CURRENT INTELLIGENCE BULLETIN - 1954/10/22

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03000845
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 6
• Document Creation Date: August 20, 2019
• Document Release Date: August 30, 2019
• Publication Date: October 22, 1954

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SUMMARY
FAR EAST
1. Chou En-lai reportedly promises "liberation" of Formosa in
1955 (page 3).
SOUTHEAST ASIA
2. Fall or major reshuffle of Indonesian government appears in-
evitable (page 3).
NEAR EAST - AFRICA
3. Leftism and anti-Westernism seen growing in Middle East
(page 4).
EAST:ERN EUROPE
4. Comment on Satellite plan reductions (page 5).
5. Comment on possible purge of top Hungarian Communist (page 6).
* * * *
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FAR EAST
1. Chou En-lai reportedly promises "liberation" of Formosa in 1955:
Chinese Communist premier Chou En-lai
told Ceylonese minister of commerce
Shirley Corea recently he was so sure
Formosa would be "liberated" he would
be willing to make a firm commitment to deliver Formosan sugar
late next year.
Corea told American ambassador Crowe
on 20 October that Chou, when asked how the "liberation" would
be achieved, replied that he expected an internal revolt on the
island to aid a Chinese Communist invasion force. Corea's im-
pression was that Peiping is grossly underestimating the power
and courage of the West and anticipates a quick, cheap victory.
Comment: It is doubtful, in the light of
the stated American intention to defend Formosa, that Peiping is
confident of an easy victory. Chou's remarks to Corea, who had
just returned from negotiating a trade agreement in Peiping, were
probably intended to reach Western capitals. Chou issued similar
warnings in conversations with other Asian diplomats in 1950 prior
to Chinese Communist intervention in Korea. In this case Chou's
remarks appear to be trial balloons rather than firm promises of
a course of action, and it is expected that further such conversa-
tions will be reported.
His account of this conversation is, however, con-
hinese Communist propaganda promising "liberation"
of Formosa, implying that further preparations are necessary,
and urging Nationalist officials and troops to defect.
SOUTHEAST ASIA
2. Fall or major reshuffle of Indonesian government appears inevitable:
The fall or major reshuffle of the Indonesian
government appears inevitable following
the threat of the Greater Indonesian
INTELLIGENCE BULLETIN Page 3
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Association (Pm) to withdraw from the cabinet on 25 October, ac-
cording to the American embassy in Djakarta.
President Sukarno's position, which will
be decisive, remains unknown, but the embassy believes three
alternatives are possible: (a) the Ali government may remain in
power without the PIR, in which case Communist support would
be essential; (b) the government may fall and the PIR would form
a new cabinet including the present opposition, in which case the
National Party would drift further to the left; (c) a nonpolitical
leader may be asked to form a business cabinet.
Comment: The combination of economic
deterioration and governmental paralysis is creating a highly ex-
ploitable situation for the Communists. D. N. Aidit, secretary
general of the Indonesian Communist Party, has already stated
publicly that Communists should be taken into the government if
the PIR should withdraw.
It is believed that President Sukarno
will use his influence to keep the present regime in power, although
discontent over the government's economic policies continues to
spread and may force a major government shake-up.
NEAR EAST - AFRICA
3. Leftism and anti-Westernism seen growing in Middle East:
The Lebanese press, which closely fol-
lows the Syrian scene, pictures the recent
Syrian parliamentary elections as a warn-
ing to the West that leftism and anti-
Westernism are growing in the Middle East.
The press notes that in Syria there has
been a spectacular advance of leftist parties, that the socialist
ideology is making progress, and that a Communist has entered
parliament for the first time.
Newspapers explain this tendency toward
the left as an outcome of indignation against the West because of
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the Palestine question. It is also seen as resulting from the peo-
ple's disappointment in their rulers' failure to secure justice for
them.
Comment: This evaluation is partially
confirmed by the recent Arab elections. Iraqi elections of 9 June
demonstrated the effectiveness of the Communists in organizing
a "National FrOnt" of extremists. The Syrian elections of 24 Sep-
tember were a 'victory for the leftist Arab Socialist-Resurrectionist
Party. The Jordanian elections of 16 Octobr s in Syria. sent a
Communist to parliament for the first time.
EASTERN EUROPE
4. Comment on Satellite plan reductions:
East Germany has followed Czechoslovakia
and Hungary in reducing industrial plan
targets for 1954 because of inability to
reach the goals set forth early this year. This is revealed by an
analysis of East Germany's 18 October announcement that its plans
had been fulfilled. The originally announced 1954 plans had called
for sharp reductions in the rates of industrial growth compared to
the achievements of earlier years.
East Germany cut its initially scheduled
increase from 12.6 to about 8.2 percent, Czechoslovakia from 5.1.
to 2.1 percent, and Hungary from 4.5 to less than 1 percent. These
downward revisions underscore the acute difficulties which the
Satellites are experiencing in shifting the emphasis of their econ-
omies to fulfill the promises of the new course.
The most pronounced failures in all three
Satellites occurred in the critical fuel and power sectors, which
were to receive special emphasis under the new course. Until
these two industries are able to overcome their problems�such as
lack of satisfactory equipment, high worker absenteeism, and
shortages of skilled labor�they will continue to act as brakes on
industrial expansion in these Satellites.
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Nor
In the case of Poland, the fourth indus-
trialized Satellite, satisfactory progress has been made and it
is unlikely that plan goals will be reduced.
5. Comment on possible purge of top Hungarian Communist:
Recent developments suggest that First
Secretary Matyas Rakosi of the Hungar-
ian Communist Party may be the first
Satellite leader to be purged since the
introduction of the new course in East-
ern Europe.
Premier Nagy in a Szabad Nep editorial
on 20 October specifically blamed "one-man leaders-E7--an
obvious reference to Rakosi's role--for the harmful policies fol-
lowed by the party and government prior to the adoption� of the new
course and stated that only collective party leadership is capable
of overcoming the grave consequences of these mistakes. Rakosi
has not appeared publicly since I October and he has not been men-
tioned in connection with the important central committee meeting
held from 1 to 3 October, which emphatically re-endorsed the new
course.
A purge or demotion of Rakosi, who was
the Hungarian party leader most closely identified with the harsh
Stalinist policies, would tend to provide a strong impetus to the
new course both within the party and among the people, since it
would serve to emphasize that the new course will be rigidly pur-
sued. The regime's vacillation in carrying out its new policies
has created an economic situation in Hungary much more critical
than those in any of the other Satellites.
Rakosi, who is a Moscow-trained Commu-
nist and Jewish, is highly unpopular and his purge would conform
with the recent emphasis on nationalism and the rehabilitation of
those who had been accused of being "national deviationists."
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