CURRENT INTELLIGENCE WEEKLY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A000300050001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 15, 2016
• Document Release Date: May 11, 2004
• Sequence Number: 1
• Publication Date: May 28, 1954
• Content Type: REPORT

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~l?fH11tAU OCI NO.6307
'Q~
28 May 1954
CURRENT
INTELLIGENCE
WEEKLY
CLASS. CHANGED TO: TS S
NEXT REVIEW DATE
9%
NO CHANGE IN CLASS. i
DOCUMENT NO.
DATE. EV EWER: 25X1
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
ET
25X1
ENTIAI
State Dept. review completed
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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.
The Current Intelligence Weekly has been prepared prima-
rily for the internal use of the Central Intelligence Agency.
It does not represent a complete coverage of all current
situations. Comments and conclusions represent the im-
mediate appraisal of the Office of Current Intelligence.
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SUMMARY OF CONTENTS
28 May 54
THE SOVIET WORLD . . . . . . . . . . . . . . . . . . . Page 3
.LANIEL BACKS FURTHER MILITARY EFFORT IN INDOCHINA . . . Page 5
While Premier Laniel's decision to reinforce French
forces in Indochina is based on immediate military neces-
sity, he probably hopes thereby to strengthen France's
position at Geneva and encourage early American partici-
pation in the war.
WEST GERMAN AGITATION FOR ORBIT RELATIONS REFLECTS
PESSIMISM ON EDC . . . . . . . . . . . . . . . . . . . Page 7
The controversy in West Germany over diplomatic
relations with the Orbit is symptomatic mainly of pes-
simism regarding the prospects of European integration.
There are serious obstacles to the establishment of such
relations, but the issue is causing Chancellor Adenauer
difficulty in holding support for his integration policies.
RECENT SOVIET TACTICS IN AUSTRIA . . . . . . . . . . . Page 9
The Soviet high commissioner's scathing rebuke to
the Austrian government on 17 May seems to have been
motivated primarily by the Kremlin's ever-present concern
over threats to its security. Moscow is unlikely, how-
ever, to take measures which would result in a crisis of
major proportions in Austria.
COMMUNIST POTENTIAL IN BURMA NOT YET FULLY DEVELOPED. . Page 11
Full support by Peiping of various Communist ele-
ments in Burma may await the development of unity among
the insurgents and the establishment by the Burmese
Communists of a firm rear base area near the Yunnan border.
EGYPTIAN REGIME MOVES TO CONSOLIDATE ITS POSITION . . . Page 13
The Egyptian Revolutionary Command Council's recent
moves to consolidate its position will have an immediate
stabilizing effect, but in the long term, these actions
will accentuate the weakness of the military group.
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There have been growing indications in the Soviet Union
that N. S. Khrushchev's rising prestige may upset the current
concept of collective leadership. During the past week
Khrushchev has received a degree of personal publicity unprec-
edented since the inauguration of the collectivity principle
just after Stalin's death.
On 19 May, the Kazakh press and regional radio carried a
full report of Khrushchev's inspection trip to Kazakhstan, and
Pravda printed a speech by B. P. Beshchev, minister of rail
ransport, containing a twelve-line quotation from Khrushchev's
speech to the February-March Central Committee plenum. In
addition, Pravda printed a speech by Kaganovich which included
references he Supreme Soviet speeches of Malenkov and
Khrushchev, but, contrary to customary protocol, Khrushchev
was mentioned first.
During his speech at the 22 May Ukrainian Supreme Soviet
session commemorating the 300th anniversary of the reunification
of the Ukraine with Russia, Kirichenko included Khrushchev--
but not Malenkov--in a brief list of "loyal disciples and
comrades-in-arms of V. I. Lenin" who participated in the forma-
tion of the Soviet Ukraine. Later he gave a laudatory account
of Khrushchev's work as first secretary of the Ukrainian party
from 1938 to 1949. In addition, the delegates to the meeting
from Kazakhstan and Uzbekistan both went out of their way to
laud Khrushchev, whose name was greeted by applause each time
it was mentioned.
This tribute receives added significance in light of the
fact that Malenkov's name is not mentioned once in any available
account of the celebration. The increasing public prestige
and actual influence of Khrushchev is contrary to the concept
of collectivity and reflects adversely on Malenkov's status as
head of party and state. While there is as yet no firm evidence
of struggle, there have been hints of differences between the
two leaders on certain internal issues. It would be logical to
expect some move by Malenkov in the near future to counter this
trend. Its continuation could only suggest that Khrushchev's
position and influence is greater than Malenkov's.
At the Geneva conference, the Communist position on the
relationship between a cease-fire and a political settlement in
Indochina is still obscure. After beginning with the contention
that the two questions are inseparable, the Communists began to
retreat toward the possibility of an armistice first. They are
currently insisting once more on the inseparability of military
and political questions.
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Molotov, in his major speech of 14 May, explicitly re-
jected an armistice along the lines of the French proposal on
the grounds that Bidault's formula did not deal with political
problems. However, Molotov's formulation--that it would be
impossible to separate the termination of the war from the
solution of "at least some" political problems--made possible
serious cease-fire negotiations without complete agreement on
a political settlement.
Chou
En-lai told Eden in private conversation on 20
May
that
the
military and political aspects of any Indochina
settle-
ment
must
be dealt with separately, with priority for a
cease-
fire,
and
that there might be three different political
settle-
ments
for
the three Associated States.
In the restricted Indochina session on 25 May, the Communists
took a harder line. Both Molotov and Chou En-lai again insisted
on the inseparability of military and political questions, and
both, backed by the Viet Minh delegate, urged alternate meetings
on military and political problems.
Under Secretary Smith reported after the 25 May meeting that
the Communists seemed concerned over the trend toward discussing
military before political matters and were trying to recover
lost ground. The under secretary believed that the Communists'
tactics in the 25 May meeting discouraged the hope that they
might permit substantive discussion on military matters to proceed
without simultaneously injecting political issues. He concluded
that the Communists were still playing for time on the premise that
time is on their side in Indochina.
At the disarmament talks in London, Soviet delegate Malik
apparently hopes to create a situation whereby the onus for the
failure of the talks ultimately can be placed on the United States.
In regard to Western proposals, Malik told the subcommittee that
there was nothing more to discuss since; there had been no change
in the American position. He insisted that the Western position
is based on the Baruch plan, which is unacceptable to the USSR.
He demanded that the subcommittee turn its attention, instead, to
the Soviet proposals for an immediate prohibition of nuclear
weapons and a one-third reduction of conventional arms.
The demand for a Soviet-style prohibition will apparently be
the main theme at the current meetings of the World Peace Council
in Berlin where a bev of pro-Soviet scientists are scheduled to
play din roles. 25X1
the current session of the council will launch the "Berlin
appeal for the prohibition of A and H bombs," which will receive
propaganda exploitation comparable to the Stockholm appeal and,
like the latter, will serve as a basis for a world-wide collection
of signatures.
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28 May 54
LANIEL BACKS FURTHER MILITARY EFFORT IN INDOCHINA
Premier Laniel, still under considerable pressure from
the French National Assembly to explore every possibility
for an Indochina settlement at Geneva, is taking steps to
forestall military disaster. The reinforcements now en
route to Tonkin were sent for this reason, but also because
Laniel probably hoped their dispatch would strengthen France's
position at Geneva and encourage early American participation
in the war. Most of the cabinet and the National Assembly,
however, still oppose any internationalization of the war.
Following the vote of confidence on 13 May, Laniel
called a meeting of the High Council of National Defense to
consider "Draconian measures." On 18 May, the council dis-
patched three top generals to Indochina on a fact-finding
mission. It also decided to send 30,000 reinforcements to
Indochina should General Ely recommend such action on his
return.
A spokesman. for Secretary for the Associated*States
Jacquet told American officials in Paris on 20 May that a
Foreign Legion parachute battalion was already on its way
to Indochina, and that about 5,000 additional men were
being processed in North Africa. In addition, a plan is now
under study to advance to June the call-up of the October
conscript class in order to release regulars for service in
Indochina.
The government hopes to convince the National Assembly
that further military reinforcements are needed~,to protect
the expeditionary force by strengthening the defenses of the
Tonkin delta. It is also anxious to remove the impression
that the fall of Dien Bien Phu broke the back of the French
military effort.
The increased military effort now planned is only a
stopgap measure, however, and not an alternative to foreign
intervention or a cessation of hostilities. General Ely
told General O'Daniel in Saigon on 18 May, "The sooner you
get into the war, the better we willlike it." He said that
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he accepted the concept of American training for the Vietnam-
ese National Army, but he refused to concede the need for
American participation in operational planning.
While most French military leaders and some cabinet
members continue to urge American intervention, a majority
of. the cabinet and of assembly deputies profess to see such
a move as the first step to a generalized war. The assembly
made it clear in the two votes of confidence in the past
three weeks that it expects the government to bring the war
to an end through negotiations at Geneva. On 25 May it put
further pressure on Laniel by voting 385-231 in favor of
holding a full-scale Indochina debate on 1 June, immediately
following the Ascension Day recess.
Laniel will probably face severe questioning when he
requests the additional funds needed for Indochina. In
particular, government efforts to enter into a Southeast Asian
alliance with the United States, but without Britain, will
evoke sharp attack.
Until it is absolutely clear that Geneva has failed,
there is little chance of the assembly accepting a policy
hostile to the climate of negotiation. On the contrary,
the continuing pressure for a settlement has severely re-
stricted Foreign Minister Bidault at Geneva. He has ex-
pressed fears of domestic reaction to his inflexibility in
maintaining his original position on the minimum terms ac-
ceptable for a cease-fire, and even his own, art is reported
critical of'his stand.
Even if the assembly accepts Laniel's reinforcement
program as a means to save the delta, or to facilitate possi-
ble evacuation, the deputies are unlikely to be diverted
from their increasing determination to rid France of the war
burden.
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28 May 54
WEST GERMAN AGITATION FOR ORBIT RELATIONS
REFLECTS PESSIMISM ON EDC
The controversy in West Germany over establishing re-
lations with the Orbit is symptomatic mainly of growing pessi-
mism regarding European integration. Certain politicians,
fearing that French failure to ratify EDC will make Chancellor
Adenauer's foreign policy a political liability in the coming
state elections, have pressed the issue recently in a search
for a new line with voter appeal. Bonn government leaders,
however, continue to regard the question of diplomatic re-
lations as premature.
The debate seems to have arisen largely by accident. In
April Karl Georg Pfleiderer, a Bundestag?deputy of the Free
Democratic Party (FDP)--one of the coalition parties--began
pushing a proposal that a group of Bundestag members should
visit Moscow to improve cultural and economic relations. They
would return to work for diplomatic relations "when the time
came." Pfleiderer has been described by his party leader,
Thomas Dehier, as "speaking for himself," and for a while this
proposal drew little notice. On 7 May, however, Adenauer was
interviewed by newsmen in Hamburg on the locally important
topic of expanding trade with the Orbit and was asked whether
normal trade relations with Moscow and Peiping would be
followed by diplomatic relations. His answer, "Very possibly,"
was later explained by the chancellery as intentionally
evasive, and was regarded by the American high commission as
noncommittal.
This was reported by the German press in such a way that
it appeared Adenauer would soon. seek diplomatic relations.
With this encouragement, and with intensified activity by
Pfleiderer, various cabinet members and some other coalition
leaders hastily endorsed the idea of political contacts with
the Orbit. Several influential newspapers added their
endorsement, linking the issue to reports that a West German
trade delegation would go to Moscow in June.
The prospect of relations with the Orbit appeals to
those politicians not wedded to Adenauer's European integra-
tion policies. First, it has the advantage of renewing hope
for German unification; second, it offers the possibility of
increased trade; and third, it promises to give the Federal
Republic normal diplomatic standing among the world's powers.
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Serious obstacles lie in the way of such relations, how-
ever, and Adenauer intervened personally to discourage Dehler
and the FDP executive board from sanctioning Pfleiderer's
trip. The chancellor warned against "breaking step with the
West" at a critical moment for Europe. When the FDP disre-
garded his wishes, he charged that the party was jeopardizing
Germany's alliance with the.West.
The greatest obstacle to the establishment of Bonn-Moscow
diplomatic relations lies in the fact that under the revised
occupation statute, the Federal Republic is not at liberty to
establish Orbit relations without the Allied'High Commission's
approva i\,
A potential obstacle is the possibility that the Soviet
Union would\insist on Bonn's recognition of East Germany in
return for Bnn-Moscow relations . Few West. German politicians
are , presently prepared to agree to such . terms.
By 19 May, Dehler was preparing to drop the Pfleiderer
plan as gracefully as he could, in view of the strong and
growing sentiment against it. Opposition to the. proposed trip
of a Bundestag,delegation to Moscow does not, however, neces-
sarily extend to the principle of increasing West Germany's
contacts with the Orbit. The FDP and the other minor coalition
parties may attempt to exploit the Orbit relations issue in the
state campaigns this year, though it is improbable that they,
will win many votes away from the Christian Democrats thereby.
In any event, the issue of Bonn-Moscow relations is "here
to stay,"according to. Ambassador Conant, since there is no,
doubt that eventually the West Germans will want normal re-
lations whether or not the contractual agreements come into
effect. The present controversy, by arousing some coalition
leaders from their passivity, has already made it harder for
Adenauer to hold support for his integration policies. Adenauer
'himself recently warned that in the absence of definite progress
toward EDC, he will be forced within a few months to modify his
present policies.
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28 May 54
RECENT SOVIET TACTICS IN AUSTRIA
The Soviet high commissioner's scathing rebuke to the
Austrian government on 17 May marked a low point in Soviet-
Austrian relations, which have deteriorated steadily since
the Berlin conference. The rebuke seems to have been moti-
vated primarily by the Kremlin's ever-present concern over
real or imagined threats to its security, stimulated by what
it regards as Western anti-Soviet activity and Vienna's growing
spirit of independence. In spite of this concern, however,
Moscow is unlikely to take measures which would result in a
crisis of major proportions in Austria.
In a continuing atmosphere of Austrian frustration over
the results of the Berlin conference, a series of incidents
between Soviet and Austrian authorities on both the local and
national levels led up to this Soviet action. On 15 March
Soviet high commissioner Ilychev called on Interior Minister
Helmer and demanded the removal of a People's Party election
poster on display throughout Austria which caricatured Foreign
Minister Molotov and criticized his veto of the Austrian state
treaty. Chancellor Raab and the Austrian cabinet backed Helmer's
order to local Austrian police to resist all pressure from the
Soviet kommandaturas for the removal of the posters.
During March and April, the Communist press and radio con-
tinued their propaganda against alleged plans for an Anschluss
with West Germany and attacked any Austrian development which
could be interpreted as furthering the country's association
with Germany or with the West. Soviet representatives in the
Allied Council meeting of 30 April vetoed the accession of
Austria to the Geneva convention on the status of refugees,
and an ordinance by the Ministry of Interior abolishing visas
for Western European nationals including West Germans. The
USSR also emphatically refused to permit any Austrian civil
air activities.
Soviet propaganda has also suggested an extreme sensi-
tivity to any plans for training the Austrian gendarmerie as
a cadre for future defense forces. There have been several
reports of Soviet officers' hinting to Austrian officials that
their future plans for a defense force are known to the USSR.
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Soviet authorities have beenparticularly'sensitive to
the appearance, in areas of troop concentration, of Russian-
language pamphlets calling on soldiers to desert from the
Soviet army. On 2 April the Soviet high commissioner strongly
protested the distribution of the leaflets and warned that local
Austrian police would be held responsible if they continued
ti 'ap ear
It is possible that the increasing Soviet toughness in'
Austria foreshadows a new shift in Soviet tactics generally.
Still, the harder and more confident tone of recent propaganda
has not as yet been accompanied by corollary action elsewhere in
Europe. While the Kremlin may be inclined to safeguard its
security by re-establishing border controls in Austria, Soviet
authorities do not appear to have taken any steps in preparation
for such action.
It would appear, then, that local considerations played a
major role in the Soviet denunciation of the Austrian govern-
ment Moscow's sensitivity to its security interests is
buttressed by a growing pique at Austria's switch from a desire
for quiet bilateral negotiations with the USSR to an openly
hostile attitude.
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28 May 54
Communist China has not yet fully exploited its oppor-
tunities for supporting various Communist and other insurgent
elements in Burma. A more determined program may await the
development of insurgent unity and establishment by the Burmese
Communists of a firm rear base area near the Yunnan border.
The Soviet embassy in Rangoon has engaged in extensive
overt propaganda activities but appears not to have pursued
an active role in support of dissident elements. This latter
function has been primarily discharged by Peiping which, in
apparent recognition of the ethnic diversity of the population,
has a varied program in Burma.
Reports from the Yunnan border area indicate extensive
Chinese Communist propaganda and recruiting activities among
the Kachin, Lisu, Shan and Wa peoples, many of whom are resent-
ful of Rangoon's Burmanization policies. Useful focal points
for these activities exist on the Yunnan side of the border,
where Peiping has created several "autonomous areas" for peoples
ethnically similar to those in Burma.
A Kachin "liberation force" under the leadership of the
Burmese Kachin renegade, Naw Seng, was reportedly organized
in China several years ago and is said to number about 1,500
men. A Rangoon newspaper recently reported that the Burmese
Communists, aided by Chinese Communist agents, are planning
a conference in north Burma designed to enlist Kachin support.
Indian Communists from Assam were also to participate in the
conference.
In Rangoon, the Chinese Communist embassy is active on
many fronts. In its efforts to gain control of Burma's Chinese
community of 350,000, it has placed special emphasis on the
subversion of youth and has succeeded in bringing the majority
of Chinese schools under Communist control. It extends its
influence among Chinese merchants by means of politically
conditioned loans from the Rangoon branch of the Bank of China.
In addition, the embassy is reportedly subsidizing the Burma
Workers and Peasants Party, a Communist-front group that
has skillfully exploited such local explosive issues as the
presence of Chinese Nationalists in the country to embarrass
the government.
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The Burmese Communist Party, with an estimated armed
following of 5,000, loosely controls several areas of central
and south Burma. Despite military reverses during the past
two years, Communist surrenders to the government are consid-
erably less than from other insurgent groups. Since 1952, the
Burmese Communists have pursued a dual strategy of military
attacks against government outposts and lines of communications,
and political overtures designed to obtain a cease-fire and
the creation of a coalition government.
Peiping's direct aid to the Burmese Communists is be-
lieved thus far to have been restricted to the training of
selected cadres in China. More substantial Chinese aid, in
the form of arms and other military supplies, has probably
been precluded by the remoteness of the Communists' main centers
of strength from the Yunnan border.
The disunity of the various insurgents may be another
factor operating to limit Peiping's aid to the Burmese Commu-
nist Party. In an attempt to remedy this condition, the party
in 1952 organized a "tripartite alliance" with another pro-
Communist insurgent organization known as the Peoples Comrades
Party. The Communists have also sought to win over non-
Communist ethnic minority insurgents, particularly the Karens,
and there has been limited local co-operation between the
Communists and the Karens in the Irrawaddy delta.
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28 May 54
EGYPTIAN REGIME MOVES TO CONSOLIDATE ITS POSITION
. The Egyptian Revolutionary Command Council's recent moves
to consolidate its position, following its success over General
Nagib and the elements demanding a return to parliamentary life,
will have an immediate stabilizing effect. In the long term,
however, these actions will accentuate the weaknesses of the
military group, especially if no progress is made on the Suez
issue.
Since reasserting their absolute authority on 29 March,
Colonel Nasr and the Council have set about neutralizing those
factions which opposed them during the March crisis. In a
series of measures, the regime barred from politics or office
any individual who held cabinet rank during the past ten years;
arrested 25 army officers; reportedly prohibited all officers
from engaging in political activities or discussion; canceled
the license and stopped publication of the antiregime newspaper
Al Misri--the largest daily in the Arab world; and dissolved
eaiiro Chamber of Commerce.
The isolation resulting from these measures, which have
narrowed the popular base on which the regime can depend for
support, constitutes a major threat to the Revolutionary
Command Council. Domination of all aspects of political and
economic life by young and inexperienced officers lessens the
prospects for successful implementation of the much publicized
reform and development projects promised by the Nasr group.
The ban on former cabinet officials deprives the Command
Council of the assistance of virtually all experienced and
competent top-level administrators and advisers--a loss the
regime can ill afford. Efforts by the Nasr group to extend its
influence over both labor unions and the chambers of commerce
and to manipulate them for political purposes is likely to create
further dissension.
The regime's summary action in convicting the owners of
the powerful Al Misri and confiscating their property, and its
attempts to subjugate other antiregime papers, may be expected
to have repercussions among politically articulate sections
and result in increased clandestine activities by opposition
groups.
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The measures against Al Misri have already given the regime
an unfavorable foreign press, particularly in Lebanon and Syria
where relations have become strained over the incident. If other
Arab states should disavow Egypt's claim to leadership, the Com-
mand Council would suffer a serious psychological setback which
would increase its internal problems.
Lacking any substitute for General Nagib's personal appeal,
the Revolutionary Command Council has sought in its speeches to
belabor the evils of parliamentary government and to attribute
to it all the economic ills of the past. At the same time the
Nasr group has been promising early benefits from grandiose proj-
ects which have yet to be implemented. Such a policy represents
a calculated risk on the part of the regime, the long-term dan-
gers of which are apparent.
Since Nasr and the Revolutionary Command Council depend
ultimately on the support of the army to remain in power, any
action likely to affect the loyalty of an important faction of
the armed forces is significant. The arrest of additional offi-
cers and the attempt to prevent army officers from participating
in politics are likely in the long run to further dissension and
antiregime sentiment.
Unless the Nasr group can obtain an early settlement on the
Suez base which it can then present as a major political victory,
the regime may find that the recent efforts to strengthen its
position have in fact served to unify the opposition.
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