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

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Document Number (FOIA) /ESDN (CREST): 
CIA-RDP79T01098A000600080002-1
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RIPPUB
Original Classification: 
S
Document Page Count: 
17
Document Creation Date: 
November 16, 2016
Document Release Date: 
February 28, 2000
Sequence Number: 
2
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Publication Date: 
September 1, 1975
Content Type: 
REPORT
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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 Approved For Release 2000/05/15 : CIA-RDP79TO1098A000600080002-1 Approved For Release 2000/05/15 : CIA-RDP79TO1098A000600080002-1 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 Approved For Release 2000/05/15 : CIA-RDP79TO1098A000600080002-1 Approved For Release 2000/05/15 : ClgP79T01098A000600080002-1 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. Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 Approved For Release 2000/05/15 : CIA-RQ. 71T01 098A000600080002-1 No Fnrei n Dirsem 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. Approved For Release 2000/05/15 CIA-RDP79TO1098A000600080002-1 Approved For Release 2000/05/15 : CIA W9T01098A000600080002-1 No Foreign Dissem 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 W SECRET Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 SECRIET 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 Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 Approved For Release 2000/05/15 : CIA-RDP79TO1098A000600080002-1 SECRET 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) 2 SECRET ,w. it 1101; 0111, i53 -RDP79T01098A000600080002-1 Approved For Release 2000/05/15 : CIA k fl '9T01098A000600080002-1 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 3 SECRET Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 Approved For Release 2000/05/15 : CISE--lr 79T01 098A000600080002-1 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) 4 SECRET Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 SECRET 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 `J SECRET Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 SECRET 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 6 SECRET Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 Approved For Release 2000/05/15 : CIA-F~p)19T01098A000600080002-1 $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 SECRET Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 SECRET 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 A SECRET pprovecor r el 2 111`-- 80`+~" Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 SECRIET 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) 9 SECRET Approved For Release 2000/05/15 : CIA-RDP79T01098A000600080002-1 Approved For Release 2000/05/15 : CIA-RDP79TO1098A000600080002-1 SECRET 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. 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