SINO-SOVIET BLOC ECONOMIC ACTIVITIES IN UNDERDEVELOPED AREAS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92B01090R000700010044-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 16, 2016
• Document Release Date: August 9, 2005
• Sequence Number: 44
• Publication Date: October 14, 1957
• Content Type: REPORT

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SECRET
BIWEEKLY REPORT
SINO - SOVIET BLOC
ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
EIC-WGR-1 /44
14 October 1957
PREPARED BY THE WORKING GROUP
ON SINO-SOVIET BLOC ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
SECRET
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SECRET
WARNING
THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
These biweekly reports on "Sino-Soviet Bloc Economic Ac-
tivities in Underdeveloped Areas" are prepared and issued
by a Working Group of the Economic Intelligence Commit-
tee, including representatives of the Departments of State,
the Army, the Navy, the Air Force, Commerce, and Agricul-
ture; the International Cooperation Administration; the
Office of the Secretary of Defense; and the Central Intelli-
gence Agency. Their purpose is to provide up-to-date fac-
tual information on significant developments in the eco-
nomic relations of Sino-Soviet Bloc countries with under-
developed countries of the Free World. The EIC-R-14 series
of reports, under the same title, provide periodic summaries
and analytical interpretations of these developments.
Printed and Disseminated by the
Central Intelligence Agency
SECRET
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S-E-C-R-E-T
Summary of Events
27 September - 10 October 1957
The import of cotton has afforded a favorable avenue for the
expansion of Sino-Soviet Bloc activities in the underdeveloped econo-
mies of non-Communist cotton-exporting countries. The Bloc's ex-
pansion of these activities has been facilitated by its ability to absorb
increased imports of cotton; by the general fear on the part of the
underdeveloped countries that they might not be able to dispose of all
their exportable cotton to non-Bloc buyers; and, in addition -- with
respect to Egypt and Syria -- by the particular government's desire
to obtain military equipment. Beginning with the 1955--56 marketing
season the Bloc has. increased substantially the total volume of its
cotton imports and extended its cotton.-buying operations to additional
underdeveloped countries.
Recent economic activities of the Sino-Soviet Bloc in South Asia
include the signing of a new trade agreement between Czechoslovakia
and India and a Soviet proposal to the Afghan government to exploit
petroleum reserves in northern Afghanistan.
In the Middle East, Egyptian petroleum authorities have recently
required the US firm, Esso, to accept petroleum from the USSR up
to the limits of its unused bunker storage at Port Said, and in addition
the Egyptian authorities have offered to sell to Esso for bunkering
purposes the Soviet oil now held in its tanks. Other economic activi-
ties of the Sino-Soviet Bloc in the Middle East include (1) continued
discussions between Syrian authorities and the members of the Soviet
technical delegations on such subjects as irrigation and power, min-
erals and petroleum, and transportation and (2) the conclusion of a
$1. 9-million trade agreement between Czechoslovakia and Tunisia
featuring the establishment of a multilateral clearing account.
In Latin America a commercial treaty, a trade agreement, and
a payments agreement which were signed with Czechoslovakia in 1955
were approved by the Uruguayan Senate in June 1957 and by the Cham-
ber of Deputies in September 1957. The most notable feature of the
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payments agreement is a provision whereby, upon agreement between
the respective banks, current balances may be used for payments to
third countries.
A Yugoslav delegation will reportedly arrive in Prague this month
to discuss utilization of the $50-million investment credit extended by
Czechoslovakia to Yugoslavia in February 1956. Only about $5 million
of this credit has been drawn upon, and the $25-million credit extended
by Czechoslovakia for the purchase of consumer goods is reportedly
still, untouched.
The Bank of China, which operates an elaborate commercial in-
telligence system throughout Southeast Asia, is an effective instrument
of Chinese Communist subversion. Its assets are used to finance pro-
Communist political groups, front organizations, publications, and
schools. Low-interest loans are extended to those who favor Communist
causes or are willing to follow the Communist line, and defaulted loans
are used as a means of political blackmail. The Burmese government
has taken action which will handicap these activities by imposing new
requirements that will hamper the operations of the two Chinese Com-
munist banks in Burma.
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S-E-C-R-E-T
CONTENTS
Page
I. Sino-Soviet Bloc Activities in the Cotton Trade . . . . 1
II. Far East (Role of the Bank of China in the Foreign
Economic Policy of Communist China) . . . . . . . 5
III. South Asia . . . . . . . . . . . . . . .
A. New Trade Agreement Between Czechoslovakia
and India . . . . . . . . . . . . . . . .
B. Developments Regarding Soviet-Afghan Oil
Agreement . . . . . . . . .
IV. Southeast Asia (Burmese Harassment of .Chinese
Communist Banks) . . . . . . . . . . . . . .
V. Middle East . . . . . . . . . . . . . . . . . .
A. Syria (Activities of Soviet Technicians) 8
B. Egypt (Use of Esso Facilities for Storage
of Soviet Oil) . . . . . . . . . . . . . . . . 8
C. Tunisia (Signing of Czechoslovak-Tunisian Trade
Agreement) . . . . . . . . . . . . . . . . . 9
VI. Latin America (Uruguayan Approval of Commercial
Accords with Czechoslovakia) . . . . . . . . . . 10
VII. Europe (Utilization of Czechoslovak Investment Credit
to Yugoslavia) . . . . . . . . . . . . . . . . . . 11
Tables
1. Imports of Cotton by the Sino-Soviet Bloc from the
Rest of the World, 195253 Through 1956-57 . . . . 2
2. Direct Exports of Cotton from the USSR to the Rest
of the World, 1952-53 Through 1956-57 . . . . . . 4
S-E-C-R-E-T
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