SINO-SOVIET BLOC ECONOMIC ACTIVITIES IN UNDERDEVELOPED AREAS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92B01090R000700010087-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 16, 2016
• Document Release Date: August 10, 2005
• Sequence Number: 87
• Publication Date: June 8, 1959
• Content Type: REPORT

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BIWEEKLY REPORT
SINO - SOVIET BLOC
ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
EIC-WGR-1 /87
8 June 1959
PREPARED BY THE WORKING GROUP
ON SINO-SOVIET BLOC ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
SECRET
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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
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Summary of Events*
22 May - 4 June 1959
Afghanistan and the USSR signed an economic and technical aid
agreement on 28 May calling for Soviet assistp.nce in improving a
470-mile road from the Soviet border to Kandahar via Herat and Farah,
Under a new Soviet-Indian economic aid agreement signed in
Moscow on 29 May, the USSR will extend a credit of approximately
$20 million to India to assist in the development of that country's
pharmaceutical industries.
On 28 May, Ceylon and Communist China signed a rubber-rice
agreement under which Ceylon will sell 30, 000 tonarof rubber to
Communist China in exchange for 230,000 tons of rice.
Burma has active clearing accounts with only two Bloc countries
at present -- the USSR and Czechoslovakia -- and progress has been
fairly slow in liquidating the sizable net credit balances in these
accounts. Clearing arrangements have been terminated with East
Germany, Hungary, and Communist China, but credit balances with
East Germany and Hungary and a debt balance with Communist China
remain. Burma has a net credit balance with all Sino-Soviet Bloc
countries as of the end of February 1959 of $6. 7 million.
An Indonesian official has announced that Communist China has
signed a preliminary agreement to extend to Indonesia a $30 million
line of credit for the purchase of a textile mill as well as other in-
dustrial equipment.
Progress on the Aswan High Dam has been limited thus far to
conferences between Soviet and Egyptian experts on technical con-
siderations concerning the design of the dam. The Egyptian press
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reports, however, that the USSR has offered to aid financially and
technically in the construction of the entire dam, instead of Just the
first stage, and to complete it in 6 years instead of 10, as originally
scheduled.
Rumors that countries of the Soviet Bloc have been reexporting
Egyptian cotton to markets of Western Europe have led the Egyptian
government to make discreet moves to enlist the assistance of the
US, West Germany, and Italy in dissuading Western buyers from
purchasing such cotton.
Turkey will purchase Soviet textile and other industrial equip-
ment worth almost $5 million for 4 plants in south-central Turkey.
Repayment probably will be over a 5-year period at 3. 5-percent
inte re st.
The Lebanese government recently concluded a deal with a local
importer to purchase 100, 000 tons of fuel oil from Rutnania for use
by the government-owned Chamoun thermal powerplant, located just
north of Beirut.
Latin American trade with the Sino-Soviet Bloc increased sharply
in 1958, thus reversing the downward trend which it has followed
since 1955. The total trade for 1958 was approximately $2.:)5 million,
an increase of 36 percent above the level of $195 million in 1957.
Large purchases of Uruguayan wool by the Bloc have induced
Uruguay to increase its imports from the USSR and the European
Satellites. Soviet pressure on Uruguay to import larger quantities
of petroleum from the Bloc may mean that US oil companies in
Uruguay will find it necessary to import Soviet or Rumanian crude
oil.
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A. Soviet-Afghan Economic Assistance Agreement . 1
3 Soviet-Indian Pharmaceutical Agreement . 2
C. 1959 Rubber-Rice Contract Between Communist
China and Ceylon . . . . . . . . . . . . . . 2
A. Burmese Clearing Accounts with Bloc Countries 3
B. Chinese Communist Loan to Indonesia 4
A. Egypt .
1. Progress on the Aswan High Dam 5
2. Reexport of Egyptian Cotton . . . . . . 6
B. Turkish Purchase of Soviet Textile Equipment . 7
C. Lebanon Purchase of Rumanian Fuel Oil . . . 8
A. Soviet Bloc - Latin American Trade . . . . . .
B. Uruguay's Trade with the USSR . . . . . . . .
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