CFEP BRIEFING

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01048A000100060004-8
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: November 16, 2016
• Document Release Date: November 13, 1998
• Sequence Number: 4
• Publication Date: January 1, 1957
• Content Type: BRIEF

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A. Typical of flexibility Bloc strategy, consistent Communist ideology,
undertake when a revolution economic and political attitudes con-
siderable headway in former colonial territories.
1. Belief poverty inevitable is giving way.
2. These countries, infatuated by independence determined develop
into economically strong nations.
B. Communist powers always emphasized opportunities for development
in colonial territories.
1. More recently, sought with increasing vigor exploit nationalism
and ambitious for economic progress.
a.' Last three years USSR sufficiently secure militarily,
politically and economically, offer economic assistance
and trade but also to supply military goods.
b. Along with these tangible exports, a large volume of
propaganda insisting that the Soviet model must be followed
in order to achieve rapid economic growth.
New phase of Bloc economic diplomacy important and integral
part of its overall foreign policy.
a. Soviet theme of competitive coexistence intended create
impression USSR bent on avoiding general war.
(1) Economic offensive supports coexistence theme, making
more believable peaceful protestations Soviet Union.
(2) Economic offensive encourage underdeveloped countries
draw away Western influences, thus expand the areas of
CFEP Briefing
neutralism and of direct Communist political influence.
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(3) Long run, economic offensive designed promote advantage
Communist economic organization, encourage under-
developed countries industrialize along lines Soviet Union.
b. Rapid Soviet economic growth, development great military
strength, given USSR assets and flexibility for economic
and technical assistance, commands world attention.
(1) USSR has already given Satellites and China more than
$2.5 billion, has promised about $ -00 million additional
aid for 1957-
(2) Provided at least $100 million to the underdeveloped
countries of the Free World in 1956, committed to
200 million in aid during 1957-
(3) Although aid program large, Soviet economy capable
supporting much larger program.
C. ....... Quarterly Report I sent to you a short time ago, data on the
magnitude and general characteristics economic offensive.
Emphasize again pattern followed.
1. Distribution of credits.
a. India, Yugoslavia, and Afghanistan, countries lying in
close proximity to Bloc territories.
b. Syria and Egypt eager to flaunt Western powers.
c. All neutral countries.
d. Implementation rapid; by end 1957 nearly one-half credits
drawn.
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RET
2. Flow of technicians follows pattern credit distribution.
Exception Yugoslavia
3. Tremendous expansion trade, distribution expansion
a. Not revealed in the chart, close relationship Soviet trade
and credit programs. Trade almost doubled past three years.
b. Although USSR increased purchases raw materials major part
increase trade exports to India, Yugoslavia and Egypt.
(1) Large shipments wheat and oil to Egypt.
(2) Soviet shipments India Yugoslavia increased primarily
result large credits.
(3) Except relief goods, major stimulus significant
increases Soviet exports, Soviet credit. Expansion
Soviet imports also consequence credit extensions.
D. Economic offensive single aspect Bloc foreign policy, consequences
difficult distinquish total picture.
1. Clear, Bloc has some success solidifying neutralist sentiment
many underdeveloped countries, considerable success strengthen-
ing anti-Western passions in Egypt and Syria.
a. Egypt and Syria, played on spirit nationalism nurtured
atmosphere antipathy former colonial powers.
(1) These countries embroiled dispute Israel, major
most rewarding approach, military assistance.
(a) Not possible stabilize conditions Middle East
(b) Anti-Western sentiment grown prestige Soviet
Soviet Union increased.
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(2) More recently Soviet Union and Czechoslovakia
cultivating opportune situation Yemen.
(a) Border and other grievances against British control
Aden.
(i) Bloc arms shipped Yemen made possible
harrassment British troops.
(ii) Military movements Yemen annoying rather than
menacing.
(b) However,, conflict could have repercussions
Western relations other Arab states, reminder
smouldering grievances against West.
b. Even areas Bloc successes lose spectacular many uncommitted
countries believe neutralist policies vindicated, convinced
collective security arrangements sponsored West unnecessary.
(1) Neutralist sentiment strengthened some measure India,
Ceylon, Burma, Cambodia, Indonesia, and Afghanistan.
(2) Psychological impact Bloc assistance bolstered
impression independence strengthened faith neutralist
policy.
(i) Example, Indian leaders pleased choose
between United Kingdom and Soviet plans
development heavy industry.
(ii) Typical neutralist Indian thinking adopt
portions each plan.
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Technique of great appeal to Bloc emphasis agreements
ostensibly free political strings.
(1) Although approaches sometimes associated diplomatic
recognition, as far as is known, Bloc not explicitly
require specific political or military commitments
(2) Doubtless intended contrast Western terms.
(3) Advantages demonstrated, Afghan and Burmese leaders,
expressed liking dealing Soviets, ground not join
military alliances, agree openly support Soviet
political objectives.
Many Bloc projects showcase type, seem intended attract
public eye, not advance economy underdeveloped country.
(1)
(2)
(3)
Sports palace, Burma.
Other projects, other countries, steel mill India,
grain-bakery complex Afghanistan.
Many leaders underdeveloped countries comment Soviet
Union not argue economic merits proposal, Western
countries do.
(a) May boomerang, so far paid off satisfaction those
inclined neutralism.
(b) Feel USSR allows develop economies as they wish;
on other hand suspect Western countries refuse
undertake popular uneconomic projects, interfering
internal affairs.
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e. Adroit maneuvers, Bloc able take advantage situations as
develop.
(1) USSR exploited atmosphere Ghana.
(2) Order Sudanese when sales lagging.
(3) When Iceland considering purchase fishing vessels,
USSR offered $3.5 million credit finance Icelandic
purchases East German ships.
(a) In this case Soviet Union willing funds buy components
UK West Germany.
(b) If accepted first acceptance Soviet aid NATO member.
f. Soviet program flexible take advantage adverse.
(1) When Burma objected barter agreement working, Soviet
Union agreed trilateral arrangement, Burma obtained
Czech products with Soviet money.
(2) Burma discovered could increase sales rice cash customers,
USSR agreed reduction shipment Soviet Union.
(3) Relief Soviet Union deals fairly indelibly impressed
Burmese mind.
g. Ostensibly providing assistance without strings appeal
neutralist sentiments, Bloc laying groundwork possible
patterning economic life underdeveloped countries after
Soviet Union.
(1) Widespread respect, particularly in Asia, Soviet success
rapid industrialization.
(a) Even those dislike Communist political, often
feeling Communist economic models offer more
relevant solutions problems than Western free
enterp 'xed economies.
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(2) Expanded economic relations enhanced receptivity.
(a) Contacts Bloc economic advisors, technical
experts familiarized engineers, economists and
industrialists underdeveloped countries Bloc
products, techniques, to some extent, economic
institutions.
(b) Business, government leaders, India and Afghanistan
favorably impressed.
(c) Consequently inclined sympathy proposals further
expand economic ties Bloc, approach less prejudice
proposals adoption institutions copies Communist
countries.
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2. Although Bloc successful fomenting anti-Western sentiment
neutrals Syria Egypt, solidified neutralist sentiment such countries India,
Afghanistan and Indonesia, failed achieve some major objectives.
a. Overtures Turkey, Pakistan Iran made purpose disrupting
Western alliances.
(1) None these countries have taken bait.
(2) Although used Bloc offers enhance bargaining positions
West, allegiance West not shaken,
b. Furthermore, some neutralist mainly these Africa for moment
rebuffed Soviet overtures.
c. So far most dramatic failure Bloc in Yugoslavia.
(1) In spite economic assistance nearly one-half billion
dollars agreements carried out,. Tito attempted undercut USSR Communist party
politicking.
(a) Consequently Soviet Union withdrew for time
being much premised support.
(b) Although relationship USSR Yugoslavia improved
recent weeks atmosphere still far from cordial.
(2) Seems clear Tito while anxious obtain Soviet assistance
probably attempt follow relatively independent course.
3. Bloc's use economic offensive gain intelligence objectives, subversio:
and collection of information.
a. Bloc generally not use technical experts subversive purposes.
Conforms Bloc objectives.
(1) Impress local leaders peaceful intentions, USSR and
Satellites send well trained technical experts circumspect behaviour.
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(2) 22 Soviet agricultural advisors Burma performed skillfully
Burmese government extended contract year.
(3) Technical experts India and Afghanistan, also well trained
suited perform assigned tasks, not engaged subversive activity.
b. Not apply Bloc experts all countries. Syria subversion important
activities Bloc personnel.
c. Isolated instances economic offensive used cover collection
security information.
(1) Recently USSR purchased Cuban sugar.
(2) Czechoslovakia interest promoting sales telephone equipasnt.
Underbid Western films Montevideo and Athens, as much as 40 percent.
(a) Uruguayan Government warned security risk, steps taken
to make impossible Iron Curtain get contract.
(b) Greek Government also informed danger, as far as we
know Czech bid still stands.
(3) Intelligence military importance acquired conducting surveys.
(a) East Germans surveyed portion Sudan.
(b) Soviet Union mapped practically all Northern Afghanistan.
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E. Anticipate continuation 11loc economic diplomacy Near East and Asia
where Bloc prestige, influence already increased.
(1) Although few new credits last eight months, slowdown not result
shift policy.
(a)
Uncommitted countries willing accept Communit credits
already received sizeable amounts, many countries allied with West unwilling
take significant Bloc credits.
(b) Recent probings new outlets few rewarding opportunities.
(c) In view growing demands within Soviet and Satellite economies
Bloc leaders careful allocating additional resources outside Bloc; however,
emergence opportunities achieve important political benefits almost certainly
prompt credit offers.
(2) Serious attempts probably made tempt Iran, Greece, and most
particularly Iceland, loosen ties West.
(3) Believe Bloc contemplating move Africa until now largely ignored.
(a) Preliminary steps already taken that direction.
(b) Ghana, Tunisia, Morocco, Liberia recently received attractive
offers USSR, offers, though rejected, may be followed specific inducements
these countries may find difficult ignore.
(4) Bloc economic diplomacy substantially increased Bloc prestige
influence all parts underdeveloped areas Free World; made possible Soviet
entrance crucial force Eastern Mediterranean; sustained neutralist sentiment
Middle East and Africa. In view apparent success economic offensive, anticipate
will continue as important integral part Soviet foreign policy.
C F DE TIAL
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