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se 2006/12/19: CIA-RDP79-00927AO04500050003-7 OCI No.'0337/64B Copy No . 57 SPECIAL REPORT BELGIUM'S CONTINUING PROBLEMS WITH THE CONGO CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE FA-CDF 26979C SECRET GROUP I Excluded from nutomatic downgrading and declassification ~nnntcnn ~nnnz Approved For Releasee22006/12/19: CIA-RDP79-00927AO0450QO50003-7 *10 THIS MATERIAL CONTAINS INFORMATION AFFECT- ING THE NATIONAL DEFENSE OF THE UNITED STATES WITHIN THE MEANING OF THE ESPIONAGE LAWS, TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS- SION OR REVELATION OF WHICH IN ANY MANNER TO AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW? \INATION CONTROLS This document MUST NOT BE RELEASED TO FOREIGN ": OVERNMENTS., If marked with specific dissemination controls in accordance with the provisions of DCID 1/7, the document must be handled within the framework of the limitation so imposed. Approved For Release 2006/12/19: CIA-RDP79-00927AO04500050003-7 Approved For Release 2006/12/19: CIA-RDP79-00927AO04500050003-7 V"Od SECRET Belgium gave the Congo its independence four years ago but still maintains a presence there al- most as pervasive as that of the colonial era. The withdrawal of the United Nations military force-- to be completed by 30 June--will once again leave the Belgians as a potential stabilizing influence in what has been a steadily deteriorating politi- cal, military, and--from the Congolese point of view--economic situation. Meanwhile, most of the large Belgian commercial enterprises in the Congo have continued to prosper. Consequently, Belgium is increasingly interested in finding some way to bring stability to the Congo in order to assure a more lastingly favorable environment for the multi- billion-dollar Belgian commercial investment there. The Belgians also want to settle the intricate Bel- gian-Congolese financial differences, and to end the former colony's continuing drain on the Belgian treasury. Vast Belgian business in- terests and the tens of thou- sands of Belgians who are pres- ently in the country still form the backbone of the Congo's economy. Damage to the economic infrastructure during the fight- ing since independence has so far been relatively slight. Bel- gian investment in the Congo has undergone some depreciation in capital equipment but, up to now, has escaped nationaliza- tion. Consequently, Belgian fears that independence would inevitably lead to a severe eco- nomic decline in Belgium have proved unjustified. In fact, Belgium has had a substantial growth in gross national product every year since 1960. company, still has numerous sub- sidiaries throughout the Congo, representing a large portion of Belgium's approximately $3.5-bil- lion investment in the country. Its interests, moreover, are by no means restricted to Union Miniere, the huge mining complex in Katanga, but extend through- out the Congo. Societe Generale also main- tains constant liaison with the Belgian Government and exerts an influential voice in finan- cial negotiations between Brus- sels and Leopoldville. Auguste Girard, key figure in Societe Generale, is highly regarded by Foreign Minister Spaak. In ad- dition, he is said to have more influence with Congolese Premier Adoula than any other Belgian. The Societe Generale de Belgique, a gigantic holding Financial Differences Belgium and the Congo have only recently come to tentative SECRET Approved For Release 2006/12/19: CIA-RDP79-00927AO04500050003-7 Approved For Release 2.006/12/19: CIA-RDP79-00927A004500050003-7 SECRET agreement on a division of the assets and liabilities of the colonial government. On inde- pendence day, 30 June 1960, the colonial government's public debt stood at $900 million-- equal to approximately three fourths of the Congo's annual gross national product. It is due in part to large deficits incurred by the Belgian colonial administration in 1958 and 1959 in connection with what was to have been a ten-year develop- ment plan. To date, much of the debt has been serviced by Belgium, whose bill for 1963 was approximately $60 million in interest payments alone. Belgium has insisted, how- ever, that the Congolese Govern- ment assume part of the load. Premier Adoula now is agreeable to settling the debt problem by taking on a $6-million share of the annual service due on the debt. In return, Belgium would hand over to the Congolese the colonial government's portfolio of shares in local public and private enterprises. The Belgian Government valued the portfolio at $760 million at the time of independ- ence. It contains documents of full ownership and control of some 35 Congolese public corpora- tions, including the main public transport companies, saving and lending agencies, public utili- ties, and social welfare funds. In addition, about half the value is made up of income-producing shares and debt instruments of large private Belgian-controlled companies in transport, mining, manufacturing, and primary agri- cultural producing industries which have accumulated over the years prior to independence, generally in lieu of royalties and other cash payments for land and subsoil concessions. Along with this portfolio the Congo- lese Government would acquire special auditing and monitoring rights to exercise close super- vision over both public corpora- tions and private companies. In negotiations last March between Spaak and Adoula, the Belgian Government tentatively agreed to turn the portfolio over to a ten-man management committee. The Congolese are to have six representatives on the committee, while the remain- der would be chosen from Euro- pean banks and possibly from the International Bank for Re- construction and Development. Delivery of the portfolio, how- ever, is contingent on the solu- tion of a complicated problem involving certain shares of Union Miniere which are to be included. The problem of payment of Congolese taxes by Belgian com- panies in the Congo has also been a matter of contention be- tween the two governments. Since independence the Belgian companies--in the absence of a. Belgian-Congolese double taxa- tion agreement--have continued to pay their taxes directly to Brussels. In pre-independence days, the revenues were divided between the metropole and the SECRET Approved For Release 2006/12/19: CIA-RDP79-00927A004500050003-7 Approved For Release 2006/12/19: CIA-RDP79-00927A004500050003-7 SECRET colony, and made up about half of the Congo's income. The Belgian Government's economic aid to the Congo is comparatively small in financial terms. It consists primarily of a program of commercial credit and the supplying of some 2,000 technicians, the majority of whom are teachers. Military Role The Belgian effort to re- train the Congolese National Army has thus far been almost a. complete failure. Belgian Army and police officers now on duty in the Congo, however, are making a notable contribu- tion in helping to maintain existing security. The train- ing plans, worked out in May 1963, called for Belgium to complete the retraining of three battalions of the 25,000-man force in 1963, and six more by the end of 1964. The program, however, has in the main not gone forward. Neither Brussels nor Leopold- ville felt any sense of urgency as long as the United Nations forces were on the scene. Younger Belgian officers have been discouraged from vol- unteering for service in the Congo partly because of old jealousies between regular army and former colonial officers. In , addition, there has been continuing dissension among Belgian officers in Leopoldville, particularly between the old- timers, who by and large have been commissioned from the ranks, and the better qualified recent arrivals. Moreover, the new- comers--including Colonel Guil- laume Logiest, who heads the had difficulty getting information on Congolese Army activities. Another hindrance is the Congolese aversion to permitting the Belgians to gain too much influence. Belgian officers are generally not allowed to exercise command authority, even at the battalion or company level. Only since the Congolese commander in chief was beaten up by army mutineers in late 1963 have Belgian officers in uniform been able freely to visit army installations and units outside Leopoldville. Another small forward step oc- curred in February when Logiest was permitted to assume tempo- ra.rily the functions of acting chief of staff. With the phasing out of United Nations forces, Belgium has moved to send additional officers to the Congo to supple- ment the 70 on duty as of 7 May. As training officers, the Bel- gia.ns can have little short-term effect, but as tactical advisers --which many of them are turning into--they are proving their worth. Indeed, a. complete col- la.pse of the central government's authority in turbulent Kivu Prov- ince has been avoided largely because of the arrival there of a handful of Belgian officers. SECRET Approved For Release 2006/12/19: CIA-RDP79-00927A004500050003-7 Approved For Release 2006/12/19: CIA-RDP79-00927AO04500050003-7 SECRET In compliance with a request from the Congolese commander in chief, a highly regarded Belgian Navy officer has recently been assigned as adviser to the Congolese armed forces. In addition, 36 Congolese naval officers are now being trained in Belgium as future instructors in the embryonic Congolese Navy. Belgium is also providing crews for US-furnished helicopters. Possibly Belgium's most important contribution to in- ternal security in the Congo thus far is the provision of police advisers. Belgians di- rect and administer the only sections of Congolese police which are effective. The pres- ence of Belgian police officers in provincial cities is still an important factor in the pres- ervation of order in those areas. SECRET Approved For Release 2006/12/19: CIA-RDP79-00927AO04500050003-7 Approved For Releaasse 2006/12/19: CIA-RDP79-00927AO0445500050003-7 SECRET SECRET Approved For Release 2006/12/19: CIA-RDP79-00927AO04500050003-7