SINO-SOVIET BLOC ECONOMIC ACTIVITIES IN UNDERDEVELOPED AREAS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92B01090R000700020007-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 16, 2016
• Document Release Date: August 2, 2005
• Sequence Number: 7
• Publication Date: April 10, 1961
• Content Type: REPORT

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BIWEEKLY REPORT
SINO - SOVIET BLOC
ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
EIC-WGR 1/135
10 April 1961
PREPARED BY THE WORKING GROUP
ON SINO-SOVIET BLOC ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
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Summary of Events
24 March - 6 April 1961
East Germany has extended a credit of $5. 7 million to Egypt for
the purchase of machinery and equipment for municipal development.
The credit is to be repaid in 5 years at 2. 5--percent interest.
Ethiopia reportedly has notified the Soviet GQvernment that it is
no longer interested in having the USSR build an oil refinery. Con-
struction of this installation was to be financed under the July 1959
Soviet credit of $100 million. The Ethiopian decision was based on a
new Soviet estimate that substantially increased the cost of the proj-
ect.
Ghana has agreed to purchase two more 11-18 aircraft from the
USSR under the same credit terms as the six previously acquired.
Ceylon and Communist China on 4 April signed the annual proto-
col to their 5-year (1958-62) rubber-rice barter agreement. The
contract, which provides for an increase above 1960, calls for an
exchange of 31, 000 metric tons of Ceylonese rubber for 200, 000 long
tons of Chinese rice..
Hungary has offered to extend to India a credit of $16. 8 million
for industrial development. Repayment would be in Indian goods over
a period of 8 to 9 years at 2. 5-percent interest. In another develop-
ment, India and Poland have signed an agreement for the construction
at Hyderabad of a machine tool factory worth $3 million.
Czechoslovakia is second only to the USSR in the foreign aid pro-
gram of the Bloc. Total Czechoslovak aid, which is equally divided
between economic and military assistance, amounted to $660 million
as of 31 March, compared with Soviet aid of $3. 8 billion and Chinese
Communist aid of $350 million.
Because of two poor agricultural years in a row, Communist China
has been buying grain from Free World countries in unprecedented
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quantities. The seriousness of the agricultural situation on the main-
land becomes apparent when these purchases -- 2. 9 million metric
tons during the past 6 months alone -- are compared with the annual
total grain imports by Communist China of approximately 140, 000 tons
during the period 1955-58.
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I. General
PLe
A. Role of Czechoslovakia in the Bloc Economic
Offensive . . . . . . . . . . . . . . . . . . 1
B. Purchases of Grain in the Free World by Com-
munist China 3
II. Latin America . . . . . . . . . 5
Soviet Approach to Venezuela on Petroleum . . . . . 5
Extension of East German Credit to the Egyptian
Region of the UAR. . . . . . . . . . . . . . .
IV. Africa . . . . . . . . . . . . . . . . . . . . . 6
A. Purchase by Ghana of Two Additional Soviet
Planes . . . . . . . . . . . . . . . . .
B. Ethiopian Cancellation of Proposed Soviet Oil
Refinery . . . . . . . . . . . . . . . .
V. Asia . . . . . . . . . . . . . . .. .
A. New Developments in Satellite Aid to India . . . 7
B. Rice-Rubber Protocol Signed Between Ceylon
and Communist China . . . . . . . . . . . 8
Czechoslovak Credits and Grants to Underdeveloped
Countries, 1 January 1954 - 31 March 1961 . . . . . . 2
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at Z. 5-percent interest. 'TlA , is the first bid that Hungary has made to
participate on a significant scale in India's economic development, and
it constitutes the largest single credit offered by Hungary to any under-
developed country. Exclusive of the present offer, Hungarian credits
to underdeveloped countries total $39. 5 million.
Hungary is willing to assist in establishing aluminum plants,
seamless tube factories, flour mills, pharmaceutical plants, and sheet
glass factories. Apro stated that the credit could be utilized for setting
up these industries either in the public or in the private sector of the
economy. Although no official Indian response to the offer has been an-
nounced, Apro said that both sides have agreed to study the technical
and financial aspects of the projects under consideration.
In another development, Polish and Indian authorities have
signed an agreement for the construction of a machine tool factory
valued at about $3 million at Hyderabad in southeastern India. This
project is the first to be obligated under the Polish credit of $30 mil-
lion that was extended to India in May 1960. * Negotiations are continu-
ing for the utilization of the remainder of the credit. Poland has offered
to supply equipment for a variety of industrial projects including coal-
washing facilities and plants for the manufacture of boilers, pumps, and
B. Rice-Rubber Protocol Signed Between Ceylon and Communist
China
The annual protocol to the 5-year (1958-62) rubber-rice barter
agreement between Ceylon and Communist China was signed on 4 April,
and it provided for an increase in this trade above the level called for
in the 1960 contract. The Ceylonese have agreed to exchange 31, 000
i-netric tons of rubber for 200, 000 long tons of rice. The 1960 contract --
17, 000 metric tons of rubber for 160, 000 long tons of rice -- did not
cover Ceylon's requirements for rice, and Ceylon was forced to acquire
additional rice from China outside the agreement. China is expected to
meet most of this year's commitment to Ceylon with rice from Burma.
See the Biweekly Report of 25 May 1960.
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