SINO-SOVIET BLOC ECONOMIC ACTIVITIES IN UNDERDEVELOPED AREAS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP92B01090R000700020039-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 16, 2016
• Document Release Date: August 3, 2005
• Sequence Number: 39
• Publication Date: July 2, 1962
• Content Type: REPORT

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SECRET ?PY
25X1
BIWEEKLY REPORT
SINO -SOVIET BLOC
ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
EIC WGR 1/167
2 July 1962
PREPARED BY THE WORKING GROUP
ON SINO-SOVIET BLOC ECONOMIC ACTIVITIES
IN UNDERDEVELOPED AREAS
ECONOMIC INTELLIGENCE COMMITTEE
25X1
SECRET
GROUP 1
EXCLUDED FROM AUTOMATIC DOWNGRADING
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Summary of Events
15-28 June 1962
The Brazilian Foreign Office currently is considering a suggestion
by the USSR that a Soviet air route to Brazil be established. After study-
ing the Soviet request, Brazil's Civil Aeronautics Directorate has recom-
mended that it be rejected. The Directorate asserted that the reciprocal
right which such an arrangement would give Brazil's air line to'fly into
the USSR is not now economically justifiable. Although it is believed that
the Brazilian Foreign Minister will refuse the Soviet request, there is
considerable interest among Brazilian economic officialdom in the even-
tual establishment of air links with the Soviet Bloc.
The Soviet Industrial Exposition in Rio de Janeiro ended its 1-month
run on 3 June, after surviving two bomb scares and much harsh criticism
from the press and many public officials. The estimated 500,000 persons
attending the fair reportedly showed a mixed reaction toward the Soviet
displays. Although space equipment, heavy industrial goods, and farm
machinery evoked much interest, the Brazilians were unimpressed with.
Soviet consumer goods, fashions, and technical instrumentation. Con-
cerning the fair's commercial impact, Soviet officials claim to have made
1, 200 contacts with potential Brazilian buyers and to have negotiated
$ 25 million in Soviet sales.
On 18 June a Soviet 11-18 left Moscow on a test flight for a proposed
Aeroflot route down the west coast of Africa to Guinea, Mali, and Ghana.
Moscow's determination to penetrate Africa with civil air routes is demon-
strated by this flight, which was made in spite of the absence of Soviet air
agreements with a number of countries that would make Aeroflot able to
provide quicker and more direct service to West Africa.
Dahomey and Senegal have broken the previously solid front of the
Afro-Malagasy Union (UAM), the 12 "Brazzaville States," by agreeing
to establish diplomatic relations with a number of Bloc countries. Recent
visits to the Bloc by Dahomey's Vice President Apithy and by Senegalese
Premier Dia resulted in diplomatic, cultural, and economic accords with
the USSR and Poland. The Dahomian mission initialed similar accords
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with Bulgaria and Czechoslovakia but apparently thwarted East Getmany's
hopes of achieving its first diplomatic relations with an African country.
During Malian President Keita's recent visit to Moscow, the USSR
extended a new developmental credit of $11 million to Mali and agreed to
allocate the remainder of the 1961 credit, estimated to be $27 million.
Although the recipient projects have not been announced, there are indica-
tions that the agreement concerned aid to the Office du Niger, an auton-
omous agency of the Malian government concerned with large-scale irriga-
tion and rice cultivation.
The Soviet-Indonesian arms agreement of 8 May provides for delivery
to Indonesia of another squadron of Tu-16 medium bombers, at least two
more squadrons of "modernized" MIG-19 jet fighters, more W-class sub-
marines and small support vessels, and additional antiaircraft artillery.
The deliveries, which are scheduled for completion by the end of July,
are already underway.
Two new developments have occurred recently in Soviet practice re-
garding technical training for nationals of countries receiving Soviet
developmental aid. A recently signed Soviet-Indian contract contains
the unprecedented provision that Indian engineers, before going to the
USSR for training, will receive instruction from Soviet experts presently
in India. This arrangement should reduce the length of time required
for training in the USSR, minimize the costs of training, and better uti-
lize the services of Soviet specialists already working on Bloc projects
in India. Another new Soviet technique is apparent in the reported agree-
ment to train Ceylonese engineers at the Bhilai steel plant built by the
USSR in India in preparation for working at a steel rolling mill which the
USSR plans to construct in Ceylon. This practice, if generalized, would
help maximize the intangible returns on Soviet foreign aid and could
project the USSR into regional economic cooperation.
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Page
I. General . . . . . . . . . . . . . . . . . . . . . 1
A. Innovations in Soviet Technical Aid . . . . . . . 1
B. Soviet Civil Air Route to West Africa . . . . . . 2
II. Latin America (Brazil) . . . . . . . . . . . . . . 3
A. End of the Soviet Exposition in Rio Amid
Controversy . . . . . . . . . . . . . . . . . 3
B. Soviet Attempt to Establish an Air Route
to Brazil . . . . . . . . . . . . . . . . . . 4
III. Middle East . . . . . . . . . . . . . . . . . . . 4
New Trade Agreement Between Iran and the USSR . . 4
IV. Africa . . . . . . . . . . . . . . . . . . . . . . 5
A. Agreements of Dahomey and Senegal
with the USSR and European Satellites . . . . . 5
B. Additional Bloc Aid Commitments for Mali's
Economic Development . . . . . . . . . . . . 5
C . Sudan . . . . . . . . . . . . . . . . . . . . 6
1. Approval by the Sudanese Cabinet of an Air
Agreement with the USSR . . . . . . . . . 6
2. Sudanese Military Mission to Moscow . . . . 7
V. Asia . . . . . . . . . . . . . . . . . . . . . . . 7
Deliveries of Soviet Equipment to Indonesia Under
the New Arms Agreement . . . . . . . . . . . . . 7
VI. Brief Note . . . . . . . . . . . . . . . . . . . . 7
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