NEAR EAST/AFRICA BRANCH INTELLIGENCE SUMMARY FOR WEEK ENDING 28 SEPTEMBER 1949

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000100050013-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 12
• Document Creation Date: November 16, 2016
• Document Release Date: January 13, 1999
• Sequence Number: 13
• Publication Date: September 28, 1949
• Content Type: SUMMARY

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)F VICE Cpl` HE Putt AWL) ESTIMATES
C ;2'N".:?1 ..L g 'rc .t L AiMN E AGENCY
I -P
SEP 281949
NOTICE: This document is a -woriKing t- a r, not
an official CIA issuance. It has been co-ordina-
ted within ORE, but riot w th the LAC Agencies.
It represents current -thhik-I by specialists in
CIA, and is designed for use by others engaged
in similar or overlapping stud e s s The opinions
expressed herein may be rethiped before final
and official publication. It is intended solely
for the information of the addressee and not for
further dissemination.
Copy fo
A DECLASSIF'I%
DOC ITN?. ;
Zoo, CHANGED S S C
NEXT REVIEW DATE.
AUTH: R 70-2
DATE41REVIEWER:
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r, bie of Contents
Anti-guerrilla policy . . . . . . .. . . . . . .................. I
Government wary 1 relaxing security measures
,furkff
Devaluation put off ............... ................. .
Policy of watchful waiting adopted
Capitalist disappoint.meat. .............................
Government retains tight grip on national economy
Devaluation results ................. .
4o serious repercussions expected
is
ra
Army dissatisfaction ...............................
Possibility of further disturbances
India - a isar&
Pakistan and devaluation .........................
Intensified economic warfare with India imminent
tea in Brief
Arab States, Lebanon, Jordwi, Iran... .......... . ...... 4
The Macedonian Pr6ble M .............................
Tito-Cominform conflict revives historic question
Ski, ~,T'
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A IA/.INCH
AINTELLrG NCl : UX MAk ( Vol. IV No. bd
a or Week F nt ing
29 September iV49
It' 111f,: U.F_ C k;
ilia a goliey: Greece is proceeding ariy in considering any
A"
Serrj
,5?t guer-
modification of its anti-guerrilla program, With only some
ri I s_left within Greece and all Greece's border posts manned for then
firs. time since 1941, the over -all strengt i of the Greek military estab12 h
meat is still being maintained at the old level, although the government
now feels able to replace some of the older reservists with conscripts
and to grant some long-delayed leaves. Poittical and military pressure
has meanwhile motivated against a prompt adoption of the broad amnesty
plan originally contemplated, on the ground teat leniency might contribute
to the revival of Communist guerrilla and political activity. At least some
elements within the Creek Government are anxious to throw off some of
the tremendous economic burden which a large military establishment
represents. Government leaders in genera-1, however, are fearful lest
any relaxation of security measures prove remature; they are consequently
stressing, both at home and abroad, the overriding need for some interna-
tional action to terminate the threats of renewed guerrilla incursion across
the northern border. While skeptical of success in obtaining such action,
high government officials have pledged that Greece will not take matters
into its own hands by launching attacks across its northern border.
Devaluation t off: Although Turkey will p ubably have to devalue the
lira (notwithstanding tae Finance Minister's assertion to the contrary),
the government has evidently decided to wait upon developments rather
than precipitately to announce devaluation at a figure which might turn
out not to be the most advantage ous. The Turks have not forgotten the
unpleasant consequences of deva..uadun in 1946, and they continue to regard
such a step with dislike. They are unlikely to lower the price of the lira
until they can estimate to what extent devaluation in other countries (part-
icularly in the sterling area) will reduce the volume of Turkey's export
trade and can assess the effects of devaluation on Turkey's internal price
structure.
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;a itaiist, disc jntmen .. The tended' y o coilectivist national
economy to strengthen and perpetuate itself has long been evident in
Turkey, where ECA aid to various government-sponsored projects has
now probably added to the dismay al Viauld-.be private entrepreneurs.
Potential capitalists who felt hopeful f a.t the extension US financial
aid would serve to release the tight, to ist grip which the government
holds over the national economy have been sadly disappointed so far.
They would be more vociferous about their unhappiness were it not for
the fact that they have some wonderfully good reasons for keeping quiet,
about their financial resources. Some of them, however, still hope that
Ur le Sam ?wiil help rescue them from outer darkness and that they will
be sufficiently assured of protection from an acquisitive government to
warran loosening up on whatever cash they can scrape together for invest-
ment.
Vev uatiot. re?p ts: The devajuai ut, A the pound sterling, followed by
devaluation of the currencies o Israel, Egypt, Jordan, and Iraq, is not
expected to have an unduly deleterious effect upon the Arab states Ines-
much as the great bulk of the area.,, trade is with sterling countries. There
will probably be some increase in prices, particularly in those goods
imported from dollar areas.: This increase, however, should not be great
because purchases from the dollar area have for some time been made
largely with free or black market dollars selling at a price very close to
the new official exchange r a.tes, thus effectively discounting in advance
the devaluation decision. Since Israel's previous dollar-pound exchange
rate -was on a 3 -1 basis, the change should not make any substantial differ
ence to that country-. NevertD eles.s, the economic and financial structures
of all these states rest upon very shaky foundations at present; accordingly,
any disturbing factor like currency readjustment is bound to have an unsettl-
ing influence.
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Army dissatisfaction: Although recognition of the Syrian Government by
the US, the UK, France, Saudi Arabia, and Egypt will bolster the prestige
of the new regime, dissatisfaction persists among certain army factions,
particularly junior officers. Parliamentary elections are scheduled for
5 November. The reformist Populist Party (not to be confused with the
Syrian Popular Party), which is heavily represented in the present cabinet,
may well gain greater control of the government at that time. If the Populist
Party appears unwilling to cater sufficiently to army demands or relegates
the army to the background of the Syrian scene, disgruntled military factions
may cause further disturbances. It may turn out that the two recent army
coups in Syria established a dangerous precedent.
I] IA - PAKISTAN
Pakistan and devaluation: Pakistans failure to devaluate its currency, as
did India and most other sterling bloc members, has further exacerbated,
relations between the two dominions. Pakistan's decision was presumably
based on purely economic considerations as well as on a desire to embar-
rass India politically and financially. The Pakistan Government has con
sistently been optimistic regarding its financial position; it is also
apparently convinced that the world demand for its raw material products
will continue strong, thus permitti Pakistan to maintain its yield from
exports while purchasing greatly desired capital goods from devalued-
currency countries at what in effect would be artifically low prices.
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Nevertheless, India has responded whit 4stonishment and anger, not only
because it must now pay higher prices for the Pakistani raw materials
which it processes, but also because Pakistan's failure to devaluate has been
automatically reduced by 30% Pakistan's Rs 3 million debt to India. Bitter
recriminations on the currency exchaxue question are being made--
each side alleging improper manipulation of the exchange rate by the
other--and a mutually costly intensification of economic warfare between
the two countries can now be expected.
India has already retaliated by announcing a ban on all coal exports
other than on government account. Pakistan would find denial of Indian
coal--it has almost none of its own--a painful and expensive punishment.
A threat to stop buying Pakistani jute is also being made. Such action.
especially if support ed by the Dundee importers, would have a near dis-
astrous effect upon Pakistan's economy. Bowever, the cost to India might
prove too great because of the resultant dislocations in West Bengal, where
unrest is already marked and where the processing and shipment c1 Jute
(mainly from Pakistan) is a major factor in the economy. Similarly, a
move to boycott Pakistanis cotton is being discussed despite the need of
India's textile industry for that cotton.
Most observers believe that economic factors will soon force
Pakistan to devaluate. In the meantime, however, the already bad rela-
tions between the two countries will further deteriorate and, of equal
importance, their none too stable economies will be subjected to additional
severe strain. At the same time, the GOI will be confronted with loud
allegations that the retention of Commonwealth ties is largely to blame
for the country's new difficulties,
Aware of the Arab states'a'&~neral lack of enthusiasm toward the ESM
anMNYC.gYIF
[UN Economic Survey Mission), Clapp and his deputies are planning to
make a formal visit to Alexandria on 24 September and to Amman on
26 September to pave the way for future technical conversations. The
ESM reportedly will go to the Arab countries having large numbers of
refugees before visiting Israel, probably about ~, October, and for the
present will stress setting up an interim works program rather than
resettlement. Strong US representations have succeeded in bringing
forth a show of UK support for the ESM, and together the US and the UK
have persuaded Iraq to receive the mission if the conversations are limited
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5.
to "such discussions as PCC members a:d last sprirg. " The enormous
gulf between passive politeness and active cooperation, however, has
still to be bridged.
Thereinaueuration of Lebanese Pret dent Khuri on 21 September has been
accompanied by a flurry of political activity. Prime Minister Sulh is
expected to form a new cabinet, which would include representatives of
a greater variety of political groups. Principal opposition groups, however,
continue to refuse to participate. Thus any new cabinet will still be
dogged by criticism, although disgruntled elements lack sufficient cohesion
to form a united front.
'the once raunteci Aram Jae~ion a a~u some vitality as arms and
equipment begin to arrive from the UK. A new branch of the Legion--
the home guard service--is receiving enthusiastic recruits from groups
of students and refugees of Arab Palestine. An anticipated 15,000 men
will be given minimum training in home defense to back up the Legion's
19,000 troops and police. A period of eclipse followed the first Palestine
truce (11 June 1948) when the Legion's supply of arms was cut W. Now
that the embargo has been lifted, however, the Legion appears to be re-
gaining its position as an effective fighting force.
Some ro ress may be registered on Iran's Seven Year Plan. The gover: nn-
ment has re-engaged Overseas Consultants Incorporated (an American
group of engineering and industrial firms) to work on the plan for one more
year. Concurrently, the Seven Year Planning Organization (Iranian) is
concentrating its attention on Azerbaijan. A joint stock company has been
formed to expand winter planting in the province; needed equipment and
supplies have been purchased; the Ministry of Roads has contributed two
million rials and the services of its staff for work in the province; and
an intensified public health program around Lake Urmia has been planned.
1 n _qIft ,l c a~f the LAS M1
.1Y . i ssion ' s contract with the Iranian Army
has been officially requested by the Iranian Government for a period of
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one year, from March 1950 to March 14161. 'i`kae extension is expected to
be granted without any alteration of present terms.
One as ct of current S+ viec-Iraxa aan culties was resolved on
26 September when eleven Iranian soldiers captured by the Soviets in a.
border Incident on 21 August were released. Although Iran had demanded
their release before 15 September on threat of closing the Soviet hospital
and VOKS in Tehran and of presenting a dossier on the incident to the
UN, no such retaliatory action was taken, presumably because the Soviets
indicated they would come to agreement with the Iranians in the matter.
The Soviets, however, still hold four Iranian soldiers seized in August,
and may continue to hold them as hostages for two Soviet soldiers who
escaped to Iran since the Iranian Government has indicated that it will
not forcibly repatriate persons seekiag refuge in Iran.
Increased efficiency in the Iranian Cat:oinet appears to be an objective
set by Prime Minister Sa.ed. He has decided to replace Minister of Roads
and Communications Seyah with General Yazdanpanah, commander of the
Imperial Guards. The energy and honesty attributed to Yazdanpaaaah
should improve the grossly incompetent administration the railways.
Saed has also announced that a greater number of army officers will be
assigned cabinet posts--a move which should make for more orderly
operations on the part of the government but which is not considered a,
step toward dictatorship.
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'~y~ MpREK
SKOPJE
(SKOPUE)
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MACEDONIA
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THE MACEI)ON.1AN PROBLEM*
The controversial Macedonian question, perennially capable of
arousing intense nationalist feeling in Yugoslavia, Bulgaria, and Greece,
is a major source of instability in the Balkans and may become aggravated
as a result of dh.e Tito-Cominform struggle. Both parties to this struggle
have already been playing on Slavo-Macedonian nationalistic aspirations
in an attempt to strengthen their respective positions. If the USSR decides
to employ additional measures in its campaign to upset Tito and resto.?w
its control in the south Balkans, Macedonia is certain to assume increas-
ing importance in the plans of both sides, as a basis both for propaganda
attacks in the war of nerves and possibly for guerrilla operations. The
danger that such operations, once started, r sight prove hard to hold within
bounds may, however, serve as a deterrent to their use.
In modern times, Macedonia has never been a racial, linguistic,
or independent political entity. Although Its boundaries are indefinite,
Macedonia is generally considered to comprise an area of some 25,000
square miles, lying in northern Greece, southern Yugoslavia, and south-
western Bulgaria.** The number of Slavo-Macedonians in Greece has
been greatly reduced since the international exchange of populations in
the Aegean region in 1922-1923. At present. the number of Slavo-Macedonians
in Greek Macecb nia is probably well below 80,000, while those in Yugoslav
and Bulgarian Macedonia are estimated at roughly 700,000 and 150,000
respectively. The language of the Slavo-Macedonians, which more closely
resembles Bulgarian than Serbian, was not given any sort of formal status
until after World War II, and then under the auspices of the Yugoslav
Macedonian Republic. This Yugoslav action has helped weaken the historic
tendency of 3lavo--Macedonians to regard Sofia as their spiritual capital.
Although Slavo-Macedonians have recurrently desired unification
and national autonomy since the nationalistic IMRO movement at the turn
of the century, this desire has never found practical expression1because
of conflicting power interests combined with internal disagreements and
* Prepared by B/EE in collaboration with B/ATE.
** The attached map provides a conventional representation of the area
to which the geographical term Macedonia might be applied. No attempt
has been made to delineate the present scattered distribution of the
Slavo-Macedonians.
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apathy. More recently, Yugoslav -tsulgarian disagreement over which
country should dominate a Soviet-sponsored unified Macedonia was one
manifestation of resurgent Balkan nationalism. At present, Yugoslavia
and Bulgaria would both like to expand their hold on Slavo-Macedonian
sympathy as well as domains.
This Yugoslav-Bulgarian rivalry over the Slavo-Macedonians does
not directly affect Greek Macedonia at present, although in the long run
the Macedonian issue will continue to threaten Greek territorial integrity.
At this )uucture the Kremlin's struggle against Yugoslavia has apparently
led to the de-emphasis of all operations against Greece. Moreover, a
considerable part of the Greek Slavo -Macedonian population remains
either apathetic or passively oriented toward Athens, although many Slavo-
Macedonians from Greece have been drawn into conflicting pro-Tito and
pro-Buglarian camps. Another limiting factor to date has been the Greek
guerrilla movement. Cooperation between the Greek guerrillas and Slavo-
Macedonian nationalists has never been good, and the relationship was
further complicated in 1949, when the Cominform (in a move aimed pri-
marily at Tito) precipitously issued a dictum favoring an independent
Macedonia which would apparently have included some Greek territory.
Although the Greek Communists were later relieved by the Kremlin from
outright support of such a policy, the raising ct the issue tended to weaken
the pro-Cominform loyalty of the nationalist element among the guerrillas.
For this reason, and because of possible latent pro-Tito sympathy in the
guerrilla rank and file, it is doubtful that the Greek rebels could be effectively
employed by the Comia.orm in connection with the Macedonian question.
With the stakes as high as they are, Soviet-Yugoslav competition
for the support of the Slavo-Macedonians can be expected to become more
intense. Yugoslavia will be at a distinct advantage in this struggle. By
far the largest number of Slavo-.Macedonians are in Yugoslavia, and the
majority of these are probably resigned to their status as members of a
Yugoslav Federated Republic. Yugoslavia's appeal to Slavo-Macedonians
in Greece is perhaps stronger than that of Bulgaria or the Greek Commun-
ists, the latter are unwilling to satisfy Slavo-Macedonian demands, while
Bulgaria's treatment of Slavo-Macedonians has been less favorable than
that of Yugoslavia. Moreover, the Yugoslav appeal may be strong for a
sizable group of the Macedonian population in Bulgaria, which is chafing
under Soviet domination and may believe that prospects for some degree
of Macedonian autonomy are greater under Yugoslav than under Kremlin
rule.
Nevertheless, the Macedonian question provides the USSR with
one of its few opportunities for exerting some pressure on Tito's posi-
tion in Yugoslavia, and in view of the Kremlin's failure to overthrow
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Tito by other means, Moscow may be tempted to use Macedonian aspira-
t ons as a pretext for launching guerrilla operations against Yugoslavia
from Bulgaria and Albania. There are increasing indications that guer-
rillas are being trained (presumably for such a purpose) in Bulgaria.
and even in Hungary and that Tito is also training guerrillas, possibly
in preparation for retaliatory apera?tions in Bulgarian Macedonia. Tito's
apparently strong military and political position in Yugoslav Macedonia
would serve to limit the effectiveness of Coninform-sponsored guerrilla
raids in the area except in conjunction with large-scale military opera-
tions. At the present stage of the Tito-Comtinform struggle such large-
Seale military activity against Tito is considered unlikely. Nevertheless
the danger remains that guerrilla operations might progressively become
so intense as to lead to large-scale fighting with serious international
im1lications.
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