SINO-SOVIET BLOC ECONOMIC ACTIVITIES IN UNDERDEVELOPED AREAS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92B01090R000700010015-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 16, 2016
• Document Release Date: August 9, 2005
• Sequence Number: 15
• Publication Date: September 3, 1956
• Content Type: REPORT

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SECRET c,p
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BIWEEKLY REPORT
SINO - SOVIET BLOC
ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
EIC-WGR-1 / 15
3 September 1956
PREPARED BY THE WORKING GROUP
ON SINO-SOVIET BLOC ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
ECONOMIC INTELLIGENCE COMMITTEE
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WARNING
THIS MATERI!.L CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN T BJ MEANING OF THE ESPIONAGE T-,AWS,
TITLE 18,USC;, SECTIONS 793 AND 794, THE?TRAN:SMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
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CONTENTS
Page
Io Summary of Events, 14+-27 August 1956 . . . . . . 1.
II, South Asia o.. o. o o o. a a 3
A. Ceylon-Czechoslovak Economic Cooperation
Agreement . . . . . . . . . . . . . . . a . o . . 3
B. Pakistan-Czechoslovak Trade Agreement . . . . . . , 4
C'. Soviet Assistance for New Experimental Research
Center in India . . . . . . , . . , . 4
D. Afghan-Soviet Disagreement over Port Construction
Cost . o a . . . . . . a o . . . . . . a o . . 5
III. Far East (Laos) . . . . . . . . . . . . . . o o o . . 6
IV. Middle East . . . . . . . . . . o . . . . 0 . . , _ . 7
A. Lebanese Trade Agreements with Rumania and
Communist China . . . . . . . . o o e
B. Greek-Polish Trade and Payments Agreement . . .
C. Syrian-Lebanese Efforts to Expand Trade with the
Bloc . . . . . .. . . . o . . 0 . . o 0
Delivery of Czechoslovak Bridge to Egypt
A. Soviet Bloc-Cuban Sugar Trade . . . , o
.
,
9
B. Uruguayan Interest in Soviet Bloc Goods . .
.
, . .
10
C. Pending Shipment of Chilean Nitrates to East
Germany . . . . . . . . . . . . .
.
. .
11
VI.
Western Europe (Iceland) . . . o 0 0 o . a
o
e . .
12
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SINO-SOVIET BLOC ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS*
I. Summary of Events, 14-27 August 1956.
The most significant features of the Sino-Soviet Bloc effort to
expand economic relations with the Free World during the period
14-27 August 1956 are (1) the signing of a 3-year mutual economic
agreement between Ceylon and Czechoslovakia and (2) reports in-
dicating that the USSR is participating in the development of a new
research center in Bangalore that will influence the economic de-
velopment of India.
The agreement between Ceylon and Czechoslovakia provides
for the shipment of machinery and other capital goods on an 8-year
credit basis in return for Ceylonese raw-materials, Soviet partici-
pation in the establishment of a new experimental research center
in India, designed to conduct research on industrialization methods
which will take maximum advantage of indigenous resources, tech-
nological capabilities, and manpower, includes the loan of Soviet
equipment valued at US $800, 000** and the use of Soviet research
specialists. A 1-year trade agreement also was signed between
Pakistan and Czechoslovakia during this period.
Running counter to these Sino-Soviet Bloc advances in South
Asia, a report from Afghanistan states that Afghanistan and the
USSR have disagreed over the costs of construction of port facili-
ties at Qizil Qala and that work has stopped at the project site.
* Although the main emphasis of the Biweekly is on economic
activities of the Sino-Soviet Bloc in underdeveloped areas of the
Free World, significant Bloc activities of this nature in areas
not considered underdeveloped also will be discussed.
** Unless otherwise specified, all dollar values in this report
are in terms of US dollars.
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In the Far East, Prime Minister Souvanna Phouma of Laos,
after a meeting with Premier Chou En-lai of Communist: China,
announced that China had offered economic aid to Laos and that
representatives of the two countries would meet in order to "draw
up concrete help for my country's five-year plan. "
Sino-Soviet Bloc economic activities in the Middle East included
the ratification of trade agreements between Lebanon and both Rumania
and Communist China and the signing of a trade and payments agree-
ment between Greece and Poland. Lebanon will export agricultural
products in return for Bloc capital goods, chemical raw materials,
and consumer goods. The agreement between Greece and Poland
calls for commodity exchanges amounting to $6 million .n each direc-
tion. Also in the Middle East the government of Syria established
a firm, headed by a native Communist, designed to expand trade
relations between Syria and the Sino-Soviet Bloc, and Czechoslovakia
delivered an electrified swing bridge to Egypt.
In Latin America the Sino-Soviet Bloc is reported to be negotiating
on a commercial level with Cuba, Uruguay, and Chile. In Cuba the
USSR is discussing an additional purchase of 127, 000 Spanish long
tons of sugar. If this sale is concluded, Cuba will have sold 767, 000
tons of sugar, worth about $58 million, to the USSR and 65, 000 tors
in addition, worth $5 million, to other Bloc countries since 1 January
1955. Although these sales are equivalent to 6 to 7 percent of total
Cuban exports, Cuba will not become dependent on trade with the
Bloc, because the USSR is normally self-sufficient in sugar and Cuba
no longer is carrying over a burdensome sugar surplus.
Uruguay, utilizing foreign exchange from a trade balance accumu-
lated in previous trade with the USSR, has purchased 2, 100 metric:
tons of cotton from the USSR. The Uruguayan government made a
further grant of $1. 9 million in accumulated funds to a private firm
for use in payment for textile machinery to be purchased from East
Germany. East Germany also plans increased trade with Chile, be-
ginning with the purchase of 20, 000 metric tons of nitrates valued
at $900, 000. In return, Chile expects to import East German opti-
cal goods, machinery, ships, and other products.
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The only significant Sino-Soviet Bloc economic activity in Europe
during this period was the recent visit to Iceland by a delegation of
high-ranking Czechoslovak officials to inspect Icelandic fish-process-
ing plants and herring ports.
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