COMMUNIST AID AND TRADE ACTIVITIES IN LESS DEVELOPED COUNTRIES, AUGUST 1975

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01098A000600080002-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: November 16, 2016
• Document Release Date: February 28, 2000
• Sequence Number: 2
• Publication Date: September 1, 1975
• Content Type: REPORT

Approved for. Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 Secret
No Foreign Dissent
Communist Aid and Trade Activities in Less
Developed Countries, August 1975
Secret
ER RP 75-29
September 1975
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Ciessified by 015319
Exempt from general declassification schedule
of E.O. 11652, exemption category:
45B(1), (2). and (3)
Automatically declassified on:
Date Impossible to Determine
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No Foreign Disaem
CONTENTS AND SUMMARY OF EVENTS
(August 1975)
Highlights
? The USSR apparently signed a contract to design a steel plant in Nigeria.
? The USSR suffered a setback when Damascus announced that Soviet oil
exploration personnel will be replaced with technicians from the West.
? Romania moved to cement relations with Egypt and Iran through
protocols to implement a number of large development projects.
Page
Continuing Communist Tank Deliveries to Libya . . . . . . . . . . . . . . 1
25X1 B
Poland and the USSR delivered ^ medium tanks to Tripoli in August.
USSR Signs Contracts on Steel Mill in Nigeria . . . . . . . . . . . . . . . . 1
The USSR reportedly signed a contract to design a 1.5 million metric ton
steel complex in Nigeria, under study since 1967.
East Asia
Czech Maintenance Support to Indonesian Air Force . . . . . . . . . . . . I
A Czech maintenance team is in Indonesia supervising the overhaul of
L-29 jet trainers 25X1 B
Latin America
Mexico Signs Cooperation Agreement with CEMA . . . . . . . . . . . . . . 2
In August, Mexico signed a general cooperation agreement with the
Council for Mutual Economic Assistance, similar to the pact signed by Iraq
last month.
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Page
Deliveries Under Soviet-Peruvian Military Contracts
Nearly Complete . .
Moscow has largely completed equipment deliveries
Bangladesh To Repay Soviet Wheat Loan . . . . . . . . . . . . . . . . . 3
Bangladesh plans to buy 40,000 tons of wheat on Western markets this
year as a first payment on a Soviet wheat loan.
Romania Expands Ties with Egypt and Iran . . . . . . . . . . . . . . . . 3
Romania signed protocols in August to implement a number of large
development projects in Egypt and Iran, two of its maj ~ it aid recipients.
Iraq Receives Further Soviet Aircraft Deliveries . . . . . . . . . . . . . . . 5
The arrival ofMMIG-23 jet Lighters in Au ust brings the number of
MIG-23s in the Iraqi air force to
Kuwait Military Negotiations with the USSR . . . . . . . . .
Official Kuwaiti sources denied reports that th.- USSR has refused to
supply arms to Kuwait.
First Soviet Petya Class Destroyer Escort to Syria . . . . . . . . . . . . .
On 25 July, Syria received a Petya 11 class destroyer, now the largest
combatant in the Syrian inventory.
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Page
Syria To End Soviet Petroleum Activity . . . . . . . . . . . . . . . . . . .
Syria's oil minister announced in mid-August that Soviet oil exploration
activities will be terminated in favor of Western-type concession arrange-
ments.
Other Activities
Economic .................................. 6
Military ................................... 9
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No Foreign Dissem
COMMUNIST AID AND TRADE ACTIVITIES
IN LESS DEVELOPED COUNTRIES
August !.975
Af rica
Continuing Communist Tank Deliveries to Libya
25X1 B
Poland and the USSR delivered ^ medium tanks to Tripoli in August,
bringing the number of Communist medium tanks supplied to Libya since
1970 to more than 1,000. Although army units are believed to be using
only about 200 tanks, the Warsaw Pact countries are expected to deliver
an additional 1,000 tanks by mid-1977. (Secret No Foreign Dissem)
USSR Signs Contracts on Steel Mill in Nigeria
The USSR and Nigeria recently signed contracts for designs and
training facilities for a long-awaited 1.5 million ton steel complex at
Ajaokuta. In the planning stage since 1967, the project has encountered
long delays becaue of controversy over location and size and questionable
availability of raw materials. Current -total cost estimates for the plant,
including a large allocation for infrastructure, range as high as US $1.3
billion. (Secret No Foreign Dissem)
East Asia
Czech Maintenance Support to Indonesian Air Force
A. Czech maintenance team, in Indonesia since early this year, is
supervising the complete overhaul of L-29 jet trainers purchased by
Note: The substance of this publication has been coordinated with the
Bureau of Intelligence and Research of the Department of State, with the
Defense Intelligence Agency, and with the Agency for International
Development. Comments and queries regarding this publication are
welcomed. They may be directed to of the Office of
Economic Research, Code 143, Extension 5291.
September 1975
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Indonesia in 1964. All of Indonesia's L-29s are expected to be refurbished
25X1 B by year's end
akarta has made an
exception to its policy of not accepting military support from Communist
countries, because of the L-29s' importance to Indonesia's Air Force. The
Czech aircraft is the most advanced jet trainer in Indonesia's inventory.
(Secret No Foreign Dissem)
Latin America
Mexico Signs Cooperation Agreement with CEM.`k
On 13 August, Mexico signed a cooperation agreement with the
Council for Mutual Economic Assistance, calling for the establishment of
a joint commission to explore cooperation in oil. and natural gas. The
agreement appears to be general in nature and probably is similar to one
signed by Iraq last month. (For Official Use Only)
Deliveries Under Soviet-Peruvian Military Contracts
Nearly Complete
reviously delivered probably fulfills most of the contracts
P
During July and August, Moscow continued co fulfill its military
agreements with Peru and tried to interest Linea in additional arms
purchases. (Confidential No Foreign Dissem)
tracked artillery prime
Peru recently took delivery of
movers and 130-mm field guns, which along wiFn MlL T-55 tanks
Soviet and Peruvian technicians also
were assembling some of helicopters celivered under an April
contract. An estimated 30 Soviet military personnel were jr Peru at the
end of August. (Secret No Foreign Dissem)
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During a Peruvian naval delegation's recent visit to Moscow, the
USSR probably tried again to sell Osa class guided missile patrol boats and
has invited Peru's minister of the navy to Moscow to follow up these
conversations,. However, initial indications are that Peru will not purchase
these boats. The USSR hopes that Peru will accept its offer of MIG-21 jet
fighters, but Lima appears satisfied with the availability of Western
aircraft. (Secret No Foreign Dissem)
Near East and South Asia
Bangladesh To Repay Soviet Wheat Loan
Bangladesh will buy 40,000 tons of wheat on Western markets this
year to make its first payment on a 200,000-ton Soviet wheat loan.
According to the agreement the Soviet wheat, valued at $35 million when
it was shipped in 1973, is to be repaid in kind over five years beginning in
1975. Because of reduced world market prices for wheat, this year's
repayment to the USSR will cost less. Nevertheless, the repayment will
contribute additional strains on Dacca's already poor balance of payments.
(For Official Use Only)
Repayments to the USSR also raised questions about future US PL-
480 wheat deliveries to Bangladesh. Under existing regulations, the United
States cannot provide commodities under its PL-480 program to LDCs
that will export the same commodity during the year. However, PL-480
deliveries will be continued if Dacca buys the wheat in the United States
for direct shipment to the USSR. The United States already has allocated
450,000 tons of grain under the PL-480 program for Bangladesh in fiscal
1976. (For Official Use Only)
Romania Expands Ties with ttaand Iran
Romania signed a series of protocols in August to expand existing
economic relations with Egypt and [ran. The new accords underline
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Romania's drive to expand equipment markets in the Near East.About one-
half of Bucharest's $1.3 billion in Third World aid has been concentrated in
this area. (For Official Use Only)
A protocol with Cairo calls for a joint Romanian-Egyptian bank,
Romania's first such venture in the Third World. The bank, to be located in
Egypt, is capitalized at $25 million with 49% Romanian ownership. Under
Egyptian law, the bank will be permitted to conduct transactions in local
and foreign currencies. Industrial agreements signed at the same time
call for implementation of projects agreed to under earlier credits: soda
and sulfuric acid plants, the Hamrawein phosphate complex, a petrochem-
ical project, and an agricultural complex. Romania offered $100 million in
new development credits to be made available when the $125 million
worth of aid still outstanding under existing credits is drawn. (For Official
Use Only)
Romania signed agreements with Iran to provide cement plants,
bakeries, machine tool plants, and a sodium silicate plant. Technicians will
undertake feasibility studies for expanding a chemical plant at Shiraz,
electrification of the Bandar Abbas railroad, building an oil refinery and
petrochemical plant, and prefabricated housing projects. Aid to agricul-
ture also will be increased through the construction of grain silos and cold
storage facilities in Iran. (For Official Use Only)
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25X1 B
25X1 B
]raq Receives Further Soviet Aircraft Deliveries
25X1 B
MIG-23 Floggers and- MIG-
21s arrived at the Iraqi port of Umm Qasr in late August. This delivery
will bring the number of MIG-23s in the Iraqi air force to
The total number of MIG-21s now stands at
The shipment provides evidence that the USSR is honoring prior
military agreements with Iraq, despite the strains that have developed
between the two countries. (Secret)
Kuwait Military Negotiations with the USSR
Official Kuwaiti sources denied reports that the USSR refused to
supply arms to Kuwait during the August visit of a military delegation to
Moscow. Earlier this year, the Kuwa:Lt press reported a Soviet offer to
exchange military equipment for crude oil. (Unclassified)
First Soviet Petya Class Destroyer Escort to Syria
Syria apparently received a Petya II class destroyer escort from the
USSR on 25 July. The Petya becomes the largest combatant in the Syrian
inventory. Besides Syria, only India has received an export model of the
Petya II, armed with two twin 76.2.-mm gun mounts, two five-tube 21-inch
torpedo mounts, and two 16-barrel 200-mm ASW rocket launchers. It also
has a minelaying and depth-charge capability. (Secret)
Syria To End Soviet Petroleum Activity
Syria's oil minister announced in mid-August that Soviet oil explora-
tion activity has failed to meet expectations and that Damascus would
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terminate Soviet-assisted oil exploration in favor of Western-type
concession arrangements. (Unclassified)
Under recent concessions granted to Western -firms, Syria will repay
exploration and development expenses from product_Dn only if oil is found.
Under the Soviet program, Syria must pay for -)oviet equipment and
services even if the venture fails. Beyond the possible financial advan-
tages, however, Western technology is considered superior. (Unclassified)
Nonetheless, Soviet credits totaling $50 million, have been the major
support for establishing Syria's national oil industry, an industry that
currently produces about 160,000 barrels a day. (Lr.cAassified)
OTHER ACTIVITIES
Economic
Africa
Mozambique. East Germany signed an agreement on 13 August to
provide Mozambique with assistance in animal husbandry and other
agricultural projects. Like other Communist countries, East Germany has
moved quickly to provide aid to the new government. Prior to independ-
ence, East Germany offered $5 million in eco1^mic aid, possibly for
budget support, as well as aid for establishing a national police service.
(Secret No Foreign Dissem)
Nigeria. Nigeria is preparing to negotiate contracts with Poland for
the expansion of shipyard facilities at Apapa. Po"ish technicians appar-
ently completed studies for the expansion earlw in 1975. (Secret No
Foreign Dissem)
Somalia. A Somalian fishing industry official was in Moscow during
August to negotiate implementation of fisheries _;rojects under a recent
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$60 million Soviet credit to Somalia. (Unclassified)
Sudan. Sudan announced in August that a Bulgarian delegation is
expected soon in Khartoum to sign a $20 million credit agreement. The
accord probably will reactivate 1967 credits that have gone unused. Sofia
probably plans to go ahead with meat and vegetable processing facilities
called for under the original agreement? (Unclassified)
Uganda. The USSR presented a preliminary mineral exploration report
prepared by Soviet geologists in Uganda earlier this year. This is the first
reference to Soviet assistance to geological exploration in Uganda.
Further Soviet activity in this field probably would require new credits, as
most of the $15 million in aid previously provided has been used.
(Unclassified)
Zaire. At a meeting of their joint commission in mid-August,
Romania and Zaire discussed formation of a joint agricultural and
livestock development company. (Unclassified)
Latin America
Bolivia. Bolivia has approved the final designs for a second Soviet tin
volatization plant, with a total cost of $15 million. Installation of the first
unit at Potosi has been plagued with delays and cost overruns. Original
estimates put the cost of each plant at $8.5 million, of which $6 million
represented Soviet equipment to be financed with a $28 million Soviet
credit. (For Official Use Only)
Dominican Republic. Romania has purchased $16 million worth of
sugar from the Dominican Republic so far this year. Trade between the
two countries previously had been negligible. (Unclassified)
Jamaica. A Chinese textile team arrived in Jamaica in mid-July to
study several textile projects first discussed when Jamaica established
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diplomatic relations with China in March 1974. (For OFficial Use Only)
Colombia. Colombia signed contracts valued at $21 million to
purchase buses from Hungary and streetcars from the USSR. The National
Federation of Coffee Growers is acting as intermediary in the $12 million
Soviet deal and will finance the sale of streetcars to )ogota over 10 years
at 15% interest. The Hungarian buses will be financed under a trade
agreement. (Unclassified)
Chile. China has entered negotiations with Chile to purchase
chemical products, presumably nitrates. Last year, Chile sold about 65,000
tons of nitrates to China, but shipments in 1975 hive been negligible.
(Unclassified)
Near East and South Asia
Afghanistan. On 22 July, Czechslovakia signer: a $6.5 million aid
contract to provide buses for a transportation project in Kabul and agreed
to assist a powerplant at Herat. (Unclassified)
Egypt. Egypt recently announced the comple':ion of two poultry
combines, a vegetable dehydrating plant, and a mat processing plant
constructed by Bulgaria under credit agreements valued at $37 million.
(Unclassified)
Iran. The USSR signed a contract on 6 August to begin electrification
of the 90-mile rail line from Tabriz to Juifa, on thf. Soviet border. The
USSR extended $18 million in credits in 1968 for rehajilitation of the line.
(Unclassified)
Iraq. Poland signed a $3 million contract to supply two pumping
stations on a turnkey basis for an irrigation project in Iraq. The Iraqi
government eventually plans to purchase 80 pumping, stations for a $400
million irrigation project, and Warsaw is interested in establishing itself as
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a reliable supplier of this type of equipment through rapid delivery on this
contract. (Secret No Foreign Dissern)
Pakistan. Chinese experts arrived In Pakistan early in August to work
out final details on construction of a sports complex at Islamabad,
scheduled to begin in October. The $35 million complex, to be completed
for the 1976 Asian Games, is being financed under a 1970 credit for $200
million. The two sides also recently agreed to start work on a $2.9 million
textile complex in Punjab under the same credit. (Unclassified)
Sri Lanka. At the close of trade talks in Moscow in August, it was
announced that Soviet-Sri Lankan trade is planned to increase by .50% in
1975 to approximately $26 million. Aid deliveries for expansion of the
Soviet-built Oruwala steel mill will contribute heavily to the increase in
Soviet exports, while Sri Lanka wi1J. expand shipments of traditional
agricultural goods. (Unclassified)
Syria. Czechoslovakia signed a contract on 30 July to equip a $105
million tire plant at Hama. The financial arrangements for the project
were not revealed. (Unclassified)
Militar
25X1 B
Guinea. The USSR delivered - MIG-21 aircraft and military
vehicles to Conakry during August under a 1973 agreement valued at $20
million. The USSR previously had delivered _MIG-21s to Guinea this
year. (Secret No Foreign Dissem) 25X1 B
A Guinean delegation headed by the minister of defense visited
Bucharest in mid-August at the invitation of Romanian military officials.
(Unclassified)
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25X1 B
25X1 B
25X1 B
GuineauBissau. The number of Soviet-supplied 'AIG-21 jet fighters in
Guinea Bissau rose to -with the arrival of = additional aircraft in
August. The delivery probably comes under an agreoment concludec by a
Soviet military delegation to Guinea last fall. (Secre': No Foreign Dissem)
Mali. The USSR has expanded military deliverie to Mali over the past
three months. A Soviet ship arrived in Conakry with tanks, APCs, and one
truck-mounted missile launcher destined for Mali. ff May and June, Mali
received MIG-17s and , MIG-15 trainer
(Secret No Foreign Dissem)
East Asia
Laos. Soviet-supplied Laotian river patrol b _Dats reportedly have
appeared for the first time on the Mekong River be -dering Thailand. The
boats probably were delivered in May and June be used to control
smuggling and illegal border crossing. (Unclassified,
Near East and South Asia
India. Nanuchka class guided missile patrol oats are among the
combat ships New Delhi will receive
The Nanuchka is armed wi'.h SS-N-9 surface-to-
surface missiles and SA-N-4 surface-to-air missiles. Some of the sophisti-
cated weaponry probably will not be provided f - r the export model.
Training and transfer procedures for the boats were planned during a July
meeting in Moscow. (Secret No Foreign Dissem)
EGRET
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