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TV 6._,, ~ oved . F e L1,. 5(026 : CIA-RDP85B0 I O 2OQtb$00Q8-? ORE 74-49 Published 22 September 1949 LIMITED DISTRIOTION A /I + C0NFIDENTIA 4-1 A G u" V E R N 'm" ME TAL PROGRAMS NATIONAL SECURITY AND INTERNATIONAL AFFAIRS FOR 1951 CENTRAL INTEL LIGENcE AGENCY ease, 25X1 Approved For Release 2005/01/26 : CIA-RDP85B00236R000200180008-6 Approved For Release 2005/01/26 : CIA-RDP85B00236R000200180008-6 CONFIDENT!AV Approved For Rase 200510T/ ': (NAAM'B00236W0200180008-6 GOVERNMENTAL PROGRAMS ON NATIONAL SECURITY AND INTERNATIONAL AFFAIRS FOR FY 1951 PROBLEM 1. Given a proposed substantial reduction of appropriations for governmental programs in national security and international affairs for FY .1951, to estimate A. The effect upon the non-Soviet world in FY 1950, FY 1951, and subsequent years to 1955. B. The effect upon the security position of the US vis-A-vis the USSR (1) As of the end of FY 1950. (2) As of the end of FY 1.951. ASSUMPTIONS 2. It is assumed A. That the proposed substantial reduction for FY 1951 will become public knowledge in the course of FY 1950. B. That over-all economic activity within the US will remain at approximately its present level for the period under consider- ation. C. That existing governmental programs in national security and international affairs will be implemented in FY 1950 in approximately their present form. D. That the objectives and aims of US policy with respect to the USSR and the security interests of the United States are as stated in NSC 20/4. FACTS BEARING ON THE PROBLEM 3. It was estimated in CIA 4-49, of April 1949, that the global. security position of the US relative to the USSR had slightly improved in twelve months. This conclusion was based on the favorable trends that had been devel- oped in Western Europe and which were con- sidered to have outweighed on balance un- favorable trends in the Far East. It was stated, however, that the trends were so un- certain that they indicated opportunities for development and not accomplished fact. It was accordingly considered that the more favorable position could not be validly pro- jected beyond the short term. While no significant positive change. has taken place in the position between April and August, 1949, these favorable trends are being nodif ed by the adverse trends noted in para. 4 below. Air Force have concurred in this report. It is based on information available to CIA as of 30 August 1949. The categorical summary of the position, as given in CIA 4-49, however, remains approxi- mately the same: Europe-definitely more favorable to the US; Near East.--basically un- changed; Far East (China and Southeast Asia)---definitely less favorable to the US (N.B. A slight improvement has taken place in Southeast Asia since April 1949) ; Far East (Offshore islands) --slightly less favorable; Latin America---basically unchanged for the US, definitely less favorable for the USSR. 4. The following unfavorable trends, which have originated outside the problem, are con- sidered now to be overtaking the favorable trends noted in CIA 4-49. They are: Note: The intelligence organizations of the Departments of State Army Navy and th 25X1 25X1' Approve Releas 4W#ff1T/ : CIA-RDP85B0 ,36R000200180008-6 -,rr. TOP SECRET B. The tendency, enforced by present dollar shortages, of states or groups of states in the areas interm:?diate to the US and the USSR to develop autarchic economic policies, and the effect of this development on the US security interest in the economic and political stability of such states and in the maintenance of the domestic economy of the US. }}rr C. The e palidirw Communismrt of the Far 5. For the purpose of estimating, it is as- suc;led that currently operative forces and trends continue in effect. The possible modi- fication of these forces and trends by events or actions which are conceivable, but not pre- DISCUSSION For discussion of 1 A see Enclosure "A". CONCLUSIONS 25X1 6. The proposed reduction will significantly reduce, within FY 1951, the capacity of the US to pursue the objectives and aims stated in NSC 20/4, and may in the critical years subse- quent to FY 1951 invalidate those objectives and aims. 7. Within FY 1.950 the principal effect of the proposed reduction will be the definitely unfavorable psychological reaction of the non- Soviei world and ai concurrent boost to the Soviet world. This reaction will tend to give support to already existing adverse trends such as: B. The tendency, enforced by present dollar shortages, of states or groups of states to develop autarchic economic policies, Thu expanding Communism of the Far East. ii. While it is estimated that there will be considerable economic consequences in FY 1.950 and FY 1951, it is not considered that these will inevitably and of themselves lead to a serious deterioration of the US security posi- tion within FY 1951, if the countries affected are given ample time and are able to prepare dictable, has not been taken into considera- tion. It is to be noted, however, that the intensity of the reaction to the proposed re- ductions, as well as the development of the unfavorable trends listed in para. 4 above will be governed to a large extent by (a) the suc- cess of such action as may be taken to check these existing unfavorable trends, (b) the de- gree to which present and prospective recipi- ents of US aid can be persuaded to accept the idea that a condition of permanent depend- ence upon US resources is neither possible for the US nor dcsirab1-, for the recipients, and (c) the degree to which the US convinces the non-Soviet world that its military force and potential will continue to be available for use in restraint of Soviet aggression. compensatory adjustments. It is noted, how- ever, that such adjustments would probably take the form of a greater dependence on bilateral trade agreements, including an in- crease in East-West trade, some reductions in standards of living, delays in implementing investment programs, and firmer patterns of economic autarchy---courses of action which, for the most part, would run counter to US international economic objectives, and the full development of which might well have an adverse effect, on over-all economic activity within the US in FY 1951 and subsequent years. 9. The interaction of psychological factors and economic adjustments, initiated in FY 1950, will develop, in the course of FY 1951, into positive trends unfavorable to the over- all US security position vis-a-vis the USSR. These trends will be supported, in part by the unimpeded development of already estab- lished trends in the Far East; in part by the psychological, economic, and political adjust- ments of Western Europe; in part by the fur- ther trend toward instability which will have been introduce([ into the situation in the Near Arid Middle East; in part by the decline in US C n_r IDFVTIAL? Approved For Rase 20!D5K:1/28 ECIA $IPP85B00136W0200180008-6 military strength; and in part by the Soviet- Communist exploitation of the opportunities that will have been opened. The deteriora- tion of the over-all US security position may not, however, reach a critical point within 1iY 1951, provided that the current situation in various key strategic areas, such as Germany and Greece, is kept under control. 10. The years subsequent to FY 1951 will be critical in terms of the 118 security position vis-A.-vis the USSR, unless effective counter- measures have been devised and are being im- plemented. At that time, the accumulating effects of unfavorable trends abroad and of exploitation of enhanced opportunities, will come into juxtaposition with the full ef- fects of reductions in programs related to US national defense. 11. The military capabilities of the US will begin to depreciate before thw close of FY 1950 and will decline at a.n accelerated rate thereaf- ter. Comparatively, mobilization capabilities will be more affected than the forces in being. The substantial reduction in US military capa- bilities will heavily tip the international bal- ance of power in the direction of the USSR which is expected to maintain its present capabilities and even to add to them by con- tinued efforts to improve weapons and produce atomic bombs. 12. If the adverse developments noted in 10 and 11 above continue unchecked to a point where the US decides that it is necessary to attempt to redress the balance vis-, -vis the USSR, the restoration of the situation in terms of the aims and objectives of US policy as set forth in NSC 20/4 would be more difficult and more costly than the maintenance of the present situation with respect to those aims and objectives. -TOP SECRET CO ~~'TF I DENT TA &' Approved Fir Release 2005/01/26 : CIA P85B0036R000200180008-6 N TT TO P SECRET, ENCLOSURE "A" The effect upon the non-Soviet world in FY 1950, FY 1951, and subsequent years to 1955. DISCUSSION 1. In FY 1950 the reaction to the proposed reduction will be primarily psychological. It will take many variant forms, and it will be most profound in the countries that, consider that their interests and objectives have been equated with US support. Certain common features will be generally present: an inter- pretation of US policy as undependable, or reverting to isolationism; a fear that US mill- tary strength will decline; a conviction that national policies, free from dependence on the US, must be quickly found and vigorously de- veloped. This initial reaction will guide eco- nomic and political adjustments. The effiects of these adjustments will develop slowly and not become significant before FY 1951. In general, they will tend to shape up into a trend unfavorable to the interests and security position of the US and resistive to the objec- tives and aims of US policy. In the absence of counter-measures, they can be expected to lead, in the years subsequent to FY 1951, to a critical deterioration of the over-all US security position. 2. General Reactions, Regionally Considered. A. 'n the UK, reactions to US foreign eco- nomic policies will already have been shaped by the outcome of the September conversa- tions in Washington, A reduction of appro- priations according to the terms of the prob- lem, involving as it would a small amount of financial assistance in relation to UK re- gait?emcrits, could not be expected to producc- any r narked additional popular reaction, nor any substantial economic effect. Olflcial analysis will probably conclude, however, that it has become essential to develop a policy capable of being largely implemented from UK-Sterling Bloc and non-dollar area re- sources. B. In Scandinavia, there will be a swing back to the concept of a neutral bloc, accom- panied by a growing lack of definition : in foreign policy. However, no drift toward gen- uine accommodation with the USSR is to be anticipated. C. In Western Europe, the reaction will gen- erally take the form of diminished confidence, hesitation and circumspection in relations with the US, less capacity to resist external and internal Soviet-Communist pressures. D. In the Near and Middle East, it will gen- erally take the forin of questioning the de- pendability of the US as a counter-force to Soviet expansion. F. In the Far East, it will generally take the form of a reduced capacity and will to resist the Communist pressures which are be- ing exercised outwards from China and in- ternally in individual countries. This re- duced capacity will show in two ways: fatalis- tic acceptance of compromise by present hold- ers of authority, and popular identification of nationalist aspirations with Communist politi- cal dynamism. F. l n Latin America, there will be a loss of confidence in the US, less willingness to accept US leadership, and a search for independent c:our::es of action, particularly on the part of Argentina, and, possibly, Chile. 3. Economic Repercussions and Adjustments, Regicnaliy _:onsidered. A. Western Europe. Economic activity, especially industrial pro- duction, has probably been sufficiently re- stored to cushion to some extent the immedi- ate and short-term effects of the proposed re- duction. There should be no purely economic consequences in FY 1950, but in FY 1951 the effects of the reduction upon the international financial positions of the Western European countries would have considerable adverse economic repercussions. If the proposed re- i;vi U)ENTIA s 6 Approved It ReTCIA-RDP85B0 .b 6R000200180008-6 duction were notified in a way that gave time for compensatory adjustments, the purely economic changes that would take place should not produce of themselves a significant adverse security trend within FY 1951, pro- vided that the adjustments are not accom- panied by serious labor troubles. The more thoroughly and successfully these adjust- ments are made, however, the greater the possibility of their working to restrict over-all economic activity within the US. The types of adjustment would be: (1) a reduction of purchases in the dollar area and an increase in bilateral agreements and trade restrictions; with a further diminu- t::,n of the prospect of re-establishing a sys tem of multilateral trade. (2) an expansion of East-West trade, essen- tially as an exchange of industrial goods for foodstuffs and raw materials; with a conse- quent weakening of the US policy of control- ling exports to the Soviet-Satellite Bloc. (3) an acceleration of the long-standing trend toward economic autarchy. (4) and, as far as continental Western Europe is concerned, economic-military de- cisions, involving demands for specific com- pensation from the US for the use of bases and strategic installations and a lowering of the presently negligible military potential in- sofar as it is applicable to the maintenance of US security. These adjustments would be accompanied by a lowering of standards of living, a slowing down of investment programs, and by con- siderable competition between social welfare expenditures and presently projected rearm- ament programs. In these connections, polit- ical repercussions will develop and, hence, it will not be valid for FY 1951 to isolate purely economic consequences. (See para. 4 A, B below.) For example, the reactivation of economic activity has derived from more than US rna- terial assistance. One of its conditions has been the encouragement and security pro- vided by alignment with the industrial and military potential of the US. This has given a reasonable assurance against Soviet military action and Communist political subversion. The possible destruction of, or even the intro- duction of momentary doubts concerning this intangible factor make it unrealistic, there- fore, to estimate conscquences in purely eco- nomic terms. B. Near and Middle East. Even in FY 1950, Greece and Turkey will be faced with major economic problems as a re- sult of the reduction of US aid. Elsewhere in the area there will simply be an over-all slowing clown of the entire process of creating economic stability. (See para. 4 C below.) C. Far East. The economic problems and consequences of a proposed reduction will be essentially psychological and political, with the impact falling chiefly in Japan and Southeast Asia in FY 1950. D. Latin America. More strenuous efforts will be made to de- velop country and regional economic autarchy and to enter bilateral and limited area trade agreements. E. Inter-regional Stockpiling Programs. The proposed reduction in stockpiling ex- penditures would probably result in a curtail- ment of development programs in the produc- ing areas. It would also result in a reduction in dollar earnings of the owning countries (especially the United Kingdom and the Netherlands) to the extent that purchases were curtailed. These reductions would have unfavorable political repercussions in the pro- ducing countries and would add to the diffi- cult adjustments which the European colonial powers will be obliged to make. 4. Political Repercussions, Regionally Con- sidered. 25X1 25X1 25X1 Approved or Release 20Q J VA 2D-!fXI'A P85B0?236R000200180008-6 NOW T.OP SECRET '..y B. Western Europe., In France and Italy instability would be greatly accentuated in FY 1950, as the moderate governments, which have rested upon US subsidies and have main- tained themselves by US-supported programs of cooperation, come under serious attack from both Right and Left. The adjustments such governments will be required to make will very probably lead, during FY 1951, to well-defined political polarization. The prob- able direction of political change will be, by way of coalitions, to governments of the Right. The stage will be set, in the years subsequent to FY 1951, for an increasing struggle for power between extremist groups. However, the basic political struggle in the Benelux countries, Scandinavia, Western Germany, and Austria will still be between democratic elements of the Right and Left (e.g., the CDU and SPD). C. Near and Middle East. No generaliza- t;on is valid for this region. Greece, Turkey, and Iran, because they are adjacent to Soviet- Satellite territory, are in a special category. Israel, as a newly formed State, has unique problems. The Arab countries are divided among themselves. The Indian subcontinent is remote from the operation of regional fac- tors. It is in the parts of the region bordering the USSR that an unfavorable reaction in FY 1950 can .most rapidly develop into a critical situation in FY 1951, and that the security position of the US can be most speedily under- mined. (1) Greece. The situation in Greece is so potentially unstable that it is considered that a substantial reduction cannot safely be ap- plied until six to twelve months after the guerrillas have been reduced to "manageable" proportions, i.e., 2,000--3,000. Reduction prior to this time would stimulate fresh Soviet- Satellite pressure while reducing Greek abil- ity to oppose such pressure. The immediate reaction in the circumstances would be a breakdown of civilian and military morale, the fall of any coalition goveriiinent, and probable attempts to form an authoritarian regime. The speedy disruption of even the present sem- blance of political unity would be followed by further decline in the already low standard of living, by disaffection among refugees, and by a deterioration in internal security. (2) Turkey. The immediate effect would be a tightening of political controls with power concentrated in reactionary groups. Eco- nomic development would be checked and re- sources allocated on a rising scale to the armed forces. The value of Turkey as a "bas- tion" would gradually diminish. A basic shift to neutrality, with the implication of accom- modation with the USSR would not occur, however, unless Greece and Iran fell under Soviet domination. (3) Iran. Currently obsessed with obtain- ing US aid, the government, especially the Shah, would receive word of the proposed re- duction with apparent anger and alarm. Even without US aid, efforts would probably be made to build the military establishment to unrealistic proportions at the expense of programs for economic development. The present anti-Soviet sentiment, however, would probably not change. The 'US would find it much more difficult to exert its influence to- ward increasing internal stability through eco- nomic and social development, and Iranian vulnerability to Soviet pressure would steadily increase. (4) Israel. The immediate effect would be to strengthen pro-Soviet political parties. MAPAM, the largest, would be in a position to press to enter the government. The present policy of neutrality would be increasingly em- phasized. Of slower development would be the delayed effect of world-wide economic ad- justments on the capacity of Israel to become a viable sta, (5) Arab Ac:tes. Denial of aid in the maib.- tenance and resettlement of Arab refugees would intensify unrest in the area. Denial of aid to Saudi Arabia would lead to difficul- ties in connection with the Airbase Agree- ment, but would not be critical in the long term. The other states would probably move to rebuild their relations with the UK and France. Economic stability and internal se- curity would probably worsen slowly in FY 1951, with the rate of adverse development de- pending to a certain extent on the situation in Turkey and Iran. C0.NFTDFl 2T-ff r . 7..-_ Approved ' ReleRak 2 1Tadd)df'//Iii i IA-RDP85B0 6R000200180008-6 Nw~ TOP SECRET "'M (6) Indian. Subcontinent. No significant reaction since the area is fairly well condi- tioned to the idea that large-scale material aid will not be forthcoming from the US in any c.ircurnstances. There would, however, be a d_umnutio.n of US in_(luence. D. The Far East. With the exception of the costs of occupy- ing and assisting Japan, already approved US expenditures in the region are relatively sinall. Korea and the Philippines are the other prin- cipal recipients. The Republic of Korea is wholly dependent on US economic and mili- .ary aid for its survival. The severe psycho- logical effect of a reduction would lead in a straight line to Communist domination. It is considered, however, that the ultimate corn- rxxunization of Korea can only be delayed, not prevented, and that the essential question here is the value of delay in relation to the 25X1 general. security position of the US in the re- gion as a whole. Although the proposed reductions will be politically used in the Philippines to whip up anti-US sentiment, it is not considered likely that US influence will be significantly affected during the period under discussion. Present commitments are contractual or authorized through FY 11)51, In Southeast Asia, the psychological re- action will reduce the US capacity to influence the course of events, and the tendency to- ward accommodation with Communism will increase. (l=or effects of reduced Stockpilingr Programs, see para. 3 E, above.) E. Latin America. US influence will dimin- ish in FY 1951 and subsequent years, more in consequence of psychological factors than re- duced expenditures. This lessened influence will be marked in more remote countries, scarcely noticeable in those of the northern area. Diminishing confidence in US power relative to the USSR will strengthen the ad- vocates of neutrality in the East-West struggle and will open the way foe- Argentine leader- ship of a "neutral" bloc that will tend to trade its influence in internatiohal organizations in- stead of uniformly supporting the US in major US-USSR issues. 5. Soviet-Satellite Reaction. A. It is considered that the proposed reduc- tion will be interpreted as indicating that new opportunities have been opened for vigorous exploitation. B. It is considered that such exploitation will include a fully developed propaganda campaign with themes designed to. (1) undermine confidence in US policies, dependability, and economic strength; (2) intensify insecurity, distrust, and fear; (3) create psychological impediments to rapid and successful adjustments; (4) vindicate the Communist views of his- torical development and the superiority of the Soviet system. C. It is considered that this campaign will be accompanied by a maximum use of political and economic weapons. (1) Increased political and economic agi- tation, and industrial subversion by local Corn- iuunist Parties. (2) Diplomatic and economic pressures to conclude political and trade agreements with the Soviet-Satellite Bloc. (3) Financial manipulations and commod- ity dumping, to impede economic readjust- ment. C.'.031'ADENTri\r$ Approved Fc# Release 2005/0~1r/X2 1: IA-'RDF85B002#6R000200180008-6 TOP SECRET -NOW %me ENCLOSURE "B" The effect upon the security position of the A. As of the end of FY 19511. US vis-ii-vis the USSR: B. As of the end of FY 1951. DEFINITIONS 1. It is considered, for the purpose of this pr:?o?blem, that the basic security interest of the US for the indefinite future, as set forth in NSC 20/4, is to keep the dispersed power resources of Europe and Asia from being drawn into a Soviet power system; and that the maintenance of this interest requires that states in the areas intermediate to the US and the USSR should identify to the maxi- mum their political aspirations and security interests with those of the US, and that the economic and social structure of the US should be kept viable and adaptable. 2. It is further considered that the relative power of the US and the USSR has been kept in a state of precarious balance since 1946 by the fact that Soviet force in being is weighed against US industrial potential, 'US guaran. tees abroad, and certain technological advan- tages, of which the US possession of the atomic bomb and the ability to deliver it is perhaps the most important. DISCUSSION Estimate as of the End of FY 1950. dependence from the US will probably result. 3. It is considered that, within the terms of the problem and assumptions, the adverse trends z ..oted in para. 4, page 1, are likely to develop more rapidly and comprehensively than would otherwise be the case. It is not, however, considered that a fundamental ntoch- fication of the global security position of the US relative to the USSR is likely to occur within FY 1950, provided the existing situa- tion in certain key strategic areas (Central Europe, and Greece-Turkey-Iran) is main.. tained in at least its present form. Regional modifications in relative positions are likely to occur, most notably in the Far East; and, while such modifications may have significant long-term security implications, they do not necessarily threaten US security in the short- terin, nor need their short-term effects be re- garded as representing irrevocable losses or irreversible trends. 4. In continental Western Europe the com- bination. of an unfavorable psychological re- action and the compensatory economic and security adjustments that will be initiated, will lay the groundwork for renewed political instability. In the UK, intensified efforts to develop a position of maximum economic in- In Scandinavia, a growing uncertainty in for- eeign policy will develop, as well as increased support for a return to the concept of a neu- tral bloc. In Central Europe, the proposed reduction will be exaggeratedly interpreted and will be over-enmphatically reacted to. In Western Europe, generally, the desire for eco- nomic and political integration will continue, but practical progress in this direction will be checked by the type of adjustment that in- dividual states will make to reduced US aid. Although military cooperation at planning and technical levels is likely to be speeded up, military readiness will be reduced in propor- tion to the degree to which US aid is with- held. Over-all. relations with the US will con- tinue of necessity in their present pattern, but will be marked by hesitation, circumspection, and diminished confidence, The area of prac- tical cooperation with the US in collective se- curiy will tend to be narrowed to those inter- ests that are of immediate concern to the states of the region. 5. In the Mediterranean region and the Middle East, it is considered that the relative US security position will continue in its pres- ent form, provided the local situation in TOP SECRET 9 C0?,? TT17NTTPL 10 Approved pr Releas~jqfA-RDP85B0 68000200180008-6 `ir/ TOP SECRET 1qW r ece is not permitted to deteriorate. The present uncertain internal stability of the re- gion is, however, likely to become more pre- carious if the factors producing instability are given freer rein by the development of doubts about US intentions. While no large- scale programs designed to check such factors (excepting ECA in Italy and subsidies in Greece and Turkey) are in operation, expec- tations of aid have been created by both US and UK policy. The proposed reductions will tend to weaken US, and indirectly, JJK influ- ence, and thc existing partial checks on pro- gressive instability will be diminished. 6. In the Far East, although the generally unfavorable position developing in this region arises from factors unrelated to the problem, it is considered that this development will be given added impetus. An unfavorable psy- chological reaction will occur, most pro- nounced in those countries that feel them- selves directly exposed to Chinese Commu- nism, more diffusely in those countries that believe themselves in danger of Communist subversion. 'I'bis reaction will generally work to supplement an already adverse trend by encouraging a tendency to compromise with a. regionally successful force and by ericourag- ing nationalist movements to place their hope in Communism rather than in US promises. 7. The military capabilities of the US will begin to deteriorate before the close of FY 1950. As soon as news of the proposed reduc- tion for 10Y 1951 becomes public, the NME will lose many key and specialized personnel. This loss of the personnel and the preliminary preparations for closing out or reducing many activities and functions of the NME will seri- ously impair the effectiveness of their opera- tions even before the beginning of FY 1951. 8. Assuming that specific events or effective counter measures have not reversed the cur- rent unfavorable trend, a categorical sum- mary of the estimated global security position of the US vis--,c-vis the USSR at the end of FY 1950, can read: A. There should be no fundamental change in the basic US security position provided a limited number of key strategic positions are maintained. B. Trends, ultimately unfavorable to the US security position, will be present and will be developing at an increasing rate. C, There will be increasing opportunities opened to the USSR for exploitation by the, techniques of a "cold war." Estirnates as of the End of FY 1951 9. Within the terms of the problem, and in the absence of comprehensive. counter incas- ure.s, it is considered that the global security positiona of the US relative to the USSR will, in the course of FY i951, begin to approach the point at which serious deterioration can set in. It is not considered, again provided that key strategic positions continue to be maintained, that obviously significant changes will necessarily have taken place; but ,~imply that the structure of US security as presently conceived will have been weakened. The chief factors working toward this end will bje the accumulating effects of adverse trends that have been recognized as operative in FY 1950 and the exploitation of these trends by Soviet-Communist action. 1.0. In. France and Italy, l.)otitical instability will probably develop toward political polari- zation. Political authority will tend to shift toward the Right. The line of cleavage of political forces will be between a nationalist Hight with dictatorial overtones and an inter- nationalist Left under Communist direction. The pattern of econurnic adjustment and com- nu rcial and financial policy will complement the political tendency. The pattern will probably be controlled, defensive, and nation- alistic. The pressure of insecurity may fur- thcr step up the degree of military coordina- tion, but the economy will not be able to pro- vide the equipment needed to make defense plans realistic. Cooperation with the US may well be limited to those precise respects in which US objectives can be equated with local security interests. The intangible guidance which the US now gives in answering a col- lective security problem will become dispersed 'POP SECRET CO1NYtTJENTIAII Approved Fc elease 20051&f N"`bT $5B002 000200180008-6 -TOP SECRET and ineffective, and agreements will more and more depend upon bargaining and well- defined quid pro quos. 11. Elsewhere in Western Europe, particu- larly in the United Kingdom, political insta- bility will be much less serious than in France and Italy, and will stem from general eco- noniic maladjustment rather than from the reduced appropriations which constitute the terms of this problem. There will be no sig- nificant political polarization. Communist influence will not appreciably increase, nor will right-wing authoritarianism gain any substantial following. 12. In the Mediterranean, Near, and Middle East, regional instabilities will probably in- crease as the indirect consequences of the pro- posed reduction are more widely felt. The decline of US influence will encourage the states of the region to seek alternative sources of strength externally or to develop artificial appearances of strength within themselves. In Greece, Communist elements, even if the guerrillas have been liquidated, may be en- couraged to attempt a new test of strength. Turkey and Iran will probably interrupt their plans for economic development and allocate their resources to military uses. The value of Turkey as a US "bastion", and the internal stability of Iran will be reduced by such a change. The Arab States will probably try to revive their UK or French connections; but, even if these were wholly re-established, the UK and France would not be able to provide the material assistance needed to check the forces creating instability. Positive shifts of alignment toward the USSR are not indicated. An increase in the opportunities opened to the 1.1 USSR for subversive action designed to make the region a weaker element in the structure of US security is :indicated. Political, social, and economic instability will probably spread from the Near East along the North African littoral. The French, particularly if policy is increasingly directed by the Right, will meet this challenge to their control with repressive measures. These developments will tend to make it more difficult to utilize the Mediter- ranean region in support of the presently con- ceived US security. position. 13. In the Far East, where adverse factors are already in vigorous operation, the most likely trend. will be toward a more rapid ex- tension of Communist influence on the con- tinent. In this connection, the situation in Japan will become increasingly important. The re-establishment of Japan as a viable state becomes essential to the maintenance of a minimum US security position in the region. It is recognized, however, that the conversion of the Asiatic mainland from an area from which the US has been excluded to an area constituting an offensive threat to the over-all US security position will not take place within the period under consideration. 14. Within FY 1951, there will be a decline in US military capabilities. The multiple and diverse activities associated with the reserve forces, the improvement of weapons and equipment, and the general plans and opera- tions in preparation for the expansion of the NME in time of national emergency will. be seriously curtailed, Reductions in the im- portant adjuncts of NME--AEC, the MAP and the strategic stockpiling programs-would further adversely affect the military position of the US and the Western Powers. These substantial reductions in US military readi- ness will tend to shift the international bal- ance of power in the direction of the USSR, which is expected to maintain its present capabilities and even to add to then by con- tinued efforts to improve weapons and produce atomic bombs. The Western Powers, which have been en- couraged by the US' to take a firm stand against Soviet aggression, will be discouraged by the prospect of a decline in US military capabilities and in the amount of direct US CoNFIDFNTIAT; C10''JFIDENTTATr Approved Fo apg)400 Wt2fti,, lA-RDP85B002 R000200180008-6 assistance in building up their own military forces. Their determination to resist Soviet aggression will weaken accordingly, with a consequent weakening in the basic US secu- rity position. 1.5. Again assuming that specific events or effective counteraction have not reversed the current unfavorable trend, a categorical sum.- rnaiy of the global security position of the US vis-A-vis the USSR, as of the end of FY 1951, can read : Estimates A. Indian Subcontinent. A. A definite reversal of the existing favor- able situation in Western Europe. B. A more rapid development of the exist- ing unfavorable trend in the Far East. C. A progressive instability in the key stra- tegic region of the Mediterranean, Near, and Middle East. D. An increase in the number and variety of Soviet-Communist pressures and a constant probing for points of weakness in the US security position. of the Probable Situation in Other Regions Beyond a reduction in the US capacity to influence events in this region, no significant change is considered likely in FY 19:10 or 1951 in consequence of the proposed redid ction. B. Latin America. In c'in ection with this region, important L. , the general support of the US security position rather than because of any danger of its falling immediately within a Soviet power system, it is noted that US influence will grad- ually diminish through the period under con- sideration. The most significant consequence will probably be the development of neutral positions and a tendency to use the Latin American voting strength in international organizations for bargaining purposes rather than uniformly to support US objectives in major US-USSR issues. C. Africa. Except for the North and West African lit- toral, which has been considered above, this region is considered to be comparatively irrelevant to the problem stated and for the period under consideration. -TOP SECRET C0NFIDTNTTA' 25X1 Approved For Release 2005/01/26 : CIA-RDP85B00236R000200180008-6 Next 7 Page(s) In Document Exempt Approved For Release 2005/01/26 : CIA-RDP85B00236R000200180008-6 ~+ rr'+ r Cy $ f, yr1Q,. e)2005/01/26 : CIA-RDP85B00236R`0O0200180008-6 WASHINGTON 213, D. C. OFFICE OF {THE DIRECTOR 2; Augwit .1953 e~','S;~;x~'#;LA3.5 J'aSilltiaM4 roil "i}i . . 131.2'. "1VE BEf. ., i.trnt p (CFTC. OF TIX. :CIMM? OF DEVE F;1 Wor2.ik>g Pa ars or, 1E 0 I. Coatirr ,.r n telephone conversation between Colonel D. P. 1 iva axA- the u4ersigraed, it is requested that 1)r. A th'U,r B. Darling, CIA Historian, be alloyed. accear to the r_ri..1a,#c?at pa.1iers. Dr. 1 wl.izg is preparing a history of the er ;k^,n.Iz s ic:;. of tae Ctantx tl Intelligence Agency, and believes C i #,.er ~.k . T. 1i N r y ?a3 co entc on the Dulles-Jackson-Correa 1 port, would b of uceletance to 'him is his undertaking. tea. Dkirl.i ; has secturity clearance through TM CC1D ::kecu , ss stint to the Lirectoa~ DOCUMENT NO, NO CR i GE IN CLASS, ^ 2< GtBL >SiFi1'3 CLASS, Cr.Zr TO TS S C NEXT Pic tti . 6?,.Y':., 25X1 25X1 Approved For Release 2005/01/26 : CIA-RDP85B00236R000200180008-6 Approved For Rase 2 =236F30Q0200180008-6 DEPARTM EN E WASHINGTON, HEADQUARTERS SERVICES WASHINGTON, D.C. 20301 November 13, 1981 MEMORANDUM FOR THE CHIEF, CLASSIFICATION REVIEW DIVISION, CENTRAL INTELLIGENCE AGENCY SUBJECT: Request for Declassification Review During the systematic review of all classified Office of the Secretary of Defense (OSD) documents over 20 years old, the Declassification and Historical Research Branch, Records Management Division, Directorate for Correspondence and Directives, Washington Headquarters Services, turned up the attached document(s). The documents were either originated by your agency, contain information for which your agency is the classification authority, or are otherwise of interest to you. It is therefore requested that your agency review the documents and recommend declassification, continued classification at the present or lesser level of classification, and/or review by other agencies. If your agency is recommending continued classification, in accordance with Para- graph 3-401, Executive Order 12065, it is requested that an authority for continued classification be specified, along with a date for the next review. The time permitted by Executive Order 12065 to reach the point where all OSD documents over 20 years old have been reviewed, and the large volume of over 20 year'old OSD documents, make it necessary to request your res- ponse within 60 days. In your response, you may wish to provide guidance with regard to what categories of information you do and do not wish to have referred to you in the future. Your assistance in effecting this review will be most appreciated. Please return the documents to Mr. Brian V. Kinney, Chief, Declassification and Historical Research Branch, Records Management Division, Washington Head- quarters Services, Room 1D517, Pentagon, Washington, D.C. 20301, upon completion of your review. Without attachments, this memorandum is UNCLASSIFIED. E. E. Lowry, Attachments (4) Approved For Release 20 Approved For Re#se 2005/01/26 : CIA-RDP85B00236R000200180008-6 mr LIST OF ATTACHMENTS 1. Report, 30 Aug 1949, Subj: Governmental Programs on National Security and International Affairs for FY 1951, ORE 74-49, Copy No. S, Log No. 24356 (TS) 2. Report, 22 Sep 1949, Subj: Governmental Programs on National Security and International Affairs for FY 1951, ORE 74-49, Copy No. 19, Log No. 022949 (TS) 3. Report, 27 Dec 1950, Subj: NIE-5: "Indochina: Current Situation and Probable Developments." (S) 4. Memo, 25 Aug 1953, Subj: Working Papers on NSC 50 (C) Approved For Release 2005/01/26 : CIA-RDP85B00236R000200180008-6