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December 21, 2016
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February 26, 2008
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October 9, 1964
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WEEKLY SUMMARY CENTRAL INTELLIGENCE AGENCY OFFICE OF CURRENT INTELLIGENCE State Dept. review completed ARCHIVAL RECORD PLEASE RETURN TO AGENCY ARCHIVES, SECRET GROUP 4 E=elude + i nrn automatic Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 SECRET (Information as of 1200 EDT, 8 October 1964) F-age INTERNAL DEVELOPMENTS IN THE SOVIET ECONOMY With agriculture in good shape this year, Soviet econo- mists have turned their attention to the debate on economic liberalism, and the question of consumer welfare. SOVIET-INDONESIAN NEGOTIATIONS IN MOSCOW Moscow publicly endorsed Sukarno's policies and agreed in principle to supply additional arms. It seems likely, however, that the Indonesians also received private warnings not to risk even limited British military re- taliation. SOUTH VIETNAMESE POLITICAL SITUATION STILL FRAGILE Premier Khanh is taking a tougher stand to head off new labor agitation, but there are signs of new political problems. AREA NOTE On Syria SECRET 9 Oct 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page i Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 SECRET ASIA-AFRICA (continued) NONALIGNED CONFERENCE UNDER WAY The dispute over Congo Premier Tshomb6's attendance may be followed by other moves which will raise diffi- culties for the West. THE CYPRUS SITUATION Turkish Cypriot leaders have still not agreed to ar- rangements for opening the Nicosia-Kyrenia road, and this issue prevents settlement of the problem of ro- tating the Turkish garrison on the island. PEIPING SCORES AGAIN IN AFRICA Communist China's campaign for wider recognition is making headway among moderate leaders of the former French dependencies, who have previously given Taipei crucially important diplomatic support. AREA NOTE On Southern Rhodesia LEOPOLDVILLE'S MILITARY POSITION IMPROVES Congo Government forces have fared better this week than their Premier. Tshombd went to Cairo to attend the nonaligned conference but is now being held there as "hostage" for the Egyptian and Algerian embassies in Leopoldville. UNITED KINGDOM ELECTIONS The public opinion polls show the Tories and Labor so close that the elections will probably be decided in the marginal constituencies. Despite a comeback by the Tories since early this year, Labor still appears to have the edge. Page SECRET 9 Oct 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page ii Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 SECRET 00i EUROPE (continued) Page POLITICAL SITUATION IN ITALY The Christian Democratic National Council's support for the center-left coalition and its program has minimized the threat of an immediate government crisis but unresolved factional differences in that party have strained relations within the coalition. LABOR PROBLEMS IN BRAZIL The government's slow progress in achieving an equita- ble balance between wages and the cost of living is causing increased dissatisfaction within organized labor and permitting a resurgence of Communist influence. AREA NOTES On Guatemala ECUADOR JUNTA LOSES SOME PRESTIGE AND AUTHORITY The junta's concessions to Guayaquil demonstrators protesting tax reforms has cost the government pres- tige and somewhat undermined its ability to carry out needed reforms. AREA NOTES On Dominican Republic and on Bolivia 15 THE ISSUE OF CHINESE REPRESENTATION IN THE UN 21 A resolution to give Nationalist China's seat in the UN to Communist China may be supported by a simple majority during the General Assembly session open- ing 10 November. PROSPECTS FOR APPLICATION OF ARTICLE 19 RECEIVE SETBACK 22 India's public support of the Soviet and French positions that peacekeeping costs are not binding on member states which are unwilling to pay will make it far more dif- ficult to line up Afro-Asian support for application of Article 19. SECRET 9 Oct 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Page iii Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 Approved For Release 2008/02/26: CIA-RDP79-00927A004600080001-5 SECRET INTERNAL DEVELOPMENTS IN THE SOVIET ECONOMY The Soviet economic scene is presently characterized by a. good year in agriculture and by the reopening of the debate on economic liberalism begun two years ago. In November the cen- tral committee is to discuss longer range measures to improve agriculture. Reports of a re- cent Khrushchev speech to top economic and political officials indicate that he called for greater attention to the con- sumer but added that other eco- nomic-sectors would not be ne- glected. Khrushchev has singled out improvement of the standard of living as the "main task" in the further development of the econ- omy. He also stressed the lead- ership's concern with agricul- ture and chemicals as well as with defense and other indus- tries not directly related to the consumer. While the offi- cial summary of his speech--a.ll that is yet available--empha- sizes the consumer goods indus- tries, it does not indicate rel- ative priorities for the vari- ous economic sectors. His past promises to the consumer have not been fulfilled. Khrushchev failed to specify the timetable for improving the lot of the consumer. His sugges- tion that it would be "expEdi- ent" to plan development for a "more lengthy period" than the present long-term plans indicates that important shifts of resources will not take place immediately. In addition, his expression of confidence that the various eco- nomic organizations "will reveal fresh reserves" in order to meet post-1965 plan goals implies a continuation of tautness in the Soviet economy. SECRET CURRENT INTELLIGENCE WEEKLY SUMMARY Page Approved For Release 2008/02/26: CIA-RDP79-00927A004600080001-5 Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 %W01 *%Wf SECRET Since mid-August, the press has been allowed to carry arti- cles on ways to improve indus- trial management and organization. This debate has been associated with the name of Liberman, who proposed in 1962 that plant "profitability" be substituted for much of the detailed central regulation now exercised by the planning authorities. Most of the present contributions re- iterate Liberman's approach by emphasizing that efficiency, quality, and meaningful incen- tives cannot be achieved unless control is decentralized. They add, however, that if profit- ability is to be a workable suc- cess criterion, prices must re- flect full costs of production. Most of the articles stress the problems involved in meshing such a system into the Soviet context. Official reservations about these recommendations have been expressed by the Finance Minis- try, and the chief critic of the liberalism approach has been Chairman of the Economic Council of the RSFSR Afanasyev. He con- fined his suggestions, however, to traditional admonitions to work better within the present system, and he allows for some possible reorganization. This administrative approach avoids the profit and price questions, but Afanasyev does not explicit- ly reject that line of attack. In the most recent contribution to the debate, Liberman has advo- cated a high-level permanent commission to consider the vari- ous suggestions and submit pro- posals for legislation. Two recent decrees demon- strate that the regime continues to search for economic incert- tives within the framework of the present system. The first decree seeks to increase the motivations for introducing new technology by raising the bonuses paid to the workers' funds of a plant, according to a percentage scale. This, however, is baLi- ca lly an extension of current practice and is not likely to produce much improvement. The other decree establishes a bonus plan for railroad workers and grain handlers to speed the transfer of grain to storage points and distribution centers. The omission of sailors and long- shoremen from this program ig- nores the problems entailed in coordinating grain shipments that are jointly transported by railroads and waterways. As of 1 October about 95 percent of the harvest of small grains and legumes had been com- pleted. Despite certain weather problems in parts of the New Lands, over-all prospects'point to a total harvest of 120 to 125 million tons of grain, the best since the record year of 1958, when an estimated 125 million tons were harvested. The Soviet population, however, has increased by about 21 million since that time. State procure- ments of grain have already ex- ceeded the previous record 57 million tons bought in 1958 and 1962. Given the need to replen- ish stocks held in state reserves, the state procurement plan of 67 million tons may possibly be fulfilled. SECRET 9 Oct 64 CURRENT INTELLIGENCE WEEKLY SUMMARY Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 Approved For Release 2008/02/26: CIA-RDP79-00927AO04600080001-5 SECRET Although the improved agri- cultural outlook should reduce the drain on its gold stock, the USSR still appears concerned with its depleted reserves. To encourage the sale of privately held gold jewelry to the state, and possibly to dis- courage its illegal export, the government has sharply increased the price it will pay for gold bought from the population. on 5 September providing "cr investiment of some $400 r,i llion in egg and poultry factor-es by 1970. Other costs involved in this program will raise= the total to about $3 billion An intriguing aspect of this Pro- gram is the designation o.1' the State Committee for Aviation Technology as the only naional industrial committee charted with organizing the produ,-rtion of machines and equipment for 25X1 the poultry industry. There is no evidence that the industry price will be raised. Collections from the popu- lation and increased production should improve the USSR's gold position marginally. Khrushchev's program this year for "intensifying" agricul- ture was underscored by a decree Responsibility for r4crgan- izing the "industrial" prc,duc- tion of eggs and poultry was one of the duties assignee the high-level commission established under party presidium member Podgorny last April. Thi com- mission is also charged with working out the "industri