COMMUNIST ECONOMIC PENETRATION CAMPAIGN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01443R000400200003-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 102
• Document Creation Date: November 9, 2016
• Document Release Date: August 5, 1998
• Sequence Number: 3
• Publication Date: November 21, 1955
• Content Type: BRIEF

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01 MID 3~'171d
COMMUNIST ECONOMIC' PENETRATION CAMPAIGN
I . Large, shrewd, Comrdvnist campaign in under-
developed areas--Near East, Middle East,
South Asia, and Southeast Asia--underway,
using economic penetration to further for-
eign policy objective of intervening openly'
in free world affairs.
A. Total value of Communist credits to
free world may well reach $400 million
or $450 million within the next six
months. (FACT CARD "A")
1. This figure includes known con-
tracts for arms, signed contracts
and other non-military projects
already underway, and those firm
Communist offers which seem most
likely to be accepted.
2. This campaign dates roughly from
spring 1954. It is continuing.
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There is no assurance that all
deals are known to Western intel-
ligence agencies.
B. Should the Communists offer Egypt $275
million or $300 million worth of goods
and services to help with the Aswan
high dam project, the total of Commun-
ist credits would be around $700 mil-
lion.
1. It is known that in response to
Egyptian initiative the USSR has
offered to help, on this project,
and there are firm reports that
the terms would be easy and at-
tractive.
2. $275-300 million is what Egypt
would need from foreign sources in
any case; there is one press re-
port that the USSR has offered
this amount.
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C. Reports of new Communist offers to free
world nations are received almost
daily. However, the offers considered
within the range of the above figures
include only those on which negotia-
tions are well along and those which
seem likely to be consummated.
II. Most dramatic phase of campaign is swift
conclusion of arms deals in the Near and
Middle East.
A. Egyptians are now committed for Bloc
arms for at least $115 million, and
negotiations are underway to bring the
total to $160 million, possibly even
(FACT CARD "B")
B. Syria on verge of first contract with
Czechs for about 75 T-34 tanks, spare
parts, and ammunition worth $5,900,000.
C. Afghans have made cash deal with Czechs
for $3 million worth of arms which are
reportedly now being delivered.
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D. Reports of further Bloc offers persist.
1. Jordan reportedly offered arms to
stay out of Baghdad pact.
2. Yemen reportedly will accept
Soviet offers, if made.
3. Saudi Arabia reportedly has offers,
and Saudi money known to be in-
volved in Syrian arms deal, may
be involved in Egyptian purchases.
4. Czech arms merchants have toured
Egypt, Iraq, India, Afghanistan,
Burma.
5. Czech arms mission en route to
Ecuador.
III. Besides arms deals, contracts have been
signed and work is actually underway on
projects using Bloc credits, personnel, and
equipment to the amount of $45.6 million.
(FACT CARD "C")
A. Other deals seem close to fruition.
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1. For example, India, which has
accepted $5.6 million in Bloc
credits to date, may soon be in-
volved for about $110 million.
IV. Communist motivation is clearly political.
India and Egypt are major targets; Afghan-
istan may be most imminent victim.
A. Contracts for diamond mining equipment
(Panna Diamond Syndicate) and Bhilai
steel plant seem most certain for near
future. Other projects already under-
way. (FACT CARD "D")
1. Diamond mining deal would give
Bloc source of industrial diamonds.
Bloc has none of its own.
B. There are many other firm Bloc offers
which may be settled in connection with-
or as result of Bulganin-Khrushchev
visit and other Bloc visitors. (FACT
CARD "E")
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C. Czech delegation arrived India 6 Novem-
ber with offer to help India's second
five-year plan which begins 1 April
1956.
1. Dvorak, Czech minister of,foreign
trade said that his country con-
sidered capital investment 'abroad
tantamount to economic interfer-
ence internal affairs. He sug-
ges-ed -Czechs would rather offer
equipment and would retain no hold.
over part of.Indian economy.
D. Bloc influence has made itself felt in
Indian planning circles.
1. In response Indian request, USSR
sent 14L high-level economists and
mathematicians, including one for-
mer GOSPLAN member, to Indian
Statistical Institute in November
1954. They stayed until September
this year.
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2. Poland sent Oscar Lange, top
economic planner. He plans to
return.
V. Growing economic ties with Bloc and anti-
Pakistan policy make Afghanistan most im-
mediately susceptible Soviet blandishments.
A. Afghans have already accepted credits
worth $11.8 million from Czechs and
Soviet Union.
1. There are other offers reported.
(FACT CARD "F")
B. 127 Soviet technicians in Afghanistan
in August.
C. Trade with West Germany now passing
both ways through USSR, - reportedly
cheaper and faster than old routes
through Pakistan.
1. Afghans taking steps to see bulk
foreign trade in future moves
same way.
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D. Former president Helmand Valley Author
ity says USSR has offered take over
this large irrigation and power pro-
ject, finish construction, and pay off
US loan. (Export-Import Bank loan of
$39.2 million at 3 1/2 and 4 1/2 per-
cent.)
25X1X6
E. Bulganin and Khrushchev now slated to
stop over Kabul for about one week on
return trip to USSR.
F. Afghans seeking strenuously to develop
independence of Pakistan, mainly
through promoting closer ties with
Soviet bloc.
1. Prime Minister Daud, who controls
government and is more favorably
inclined Soviet bloc than other
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Afghan leaders, seeking approval _
his anti-Pakistan policies from
Grand Assembly of Tribes (Loe
Jirga).
FYI (King Zahir Shah may be able to
forestall specific endorsement
Daud's "pro-Soviet" policies by
using President Eisenhower's re-
cent letter offering help. Jirga
will in any event probably endorse
call for independent Pushtoonis-
tan. Afghans may also promptly
ask US for support against Pakis-
tan.)
VI. Current Communist campaign shows skill in
adapting to local conditions, willingness
to promise even greater effort, speed in
execution. The bloc enjoys propaganda ad-
vantage of appearing to step up offers to
coincide with decreases in Western sources
of external aid.
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A. Czechs evidently chosen - possibly at
meeting in Prague in April - to spear-
head campaign in Arab world.
1. Two immediate objectives:
a. To nullify Western-sponsored
mutual defense planning.
b. To encourage emergence of
neutralist bloc which would
permit Bloc voice in area
affairs.
B. Recent tours of Bloc by persons from
underdeveloped countries has impressed
experts as well as diplomats with
Soviet "sincerity."
C. Communist offers are attractive be-
cause they are on easy terms and be-
cause the recipients can see no visible
strings.
1. Most Bloc offers are at nominal
interest rates (2 - 2 1/2 percent)
on easy payments.
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They are often deferred, with pay
ments in soft (local) currencies
or traditional exports.
2. Governments are not asked to sign
political or military commitments."
3. Countries with ambitious develop-
ment programs and unsalable sur-
pluses see a ready market in the
Bloc and a chance to get capital
equipment and arms.
4. While countries can save foreign
exchange and hard currencies, the
USSR builds up credits in soft
currencies.
a. This is a war chest which may
be used within the country
as the Communists see fit.
D. Soviet leaders told 25X1X6
in July 1954 that it would not be long
before Soviet industry was strong
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Asian nations.
1. Confirmed by Khrushchev
25X1X6
25X1X6
E. Except for the steel mill offer, Bloc
offers are not in competition with
their own industrial requirements and
priorities. Moreover, the Bloc offers
are not give-aways. They expect eco-
nomic as well as political payments
for their credits.
25X1X6
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VII. Besides arms deals with Arabs and strong
push against Indian and Afghanistan, the
Communist effort can be seen in other forms.
throughout the Middle East and Asia and in
Latin America.
A. In Egypt, Communist contracts includ-
ing projects under construction total
$10,995,000. There is a further offer
worth $1,200,000. Any offer on the
Aswan high dam would be in addition to
above. (FACT CARD "G")
B. Syria has been offered projects worth
$67,920,000, of which the bulk is a
Polish offer to help build a 500 kilo-
meter railroad at an estimated cost of
$65,000,000. (FACT CARD "H")
C. In Indonesia, Communist contracts and
projects underway total $16,600,000.
There are offers for $6,000,000 more.
(FACT CARD "I")
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D. Turkey has received offers worth
$3,175,000. (FACT CARD "K")
E. Lebanon has received offers worth
$3,000,000. (FACT CARD "L")
F. Sudan has received offers worth
$3,150,000.
G. In Iran, the Czechs have.completed a
sugar factory worth an estimated
$650,000. No further Communist offers
have been reported.
H. East Germany has offered to build a
cement plant for Saudi Arabia of an
estimated value of $5,000,000. No
other offers are known.
I. The Bloc is meeting considerable suc-
cess in expanding trade and diplomatic
relations with Latin America.
1. Latin American trade with the bloc'
in 1954 more than four times same
trade in 1953. (FACT CARD "M")
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2. Hungary seeking open network
commercial agencies.
3. Poland wants expand trade with
Brazil.
4. Poland reported making "unbeliev-
ably" favorable offers to Ecuador.'
5. Soviet export drive aimed at
Argentina, primarily to reduce
USSR's deficit.
VIII. Chinese Communist part is impossible to
estimate in precise figures, but it
appears to fit the general pattern of
economic means to gain a political end.
A. Chinese Communists in deal with Egypt
gave 60,000 tons of steel products and
wheat for Egyptian cotton.
B. Peiping buys rice extensively in
Southeast Asia, particularly from Bur-
ma. China does not need this rice.
C. Peiping pays a premium price for Cey-
lonese rubber and buys more than it
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TOTALS
Communist credits for arms $124 - 170,000,000*
Communist credits for signed
contracts and projects under way 45,000,000/
Communist credits offered on deals
under negotiation and considered
.likely
229,000,000,'
TOTAL *' $400,000,000
If higher Egyptian figure used, total is
$445,000,000.
*$124,000,000 ,' if Egyptian total is
$115,000,000.
$170,000,000 if Egyptian total is
$160,000,000.
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Additional orders placed in late October
and early November raised Egyptian bill for
Soviet bloc arms to equivalent of $115,000,000.
Further Egyptian negotiations with the Bloc
are underway with Egypt considering spending
a total of $160,000,000, possibly more.
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Signed contracts with Bloc, including
projects now underway:
India
$5,600,000
Afghanistan
11,800,000
Egypt
11,000,000
Indonesia
16,600,000
Iran
650,000
$45,650,000
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INDIA
Signed contracts including projects now under
construction:
USSR----Cement Plant
$2,000,000
est.
Czech---Suspension Bridge
1,000,000
est.
Czech---Thermal Plant
600,000
est.
Czech---Cement Plant
2,000,000
est.
TOTAL
$5,600,000
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USSR---Diamond Min. Equipment
$7,000,000
USSR---Coal Washing Plant
2,000,000
est.
USSR---Steel Mill Equipment
95,000,000
USSR---Cotton Spinning Factory
1,000,000
est.
USSR---Brick Plant
100,000
est.
USSR---Manganese Ore Dressing
Plant
150,000
est.
Czech----Camera Factory
250,000
est.
Czech----Coking Plant
13,000,000
Czech----Sugar Plant
650,000
est.
Hungary--Wire Plant
50,000
est.
Hungary--Cement Plant
2,000,000
est.
E. Ger.--Cement Plant
2,000,000
est.
E. Ger.--Chemical Plant
500,000
est.
E. Ger.--Sugar Plant
350,000
est.
TOTAL
$124,050,000
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AFGHANISTAN
Arms deal with Czechoslovakia
Other credits signed to date:
USSR------$6,800,000
Czech----- 5,000,000
$ 3,000,000
(excluding arms)
$11,800,000
TOTAL
$14,800,000
Firm projects under above credits are:
USSR----500,000 gallon gasoline
storage tank
USSR----2-70,000 and 2-120,000
$ 600,000
gallon
tanks 600,000est.-
USSR ---- silos,
flour mill, bakery 3,500,000
USSR----road-building, street-
paving
2,100,000
Czech---cement plant
1,500,000
Czech---remaining credit which may
be allocated to glass
factory, cannery, etc.
3,500,000
$11,800,000
USSR gasoline pipeline 700,000est
Additional reported Czech credit offer of
$10,000,000 plus reported offer of $5,000,000
more.
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EGYPT
Arms deal (est.) at least $115,000,000
and as much as 160,000,000
Signed contracts, including projects now
under construction:
USSR-----Cement Factory $2,000,000
est.
USSR-----Fertilizer Plant 5,000,000
est.
USSR-----Butane Gas Plant 100,000
est.
Czech----Shoe Factory 100,000
est.
Czech----Swing Bridge 250,000
est.
Czech----Bridge 95,000
Hungary--Bridge 3,200,000
E. Ger.--Transformer-distributor
Station 250,000 est.
TOTAL
$10,995,000
USSR-=---Aswan High Dam
$275,000,000
est.
Czech----Generators
1,200,000
est.
TOTAL
$276,200,000
TOTAL --- $447,195,000
(without Aswan dwi) --- 172,195,000
(using lower arms
figures) --- 127,195,000
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FACT CARD "H"
SYRIA
Arms deal -- initial Czech
contract
Approx 75 T-34 tanks &)
spare parts. )
Ammunition ) $5,900,000
Poland----500 km railroad
Bulgaria--Hydro turbine &
$65,000,000 est.
generator
250,000 est.
Hungary---Cement
Plant
2,000,000 est.
Hungary---Power
Plant
670,000 est.
1
TOTAL
7,9200
,0 0
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FACT CARD "I"
INDONESIA
Signed contracts including projectsnow
under construction:
East Germany--Sugar Factory $13,000,000
Czech---------Radio Factory 600,000 est.:
Czech---------Pharmaceutical Pant 3,000,000 est.
TOTAL $16,600,000
Offers:
Rumania-.------Cement Mill 5,000,000
Hungary-------Elec. Power Plants 1,000,000 est.
TOTAL $6,000,000
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FACT CARD "K"
TURKEY
Offers
USSR---------Wheat Mill
$ 20,000 est.
USSR---------Macaroni Factory
22,500
USSR--------- Brick Factory
1,600,000 est.
Czech--------Thread Factory
1,200,000 est.
E. Ger.------Elec. Materials Plant
136,000
E. Ger.------Spinning Mill Equip.
47,000
Hungary------Power Plant 150,000 est.
TOTAL $3,175,500
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FACT CARD "L"
LEBANON
No known signed contracts.
Offers:'
E. Ger.---Cement Plant
$1,000,000
Czech-----Porcelain Factory)
1,000,000 est.
-----Crystal Factory )
(all three)
-----Glass Factory )
Hungary---Cement Plant 1,000,000 est.
TOTAL $3,000,000
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Latin American exports to Bloc
$190,632,000
imports from "
109,978,000
Total Trade with Bloc 1954
$300,610,000
Latin American exports to Bloc
$38,400,000
it imports from "
31,300,000
Total Trade with Bloc 1953
0
$69,700,000
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FACT CARD "N"
SOVIET COMMITMENTS WITHIN THE COMMUNIST BLOC
(since 1946)
1. Credits to European
Satellites ......$1.3 billion
Communist China ......
$1.73 billion
($600 million still owed USSR; to be
paid by 1965)
2. Soviet gift to North
Korea ............. $100 million
Chinese gift to North
Korea............. 340 million
$440 million
3. Soviet military and economic aid, in
addition to above sums, to Communist
China--est. $500 million to $1 billion.
14 0 itlt' --
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eign policy objective of intervening openly
developed .mess-:-VeaLr East,_ Middle East,.
South to a, Yard Soot east Asia--underway,
using economic pene'tratfon to. further for-
in free world.affairs.
A. Total value of Communist credits to
free wor'd.`ay well reach $400 million
or, $450 million within the next six
months. .(FACT CARD "A")
1. . This figure includes known con-
tracts for arms, signed contracts
and other non~-ailitary projects
already underway, and those firm
Communist offers. which seem most
likely to be accepted.
2. This campaign dates roughly from
spring, 1954. It is continuing,
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There is no assurance .t a a
deals are known to Western intel-
ligence agencies.
B. Should the Communists offer,Xgypt $275
million or $300 million wotth of goods
and services to help with the Aswan
high dam project, the total of Commun-
hist -credits would- be around.- 4700 ail-
1 ion .
1. it is known that in response ' to
Egyptian initiative the USSR has
offered to help on this project,
and there are firm reports that
the terms would be easy and st-
tractive.
2. $275-300 million is what Egypt
would need from foreign sources ir.
any case; there is one press re-
port that the USSR has offered
this amount.
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C. Reports of e~ey COa*ynist 01 er
world natives ar* received'sl*ost
daily. nowever, th+ offers coosidsred
?i,th s ttt. rim of .the above figures
include . ohly #botto on *ob negate-
imp , sro, ValY -~ its those W!-icb
seem likely to bs
host, drasmatic" phase Of c p t$' i. swift
aouclustb* of arcs 4014 in the ttear sno
Middle last,
A. Egyptians are nO comitted for Sloe
arcs for at least $115 pillion, and
negotiations are underssy to bring the
total to $Ba ?illlon..possibly evan
"B")
Isere. (FACT CAM
B. Syria on verge Offirst contract.with
Czechs for about. 75. T-34 tanks, spare
parts, and as5unitioa worth $5,900,000.-
C. Afghans have ade cash deal with Czechs
for $3 million worth of arcs which are
eportedly now being delivered.
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D. Re DoT a~ o le u
y out of .,Baghdad pact.
reaea reportedly vil2 . accept
dovipt offers, if a~tda
reportedly o!Zer,a srmo ;v
Saudi .* *biaa.;reporWl7 has 'otter
and Saudi coney tno :` to ins
voleed ip .Syrian arm* de0, ray
be #arrvoaved 1 n lgypt .an pu* Oh* *
Czech arse aerchants have "tour.
IBypt, . Iraq, India, . Afaba>aiaat*n,:
Bur*ar .
Bcu*dcr
s. Czech arse aission on rou1S to
II'I Besides are. deals,. contracts have been
signed and work-ii actually underway on
projects using Bloc credits, personnel,
.equipsent to the aaount of $45.6 million.
(FACT CARD "C")
A. Other deals seem close to fruition.
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1. For example, Indis, which has
accepted $5.6 ^Illiou in Bloc
credits to date, may soda be in-
volved for about $110 million.
Iv. Cosauntat motivation. is clearly political.
Iadis; abd Egypt are as or to ots; Afghan-
istan say be most i.rasineat vtctia
A. Contracts for . diasond sLniag oqui.paent
(Psi Diasoad Syndicate) and Bhilai
'steel-, plant axon soot certain 'tor near
future. Other projects a lroady under-
way. (FACT CARD "Dr o)
1.. Diwnond rataing deal mould (live
ploc source. of industrial diamond
Bloc tas aoae of itw own.
B. There are many other firm Bloc offers
which sat be settled is -couaection with
or as result of Bulgsnin-Khrushchev
visit and othek,Bloc visitors. (FACT
CARD "Rol)
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Czech delegation arrived India 6.Novem
ber with-offer to help India's sedand
f i~te-year play l b : tteginsc April
1916 .
Dvorak, Czech sinister : of foreign
trade) said that his country. con-
*idered cspit tl' inve*tsent abroad
tantamount to economic tnterfer-
once internal. affairs.
go tad Czechs would rather offer
equipment and would retain no hold.
over part of Indian economy.
D. Bloc influence has sade itself felt in
Indian.pisnning circles..
In response Indian request, USSR
sent ..$ high-level economists and
sathematicians, uQluding one ot-
mer GOSPLAN member, to Indian
Statistical Institute in November
1954. They staye until September
is year.
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 Sanitized - Approved For Release CIA-RDP80R01443R000400200
2. Poland sent Oscar Lange, top
econosic planner. He piano to
return.
Growing ecoacinic.tiss- with Blois and anti-
Pakistan ' policy asks -Afghanistan sit is-
nediataly susceptible Soviet blandishments.
A. Afghans .have already accepted credits
worth 411.8 sillios Sron Czechs and
Soviet Union.
i
l . sere are other offers ~ repor ted .
(FACT CAR'D "F" )
B. 127 Soviet technicians in Afghanistan
In August.:
C. Trade 'with Most Germany Dow passing
both ways through'-USSR, reportedly
cheiper.and faster.than Old routes
through Pakistan.
1. Afghans taking steps to see bulk
foreign'Arade in future moves
same way..
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 Sanitized - Approved For Release : CIA-RDP80R01443R000400200003-4
For** . r president Selland Valley Author,
t.Ys USSR has offered take. over
1arge irrigatioa:.tnd power pro-
-
finish construction, sa4 pay of
moo. (Zzport-laport M aak los.n of
rttiajrn trip to USSR.
4*.* seeking strenpously to develop
`*tilion at 3 1/2 and 4.),:.psr-
tin and Khrusbahs.v now slated to
over Kabul for about one week on
JX46pondonce of Pakistan, mainly
through .prototttg closer ties,.with
Javlet bloc.
T Prime Minister Daud, who controls
ernsent and is More favorably
1.a.clined Soviet bloc than other
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 Sanitized - Approved For Release : CIA-RDP80RO1443R00040020
Afghan leaders, seeking approoai
his anti-Pakistaa:pollciesfros
Grand-Assembly of Tribes U o.
jirga .
FYI- (;;Lag Zahir shah say .b. able to
forestall sps0iiic endorsesent
Daud'.a "pro-Beliet" policies by
using President gilseohower.'s re-
cent letter offering help. Jirga
will in any a-vent probably endor
call for indepsndept Pushto.mis-
t.an. Afghans Say also promptly
ask US:for support against Pskis
twin.)
V1. Current Codusist esspalga sbbwws skill in
adapting.. to local canditioas,, willingn As
promise even greater effort, speed. in
execution. The bloc enjoys propaganda ad-
vantage of appearipg to step up offer.s.to
(;cincide with decreases - in Western sources
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 Sanitized - Approved For Release : CIA-RDP80R01443R000400200003-4
A . Czechs ?vldently. cbosep -..p&asibly at
seetiag is pr*gue in April: to spear.
d aanpai g' in .drab world.
Two imteditte abj cti' +s:
To nullity vpst rnv oponsored
asutual defense - planai~-!t.
b. To encourage. a aergeoce of
neutralist bloc which xould
potmit Bloc Tote* In area
affairs.
B. Recent tours of Bloc by persons fr0M
.underdeveloped countries-has Impressed:
experts as well. as diplomats with
Soviet "sincerity. "
C. CoMvnist of2srs ar4. attractiv0 De.-
cause they are on easy teems and be-
cause the recipients can see no visibim
strings.
). most Bloc offers are at nominal
interest rates (2 -. 2 1/2 percent
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 Sanitized - Approved For Release : CIA-RDP80R01443R00040020000
They are often deferred, with pay'
gents in soft (local) currencies
or traditional exports.
2. Governments are not asked to sign
political. or =ailittrf con*ittents.
Countries with. asbit.i us develop-
sent programs-and Incalable sur-
pluses see a re&ty market in the
Bloc and a dhanoe to get capital
equippent and arses.
25X1 X6
be used within the country,
as the Communists see fit.
a. This Is a, vat chest which may
4.1 While countries can save foreign
exchange and hard currencies, the
USSR build* up credits in soft
currencies.
P..n July 1954 that.it would not be long
f), Soviet leaders told
> nrn Soviet industry was strong
r a j tcc r tribute to development of
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 Sanitized - Approved For Release : CIA-RDP80RO1443R000400200103-4
Asian nation
25X1X4
E. Excwpt for the steel mill offer, Bloc
offers are not in Competition with
their own industrial requirements and
priorities. Moreover, the Bloc offers
are not give-aways. They expect eco-
noric as well its political payments
for their credits.
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12 --
 Sanitised - Approved For Release : CIA-RDP8ORO1443 t%qq 200003-4
m 1.
an
:r ..~ T r,..,. , .i.~t .,-*nf~ .r4Ailn with Ara
push against Indian and Afghanistan,. the
communist effort can be seen. in other fors
throughout the Middle last and Asia and in
Latin America.
A. in Egypt, Coasunist contracts includ-
ing projects under construction total
$10,995,000. There is a further offer
worth $1,200,000. Any offer on the
Aswan high dais would be in addition to
above. (FACT CARD "G")
B. Syria has been offered projects worth
$67,920,000, of which the bulk is a
polish offer to help build a 500 kilo-
meter railroad at an estimated cost of
$65,000,000. (FACT CARD "H")
C. in Indonesia, Communist contracts and
protects underway total $lb,600,00U.
there are offers for $6,000,000. wore.
riA(:T CARD 111")
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 Sanitized Approved For Release: CIA-RgP8g41W40;0200 3-4
D. Turkey hits re+caive o
$ l7 - (lrc. CARD
Leltaa-oa i s received of,i0rs worth.
; , 000 , QQt'l . - (FACT CARD
Buda* hs?r#asived bffers s0rth
$3,130,000.. }
G. In Iran, the Csech$ have.Completed a
fant4ry worth :aa . satiiRatsd
850, 0?p,, t further dOi mu*ist: offers
ha a been reported;
East Germany has offered to baud a
cement plant for Saudi Arabic of an
estimated value of $5,000,000.
other offers are know . .
The gloq la ateettng considerab).e: sucr
ces? in .spending trade and diplomatic
-
relations with Latin America.
1. Latin American trade with the bloc
in 1954 more than four times say
trade in 1953. (FACT CARD "1941)
p 4'
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 Sanitized - Approved For Release : CIA-RDP80R01443R00040020
2. Hungary seeking open network
commercial agencies.
Poland wants expand trade with
Brasil
Poland reported making "unbeliev-
ably"' favorable offers to Ecuador.
5. Soviet export drive aimed-at
Argentina,, primarily to reduce
USSR's deficit.
Chinese Comunist part " is impossible to
estimate in precise figures, but it
ma . China do** not need this rice..
ice ..
.
Southeast Asia, particularly from Bur-
wheat for Egyptian cotton.
B. Peiping buys rice eatensivelT in
gave bO,QOO tons of, steel products and
appears to fit the general pattern of
economic means to gain a political end.
A. Chinese Consaunists in deal with Egypt
C. Peiping pays a premium price for Coy-
Sanitized - Approve`c;rfeYe 'see:' A-I (PF 'f44''R0004002
 Sanitized - Approved For Release : CIA-RDP80RO1443R00040020 J03-4
FACT CARD "A"
TOTALS
Coaauai$t credit* f`or arns. $124 --M-0000,000
Coaaun.ist credits for signed
contracts. and projects -under way 45,000,000
Coaaunist cr tts. offered on 4ps39
under nogotistioz and cbu*id*rod
likely
If higher Egyptian figure used, total in
$445,000,000.
*$124,000,000 f if lgyptiau total is
$1 5,000,040.
$170,000,.000 if Egyptian total is
$160,000,000.
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 Sanitized - Approved For Release : CIA-RDP80R0l443R0004002000 ?3-4
FACT CARD "B"
Additional order. placed in late October
and early November raised Egyptian b14.1.- for
Soviet bloc arms tv equivalent of $115,(M),000.
Further Egyptian negotiations with the bloc-
are underway with Egypt conaideriug apeuding
a total of $180,000,000, possibly more.
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 Sanitized - Approved For Release : CIA-RDP80RO1443R0004t10200003-4
iLC CAI tD
wit% 8,10C
is stow.. ~~dirN
r~ef?-
gypt
Indonesls
Iran
11,000,E
$,001,000
$45,550,000
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 tized Approved For Release : CIA-RDP80RO1443R0004002 10003-4
ACT CARD "D"
INDIA
~a~ts-t Plant -0.00,000;out.
V$$* ---C
.
4Q$Pe asioa Bridge 1, 000 , 000 est.
tcrti-
-
Csiclr--M-Tlrersa-I Pleat 600 0 000 est.
%-
D
.
OtO .4P
Plant OO
TOTAL
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 Sanitized ],Approved For Release : CIA-RDP80R01443R000400200003-4
FACT CARD "E"
off?rs to liidis.
MR--- lia*o 2d Bin. Zguipme t
Q8$1t---Coal Washing Plant.
it 8-----8 1. ]till Rgo tpseat
Q581---Cotton ?Spinning, `aotozy
,881t--~w8rek Plant
ussR---Yatganese Ore Dressing.'
Plant
Czech----Camara ractory
Caeab->---coking Plant
Csecth--r-4 rg*r Plant
Rungary--Wire Plant
Eeingary"-Cement Plant
E. Ger.-?-Cemaat Plant
E. Ger.--Chemical Plant
Gar.--Sugar Plant
.$7.000,000
. 2 , OOO O0i ea t
9,x,000 1,000;000 wst
100,000 eat
150,000 out
330.,000 Vest
S , O00,OOO
650,#00 eat
50,600 eat,
2,OOO,Q0 eat
8,000,000 e+at,
5000,000. eat.
354 000 eat.
$124,050,000
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 Sanitized - Approved For Release : CIA-RDP80R01443R00040020003-4
FACT CUM "Ir.
FGBA!I S TAN
Arms deal with.CseIthog}Q7ahia $ 5 ,000 # 000
Other credits 84gaedt teat -&a'+ a :
L SSR----- -$$,800,000,
Czech----- 5',000,000-
. (excluding sue)
TOTAL $14,800,000
rm projecto tinder aborv C Zits are:
sSSR----500,000 gallon gasoline
storage tank
$ 000,000
`:SR----2-70,000 and'2-120,000
gallon tanks
500,000es
flour mill, bakery.
3,500,000
>SR----road-building, street-
paving
2$100,000
".tech.---cetrut plant
1. 500,000
Czech-renaming credht which may
be allocated to glass
factory, cannery, etc. .3,,500,000
$11800,000
u'SSR gasoline pipeline 700,000est
,-'ditional reported Czech credit offer of
11j,000,000 plus reported offer of $5,000,000
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 Sanitized - Approved For Release : CIA-RDP80R01443R000400003-4
FACT CARD "G"
EGYPT
firms deal (est.) at least $115,000,100
and ,as each as 160j0009,000
Signed c.OntraCt* inCluding projects now
finder construction:
USSR-----Cement Factory
? $2,0000,000 'est.
USSR-----Fertiliser Plant
5,0 10,000 est..
USSR-----BOtane Gas Plant
100,000 eat.
Izech---- Shoo Factory
.100,000 est.
,;Lech--- Sving Bridge
250,000 est.
;ech----Bridge
95,00
iungary---Sridge
5,200,000
E_ Ger.--Transior er-distributor
Station 180000 est.
TOTAL $10,995,000
USSR-='--Aswan High Dan $275,000,000 W.
3 c h----Ge ne ra toral i 1Q4 , 000 est.
``TOTAL $276,200,000
TOTAL
---
$447,195,000
(without Aswan dl
?--
172,195,000
':sing lower arms
figures)
---
127,1950000
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 San tized - Approved For Release : CIA-RDP80R01443R000400210003-4
FACT CARD "K"
Aram deal.-- initial Czech
contract
Approx 75 T-.34 tacks Li)
spare parts.. )
Aa*unitiop
) $5,900,00,0
Poland----500 ka railroad
$65,000,000.est.
Bulgaria--Hydro turbine`&
generator
250,000 est.
Hungary---Cement Plant
2,000,000 est.
Hungary---Power Plant
670 000 est.
,
TOTAL
000
$
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 Sanitized - Approved For Release : CIA-RDP80R01443R0004000003-4
FACT CARD "I"
sign". egntractoa P dc now
ender coattruetun:
600 , 000 08 %
Ptai~wrestiot P 3 00011-O60 *at.
,zeah
TOTAL $160600,000,
of ffrs:
~ussaia-s-- -C* t Kill
Hungary-------- ioc.. Power Punts
TOTAL
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Tl
 Sanitized - Approved For Release : CIA-RDP80R01443R00040f200003-4
? ACT CARD "K"
TURKEY
Offers
USSR---------Wheat Hill $ .20, 000 est.
USSR --------- Mecarotti Factory 22 500
CZ0ch Factory 1,200,0004st.
E. Ger. ----,--Elec . Matsriaj's Plot 136,000
I. Ger.---- Spinning Hill Equip. 47,000
Hungar
------P?
y
wer Plant
150000 est.
TOTAL $3,175,500
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S
 Sanitized - Approved For Release CIA-RDP80R01443R00040000003-4
FACT M~
tnova signed QatT*Cfis.
=offers
E . Ger..--_O* *t P **t
t;zech-----Pore*Yrtia Tact/ J
- -----Crystal !*CY7
.. Glair !`slctory':
itungary---Cereat Plant
TOTAL
(r11 three)
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 Sanitized - Alproved For Release : CIA-RDP80R01443R000400200003-4
`ACT CARD ff M"
tin..A i.r1can exports -to Bloc
i,vorts f i I~ 1f
3.4000
'Total ''aflde oiti~ Bloc 1954 3OO,63O,00 -
its to Bloc .3$,400,000
Lana American sspa
Total Trads. sits aloc.1953
f? imports from
$190 , 632, 000
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 Sanitized - Approved For Release : CIA-RDP80RO1443R000400200003-4
iI lbil
U,O"L57R; t(,, lie
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 Sanitize -jrpotgl For Release: CIA-RDE$01Aq( 0003-4
BULGANIN-KHRUSUCHIV TRIP
Bulganin and Khrusucbev will leave India
-about I December for one week stay in
Burma; then to Afghanistan for several days1
A. Reports of a subseQuent'stop at Cairo
still unconfirmed.
B. They are accompanied by high level
staff espectaiIy qualified to discuss
iti:al, trade and cultural relations
I
C. Delegation Includes:
N. A. Mikhailov - Minister of
Culture
Gromyko - First Deputy
Foreign Minister
P. M. Kumykin - Deputy Foreign
de Minister
i,. Serov - Heat of the Committee
8t: .e Security (KGB)
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 Sanitized ,ppr,Q-)Ied.For..Release,: CIA-RDP80RO1443R000400200003-4
it, i?_r >u for Deputy itiazis Lr u
A ricuiture (native of
Tadzik Republic)
idle.. Z. R. Rakhiababayeva - First
Deputy Minister of culture
of the Uzbek Repubi -c
1. There are Ureic and Tadzh i 4
minorities in Afghanistan..
r-1
These are only the top members of the
delegation. Press has reported the
entire group iaumbers about 100.
II. Bulganlii sad Khrustachev are visiting major,
L.ities of India (Bombay, Calcutta, Madras)
and other show paces.
A. A good chance they will also visit
hiiai, apparently in anticipation of
Inch is `s ear.: y acceptance of Soviet
-tRl-cl :z:ii% offer.
1. `ov ict ?=ttrvey teams already on
housing construction
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 Sanitized - Approved For Release-, M-R'DP80 t0144300b4ob2o000 3-4
iriLeresteu in gutd relations
India than with any other country
_
:z r 0 a
-`c vier leaders undoubtedly have arrived
-.iih rash of otter; for all three countr
a a. ly economic and technical assist -
c Bul?anin has already publicly
~-i Soviet aid in developing Indian
rid a L.c,r?iz energ
v roc peaceful
vicepcibie to Soviet offers than
nera= ejse of nartic+iiarly ac;.ltf'
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 Sanitized -Approved For Release : CIA-RDP80RO1443R000400 0003-4
t t ? c'rh.3nr. 4r y i c:
t: [::r)tnm'.7tll7St not iriF st :tj 1C+r
tur-iher r- .)1tnr-t heti pc?, thF,=c
r?1niriP- ind Qnvic_t hi
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 Sanitized - Approved For Release : CIA-RDP80R01443R000400200003-4
i-in:: 1,
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 anitized - Approved For Release : CIA-RDP80R0.1443R0004PO200003-4
B. ~ About, #. , percent. total t ?
Oros 4 rsct3T i - o ; tr t#r- _?
Motbiir 7.; Jv . , t ..: tid b
ie d of serous. d --
.r-tlase :oa+itte.:-i,1
b ~r.f1.cted is . Iii
btgh relaags. f Q ,_. Ufl eww
toroerbly ote d' by Zsst
Sanitized Approved F 'ra ftT8ash =RDP80R01443R000400200003-4
 Sanitized 'AppI W or Release : CIA-RDP8 R6444 900A?b?00( 3-
25X1X4
THAILAND
Recent reports, frof Bangkok indicate Thai
government reassessing its strong anti-Cosy
unist attitude.
A. Phibun in
cabinet meeting advised modification
tough Thai policy re Peiping.
S. Also advocated greater independence of
US, citing benefits to be derived from
more neutral stand.
C. Growing numbers officials said to fear
Thailand's present attitude has been
too inflexible in view fast-moving
Asian events.
There are also reports USSR and Co inuaist
China recently active in encouraging That
neutrality. 25X1DOa
Sanitized -
03-4
 Sanitiz
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 SOR01443R000400200003-4
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 San Pi- ed A TNed For Release : CIA-IkbFNREI 443Pt%400200003-4
25X1X4
THAILAND
I. Recent reports from Bangkok indicate Thai
government reassessing its strong anti-Com-
munist attitude.
A. Phibun in
cabinet meeting advised modification
tough Thai policy re Peiping.
B. Also advocated greater independence of
US, citing benefits to be derived from
more neutral stand.
C. Growing numbers officials said to fear
Thailand's present attitude has been
too inflexible in view fast-moving
Asian events.
II. There are also reports USSR and Communist
China recently active in encouraging Thai
neutrality. 25X1D0a00200003-4
Sanitized - Ap
0200003-4
 Sanitized - Approved For Release : CIA-RDP80R01443R000400200003-4
B. TASS rep in Bangkok reported saying
Phibun's planned trip to Burma should
coincide Bulganin visit and two leaders
should "have a good talk."
C. Peiping said to have offered to buy
Thai products and invited Prime Min-
ister's wife to visit China.
1. She was cordial to Peiping dele-
gation which went to World Federa-
tion United Nations Association
meeting in Bangkok..
D. Indirect trade with Communist China
flourishing and pressure for direct
trade mounting.
III. While some weakening previous adamant Thai
position expected, no abrupt or major
change likely for present.
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 BRIEFING z-r+ L-1 PIP
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BERLIN AND EAST GERMANY
I. Communists introduced temporary ha.ra.ssments
around Berlin on Friday.
A. Eastbound West German vehicles were
closely searched at East-West German
border for Western publications for
about six hours.
B. East German police clamped down on
"reckless" driving by Western drivers
on highways to Berlin.
C. Main ship canal between West Berlin
and West Germany closed, evidently
temporarily.
II. Purpose is probably to assert East
German authority over internal a,ffa.irs.
III. Last week's refugee flow into West Berlin
increased over previous week from 3839 to
44 50 .
A. Weekly average since 1 July has been
3870.
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 Sanitized - Approved For Release : CIA-RDP80RO1443R000400200003-4
B. About 42 percent total refugees
cross directly into West Germany.
1. Thus, total refugee figure
probably almost double that
of Berlin count.
IV. East German propaganda threats against
Berlin continue.
V. Morale continues low in East Germany.
A. Soviet attitude at Geneva has
destroyed remaining hopes for
re-unification.
B. Prospects for food shortages and
for conscription this winter will
further weaken morale.
C. Another 17 June not expected.
1. Instead of serious demon-
strations, opposition will
be reflected in continued
high refugee flow, unless
forceably stemmed by East
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 NSC BRIEFING
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BULGANIN-KHRUSHCHEV TRIP
I. Bulga.nin and Khrushchev will leave India,
about 1 December for one week stay in
Burma.; then to Afgha.nista.n for several days.
A. Reports of a, subsequent stop at Cairo
still unconfirmed.
B. They are accompanied by high level
staff especially qualified to discuss
political, tra.de and cultural relations
with South Asians.
C. Delegation includes:
N. A. Mikhailov - Minister of
Culture
A. A. Gromyko - First Deputy
Foreign Minister
P. M. Kumykin - Deputy Foreign
Trade Minister
I. A. Serov - Head of the Committee
of State Security (KGB)
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 Sanitized - ApprovedoRe qo IA- tQJJJARP06P0200003-4
Agriculture (native of
Tadzik Republic)
Mme. Z. R. Ra.khimba.bayeva. - First
Deputy Minister of Culture
of the Uzbek Republic
1. There are Uzbek and Tadzhik
minorities in Afghanistan.
These are only the top members of the
delegation. Press has reported the
entire group numbers about 100.
II. Bulga.nin and Khrushchev are visiting major
cities of India ('Bombay, Calcutta, Madras)
and other show places.
A. A good chance they will also visit
Bhilai, apparently in anticipation of
India's early acceptance of Soviet
steel mill offer.
1. Soviet survey teams already on
scene, and housing construction
activity has been reported.
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a,. "11001110466W
 Sanitt;W - cMA FQg a eik lArRIPP M QQ0400200003-4
leaders are there.
IV. Soviets more interested in good relations
with India. than with any other country
in area..
V. Soviet leaders undoubtedly have arrived
with rash of offers for all three countries`
especially economic and technical assist-
a.nce. Bulga.nin has already publicly
offered Soviet aid in developing Indian
industry and atomic energy for peaceful
~~r-Y-1J Ca~vtr + dr~(cUC,~ Sell
uses. SS1%
~M~L i c a`~AM Cci 9,..A4 da 1a wq A ux.
VI. It is expected that the three states will
be more susceptible to Soviet offers than
previously because of particularly acute
economic problems they face at present.
A. Also the lack of Soviet attempts to
attach political strings to economic
assistance has convinced many Asians
that they can do business with the
Soviet Union without succumbing to
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will enhance Soviet influence in area.
A. Visit will lend cloak of respectability
to communist policies and local Com-
munist parties and open way for even
further contacts between these
countries and Soviet bloc.
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ti-SC BRIBFIlG-
i la.is u
xiddle East?
th As a } and Boo b 'eta--diao wad :s
is pent oo.-to'fur't r for-
.&
n Free worth a#xa
A. Total value Qt Al#t credits to
froe. world ,fir'Vol, 1Ucb $400 million
or'$450 aillioa,witbia the next six
months. (FACT CAAt3 "A")
1. This figure 1061 as known can-
tracts for acme,. signed contras is
and other .044 01litsri . projects
already and r -T, and those fiirm
likely to,`be
2 This campiign
Ppring 1934.
accepted.
dates roughly from
It is continuing,
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 Q0200 3! 4
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. ja
W. a nc e
-
Should the Cowunigts offer Egypt $273.
Iiteaceagencies.
- seas ano~q to rester" inter-
There is no ass
aaiii-ima or $300 . ^il1ion worth of, goods
and services td help with- the Aswan
`
Cos un-
high dam project, the total of
around $700 ail
ist credits would
Egyptian initiative toe USSR ha
offered to help.on this project,
and there are firm reports that
the- terms would be. easy and at-
port that the USSR has offered
this amount.
would need fYoa foreign sources i
any case; there is one press re-
tractive.
2. $274-300 million is what Egypt
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 Sanitized - Approved For Release CIA-RDP80R01443R00040020 03-4
C. Reports of aev Comounist off ore .to Ire
world nstibam axs`received almost
daily. lfottsli"#i,k., ate., of fsrs considered
withtu: tb ro rf -.th! above figures
inclsds:. o * y tb+ai~ :oa a-kiach
tir.fts are wali' * ^ 1 4 those which
see likel_? to big:
II . most dramatic phase of tai a Is swift
conclusion of ar dsa .* _ Ia the 1iear ' *od
Middle Bast.
A. Egyptians are aov committed for Bloc
arms for at least $113' million, and
negotiations ar. uadervay_to bring the
total to $160 #U1 oe; possibly even
more. (FACT CARD "B"
B. Syria on verge of first avatrAo% with.
Czechs for about-75 T-34-tanks., s are-
parts,,and asmaaition worth $5,.900,000.
c. Afghans have 44e cash deal with Czechs.
for $3 million worth of as which are
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D. Reports of further Bloc offers persist
Jordan reportedly offered. arts to
staff ovt of Bighdad pact.
Yese* reportodly~ will accept
--Saudi Arabi#?` rtportadly has offs
and Saudi money know to he ia-
.volved in $ rian arms deal, say
.Soviit offers, if ads.
Egypt, Iraq, Indl$, Afghanistan,
Czech-arms merchants have toured.
III. Besides arcs `deals, loptractai_ bare been
signed and work in actually underway on
projects-using Bloc credits, personnel, a
equipment- to the.anoent of $45.6 Gillian.
(FACT CARD "C")
A Other deals sees close to fruition.
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1. For ezaSPIa 9 India, which has
accepted ~.~ Billion in Bloc
_.cr*dito to -d$ to . Say soon be in-
volved tot about $110 million.
Octunisfitt~-!~ttton early political x
India ^ad- XgYpt are. Xa. ', target x; Afghan
ietan way be lost i nrnt victit-.
t
A. Contracts. for d).aso*d ainia$ egaipser
(panna Diamond syndicate) and Bhi.lat
steel plant s* *O*t certain for, near
future. Other projects already under-
way . (FACT CARD "W")
1. Di*ROUd-^iaing deal wOyld give
Bloc source of iedvstrif-l diaaond
Bloc has nt>ne. Of its own.
are many ether firm Bloc of3er8
B. There
which nay be settled is coaaectiou With
or as resultot, Bulganin-Hhrushchev
visit and othei Bloc visitors. (FACT
CARD "E")
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200003-4
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C., Czech deieg*tion arrived India 6 ,lovea_
brer truth offer to help India's second
five year plan th db beg_ies1 April
:
l956.
Dvt ra k, Czecxh. *iaister:.of 1oxoia4
trade , a&Id that his country con-
sidered capital invtatseit abroad
tantaiouat to'economic iaterfer-
once internal -- a f fa irr