging the broad
lines of its plans for Spain's
governmental leadership after
the Generalissimo dies or steps
down.
On 1 April Franco told
the press that laws were being
prepared to round out and de-
fine the roles of the chief of
state and the head of govern-
ment and to elaborate the sys-
tem for appointing them. Eight
days later he told the national
council of the Falange organiza-
tion that it was necessary to
define these roles because many
of the powers he presently holds
are "nontransferable." He made
no reference to a timetable or
the specific steps involved.
In the press interview he
stressed the need for a "social
popular and representative
monarchy."
Franco's rather vague
statements on constitutional
reform were discussed by Vice
President Munoz Grandes in an
early April conversation with
Ambassador Woodward. Munoz
Grandes said the government was
searching for a way to give
the people a voice in the selec-
tion of a chief of state, either
by a referendum to pass on a
selected candidate or by an
15 May 64
election to choose between two
or more candidates. He said
he himself prefers broader par-
ticipation in electing members
of parliament, which, he said,
should have the power to reject
cabinet ministers nominated by
the chief of state. Munoz
Grandes feels there is little
popular interest in the monarchy
and that Franco's recent empha-
sis on it is not to be taken
too seriously.
Franco presumably will not
delegate his principal powers
as long as he remains in office.
Nor is he likely to agree that
restrictions on civil liberties,
including a multiparty system,
may be lifted immediately after
his departure, since he has
repeatedly insisted that any
future regime must adhere to
the basic principles of the
Falange.
Munoz Grandes, Franco's
most likely, if probably tempo-
rary, successor, is a leading
candidate for the post of head
of government if it is created.
Although Munoz Grandes favors
freer public expression, he has
indicated that it should not
be allowed to obstruct orderly
processes of government. 25X1
SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
Page 14
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
SECRET
Europe
NOTES ON LOCAL ELECTIONS
Britain: The British elec-
torate's swing to the opposition
Labor Party continued in last
week's borough council elections.
Sizable Labor gains were reg-
istered not only in working-class
areas but also in such staunch
Conservative strongholds as
Portsmouth, Darlington, St. Al-
bans, and Ramsgate. The Liberal
Party also did badly, losing
three seats to the Laborites or
Conservatives for every one
gained. In several constitu-
encies, the Liberals' losses
make it doubtful that incumbent
Liberal MPs will be able to hold
their seats in the October gen-
eral elections.
These results are roughly
consistent with the most recent
public opinion poll findings
which give Labor a lead of nine
percentage points over the Con-
servatives. Some political ob-
servers believe that the Con-
servatives cannot close this
gap by October, and are guess-
ing that Labor will end with
a 75-seat parliamentary major- 25X1
ity. Other forecasters are pre-
dicting even larger Labor mar-
Italy: The 10-11 May ballot-
ing to es ablish an administra-
tion for the newl y created Friuli-
Venezia Giulia Region in northern
Italy produced no upsets. As
expected, the parties of the na-
tional coalition government in
Rome obtained a majority in the
new 61-member council, with 28
seats going to the Christian
Democrats, 7 to the Nenni Social-
ists, and 6 to the Saragat So-
cial Democrats.
The Nenni Socialists showed
a 20-percent loss compared with
1963, because of the defection
of part of their left-wing fol-
lowing to form the new Prole-
tarian Socialist Unity Party
(PSIUP). However, the PSIUP,
despite substantial funds from
the economic right, managed to
elect only one candidate, and,
in the opposition, neither the
Communists nor the rightist
parties made the large gains
which had been predicted.
This was the first important
election since the formation of
the Moro government last Decem-
ber, and as such was watched for
indications of its effect on re-
lations among the parties in the
coalition government. The slight
Christian Democratic gains may
serve Moro at the party's nation-
al congress next month as proof
that its center-left policy has
not reduced its voting appeal.
However, since these votes came
from the right, Moro's right-
wing opponents in the party may
feel encouraged to increase their
efforts to head off the govern-
ment's reform program.
The Socialist losses to the
PSIUP, on the other hand, may
compel Vice Premier Nenni to
step up pressure for early gov-
ernment action on these reforms
in order to prevent further losses
to the PSIUP in nationwide mu-
nicipal elections this fall.
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
Page 15
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
'NOW SECRET "Of
The two main opposition par-
ties in Panama are charging that
the government used illegal means
to ensure the apparent victory
of Marco Robles in the 10 May
presidential election. While the
parties may have proof of fraud,
the government's skillful handl-
ing of the election thus far in-
dicates that the official vote
counting, which begins on 16 May,
will, confirm government candidate
Robles' election.
The US Embassy has been
informed
that election results announce
so far by the press--which give
Robles an 11,000-vote lead in a
total of some 328,000 ballots--
ties that their cooperation now
would pay political dividends.
The Opposition Alliance,
which backed the third-place
candidate, Juan de Arco Galindo,
has already filed a formal
complaint charging the Chiari
government with electoral co-
ercion, and Arias has announced
that he, too, will file a com-
plaint. The embassy believes
that since Arias is short of
funds and unsure that his fol-
lowers are, sufficiently well
organized for a successful popu-
lar protest, he is likely to
stick to legal means in pro-
testing the election results.
However, Arias has 25X1
called for a general strike
to back his charges of elec-
toral fraud. His followers
are largely concentrated in
the cities of Panama and Colon,
Arnulfo Arias re-
ceived more votes, and Robles
fewer, than the premature releases
by the National Election Tribu-
nal have shown.
Arias believes he won the elec-
tion by 2,000 votes. Since rep-
resentatives of all 19 parties
presumably were given certified
copies of the totals from each
voting precinct--as the law re-
quires--
there will be grounds for chal-
lenges. On the other hand, the
government will probably be able
to convince the independent par-
but they are probably unwill-
ing to risk reprisal by the
National Guard or the loss of
their jobs.
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
SECRET
Western Hemisphere
NEW BRAZILIAN GOVERNMENT'S POLICIES TAKING FORM
The month-old government
of President Humberto Castello
Branco in Brazil is beginning
to assume a distinctly reform-
ist character although many of
its policies remain to be clearly
developed. It has indicated
that it intends to continue the
cautious and methodical approach
it has taken thus far toward
Brazil's persistent and perplex-
ing problems.
"Operation Cleanup" against
Communists and other extremists
appears to be slowing down in
most areas, although the gov-
ernment continues to fire pub-
lic officials and to suspend
political rights. The authori-
ties are beginning to demon-
strate that they are concerned
not only with combating Commu-
nism and corruption but also
with restructuring the country's
political framework. Legisla-
tive and other political leaders
are studying several plans for
electoral reform as well as a
proposal that Brazil again
adopt a parliamentary form of
government.
Most reform measures to
date have occurred in the eco-
nomic field, where the adminis-
tration is trying to temper the
reaction to several unpopular
measures by promulgating others
with a more favorable public
impact. It has for example,
given priority Lo low-cost hous-
ing projects and reasonable pay
raises for military and civil
service personnel, while at
the same time exploring ways
to cut the budgets of all min-
istries by 30 percent. The
abolition of substantial import
subsidies on petroleum, newsprint,
and wheat probably will be espe-
cially unpopular with Brazilian
consumers and some business in-
terests, but the government con-
siders this move vital to reduc-
ing its huge budget deficit.
This and other moves demonstrate
the primary importance the gov-
ernment attaches to improving
its fiscal position.
The foreign policy now tak-
ing shape in Brasilia appears
distinctly more pro-Western than
that of the Goulart regime. The
Castello Branco government's
basic antipathy to Castro was
manifested well before it formally
severed relations with Cuba on
13 May. There are also indica-
tions that Castello Branco will
take Brazil's inter-American
obligations and traditional
friendship with the US more
seriously than did Goulart.
Potential sources of new
difficulty for the government
have arisen. Powerful landowners
in several areas are reportedly
using the revolution as an excuse
to restore semifeudal conditions
on their estates.
SECRET
15 May 64 CURRENT INTELLIGENCE WEEKLY SUMMARY
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
Page 17
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
SECRET"'
Western Hemisphere
The political climate in
Bolivia, with national elections
scheduled for 31 May, is begin-
ning to heat up. The situation
now has become more complex
than ever as a result of a strong
effort by former president
Hernan Siles Zuazo to gain con-
trol of the ruling Nationalist
Revolutionary Movement (MNR).
Siles has suggested a plan
which he maintains would reunify
the badly divided party. His
ultimate purpose, however, ap-
pears to be to supplant Presi-
dent Paz Estenssoro as party
chief--and again MNR presiden-
tial candidate--and to regain
the presidency for himself.
Under Siles' plan, the
elections would be postponed
for a year, during which time
the splinter National Revolu-
tionary Party of the Left (PRIN)
headed by incumbent Vice Presi-
dent Juan Lechin, and the dis-
sident Authentic Revolutionary
Party (PRA) would be allowed
to reassociate with the MNR.
Meanwhile, Congress would select
an interim president--who could
be Paz himself--to serve for a
year, but Paz would not be eli-
gible for re-election next year.
Both PRIN and PRA have agreed
in principle, contingent upon
Paz' reaction.
Siles has been playing on
the mutual animosity and dis-
trust between Paz and his new
vice-presidential running mate,
General Rene Barrientos, in
hopes of pressuring Paz and
his followers into accepting
the plan. Barrientos is also
feuding with the party's pro-
fessional politicians, who are
generally loyal to Paz.
On 11 May, Jose
oias uevara, a powerful peas-
ant leader and Barrientos sup-
porter, announced that he is
withdrawing his support of Paz
in favor of Siles.
Meanwhile, Lechin appears
to be awaiting developments
within the MNR before deciding
whether to lead an insurrection
as he has threatened to do ever
since he split with Paz last
November. At the moment, the
PRIN and other opposition groups
plan to boycott the elections.
SECRET
15 May 64
Page 18
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
We IWW
SECRET
Western Hemisphere
The Dominican Republic's
provisional regime appears to
have strengthened its position
last week by taking firm meas-
ures to end a series of strikes
that began on 2 May with an il-
legal walkout by taxi drivers.
Three leading opposition par-
ties, in collaboration with ex-
treme leftists, had tried to
turn the strikes into a move
to oust the ruling triumvirate.
On 8 May the government
ended the taxi strike by threat-
ening to arrest the strikers,
broke up a sympathy strike by
dockworkers by bringing in other
workers to move cargoes, and
blocked a similar move by the
National Federation of Teachers
SECRET
15 May 64
CURRENT INTELLIGENCE WEEKLY SUMMARY
by promising to fire teachers
who participated. On the same
day an estimated 30 political
prisoners, most of whom were
members of the outlawed Domini-
can Popular Movement or 14th
of June Political Group, were
deported to Portugal.
Leaders of the Revolution-
ary Social Christian Party and
ex-President Bosch's Dominican
Revolutionary Party deny giving
the strikers anything but sym-
pathy, but predict that "crisis
will follow crisis" until the
regime announces early elec-
tions. Ex-President Balaguer's 25X1
Reformist Party may have given
the strikers some financial
su port.
Page 19
Approved For Release 2008/04/04: CIA-RDP79-00927A004400120001-2
 25X1 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
 Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2
I~IV \/L\L i r
.c1 ('R 1 T
Approved For Release 2008/04/04: CIA-RDP79-00927AO04400120001-2