SINO-SOVIET BLOC ECONOMIC ACTIVITIES IN UNDERDEVELOPED AREAS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92B01090R000700020001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 16, 2016
• Document Release Date: August 2, 2005
• Sequence Number: 1
• Publication Date: January 16, 1961
• Content Type: REPORT

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BIWEEKLY REPORT
SING -SOVIET BLOC
ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
EIC-WGR 1 /129
16 January 1961
PREPARED BY THE WORKING GROUP
ON SINO-SOVIET BLOC ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
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Summary of Events.
30 December 1960 - .12 January 1961
On 9 January, Communist China and Burma jointly announced the
conclusion of an economic and technical cooperation agreement and a
payments agreement. The former calls for the establishment of a line
of credit of $84 million that will be available to Burma until September
1967, with repayment to begin in 1971. The payments agreement pro-
vides for the establishment of a clearing account in the central bank of
each country.
A ,joint Soviet~Indonesian communique has. revealed that the USSR
will extend a credit of $300 million to $400 million to Indonesia for mili-
tary aid.
Considerable progress is being made in training Cambodian tech-
nicians to staff the four gift factories constructed with Chinese Com-
munist aid funds. In October, 89 Cambodian trainees who had studied
plywood, textile, and paper manufacturing in China returned for assign-
ment, and 87 Cambodians departed in November and December to study
cement manufacturing and electricity.
"Che" Guevara has revealed a significant feature of the multilateral
payments agreement that Cuba recently concluded with the USSR and other
Bloc countries. The accord permits the transfer of trade balances from
one Bloc country to another (for example, a credit accumulated by Cuba
from the sale of sugar to floe USSR. could be used to buy goods from Hun-
gary). Cuba also has received $32 million in additional economic assist-
ance from the European. Satellites.
On 2 January the Cuban.. Army displayed same of its Bloc military
equipment in a parade in Havana. Total Bloc military materiel delivered
to Guba appears to have a value of about $40 million to $50 million.
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CONTENTS
Page
I. Latin America (Cuba) . . . . . ? . . .
A. Additional Soviet Bloe Economic Aid to Cuba . .
1
B. Soviet Bloc Military Equipment in Cuba . .
1
Ih Africa QDisplay of Soviet Arms in Guinea) . .
3
III. Asia . . . .
4
A. Sino~Burmese Economic Development Assistance
Agreement . .
4
B. Training of Cambodian Technicians in Communist
China . . . . . .
5
C. Soviet Military Aid for Indonesia . . .
5
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SING-SOVIET BLOC ECONOMIC: ACTIVITIES
IN UNDERDEVELOPED AREAS'~~
I. Latin America (Cuba)
A. Additional Soviet Bloc Economic Aid to Cuba
In .his speech on 7 January in Havana, Ernesto "Ghe" Guevara re-
vealed a~ignificant feature of the multilateral payments agreement that he
recently signed in Moscow with the USSR and. other unspecified Bloc coun-
tries.'~'~ He said that this agreement permits the transfer of trade balances
from one Bloc country to -another (for example, a credit accumulated by
Guba from the sale of sugar to the USSR could be used to buy goods fro:nz
~Iungary). This departure from the Bloc's previous insistence on strict
bilateralism indicates Soviet willingness to clear away some of the barriers
to Cuban access to the combined markets and resources of the Bloc.
In the course of his speech, Guevara.. announced additional eco-
nomic aid to Cuba from the European. Satellites. East Germany has ex-
tended its first assistance to Cuba in the form of a $10 millon'~'~e'~6 credit;
Rumania has granted. Cuba. a $15 million .credit, details of which were not
disclosed; and Hungary has increased its credit to Cuba, from $8 million.
to $15 million. In addition to the credits mentioned above, Hungary and
Rumania have recently signed 1961 protocols to their long-term bilateral
trade agreements with Cuba.
B. Soviet Bloc Military Equipment in Cuba
On 2 January the Cuban Army displayed same of its- Bloc rnili~~
terry equipment in a parade in Havana. The arms on display apparently
~~ Although the main emphasis of the Biweekly Report is on economic
activities of the Sino~Soviet Bloc in underdeveloped areas of the Free
Woxld, significant Bloc activities of this nature in areas not considered
underdeveloped also will be discussed.
'~~~ 5ee the Biweekly Report of 2 January 1961.
~'~~' Unless otherwise specified, ail dollar values in this report are in
terms of US dollars.
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As a climax to the almost excessive cordiality surrounding the
current Chinese Gommunist friendship mission to Burma, a ,joint Sino-
Burme se communique was issued on 9 January announcing the conclusion
of an economic and technical coo eration a reement and a payments
agreement.
According to the text of the economic agreement, published by
Peiping, aline of credit of $84 million, bearing no interest, is to be
available to Burma over a 6?~year period ending in September 1967. The
loan may be used to construct p.ro,jects mutually agreed upon, to purchase
machinery, to defray the costs of Ghinese Gommunist technicians in
Burma and Burmese trainees in China, and "for the supply of materials
to generate Burmese currency required for the eonstruetion of agreed
projects. " The Peiping text calls for repayment of the loan in 10 equal
annual installments beginning in 1971. Repayment may be made either
in the form of Burmese ex orts or in "the currenc of a third country
agreed upon by China.'
The separate payments agreement provides for the establish?~
ment of a clearing account in tlae central bank of each country. At the
end of each fiscal. year the accounts are to be balanced, and net credits
in excess of $1. 4 million are to be worked off within 6 months through
shipments of goods or payment in a mutually agreed upon third currency.
The agreement provides that the accounts may be used to pay far com-
modities; the cast of diplomatic and economic representatives; and "the
expenses of experts, trainees, and all kinds of missions and delegations"
as well as "other payments agreed upon" mutually,
The friendship mission .itself apparently was a great success.
A Ghinese Communist team of more than 440 delegates was headed by
Premier Ghou En?,l.ai and 3Tice Premiers Ghen T and Lo Ju.i-Ghing. The
mission was divided into 10 different groups, including 4among others)
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Buddhist, art and cultural, military, sports, journalistica and film de.le--
gations. The most important group was a delegation sent to exchange
instruments of ratification of the recent border agreement. The ratifi?-
cation was effected on the twelfth anniversary of Burrna.'s Independence
Day, and the Independence Day celebrations., which were unprecedentedly
grandiose, were dominated by the Chinese guests of honor. A special
Burmese order was created for and ceremoniously presented to Ghou
En-lai, with lesser decorations going to 13 other Chinese, including the
Ambassador. Ghou and Burmese Prime Minister U Nu ,jointly opened
the massive Ghinese Communist Industrial Exhibition,. which covered
4, 500 square meters and included more than 4 600 industrial and agri-
cultural products.
See the Biweekly Report of 10 ?ctober .1960.
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