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November 9, 2016
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January 29, 1999
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August 22, 1950
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Approved For Rese 1999/09/02 CIA-RDP79-01QMA000300020004-3 22 August 1950 SUMMIES OF TRENDS AND DEVELOPMENTS USSR 1. he Soviet obiect3.vfa, in Ingo-Chinais to elim .hate Western influence and to extend the control of the pro-SSoviet regime over all of Vat~Nam. Even failing this, it is to Soviet advantage to have French troops heavily committed in Indo-Chinas thus hampering the stabilization of the French economy and European defense plans. To achieve this goal, wholly or partially, the Ho forces are expected to launch an offensive against one or more ixaportant French Viet Namese positions in the near futures aided by covert Chinese Communist equipment, arms, training.. and advisors, (Page 5 ) 2. i_at revision of SC records softenitna the USSR's r2Ao1 s Po sit-on that the Korean roblem and Chinese Communist rems2cal,, .t iron in the UN are 'rinse -oa:rablk " is as fiur?ther indien,-- t? or that to e` USSR is t to obta.injy cater freedom of action in dea'.i ~~rithtthe Korean issue. By disentangling itself from a comtni tmcnt to obtain a seat in the UN for Chinese Communists before agreeing to a settlement of Korean issue,, the USSR would be free to agree to a negotiated settlement at the moment most advantageous to its own interests. (Page 6 ) 3. Wliilc~ recent Soviet actions could foreshadow a ofsys+e tie encroachment on Austria fs aglitticaI sover- eir~, yy they may welly be nothing more than probing actions in the Soviet Union's continuous war of nerves against the Austrian Government, (Page 7 ) as rHN Approved For Release 1999/09/02 : CIA-RDP79-01090A000300020004-3 Approved For Re dse 1999/09/02 : CIA-RDP79-01 QWA000300020004-3 co 40 The vast_ potash deposits of the Sovzone of Germany have -provided the USSR with one of its stropgest,bar Innir media in international trade, (Page 8 ) 5a The USSRhas for some time boon rebuilding and pyro pr 1 , the direct transport .tion facilities from Moscow to . .`w__...- Smolensk MinskErest~ (Page 9 ) 6?,l ~hu?li,lre iinno confirmation re ag Ldinthe rlamorc d visits of "ire- t ?emier Molotov -be Pekin, ,the various rc or ou movements, of Soviet and Chinese officials concerned with i.itical as well as mllitaY _af 'airs indicate that the USSR maybe conducti hh-level can f renoes in Perking and Miakden, In this event, conversations probably canter on a x^e-evaluation of overall policy to accommodate the changed situation developing from US action in Korea and Formosa, and discussion of Soviet support to the Chinese Communists whose plans for the attack on Formosa wore probably blocked by, the initiation of hostilities in Bc rea? However, lacking firm information, any estimate re- gnrcling the holding of cionforencea and discussions therein$ is wholly spectLlative0 EASTERN EUROPE GENERAL. 7A Hunger and_Poland have submitted to ECE lists of industrial machine available fore port, which is interpreted as largely a~maneuver to discourage parallel export control action. (Page 10 ) COENTIAL Approved For Release 1999/09/02 : CIA-RDP79-0109OA000300020004-3 Approved For Remise 1999/09/02 : CIA-RDP79-01 G 0A000300020004-3 gULG4LTA 8. B l riats ddemand that Turkey roj?triate 2 0,000 Btrlgariara city ens of Turkish origin is, yrobablypr Ma , de. s,~nec b embarasTur, k through inability to comply with conditions set out in the Bulgarian note. At the same .time, the move will enable Bulgaria to increase the rate of removal of this.dissident and potentially dangerous minority. (Page 11 9.h~ ,Ttze domcs,zc trdedeoree is beingn ei ented in j"ao7 a with the expansion of free trade facilities and In- creased supplies of industrial consumerst goods to rural areas. The latter is particularly emphasized for the purpose of elicit-. ing larger and quicker deliveries of cereals from the peasants. HUNGARY 10, Eugene Varga. the USSRs famouseepnosit~wha has 2~0rs visiting in Fluff ~xo_e ince Junes is rc~ ~e ted to have bocoma an in stant econan~ic ar lrisor to the Hun Tian Govern- monk, ?Of Hiungarian origins ho served as Minister of Economics in the abortive Bela Kun regimen and in 1919 escaped to the USSR. After World War TIC Varga became the central figure in a much publicized controversy revolving around certain: of his unorthodox views; he was forced to recant in 1949 and was given the comparatively minor task of working on a plan to introduce scientific techniques into the economy. If he is now., in fact, serving as an economic advisor to the H ngarian Government, it would appear as a combination of circumstances: (1) Varga had lost much prestige and was no longer permitted freedom in his field; (2) Hungary -3_ Approved For Release 1999/09/02 : CIA-RDP79-0109OA000300020004-3 Approved For Re lse 1999/09/02 : CIA-RDP79-01 QWA000300020004-3 badly needed experienced economists; (3) Varga, now 70 and aware of his insecure position in the USSR, was probably content to spend his remaining days in his native country as a relatively inconspicuous advisor. 114 Si? .Qa' ~Qx~. th4aLe of Bishops, into aceep;ti s, version o f a Church- tat a. ree-- ment ma _, compel the iun arian Government to stage another Mird;gent ty trial? Since May, Bishop Petory has been under constant attack in the press, and recently the Hungarian National Peace Council demanded that the Government "put an end most urgently to the Bishop's activities," Accused of being a fascist, an agent of the imperialists, and an enemy of the people, Petory is be .ng s?h ectod to the same kind of propaganda preparation which led to Mndszenty's arrest and trial, ?Petory is not alone among the Bishops in his recalcitrance, therefore the reason for singling him out for special berating may be that his national reputation would make him a more effective scapegoat than the less well-known Bishops., The throats against Potery, may, in themselves serve the Govern- a lent 's purpose of bringing the Church to terms,, although in view of their continued stubborn opposition, it seems likely that further pressure must be brought to bear before the Bishops are completely b roken. 12" Rmiors that osl~zv and?Sovietomissarics met to seek r ppra h mc'nt tn late uoyorearly Aumst are pro-- fabrication. Not only is evidence to support them lacking but the disadvantages of such an agreement would tend to militate against its occurrence. - 4 (Page 12 ) Approved For Release 1999/09/02 : CIA-RDP79-0109OA000300020004-3 ' Approved For Refee se 1999/09/02 : CIA-RDP79-010VA000300020004-3 Soviet-Communist Plans for VietNam offensive The Soviet objective in Indo-China is to eliminate Western influence and to extend the control of the pro--Soviet regime over all of Viet Nam. Even failing this, it is to Soviet advantage to have French troops heavily committed in Indo-China, thus hampering the stabilization of the French economy and European defense plans. To achieve this goal, wholly or partially, the He forces are expected to launch an offensive against one or more important French Viet Namese positions in the near future aided by covert Chinese Communist equipment, arms, training and advisers. Simultaneously, increased terrorism and propaganda in the Frenoh- Viet Nam cities will attempt to intimidate and/or persuade Viet Natese and overseas Chinese of the advisability of siding with the Vet Minh and of the inevitability of a "democratic"' victory. In addition, sabotage of French depots and US arms aids now arriving in Viet Nam9 can be anticipated. Soviet aid and advice for this move has' been delivered primarily through the Soviet Legation at Bangkok and through the Chinese Communists. It is probable that the Soviet Legation at Bangkok has provided funds and advice to the Viet Minh. The French Far Eastern Command has reported that Soviet advisors and technicians are actually with Viet Minh forces, Soviet military personnel in South China and Hainan are reported to be supervising Chinese Communist aid to Viet Minh forces as well as joint preparations for the fall offensivem, Closer Chinese Communist-Viet Minh cooperation apparently dates from early 1950, when Ho Chi-minh was recog- nized by the Peiping regime and the USSR. Recently Chinese Communist aid to the Viet Minh is reported to have been greatly increased. Arms and equipment, and probably advisers and technicians, have been sent from South China and Hainan,. Roads, air bases) and training camps have been constructed or repaired in China near the border. Between 10,000 and 20,000 Viet Minh troops have been trained and equipped in China and some have 5 - Approved For Release 1999/09/02 : CIA-RDP79-0109OA000300020004-3 ? Approved For Ruse 1999/09/02 : CIA-RDP79-01QDOA000300020004-3 apparently engaged in joint operations with Chinese Communist units against anti-Communist guerrillas in China, The Ho radio has increasingly stressed the role of Viet Nemeso Chinese in the "liberation movement." Recently it announced a conference to unify the combat forces of various Chinese organizations in South Viet Nam and emphasized the directive of the Peiping Government to all overseas Chinose to cooperate in the "fight for the liberation" of countries in which they reside. These moves are probably designed to prepare public opinion for Chinese Communist-Viet Minh cooperation, as well as to pressure overseas Chinese into supporting the He regiz:lo Despite Chinese Communist propaganda hints that an excuse for "defensive action" against the French may be sought open entry of Chinese Communist forces into Viet Nam is not expected for several reasons. First, the USST. apparent- ly is desirous of keeping Communist actions localized at this time, While a Viet Minh offensive would probably not result in an extension of warfare beyond Indo-China, where fighting has been contin;aing for several years, the overt participation of Chinese Communist troops might have widespread repercussions which would not be sufficiently counterbalanced by the more rapid Communist conquest of Viet Nara than the Viet Minh could accomplish with clandestine and d sguised aid, Second, the Chinese Communists are-already committed to two military tasks (Taiwan and Tibet) and, in addition, the internal security situation would discourage the Peiping regime from dispatching troops to non-Chinese territory, Finally., the Viet Nameso generally dislike and suspect all Chinese, and the Ho regime would be handicapped by open alliance and support of Chinese Connunist troops in Viet Nam, (SECRET) M~.1;3.k I~, Sc~v?.et x~osition far Socur%ta _,Council reword' Soviet UN Delegate MalikTs recent efforts to -6- Approved For Release 1999/09/02 : CIA-RDP79-0109OA000300020004-3 Approved For Rose 1999/09/02 : CIA-RDP79-01`61 OA000300020004-3 revise the records of the SC suggests that the USSR is softening its previous position that the Korean problem and Chinese Commun- ist representation in the UN are "inseparable." On 10 August Malik revised the SO records so that his earlier statements in the SC with respect to the "close and indissoluble" connection between representation of China and the peaceful settlement of the Korean question were amended to read that these two issues are "connected questions," Previously, the USSR had consistently maintained that Commanist China must be represented in the SC before any action could be taken on the Korean question, and in his reply to the Nehru proposal Stalin made it clear that the USSR considered the participation of Communist China in the UN "obligatory" for a settlement of the Korean issue. Malik?s revision of the SC records is a further indication that the USSR is trying to obtain greater freedom of action in dealing with the Korean issue, By disentangling itself from a comni-tnent to obtain a seat in the UN for the Chinese Communists before agreeing to a settlement of the Korean issue, the USSR would be free to agree to a negotiated settlement at the moment most advantageous to its own interests. Because the voluntary Soviet return to the SC with- out the prior admission of Communist China has lessened the urgency of this problem, the USSR must now realize that the ad- mission of Communist China will probably have to await a settle- ment of the Korean issue.. The USSR may hope, however, by separating the two issues, to utilize more effectively the problem of Chinese representation as a wedge to divide the non-Communist world when the Korean issue has been solved. (SECRET) Recent Soviet actions in Austria "B" Soviet officials in Austria have recently made demands which,, if implemented, would encroach onAustrials political autonomy. The Provincial Government of Lower Austria Approved For Release 1999/09/02 : CIA-RDP79-0109OA000300020004-3 Aplroved For Re se 1999/09/02 : CIA-RDP79-01 NWA000300020004-3 has boon notified by the Soviet Cor,zaandor of the province that henceforth a Soviet observer will attend all Provincial Cabinet sessions. The Provincial Government has replied that such action would violate the Austrian Constitution and the Allied Control Agreement, and that the appearance of a Soviet observer at any session would result in immediate dissolution of the meeting. The local Soviet Coriiander of Wiener Neustadt9 who recently prevented the execution of a court order against a Cor..nuaaistp has notified the court that- he would soon issue a list of Austrian laws which could be executed without prior Soviet approval, The execution of all other laws would apparently re- quire prior approval. Soviet officials have consistently refused to honor Austrian court orders to evict Coriunists who illegally occupy ape ri gents and other housing,, but this is the first time that a Soviet official has assumed the right, of direct control of a court in its execution of all Austrian laws. The Austrian Government has decided to convene a special Parlianentary pro- test session if the Soviet authorities attempt to implement either of those announced intentions. 'W'hile those actions could foreshadow a Soviet policy of systematic encroachment on Austriats political sover- eignuy9 they nay well be nothing more than probing actions in the Soviet Unionts continuous war of nerves against the Austrian Govu nnent, The USSR has, in the past, retreated from similar demands which encountered vigorous reaction on the part of the Austrian Government. (SECRET) USSR a?lo to ng East German po .h. in international trade The vast potash deposits of the Sovzono of Germany, with an estimated 19200,000 tons annual production, have given the Soviet Union with its own production of 4009000 tons control of nearly 45 percent of the worldIs output of this important fertilizer and provided the ITS M with one of its strongest bargairn- ing media in international trade. The present Soviet policy is to SECRET Approved For Release 1999/09/02 : CIA-RDP79-0109OA000300020004-3 Approved For Re s se 1999/09/02 : CIA-RDP79-01 WA000300020004-3 SECRET derive every possible immediate advantage from this favorable export position without regard for future economical working of the deposits, Soviet influence in the potash trade is shown in several instances. Through sales in Canada and the USy normally supplied by US producers,1the double purpose of breaking existing prices and also obtaining US dollars without regard to production costs has been achieved, The normal potash markets in the U.K. have boon disrupted by prolonged negotiations over terms of sale and delay in shipping. Soviet relations with Dutch and Belgian interests have been more cordial and, by barter arrangements, materials which are in critically low supply in the Sovzono, have been obtainod, The potash mines and processing plants are being exploited at the maximum possible rate with no attempt being made to modernize ae rehabilitate the installations and, as a consequence, production is already on the decline. This may be simply another example of short-sighted production policy, but it may have a more sinister explanation. In the event of total war mobil,&t.ony potash production would be curtailed appreciably, as it was during World War II, in order to divert the manpower into more direct war use and to conserve the large quantities of coal used by the potash plants, (SECRET) U SIt 1 npre!es Moscow-Minsk-Warsaw line The USSR has for some time been rebuilding and prcp,,ring the rail, highway, and air transportation facilities along the Moscow-Smolonol-Minsk-Brest Warsaw route. "B" The construction of many airfields along this route has been reliably reported and an American observer in mid-May noticed fairly large numbers of air force personnel travelling or waiting in stations between Moscow and Brest. The improvement of the Moscow-Smolensk;Minsk high- way, one of the very few first class Soviet highways, is now SECRET Approved For Release 1999/09/02 : CIA-RDP79-0109OA000300020004-3 Approved For Retfse 1999/09/02 : CIA-RDP79-010VA000300020004-3 being extended from Minsk. Railroad service has also been improved, and the trans--loading yard at Brost is one of the largest in the USSR, New station facilities are being constructed, notably at Smolensk, and the roadbed is being improved, An American traveler in May of this year reported a smooth ride. This is unusual in the USSR and probably is a result of strengthening the roadbed to support hoavy.loads, (SECRET) EASTERN EUROPE GENERAL H ,a.rian,_ ,nd Polish d ata subi ,teed to ECE nB11 in manuy2K toforestall stricter effort control Hungary and Poland have reported to the Industry and Materials Division of the UN Economic tbmmission for Europe, a wide variety of engineering products available for export to Western Europe, Motors, machine tools, steam locomotives, and combine harvesters, same of which are now being exported in limited quantities are among the items listed. In furnishing the lists, the Communists follow their usual practice of with- holding any data of value - prices, quantities and delivery dates, The Industries and Materials Committee of ECE has always received strong Communist support because the Kremlin considers it a vehicle for undermining the influence of OEEC and EGA. These lists were probably also submitted with a view to confusing Western export control negotiations and to provide a propaganda device. Proclaiming the ability to export industrial items which appear to fall within the "strategic commodityo categories would substantiate: (1) the Orbit con- tention that it is Western not Eastern Europe which is dependent Approved For Release 1999/09/02 : CIA-RDP79-01090A000300020004-3 Approved For Ret se 1999/09/02 : CIA-RDP79-010WA000300020004-3 upon East-West European trade, and (2) Communist claims that export controls are useless and may as well. be abandoned. In spite of the impressiveness of the products itemized, there has boon no easing of. Orbit effort to acquire similar categories of commodities from Western Europe. (SEOIIET) BULGARIA Btilgt2ri, demands xeriation of m.noriy~o Tore Constant bickering on the propaganda and diplomatic fronts between Bulgaria and Turkey, featuring charges and denials of Crnmminist maltreatment of the Turkish 700,000 racial minority in Bulgaria, has culminated in a Bulgarian note demanding that Turkey repatriate 250,000 of its former citizens within the next three months. During the past two years Bulgaria has issued passports to, and the Turks have admitted, at least 15,000' Bulgarian citizens of Turkish origin. At the present time, Turkey is admitting about 600 per week. Inasmuch as a Bulgarian condition of immigration is the confiscation of all property, even the present influx is taxing Turkish resettlement facili- ties. The new Bulgarian demand would raise the number to approximately 20,000 per week. The Bulgarian note is an admission that the Communists have found the Bulgarian Turks increasingly rocal- citrant. Although the urgency implied by the Bulgarian note might indicate that the Kremlin contemplates Bulgarian aggres- s'ion' in which event the large and homogeneous Turkish minority would present a major control problem, it is more likely that this is a Soviet maneuver to embarrass the Turkish Government by Turkey's inability to comply within the time set. Although Turkey is anxious to repatriate its racial. minorities in Communist controlled territory,, literal compliance with the demand within the time wt will probably Approved For Release 1999/09/02 : CIA-RDP79-0109OA000300020004-3 Approved For ReIe se 1999/09/02 : CIA-RDP79-010 A000300020004-3 SECRET be impossible. The fact that all such immigrants will be com- pletely indigent and that Bulgaria will attempt to infiltrate the group with Communist agents will necessitate time-consuming resettlement arrangements and minute individual screening. The expense involved will be a significant drain on Turkish economy. Ample justification can be found in this Bulgarian maneuver for a further strengthening of charges of violation of human rights. Bulgaria cites as authority for the demands a Bulgar-Turkish Convention of 1925 covering the rights of nationals of each of the two countries resident in the other. However, Bulgaria has always treated these ethnic Turks as Bulgarian citizens, This mandatory mass emigration and confis- cation of property constitute violations of fundamental human rights, if Bulgaria is now contending, as it would appear, that these Turks are Turkish nationals, Bulgaria has denied to them the privileges and rights provided for such nationals by the Convention. (SECRET) Rumors of yTito?-Krwomlin r proohemcnt discounted "An Despite persistent rumors emanating from various European capitals that Yugoslav and Soviet emissaries met in late July or early August to seek a rapprochement, there is little ground for believing that such a rapprochement is pos- sible. The original. sources of the rumors axe tenuous and the best efforts of US observers to confirm thorn have been unavailing. Moreover, the logic of the situation is against such a reconciliation, Although Yugoslav loaders are concern- ed about Soviet menaces in Yu.goslaviats present plight, the Yugoslav hierarchy must be well aware that the only conditions acceptable to the Kremlin would lead to their capitulation and eventual elimination, It is doubtful if even the imminent threat of Soviet aggression would prompt Tito to this course of action. For its part, the Kremlin would find a volte-face on Yugoslavia extremely difficult to execute, in view of Soviet Approved For Release 1999/09/02 : CIA-RDP79-0109OA000300020004-3 Approved For Rir ase 1999/09/02 : CIA-RDP79-014WOA000300020004-3 C0% pressures on Tito during-the. past two years. Moreover, at the present period of crisis, when the lines are being more clearly drawn between the East and West, the Kremlin could ill afford to allow Satellite Communists in Europe and Asia to assume that the Kremlin might countenance an equality among sovereign Com- munist states, such as a rapprochement with Tito would signify. Any indication that Tito had succeeded in effecting a roconcilia- Lion, however uneasy, would undermine the Kremlints point that the Soviet Union will not countenance the least opposition within its orbit. Thus it would appear that the rumors are fabrica- tion, They may have been spread bys (1) Soviet agents in order to doter the US and other Western powers from bolstering Tito's economy at a critical stago, (2) Greek representatives attempting to guarantee a steady flow of US aid to Greece by raising the specter of a Yugoslav Soviet combination, or (3) anti-Communist Yugoslavs in an effort to weaken the Tito regime and thus perhaps strengthen their own position. (SECRET) -13- COI~NTIAL Approved For Release 1999/09/02 : CIA-RDP79-0109OA000300020004-3