INTELLIGENCE HIGHLIGHTS NO. 25 WEEK OF 27 OCTOBER - 2 NOVEMBER 1948

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01082A000100020036-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 9, 2016
• Document Release Date: November 1, 1999
• Sequence Number: 36
• Publication Date: November 2, 1948
• Content Type: PERRPT

Approved For Release 2000L0. U, 4-RDP79-01082A000100020036-9
DRAFT
OFFICE OF REPORTS. AIR, ESTIMA4. CIA
FAR EAST/`PACIFIC BRANCH
INTELLIGENCE HIGHLIGHTS NO. 25
WEEK OF - 27 OCTOBER - 2 NO E ER -1948
SECTION.I. SU::IMARY OF FAR EAST TRENDS AND DEVELOPMENTS
The South Pacific Commission, meeting at Sydney. has chosen Noumea,
New Caledonia, as the site for its permanent headquarters (page S).
Despite its own difficulties the Chinese National Government is
apparently attempting to influence internal Siamese politics (page 3).
The failure to date of Japanese exports to attain anticipated levels
has compelled a one year postponement in the time schedule of the Japanese
five year plan for economic recovery (page 4).
'flESR claims for repatriation expense reimbursement is probably an
attc u ate protection as their- gain experience.
On the other hand, assassinations and occasional acts of sabotage con-
tinue while only a few over 400 insurgents have been reported as killed or
captured since *'ay 1948. In view of the ease with which the infiltration
of men and arms can take place over the Siamese border and along ?'alayars
long coast line, it is believed that this number could be quickly replaced.
The insurgents are also extremely elusive. any of them have had considerable
previous military training and experience. They also have an excellent
intelligence system, their jungle 11know how" is good. A further serious
C&C
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MAYA (continued)
complication may arise in view of the large Chinese population in ?'alaya
(which actually outnumbers the indigenous T'alay population if Sing,anore
is included). If China goes Communist, however, there is a strong possi-
bility that many of these Chinese, who have thus far hesitated to align
themselves, will actively support the Malayan Communists, who are primarily
Chinese, and will became less cooperative with the British.
in spite of the fairly optimistic reports made by British officials in
Malaya, it is believed that it will require more than the two years predicted
by the British to suppress Communist activities. Barring major international
developments, however, or a substantial increase of Chinese Communists in
the area, the British should be able to continue the production of tin and
rubber at least at present levels. Such production, nevertheless, will be
maintained only at the expense of continued tension, and a tremendous cost
in terms of'money, man-power and retarded economic rehabilitation and
development.
SIAM
UK Interested in furnish mi.li assistance to Siam. Similar US "B'f
and tUK terests in curbing Communism in Southeast Asia-may call for die--
25X6 cussions concerning the type and extent of military assistance to the S
Array.
25X6
Meanwhile, the US Embassy
,
angkok, in assessing Siam's anti-Communist capabilities has recommended that
Siam be assisted militarily on a limited scale by a 'joint IIS.TIF' effort. The
Siamese Army, although comparatively well-trained, but obsoletely equipped,
is probably incapable of sustaining a drive to suppress a well organized up-
rising. As a consequence, for example, the Siamese Army is ineffective in
its attempt to asa:ist the ITT< in controlling the border movements of Malayan
'"'estern military assistance would enable the opportunistic Siamese
Premier, Phibul, to implement his anti-Communist policy. It will, in addition,
increase his prestige and popularity with the Siamese Army from which he de-
rives his primary political support. It is possible that Phibul is promoting
military assistance from the UK and is encouraging their current effort to
expand TTY-Siamese trade, in the hopes of securing a ITS military commitment.
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Disbandment of Philipmine Scouts evokes re nests for T'S aid. Dis- "A"
closure an 19 October the i plan disband some 29.OM Ph ipnine Scouts
(Filipino units of the I'S Army) has precipitated a rhilippine request for
rR aid based an the ITS-Philippine '!i].itary Assistance Agreement. In con-
ference with the T'S Charge d'Affaires, Quirino asked the ITS to supply the
necessary arms and equipment which would permit absorption of the discharged
Scouts by the Philippine armed forces. In a subsequent meeting held on
24 fctaber, President auirino further stated that the 115 should fulfill a
Phi,lipoine request of 27 July 1948 for a grand-in-aid of "20 million to
develop the Philippine military establishment. Mile there has not yet
been adverse Philippine reaction to public announcement of the ITS decision
to disband the Scouts, it is believed that actual discharge of the men,
which is to be completed by 30 September 1949, will cause considerable ill
feeling toward the TTS. Disbandment may also embarrass the ),uirino adminis-
tration during the 1949 presidential campaign and improve the prospects of
the opposition which is led by Jose P. Laurel, the former puppet president
under the Japanese.
TN1Y ?ESIA
Dutch Mma=g to use milit measures. The Dutch are prepared to "A"
and a po a act on" ag a the Republican Ixdonesians and may do so
within the next month if they are not able to reach a peaceful settlement
on their own terms. Leading Dutch officials have repeatedly stated that
they cannot continue to allow law and order to deteriorate in Indonesia.
The Government has sufficient popular `hacking in the Netherlands for police
action, and is building up its case by repeated mnphasis on Republican truce
violations and release of details to the Dutch press. The Dutch am in
Indonesia is prepared for immediate action and is confident that it can
overrun the Republic in two to three weeks. Should presently scheduled
discussions between Netherlands Poreign ''mister Stikker and Republican
Prime 'Iinieter ?iatta offer the Dutch no satisfaction, they may expedite the
establishment of en interim government for non-Republican Tndonesians and
begin mopping up measures in their own territory in the name of this govern-
ment. This military action would immediately involve Perublican territory.
The Republic, despite the fact that it has lost much of its former strength
because of the economic blockade and the abortive Communist coup of September
1945, would meet any Dutch military moves with determined attempts at
sabotage and guerrilla warfare, aotaealing at the same time to the t'N Security
Council.
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