CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A002600580001-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: December 15, 2016
• Document Release Date: November 18, 2002
• Sequence Number: 1
• Publication Date: August 5, 1956
• Content Type: REPORT

20(73t0'I/2~"CiA=Ri7P79T~Q~75~
5 August 1956
Copy No. ~ ~) 5 k J
CURRENT
INTELLIGENCE
BULLETIN
DOCUMENT NO. '-
1 i DECLASSIFIED
CLASS. CHANGED TO: TS S C
N[XT REVIEW DATE:
AUTf ~ H
DATE, ~ REVIEWER: C
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
~'/ State Dept. review completed
~//~
TOP SECREfi
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CONTENTS
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20 PEIPiNG COMMENTS ON TROOP MOVES IN BURMA
BORDER AREA
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3. YUGOSLAVS ACCEPT LARGE SOVIET-EAST GERMAN
ALUMINUM DEVELOPMENT LOAN
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5o NEPALESE PRIME MINISTER REQUESTS AMERICAN
INDUSTRIAL ASSISTANCE
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6 o BRITISH URGING NEUTRALITY FOR LAOS
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7. SOVIET MID-YEAR PLAN FULFILLMENT
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5Aug56
Current Intelligence Bulletin
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20 PEIPING COMMENTS ON TROOP MOVES IN BURMA
BORDER AREA
paign without retreating from the unyielding position the
Chinese have taken on the Sino-Burmese border question.
Peiping's first statement about the
alleged Communist military intrusion
in the disputed Sino-Burmese border
area is clearly an attempt to minimize
damage to the Communist peace cam-
In a broadcast of 3 August9 the authorita-
tive "Observer" of People's Daily dismisses newspaper re-
ports that Chinese troops have occupied Burmese territory
as "groundless" and "absurda' "The American propaganda
machine" is accused of exploiting the situation in an attempt
to draw Burma into SEATO and create tension between. Burma
.and Communist Chinao
Peiping tacitly admits the presence of
some Chinese troops in the disputed .territory along unde-
marcated portions of the -Sino-Burmese border but claims
that their mission is to "preserve the status quo" until bound-
ary questions can be settled by diplomatic means through
"peaceful consultations and negotiationso'
Since 1954, Communist China has brusquely
parried repeated Burmese efforts to obtain a negotiated settle-
ments Peiping's statement suggests the Communists plan to
keep their new military outposts in place along the disputed
border in order to strengthen Chinese territorial claims.
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3. YUGOSLAVS ACCEPT LARGE SOVIET-EAST GERMAN
ALUMINUM DEVELOPMENT LOAN
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Under an agreement signed in .Moscow
and announced on 3 August, the USSR
and East Germany have granted Yugo-
slavia an immediate long term credit of 700,000,000 rubles
($175,000,000) for the development of a .Yugoslav aluminum
project, including necessary hydroelectric power facilities.
This agreement is to .finance construction of facilities with
an annual production of 50,000 tons. A future credit for
doubling this capacity has been promised.
East. Germany and the USSR are each to
give an equal share of the present credit, but part of the
Soviet share is apparently to be in the form of wheat deliv-
erieso The Yugoslavs will sell the wheat internally to meet
the construction costs of the project. All the credits are to
be repaid by aluminum exports, which are to start not later
than 1961.
Comment Since mid-June, Belgrade has insisted it
was looking for Western financing for both
power and aluminum production facilities. As recently as 14
July it publicly reiterated its desire for West European foreign.
exchange credits and American wheat on credit for local cur-
rency needs.
Previous Soviet bloc credits accepted by
Yugoslavia totaled $2899000,000. This newest credit will
help. satisfy: Soviet aluminum needs and Yugoslav wheat needs.
The -USSR may have to help finance at least
part of East Germany's share of the credit. .This credit may be
considered by the Yugoslavs as payment of the East German war
reparations. -The Yugoslavs may have informally promised dip-
lomatic -recognition of East Germany in the near future as a
.quid pro quo? despite the fact that Tito told the West Germans
onl three weeks a o that his " resent" policy was not to do so.
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5.. NEPALESE PRIME MINISTER REQUESTS .AMERICAN
INDUSTRIAL ASSISTANCE
The Nepalese prime minister informed
the acting director of the American ICA
mission in Katmandu on 30 July of his
cabinet's strong feeling that a program of
industrial development in .Nepal must have
riority for fiscal year 1957. The prime minister
stated that Nepal needed certain machinery, foreign commodi-
ties., and other industrial equipment and technical aid which
India could not furnish Indicating that the development pro-
gram must begin immediately if free government is to survive
in .Nepal, the prime minister clearly implied that if the United
States could not provide the necessary materials, Katmandu
must "reluctantly" accept Communist assistanceo The prime
minister -also implied that the United States should aid .Nepal.
despite Indian efforts to minimize American influence in that
country o
Comment Nepal recently agreed to establish diplo-
matic relations with Communist China anal
the USSR, and has received offers of aid from both countries.
India is jealous of its dominant position in .Nepal and would be
uneasy over a material increase in American aid to that coup-
try.
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6. BRITISH URGING NE UTR.ALITY FOR LAOS
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The British..Foreign Office has re-
iteratect to the American embassy
in London its belief that Laos will
inevitably become neutral, and has
u the time is ripe to solicit from Laotian
premier ~Souvanna .Phouma a "favorable" foreign policy
statement confirming Laotian neutrality. This statement
would declare .Laotian .neutrality, a .foreign policy based
on the "five principles of Pandit Nehru;' and the intention
to defend .Laotian independence against any threat.
Comment The British evidently have been press-
ing these views on Souvanna Phouma
for some .time, :The measure of their success is indicated
by the closeness with which the premier has followed the
British line in his current negotiations with the Pathet Lao.
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7, SOVIET MID-YEAR PLAN FULFILLMENT
growth rate of the last three years and exceeded the plan by
two percent. Targets for principal producer and consumer
goods were met or almost met, and data on the production of
specific commodities suggest a slight yet noticeable shift in
favor of consumer goods o Increases in sown acreage and in
deliveries of machinery and fertilizer to agriculture, coupled
with continuing good weather, presage a good harvest this .fall.
Labor productivity increased to the planned degree in both in-
dustry (eight percent) and construction (10 percent) o
The report on plan fulfillment for the
first half of 1956 shows that the .Soviet
economy is off to a good start on the
Sixth Five.-Year Plan. Industrial pro-
duction maintained the 12 percent annual
The volume of state investments during the
half year, although 10 percent greater than in the correspond-
ing ,period of 1955, represented only 86 percent of the plan.
This performance is attributable primarily to chronic construc-
tion difficulties and secondarily to shortfalls in the production
of equipment, and, if not corrected, ma com lirate fulfillment
of Five-Year Flan production targets.
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