BURMA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00890A000700070020-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 5
• Document Creation Date: December 15, 2016
• Document Release Date: August 5, 2003
• Sequence Number: 20
• Publication Date: July 10, 1956
• Content Type: BRIEF

25X1 I I Approved For Re
NSC BRIEFING 10 July 1956
BURMA
1. Within recent weeks we have been getting the first reports
that the Sino-Soviet promotion campaign in South and Southeast Asia
is running into some difficulties.
A. These troubles have appeared in India, Afghanistan,
Indonesia and Burma.
B. But it is Burma--which was to be the shining showcase
of "coexistence"--that provides the most interesting case in point.
2.' Burmese leaders were deeply impressed by Moscow's and Peiping's
pledges of non-aggression and non-interference in Burmese internal
affairs. They felt their problems with the domestic Communist threat
were soon to end and that their territorial integrity had been assured.
A. They were badly jolted, however, during the April elections,
when it became obvious the opposition National United Front, a
pro-Communist coalition, was being heavily subsidized by the Soviet
and Chinese embassies.
B. It is now pretty well accepted that U Nu resigned as premier
in disillusionment over this meddling and was the author of an
"anonymous" letter to a. local newspaper which specifically set
forth such charges.
3. Nu and other Burmese officials are also said to be greatly
disturbed by the anti-government activities of returned Burmese
visitors to the Bloc.
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A. These returnees (who have gone to the Soviet Union and
China in groups or as individuals) include trade unionists,
youth leaders, educators, women's organizations, and a variety
of cultural and professional representatives.
B. They have apparently been profoundly impressed by what
they were shown during their visits and, once back in Burma,
many have worked assiduously against the government.
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6. In the "mutually beneficial" field of economic exchange,
Burmese-Bloc relations have also soured. The Burmese are finding that
barter trade with the Bloc--which they expected to wash out their
staggering rice surplus--is not the panacea they thought.
A. The country badly needs anti-infla.tionay consumer goods
and the Burmese are complaining of excessive Bloc red tape,
lack of information on what is available, the uncertainty of
delivery dates, and poor quality.
B. These problems, and the failure thusfar to conclude any
major agreements for capital goods purchases, have resulted in
the accrual of large unexpended credits--perhaps as much as
$ 50,000,000.
C. U Nu himself, under whose regime the barter deals with the
Bloc were promoted, openly criticized such pacts in a May press
conference. He said "a ma.n would be crazy to barter rice when he
could sell it for cash." He charged the Communists had jacked
prices to the point Burma suffered a 20 to 30% price disadvantage,
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and vowed to end such trade as soon as he could.
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D. On the other side of the fence,
the Poles and Czechs are critical of the poor
quality of Burmese rice and long delays in the loading of their
ships. Furthermore, the Poles complained that the Burmese are
setting unreasonably high quality standards for Polish manufactured
goods.
X. Finally, as a, quite expressive example of the Burmese
attitude toward trade prospects with Communist countries, a. high- 25X1
level Burmese bade mission now travellin in Europe deleted all
Communist countries from its itinerary
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7. This increasing Burmese discontent with its Orbit relationships,
however, cannot be expected to lead to any early abandonment of its
neutral foreign polioy.
A. In view of the very sizable credits they have already
accumulated, the Burmese cannot disengage from .ice barter arrange-
ments overnight--even if they find new cash markets for their rice.
B. The Soviets have promised some eye-catching construction
in Rangoon such as a hospital, a sports center complete with stadium,
and a technological institute whose proposed size "staggered" the
Burmese. Apparently, Moscow is giving priority to these projects
and, when completed, they should make a favorable impact in a
small city like Rangoon.
C. Communist leaders are certainly aware of the frictions
that have arisen and can be expected to take carrective steps.
8. But the initial momentum of the Sino-Soviet offensive in
Burma has been lost and the Ba mese will be far more sophisticated in
their future dealings with the Communists. They have already shown
noticeably greater interest in US aid--last week Ba Swe publicly voiced
hopes that an agreement on an American assistance program might soon
be reached.
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