OCI WEEKLY REVIEW
Agency: CIA
Originator: CIA
Document date: 11/22/1963
Document type: PAPER - TEXTUAL DOCUMENT

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DOCUMENT

INFORMATION

Released under the John

F. Kennedy

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22 November 1963

SC No. 00619/63

Copy No. 384

WEEKLY REVIEW

OFFICE OF CURRENT INTELLIGENCE

SERIES "DL"

COPY DATE 07 APR 1991.

*THIS COPY MAY NOT BE FURTHER REPRODUCED

CENTRAL INTELLIGENCE AGENCY

THIS DOCUMENT CONTAINS CODE WORD MATERIAL

NO FOREIGN DISSEM

FOR SECRET

GROUP /Exeluded from.automat

-228702/28ngroding and declassioni

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This document contains classified information affecting the national

security of the United States within the meaning of the espionage

laws, US Code Title 18, Sections 793, 794, and 798.

The law prohibits

its transmission or the revelation of its contents in any manner to

an unauthorized person, as well as its use in any manner prejudicial

to the safety or interest of the United States or for the benefit of any

foreign government to the detriment of the United States.

It is to be seen only by US personnel especially indoctrinated

and authorized to receive COMMUNICATIONS INTELLIGENCE

information; its security must be maintained in accordance with

COMMUNICATIONS INTELLIGENCE REGULATIONS.

No action is to be taken on any COMMUNICATIONS INTELLI-

GENCE which may be contained herein, regardless of the advantages

to be gained, unless such action is first approved by the Director

of Central Intelligence.

DISSEMINATION CONTROLS

This document MUST NOT BE RELEASED TO FOREIGN

GOVERNMENTS. If marked with specific dissemination

controls in accordance with the provisions of DCID 1/7,

the document rust be handled within the framework of

the limitation so imposed.

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TOP SECRET DINAR

CONTENTS

(Information as of 1200 EST, 21 November 1963)

CUBA

CUBA'S NEW COMPULSORY MILITARY SERVICE LAN

This law,

explained in a broadcast by Raul Castro

n1 Novenber

cating" those still unadjusted to the Castro regime.

TRAINING OF CUBAN MILITARY PERSONNEL

Raul Castro also stated in his broadcast that some

7,000 Cubans had volunteered to train in special

weapons and that "antiaircraft missile troops" hac

completed their first phase of instruction.

DEPARTURES OF SOVIET PERSONNEL FROM CUBA

Some 1,700 Soviets--most of them probably military

--may have sailed for the USSR since 9 November.

- GUERRILLA AND ANTIGUERRILLA OPERATIONS IN CUBA

The anti-Castro guerrillas in Cuba have not been

able to develop the cohesion and drive that char-

acterized the Castro revolutionary groups before

Batista's fall. The Castro regime, moreover, has

created a large special force to hunt down insur-

gents, and has enacted stringent laws designed to

discourage the population from supporting them.

(Pub-

lished separately as Special Report SC No. 00619/63C)

THE COMMUNIST WORLD

THE BARGHOORN CASE

Moscow's handling of this affair suggests an ini-

tial miscalculation of the repercussions in the US,

followed by efforts to minimize the damage to Soviet-

American relations.

USSR REJECTS ALLIED STATEMENT ON BERLIN ACCESS

Moscow's rejection of the Allied statement on har-

monized access procedures maintains the deadloc!

on the question of "control" and is another tacti-

cal maneuver to draw the Hest into formal talks.

PEIPING RENEWS ATTACK ON. MOSCOW

The Chinese apparently regard Khrushchev's latest

request for a cessation of polemics as a sign of

weakness and as a good time to press the attack.

page

1

2

3

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THE COMMUNIST WORLD (continued)

INDICATIONS OF ECONOMIC REAPPRAISAL IN THE USSR

Scheduling of a central committee plenum early next

month indicates that the 1964-65 economic plan now

is ready for presentation alter a delay apparently

occasioned by a reappraisal of the economy in light.

ais of the poor

agricultural

situation.

RUMANIA OPENS DOORS FOR COOPERATION WITH YUGOSLAVIA

this week by Rumania's Gheor

ghiu-Dej will complete the process of re-establish-

ing contacts at a high level between rugoslavia and

all the members of the soviet bloc..

•-:?

SATELLITES UNDERMINE GDR'S POSITION ON BERLIN

Clauses In Rumanian and Hungarian trade pacts with

Bonn acknowledging their applicability to "est Ber-

lin and giving semidiplomatic status to fest German

trade missions undercut basic Bast German positions.

COMMUNIST CHINA'S LEGISLATURE CONVENES IN SECRET

"The National People's Congress, which used to be a

major annual forum for public boasting, was also

held behind closed doors last year.

PEIPING SEEKS LARGER FOOTHOLD IN LATIN AMBRICA

*Lacking diplomatic recognition in any latin Amer-

ican country except Cuba,

Peiping must depend on

its news offices and unofficial commercial missions

to support political and subversive efforts.

AS IA-AFRICA

SOUTH KOREAN NATIONAL ASSEMBLY ELECTIONS

"The governing junta's party is running scared, but,

even if it falls short of a majority, should be able

to dominate the government.

PROBLEMS MOUNT FOR NEW SOUTE VIETNAMESE REGIME

- Some military officers are showing signs of person-.

al political ambitions, and internal disagreements

are already apparent

on such matters as the role

the prospective advisory "council of sages."

of

CAMBODIA RENOUNCES AMERICAN AID

"Sihanouk's action follows weeks of charges that

the US supports dissident Cambodian broadcasts

from Thailand and South Vietnam.

Page

6

8

9

10

11

12

13

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ASIA-AFRICA (continued)

TENUOUS "CEASE-FIRE" IN LAOS

*The Communist

faction may be seeking a temporary

detente to gain time for broader military ventures,

or to undermine the neutralist-rightist alliance

by minor concessions to the neutralist faction.

ARMY TAKES OVER IN

IRAQ

The new regime

retains some Baathist coloration.

While Iraqi-Syrian union now seems a dead issue,

Syria's Baathist leaders may expect to reach some

accommodation with Baghdad.::

AFRICANS DEAL WITH ALGERIAN-MOROCCAN DISPUTE

*While the conciliation commission selected by the

Organization of African Unity pursues its delib-

erations.

Morocco and Algeria will quietly improve

their military positions.

NEW

SOMALI-ETHIOPIAN TENSIONS

Fighting in Ethiopia's Somali-inhabited Ogaden re-

gion has sharply increased,

and the Sonali Republic

will probably seek international support for its

territorial claims there.

EUROPE

NEGOTIATIONS FOR A CABINET IN ITALY

Disagreements over the prospective government pro-

gram

are retarding the negotiations for a center-

left coaltion.

THE

ITALIAN ECONOMIC OUTLOOK

* Industrial output is at a record high, but infla-

tionary pressures and balance-of-payments deficits

persist.

Businessmen now are apprehensive about

concessions to Socialist viewpoints in a center-

left government.

The Socialists, however, say

they will support, for the present at least, con-

servative financial policies designed to prolong

the economic boom.

(Published separately as Spe-

Cial Report SC No. 00619/63A)

=, -

THE ERHARD GOVERNMENT IN WEST GERMANY

new chancellor has made few changes in the cab-

inet or policy inherited from Adenauer, but he dis-

plays a flexibility which is likely to be particu-

larly

evident in his approach to East-West relations.

Eager

to promote US-German harmony, Erhard will visit

Washington

from 24 to 27 November.

(Published sep-

arately as Special Report SC No. 00619/63B)

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14

15

16

17

18

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EUROPE (continued)

MANSHOLT PLAN FOR SETTLING EEC GRAIN CONTROVERSY

EEC Commissioner Mansholt's proposals for unify-

ing Common Market grain prices appear

to offer

some hope for solution of the Community's most

vexing problem.

CHANGING BRITISH LABOR PARTY DEFENSE POLICY

Apprehensive about upholding its policy in an

election campaign or as the government party, Labor

1s modifying its heretofore flat opposition to the

MLF and an

"independent" British nuclear deterrent.

AREA NOTE

On the British Communist Party.

WESTERN HEMISPHERE

Page

-

19

20

do sure

21

AREA NOTE

On Canada

ARGENTINA ANNULS OIL CONTRACTS

The foreign companies nevertheless continue to op-

erate pending court determination of their financial

position vis-a-vis the government and negotiation

of new contracts...

THE OIL CONTROVERSY IN PERU

President Belaunde appears to be adopting a more

conciliatory position on the controversy over taxes

to be paid by the US-owned International Petroleum

Company.

VENEZUELAN PRESIDENTIAL ELECTION ON 1 DECEMBER

Communist-inspired violence aimed at disrupting the

election continues, and there remains a tacit threat

of intervention by

military leaders if they find the

winning candidate unacceptable.

""i"

21

22

23

24

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Cuba

CUBA'S NEW COMPULSORY MILITARY SERVICE LAW

Cuba's draft law on compul-

sory military service, explained

in detail by Raul Castro in a

nationwide broadcast on 12 No-

has far-reaching social

and political ramifications.

It is to be an important new

instrument of control over the

population and a neans of "re-

educating" Cubans who have not

yet become adjusted to living

working in a "socialist"

country.

When Fidel Castro first

announced last July that such a

law would be forthcoming, it was

in the context of a bitter at-

tack on the remnants of the

Cuban middle class. He said the

law

would make Cuba a nation

"more and more of workers and

less and less of

ensure that the "sons of today's

parasites do not become tomorrow's

potential lumpen" (his word for

recalcitrants and dissidents,

whatever their class origin.)

In a talk to representatives

of Cuba's central labor organi-

zation on 15 November, Raul

Castro indicated that

politically

unreliable Cubans will be im-

pressed into labor battalions

rather than inducted into regular

military units.

He expressed

confidence that many "lumpen"

so impressed will be rehabil-

itated.

Raul Castro declared that

the law will not be officially

promulgated for another two or

three weeks.

In the interim,

the "people"

are to discuss

and "approve" it in meetings

of their "mass organizations."

The draft law makes all

Cuban males between the ages of

17 and 45 liable to three years

of active military service.

Women between 17 and 35 who

volunteer will be accepted for

two-year terms.

The law states

that an individual nay fulfill

his obligations either by sery-

ing full time for three years

or, at the discretion of the

state, as a member of the re-

serves.

Students and others

whose civilian duties are judged

to be of sufficient importance

may be assigned to the reserves,

but will nevertheless be re-

quired to take military train-

ing during certain periods of

the year.

The pay for draftees on

active duty is to be a token

"allowance" of only seven pesos

per month--as compared with

the 60 to 80 pesos that the

lowest ranking Cuban soldiers

now receive.

Castro justified

this by indicating that all

the draftee's personal needs,

as well as those of any de-

pendents he might have, would

be taken care of by the state.

All eligible Cubans are

to register during the month

Castro estinated

that some 1.5 million Cuban

males will participate in

the initial registration.

His calculations indicate

that approximately 28,000

are to be called to active

service each year. Thus,

after the program has been

in effect for three years,

there will be about 84,000

men on active duty under this

program. (CONFIDENTIAL)

22 Nov 63

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Cuba

TRAINING OF CUBAN MILITARY PERSONNEL

In his 12 November speech,

Raul Castro stated that some

7,000 Cuban students had joined

the armed forces when Fidel Cas-

tro asked for volunteers to

train in the handling of special

weapons. He added that he had

recently attended the graduation

of Cuban students completing

the first phase of instruction

for "antiaircraft missile .

troops. "

Cuban surface-to-air mis-

sile (SAM) trainees recently

completed the four-month

classroom phase of SAM instruc-

tion at San Julian airfield

and

are scheduled to begin field

training at SAl sites this

month.

The 7,000 Cuban stu-

dents said to be

enrolled in

"special weapons" courses

probably include the SAN

trainees as well as those

training in radar, cruise mis-

sile, Snapper antitank rocket,

and possibly FROG tactical

rocket operations. (SECRET)

DEPARTURES OF SOVIET PERSONNEL FROM CUBA

Five Soviet passenger ships

have arrived in Cuba and de-

parted for home since 9 Novem-

ber.

Four of these arrived di-

rectly from the USSR while the

fifth came from

Brazil.

ÜER Act 6 (1) (B)

The number and type of per-

J one vessel was

to carry a full complement on

the voyage to Cuba.

Available evidence indi-

cates that about 1,000 Soviets

-most of then probably mili-

tary--left Cuba for the USSR

aboard three of these ships

and suggests that another 700

departed on the renaining two

vessels. (SEERBT KIMBO)

r....".

?..=

-- -

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The Communist World

THE BARGHOORN CASE

The release of Professor

Barghoorn on 16 November,

two

days after President Kennedy's

public condemnation of Soviet

behavior, apparently reflected

a decision by the Soviet leaders

to disengage as quickly as pos-

sible from this episode and to

try to minimize the damage to

Soviet-US relations.

Ambassador Kohler believes

the Soviet authorities failed to

anticipate the US reaction to

Barghoorn's arrest and that they

were bewildered and genuinely

alarmed by the volume and in-

tensity of US protests and ac-

tions.

Moscow's terse announce

ment of Barghoorn's release stated

that in view of

the

"concern

of high US officials," the So

viet Government had

decided

"merely to expel him from the

Soviet Union"

rather than bring

him to trial on espionage charges.

Gromyko informed Kohler privately

that this decision was the result

of Khrushchev's personal inter-

vention and requested that this

be brought to the attention of

President Kennedy.

In Ambassador Kohler's

view, this episode does not

reflect a deliberate decision

to worsen relations with the US

or to jettison the peaceful co-

existence policy and move closer

to Chinese Communist positions.

Although the ambassador acknowl-

edges that Soviet authorities

regard an occasional espionage

case as a useful device for warn-

ing the Soviet people against

unmonitored contacts with West-

erners, he feels the primary

motive in the Barghoorn affair

was the desire to secure a hos-

tage for 1. A. Ivanov, an em-

ployee of the Soviet "Antorg"

trade organization in New York

who was arrested on 29 October.

Gromyko told Kohler on 16 No-

wenber that the USSR expects

that the US Government

"will

take the necessary measures"

to release Ivanov.

Soviet propaganda has plajed

"hue and cry" raised in the US,

nd expressed the pious hope thal

ashington "will correctly evalu

ate the good will of the Soviet

Government" in releasing Barghoa.

Moscow's apparent desire

to avoid further damaging pub-

lic exchanges over this case

was evident in Gromyko's "con-

fidential" warning to Kohler

that if any US official pub-

licly attempts to justify Barg-

zoorm's behavior, thus casting

doubt on the legitimacy of So-

reserve the right to publis

materials of the investiga.

CRET NO FOREIGN DISSEM)

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CODE WORD MATERIAL ON REVERSE OF PAGE

SECRET

HARMONIZED ALLIED PROCEDURES

ALLIED VERSUS SOVIET PROCEDURES FOR BERLIN AUTOBAHN

TEXT OF SUMMO YET DROOLE TRANSMITTED

-StERET

ADVANCE NOTIFICATION

1. Advance notification will ba alven for convoye of eight or more

vehicles.

2. Prior notification will be given orally not later than 15 minutes

bofore arrival of convoy at Soviot checkpoint.

Allies also agroad

that this provision would not alter axisting valf-imposad restraints

on sending convoys containing six or sevon vehicles.

DISMOUNTING

1, Drivors, co-drivors, and crow membera do not dlamount for

heodcount.

2. Passengers in buses, whether the buses are traveling singly or

as part of a convoy, will not dismount.

3. Passengers in other singie vehicles will not dismount, excopt

that those in vahicier carrying 10 or more passengers will bo

prepared to dismount.

4. Passengers in any convoy with more than 30 passengors (not

counting bus passangers) will be prepared 1o dismount.

5. Passengers in convoys with 30 passengers or less (not count-

ing bus passengers) will not dismount, axcept that those In

Individual vehicles carrying 10 or more passengers, within the

convoy; will be propored to dismount.

6. Dismounting for heodcount (if requested by a Soviet check-

point officer) will be carried out under the following conditions:

a) Dismounting will be axecuted on order of the Allled

convoy commander and not of a Soviet officer.

b) Allied convoy commander will dotermino where the

troops should form for hoodcount, taking Into account

conaldoralions of the danges ol axcessiva publle displaye.

c) In avent troops dismounted for headcount are photo-

graphed or exposed to propaganda broadcasts, distribution

of propaganda pamphlets, or other forma of propaganda, or

are otherwise harossed, they will promptly romount.

d) Headcount In no case will axceod 15 minutos in

duration. Otharmise troops will remount.

•) Dlemounting will not be performed in inclament

woother (extrome cold, rain, anon, aic.)

INSPECTION

1. On vahlcios carryina passongers, tallgates the tops of which aro

over six foor from the ground will be lowered at Sovlet request. No

tailgates six foot or lower will be lowered.

2. Only convoy commander's identity card will be presented to the

Soviets together with freight documents.

1. Not mentioned

2. Not mentioned

1. (500 A bolom.)

3. Not montioned

4. In any convoy with more than 30 possengers (i. 0., exclusive

of drivers, assistant drivers, and, in the cose of spocialized vohicles,

other crew membors), the possongere will be propared to dismount for

hoadcount.

5. Convoys with 30 passengers or les will not dismount for hoodcount,

except that individual vehicles with 10 or more passongers, In tha

convoy, will bo propored to do so.

6. Dismounting for hoodcount will bo carried out under the following

conditiones

a) Dismount will be oxacuted on ordor of the Allied convoy

b) The Allied convoy commander will determine where the

troope should form for headcount.

6) In the avent troope dismounted for headcount are photo-

graphed or axposed to propaganda broadcaste, distribution of

propaganda pamphlots, or othar forms of propagando, or are

otherwise harassed, they will promptly romount.

d) Hoodcount will be porformed axpoditiously, Otherwica

the troops will remount.

•) Dismounting will not ba performed in inclement weather.

1. On vehicles carrying passangers, the Allied convoy commander will

be propored to lower tailgates the tops of which are over six feet from

the ground. No tailgates six foat or lomer will be lomored.

2. Not mentioned

SOVIET PROCEDURES AS COMMUNICATED TO

THE ALLIES ON 16 NOVEMBER 1863

1. Adrance notico must be given in accordance with established

proctica. Convoye of los than five vehicles are procesed through

without advance notica.

2. Not mentioned

diming are not counted l da iermining whather a convoy should

3. Troope trovaling in bures ore chocked without a linoup.

3. Troope trovoling in single vehiclos are chocked without a linoup.

4. Allied troops travoling in convoys dismount ond line up for verifi-

cation. Two men may be loft with each vehicle as guards.

5. Verification of personnal is allowed in tho vahicies if the sum

total does not axceed on average of two or three men por venicle,

nor including drivers.

6. Not mentionod

"a) Not mentionad

b) Not mentionad

c) Not montloned

d) Not montioned

•) A check of personnel will be made in the vohlclos in cose of

bod weather, I.o., mom or rain, with the pormision of the Soviet

commander, as is the prosent practico.

! count i in con la mode with tallgates down or with toilgores up it

2. Allied convoys ara procossed by prozonting established documents.

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The Communist World

USSR REJECTS ALLIED STATEMENT ON BERLIN ACCESS

Moscor's rejection of the Al-

lied statement on harmonized pro-

cedures on the Berlin autobahn

maintains the deadlock on the ques-

tion of "control" over procedures

and is another tactical maneuver

to draw the dest into a formal dis-

cussion of the whole question of

access to Berlin.

The USSR's reply of 16 Novem-

ber disnissed the Allied statement

as representing merely "internal

instructions" and again emphasized

its own clain to control the pas-

sage of persons and goods of Al-

lied forces through Soviet check-

points.

The Soviet response, delivered

to representatives of the Allied

military liaison missions, reit-

erated earlier renarks of

Foreign

Kinister Gronyko in insisting

that

a 29 June 1945 meeting of Allied

commanders in chief "exactly es-

tablished" that Soviet authorities

"take care of protection, control

and traffic regulation" for access

roates used by the Allied military

forces.

The ambiguous presentation of

Soviet procedures by the chief of

the Soviet military liaison mission

deliberately preserved wide lati-

tude for Soviet checkpoint command-

in processing Allied convoys.

In a further attempt to dem-

onstrate Moscow's firmness on this

issue,

Gromyko told the Danish for-

eign minister that the USSR would

not give in on the question of auto-

bahn procedures. He also told the

UK ambassador on 14 November that

the 1945 agreement "could not be

changed one lota."

A series of incidents in the

Berlin air corridors between 14

and 16 November apparently were not

staged to pose the threat of more

serious and drastic harassment of

the Allied access routes.

sighted by civil air pilots in the

air corridors on 14 November were

probably related

to a Soviet mili-

tary field exercise in the area.

The sporadic shining of high-

powered searchlights on US civil

aircraft on all three days may have

been the work of local East Ger-

man border troops acting without

authority from higher military

headquarters.

The US representa-

tive at the Berlin Air Safety Cen-

ter protested this action, and

there have been no further inci-

dents reported since 16 November.

(SECRET KIMBO NO FOREIGN DISSEM)

PRIPING RENEWS ATTACK ON MOSCOW

The Chinese Communist lead-

ers apparently regard Khrushchev's

25 October request for a cessation

of polenics as an expression of So-

viet weakness.

They certainly

vier it, not as genuine, but as a

taetical move aimed at gaining a

needed respite.

The Chinese have

no intention of giving Khrushchev

this respite.

Hoscor's recent effort to ar-

range a stage-managed international

Communist meeting to condemn the

Chinese was apparently resisted by

other Connunist parties.

The Chi-

nese probably believe that this was

a significant setback to Khrushchev's

attempts to isolate them.

therefore feel, as they did when

he called for a cessation of polem-

ics last February, that this is

a good time to press the attack.

This emerges clearly from a

19 November combined Red Flag -

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People's Daily article--the fifth

In Peiping's current series of

attacks on the positions outlined

in the Soviet Union's 14 July

open letter.

A long commentary

on the "questions of war and

peace," the article advanced

no

new ideas of this oft-debated

issue but concentrated on heavy

personal abuse of Khrushchev.

Just before the Soviet October

Revolution celebrations on 7 NO-

vember, when the Chinese were un-

certain whether they would be

faced with an extreme challenge

from the USSR, their war of words

with Moscow had taken on a more

ambiguous tone.

The fourth con-

mentary, published on 21 October,

did not

attack Khrushchev with

the customary vigor.

The flavor of the current

article, however, is contained

in the comment

that the US im-

perialists have not become

"beautiful angels in spite of

Khrushchev's bible-reading and

psalm-singing; they have not

turned into compassionate Bud-

dhas in spite of Khrushchev's

prayers and incense-burning."

The Barghoorn affair gives

the Chinese a ready-made example

of how the Soviet leadership has

abandoned principle and knuckled

under to US pressure while gain-

ing nothing in return.

Peiping

has lost no time interpreting

it this way.

Although there has

been no editorial comment as yet,

selective reporting in the

nese press makes the point

clearly.

Using Western news stories, Pei-

The Communist World

ping details the forms of pres-

sure the US applied to gain Barg-

hoorn's release and then depicts

Khrushchev's personal interven-

tion as a hasty and complete sur-

render.

The Chinese realize that

Khrushchev's requests for a

tempering of the dispute are

welcome among other Communist

parties which find the constant

cross fire difficult to escape.

To counter this, Peiping has

periodically cited the number

of anti-Chinese articles which

continue to appear in the So-

viet press.

In preparation for

their renewed assault,

the. Chi-

nese on 15 November printed a

hasty and "incomplete" count

which showed that more than 80

articles with anti-Chinese con-

mentary had appeared in the So-

viet press in one two-week period

following Khrushchev's 25 Octo-

ber request for a pause.

Moscow, unless stung to a

quick response by the fury of the

Chinese attack on Khrushchev, will

probably maintain its self-imposed

ban on its polemics while it seeks

a way to convince other Communist

parties to join in the isolation

of Peiping.

The Soviets now have

begun to hint that, instead of an

international gathering, another

bilateral meeting might be held.

Moscow probably believes that the

almost inevitable failure of bi-

lateral talks would show that its

constant attempts to be reason-

able produce no change in Chinese

behavior.

(CONFIDENTIAL)

22 Nov 63

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The Communist World

INDICATIONS OF ECONOMIC REAPPRAISAL IN THE USSR

The scheduling of a Soviet

central committee plenum on the

chemical industry for 9 December

indicates that the 1964-65 economic

plan now is ready for presentation.

Completion of the plan was delayed

apparently to reappraise the econ-

omy in light of the unusually poor

1963 harvest and the extraordinary

purchases of Western grain.

Judging from the press dis-

cussion,

the plan is predicated

on the rules set out by Khrushchev

last summer--greater concentration

of investment to speed construction,

a sharp boost in chemical output

to support agriculture and indus-

try, and stepped-up investment in

irrigation.

While Khrushchev con-

tinues to tell some Westerners that

the program will involve cutbacks

in military expenditures, he has

told others that both agricultural

and military needs can be met si-

multaneously.. There are many

signs in the press that Soviet in-

dustry is already being redirected

to support the new program.

Apparently there is concern

in some Soviet circles that these

problems are being underrated.

On 17 November, Pravda published

a letter from several prominent

scientists who cautioned that

agriculture does not have enough

storage facilities and machinery

to utilize additional fertilizer,

that the country now is wasting

virtually half the fertilizer al-

ready being produced, and that

some of the plans put forth by

the Ministry of Agriculture are

unrealistic.

The scientists sug-

gest that some of the increased

investment for new fertilizer

capacity be used for more urgent

farming needs.

The regime's pur-.

pose in permitting this letter to

appear was perhaps to underscore

the need to effect a wide range

of resource shifts in favor of

agriculture, but also to indicate

that certain elements in the pro

gram are still open for debate.

Khrushchev recently told

visiting US businessmen that the

crash fertilizer program would

rapidly boost agricultural output.

His statement that farm output

depends neither on the capitalist

nor the socialist system but on

investment is in sharp

contrast

with the organizational manipula-

tions which characterized his

approach to the farm program for

several years. His boast that

the new program will enable the

USSR to match US agricultural

productivity overlooks production

and allocational problems inherent

in the undertaking and ignores

serious soil and climatic handi-

caps.

1964-65 planning was delayed by

recent events--particularly the

unexpected requirement to spend

a large amount of gold for Western

grain.

Soviet planners are considering

steps to speed up the expansion

of gold production, but that the

increases envisaged would be rel-

atively modest and would do little

to ease the balance-of-payments

problems. The 1964 increase under

discussion for the chief gold-pro-

ducing region apparently amounts

to one or

two tons (worth $1 to

$2.25 million) --only about one

percent of total Soviet output.

Plans in other gold-producing

areas are not known. (TOP SECRET

DINAR)

22 Nov 63

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Rumania's Gheorghiu-Dei

is visiting Yugoslavia...

... to sign an agreement for develop-

ment of the "Iron Gate" of the Danube.

He was preceded in Yugoslavia

by Khrushcher in August .....

... and Hungary's Kodar

in September.

631119 3

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The Communist Horld

RUMANIA OPENS DOORS FOR COOPERATION WITH YUGOSLAVIA

Rumanian party First Secre-

tary Gheorghiu-Dej arrived in

Belgrade on 22 November as

leader of the highest ranking

group from the soviet bloc to

visit Yugoslavia since its

rapprochement with the bloc be-

gan nearly two years ago. Al-

though ostensibly for the pur-

pose of signing an agreement

for construction of an ambitious

hydroelectric and navigation

project on the Danube border

_-the so-called Iron Gate--

the eight-day visit will un-

doubtedly be the occasion for

party and governmental talks on

a wide variety of subjects.

For Yugoslavia, Dej's visit

will complete the process of re-

establishing contacts at a high

level with all the states of the

Soviet bloc.

During the past

year, Khrushchev, Bulgarian

party chier chivkov,

and Hun-

garian party First Secretary

Kadar have visited Yugoslavia.

Tito has been to the USSR and

Hungary and is expected to

visit Poland in the spring.

Visits by delegations

politboro level have already

been exchanged with Czechoslo-

vakia and Poland, and Belgrade

sent an important delegation to

East Germany's party congress

last January.

While Rumania did not par-

ticipate in the last anti-Yugo-

slav campaign as heartily as

most bloc states, it has lagged

behind these states in recent

months in improving its relations

with Yugoslavia. This demonstra-

tion of reserve

toward Belgrade

has complenented Bucharest's

failure to attack the Chinese

directly in the Sino-Soviet dis-

pute and has apparently been

intended in part to demonstrate

Rumanian independence from the

USSR.

Before accepting Tito's in-

vitation Dej reportedly insisted

on certain econonic preconditions,

the Iron Gate agreesent being

the nost significant.

The con-

trast between Bucharest's tough

internal orthodoxy and Belgrade's

relatively liberal donestic

policies has apparently also

been an impediment to closer Yugo-

slav-Rumanian relations.

Now, the fact that both coun-

tries,

Yugoslavia sore so than

Rumania, refuse to subordinate

their national econonic programs

to Soviet bloc interests pro-

vides a basis on which their re-

lations could be rapidly improved.

Both countries obviously attach

considerable importance to the

visit.

Includes he ney re delegatures

and there

has adition to Desi ate peres

build-up in both states.

(CON-

FIDENTIAL)

22 Nov 63

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she Communist World

SATELLITES UNDERMINE GDR'S POSITION ON BERLIN

The terms of trade agreements

concluded between several East

European countries and West Ger-

many undercut basic East German

positions on the Berlin and Ger-

man questions.

reflects the greater willingness

of the East European countries

to put their national interests

ahead of those of the Soviet bloc

and has the effect--whether in-

tentional or

not--of isolating

the GDR from its Eastern neighbors

on the Berlin issue.

Both the Rumanian trade pro-

tocol with West Germany--initialed

on 17 October--and the Hungarian

agreement signed on 9 November

contain a "Berlin clause"--i.e.,

a declaration that the agreement

is applicable to the currency

area of the Deutsche Mark West,

which includes West Berlin.

resemble the Polish - West Ger-

man agreement signed last March

which included a secret protocol

to this effect.

Any public acknowledgment

of West Berlin's ties with the

Federal Republic is anathema

East German regime, which

maintains that West Berlin is an

entity separate from the Federal

Republic.

The USSR also has

pressed Bonn hard to avoid any

reference--any written one, at

least--to this subject in con-

nection with the Soviet - West

German trade agreement.

In addition, the opening of

West German trade missions in

Eastern Europe will detract from

the GDR's claim to be the sole

representation of Germany in the

satellite capitals. The situation

is aggravated from

the GDR's point

of view by the fact that the new

Hest Geruan offices will have a

semidiplonatic status.

Walter Ulbricht displayed

his annoyance in a speech on 11

Novenber to the GDR State Council

in which he commented on Bonn's

"more flexible tactics" toward

Bastern Burope.

"The reduction

in tensions is

being exploited

by imperialist forces in Bonn,"

he said, "to penetrate into the

GDR and the people's democratic

countries by changed methods."

While the Bast German leader did

not expressly refer to the recent

West Gernan trade pacts, this is

the one area where the more elas-

tic policies forecast by West Ger-

man Foreign Minister Schroeder in

August 1962 have shown results for

Bonn.

In the case of the Rumanian

agreement, Bucharest reportedly

took careful steps to keep the

GDR--and perhaps the USSR--in the

dark on the progress of negotia-

tions.

The British minister in

Bucharest had heard that the GDR

Embassy was "extrenely discomfited"

by the signing of the agreement

and expected a new chill in East

German - Rumanian relations, already

none too cordial.

Meanwhile, Czech party leader

Novotny has also made a bid to ne-

gotiate an exchange of trade mis-

sions. with Bonn.

Bulgaria, too,

has shown a willingness for talks

and nay have begun negotiations

this week. Berthold Beitz, Krupp's

effective

and ubiquitous general

manager, vas in Sofia in September

as a guest of the Bulgarian premier

and has been invited to visit Czech-

oslovakia in December. Negotiations

for the renewal of the Soviet - West

Gernan trade agreement are tenta-

tively scheduled for January. (SE-

CRET NO FORBIGN DISSEM)

22 Nov 63

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The Communist world

COMMUNIST CHINA'S LEGISLATURE CONVENES IS SECRST

With little to brag about,

according to Chen, may involve

the Chinese Communists again

a stretch-out of the existing

this year are holding their rub-

PiTe-Year Plan (1963-67) schedule

ber-stamp legislature, the Na-

to a seven- or ten-year period.

tional People's Congress (SPC),

Toe leadership probably sees bene-

behind closed doors.

It convened

fits in setting goals far enough

in Peiping on 17 November, at-

in tbe future to relieve the re-

tended by liao, other top leaders,

gime of pressure to show immedi-

and more than

1,000 delegates

ate results.

including some

Overseas Chinese.

Past NPC meetings have lasted frOn

11 to 25 days.

Before the collapse of the

Leap Forward in 1960,

the NPC

had been a major annual forum for

publicly boasting about achieve-

ments and for presenting national

policy. It did not meet at all in

1961, however, and the 1962 session

was held in secret. This year's

session, originally scheduled for

second quarter, was postponed,

partly because it would have inter

fered with preparations for the 5

July confrontation with the so-

viets in Moscow.

The opening of the session

was preceded by secret meetings

on 15 and 16 November of the

Supreme State Conference, a se-

lect forum often used by

the

chief of state to publicize ma-

jor policy pronouncements.

This

time, however, Peiping merely

announced that Liu

Shao-chi: in

his capacity as chief of state,

and Premier Chou En-lai had made

"important speeches on the pres-

ent international and domestic

situation and future tasks."

The agenda of the NPC has

not been announced, but Foreign

Minister Chen Yi told a group of

visiting Japanese newsmen on 28

October that the meeting would

deal chiefly with economic ques-

tions.

These include a

"new па-

tional economic progran," which,

One of the few surprises of

the SPC thus far has been the an-

sourcenent that Vice Premier Li

Fa-chus presented the keynote

speech. He had been out of pub-

lie mier for four and one-half

months.

Li's report, describing the eco-

monic situation in 1963 and the 1964

plan, was followed by a financial

report by Vice Premier Li Hsien-

Their reports probably were

cast in highly somber terms to

condition delegates for a con-

tination of hard times. Late-

sexson floods reduced the food-

grin harvest probably to a level

slightly less than the mediocre

harvest of 1962.

The prospect of a decline in

the already meager food rations

has made regime pronouncements

understandably more cautious since

mid-September. For example, Chou

Ba-lai on 1 October spoke only of

a "tread of general improvement"

since the disaster years of 1959-

61, made no comparison between 1963

and 1962, and admitted that "there

is no lack of shortcomings and mis-

takes in our work."

Chen Yi re-

cently said that 1964 will be an-

other year of economic "readjust-

ment," a euphemism the Chinese

have been using in the past three

jears to describe the severe re-

trenchient.

(CONFIDENTIAL)

22 Nov 63

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The Communist World

dEK Act 6 (1) (B)

PEIPING SEEKS LARGER FOOTHOLD IN LATIN AMERICA

The Chinese Communists

have recently stepped

up efforts

to develop more press and trade

representation in Latin America.

Lacking diplomatic recognition

by any Latin American country

except Cuba, Peiping has been

forced to depend on its New China

News Agency (NCNA) offices and

unofficial commercial missions

to support political and sub-

versive efforts.

Mexico, the center for Com-

munist subversive activities

in Central America, is currently

the target for renewed Chinese

approaches.

fair is scheduled to open there

in December.

A delegation

headed by Kuo Mo-jo, a high-

ranking cultural propaganda

specialist, will

be in Mexico

City to open the exhibit.

Kuo

is the most important Chinese

official ever to visit Latin

America-except for Cuba.

The

fair is the largest such venture

on the mainland to date.

This year China has signed

agreements to purchase 300,000

metric tons of wheat and 16,000

bales of cotton from Mexico.

made area over 1 eter

ble Sino-lexican exchange in

1962 and would provide a talk-

ing point in attempts to estab-

lish permanent Chinese trade

representatives in Mexico.

Two

NCNA correspondents who arrived

in Mexico City last July on tem-

porary visas are still there and

may be trying to set up a perma-

nent office.

The Chinese trade fair may

move on to Brazil after its

Mexican engagement. Last July

a Chinese delegation met with

officials in Brasilia to dis-

cuss the possibility of a cul-

tural and trade exhibit in Sao

Paulo and other large Brazilian

cities.

more

than nine Chinese were scheduled

to go to Rio, apparently for an

exhibit, and

that Peiping will

send two unofficial trade rep-

resentatives to Brazil on perma

nent assignment to promote Sino-

Brazilian trade.

first established an outpost

in Brazil in 1961 when NCNA

sent two correspondents to staff

an office in Rio.

Peiping's commercial mis-

sion in Chile -established in

1961--has apparently had ample

time for activities other than

trade.

Its recent offer to

purchase 10,000 tons of Chilean

copper--worth about $6 million

--is the first significant

Chinese trade overture there

since 1959. Officials from

this office visited Uruguay

during July and August this year

to explore the possibility of

setting up a new trade post in

Montevideo.

(SECRET SABRE NO

FOREIGN DISSEM)

22 Nov 63

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Asia-Africa

SOUTH ZORELS NATIONAL ASSEMBLY ELECTIONS

The gorerning junta's Deno-

cratic Republican Party (DRP)

is running scared in the can-

paign for the 26 November elec-

tions to the South Korean Na-

tional Assembly. Opposition

forces are likely to obtain a

nominal najority and secure a

forus for harassing President

Pak Chong hui's regime.

Never-

theless, the junta should be

able to

dominate the new assembly

through bribes and coercion and

by making the sost of the strong

powers vested in the executive.

The asseably will be the

first to meet since the present

regime seized power in May 1961.

Nearly 1,000 candidates repre-

senting five najor and seven

minor parties are competing for

the seats of the 131 single-

sember districts; an additional

44 seats are to be apportioned

according to the over-all popular

vote.

The four nain opposition

parties are trying to exploit

ridespread public concern over

deteriorating econonic conditions

and disenchantent with the re-

gine's authoritarianisn.

candidates are generally better

know than the DRP's and have

stronger local ties. Neverthe-

less, these parties

are hampered

lack of financial support

and by an excessive number of

candidates coupeting against

one another. Already divided

by long-standing personal and

factional differences, they are

also reluctant to make any deals

involving withdrawal of candi-

dates because this would reduce

party chances of gaining seats

under the second-stage apportion-

ment.

At the same time the

for funds reportedly has

led to the sale of some posi-

tions on opposition tickets to

covert regime backers seeking a

more popular label.

Shaken by Pak's narrow

margin in winning last month's

presidential race, the DRP claims

that only a victory for its

candidates can assure the country

political stability. The cam-

paigns of regime candidates are

being supported by the govern-

ment administrative apparatus

and are lavishly financed. The

police are being used to a

greater extent than last month

to put pressure on the electorate

and harass the opposition.

regime also appears to be f1-

nancing most of the minor parties

with a mind to splitting the

opposition vote.

Both the DRP and the opposi-

tion have generally indicated

their support for continued co-

operation with the United States.

The major exception is former

security chief Kim Chong-pil.

Kim reportedly aspires to become

premier in a DRP government.

the course of a highly national-

istic address to college students

on 4 November, he delivered a

diatribe against "Yankeeism"..

a protest which he claimed was

distinct from anti-Americanism.

The generally favorable reaction

suggests that Kim may be able

to use this theme in the future

to whip up support fron among

the volatile Korean students.

(CONFIDENTIAL NO FOREIGN DISSEM)

22 Nor 63

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Asia-Africa

PROBLEMS MOUNT FOR NEW SOUTH VIETNAMESE REGIME

oaetAT114

Problems are increasing for

his provisional cabinet and

to

the new regime in Saigon as it

the scheme of some officers on

begins to grapple with the task

the junta's political staff to

of governing South Vietnam.

make the council a vehicle for

setting up a manipulated two-

party system.

General Ton That Dinh may

be using his position as security

minister to build up an independ-

ent political base.

After the

coup, he portrayed himself to

the press as its real instigator,

and has put himself further in

the limelight by a tour of sev-

eral provincial cities where

he held rallies to drum up public

A recent intercepted

directive from his ministry re-

questing all province chiefs to

report daily on the local politi-

cal situation may be indicative

- of his personal ambitions.

Meanwhile, there are re-

ports of lower

morale in the na-

tional police directorate where

the new chief, General Xuan, 1s

filling key posts with his per-

sonal followers.

Air force of-

ficers are criticizing their new

commander, whom they consider

poorly qualified and politically

The Information Ministry

reportedly has ordered newspapers

not to criticize the armed forces

or publish divisive articles on

religion.

One military officer

claims the generals have been

The regime faces potential

disgusted by the unprincipled

difficulties in its efforts to

behavior of the press since the

garner support from traditional

lifting of restrictions.

opponents of the Diem regime.

Various remnants of the once-

powerful politico-religious sects

are being encouraged to rally,

but may attempt to set conditions

for active support of the regime.

Their factional activities were

a weakening element in South Viet-

nam before they were forcibly

suppressed by Diem in 1954-55.

Vietnamese Communists in

Cambodia reportedly have been

told that the Viet Cong plan,

by inciting the South Vietnamese

people to make impossible de-

mands, to force the new military

rulers to follow "the road of

the Diem regime" by resorting

to repressive measures.

Disagreements over the role

of the prospective

civilian

"council of sages," which is to

on the transition to a

permanent government, may en-

courage some politicians to re-

main aloof.

Phan Huy Quat--a

leader in the Dai Viet party,

which wants the council io be

an embryonic national assembly

responsible only to the military

junta--asserts that he is becon-

ing disillusioned.

He objects

to Premier Tho's plans to have

a small council subordinated to

The intensified Viet Cong

military drive appears to have

slackened after reaching an

all-time high in the week of

5-11 November with over 1,000

incidents including 233 armed

attacks.

The attacks, how-

ever, were primarily small.

scale and apparently designed

as much for psychological im-

pact as for actual military

gain.

(SECRET SABRE NO FOR-

EIGN DISSEM)

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Asia-Africa

CAMBODIA RENOUNCES AMERICAN AID

Cambodia's renunciation of

US aid and demand for withdrawal

of American military advisers

marks a

new departure in Prince

Sihanouk's strategy for main-

taining his country's independ-

ence and neutrality.

announced the moves before a

mass rally in

. Phnom Penb on 19

November, and the next day gave

formal notice to the US Embassy.

is Bossy.

Naradipo, now studying in Pei-

ping.

His actions followed weeks

of fulminations against alleged

US support of dissident Khmer

Serei (Free Cambodia) elements

who have been beaming anti-

Sihanoul broadcasts into Cam-

bodia from mobile transmitters

in South Vietnam and Thailand.

Even though this ragtag group

does not threaten his firm con-

trol over Cambodia,

Sihanouk

has always reacted

violently

whenever Khmer

Serei activities

have flared up. He believes,

moreover,

the US played

major role in the overthrow of

the Diem-Nhu regime in Saigon,

and so considers the current

Khmer Serei operations more omi-

nous than usual.

His emotional

speeches earlier this month con-

tained frequent references to

the possibility of his assassina-

tion,

and he

even designated a

successor--his 18-year-old son

Sihanouk had long wished

to revise the terms of US aid

to Cambodia.

He was already

moving in the direction of

breaking the West's monoply

on military assistance, having

recently accepted a few jet

fighters and antiaircraft guns

from the USSR as a "personal

gift." Sihanouk also partly

blamed US aid operations for

Cambodia's economic stagna-

tion.

He thus criticized the

Commodity Import Program for

allocating foreign exchange

to the private sector of the

economy, and has announced

plans to nationalize Cambodia's

import-export firms as of 1

January:

Sihanouk's actions have

already disrupted business

aevaruation, and dismayed

and dismayed

his conservative advisers

and others in the royal fam-

These repercussions

may yet lead him to moderate

his course and seek to re-

negotiate the terms of US

(SECRET)

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63

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Asia-Africa

TENUOUS "CEASE-FIRE" IN LAOS

Laotian neutralist commander

Kong Le and Pathet Lao military

chief Singkapo on 16 November

agreed to a cease-fire on the

Plaine des Jarres.

Subsequent

meetings were

set

to work out

details, and

"to create a

favor-

able atmosphere" for an eventual

meeting of Premier Souvanna

Phouma and Pathet Lao leader

Souphannouvong.

• In a meeting on

19 November, however, the mili-

tary leaders made no significant

progress, agreeing only to

another

conference on 26 Noven-

ber.

30023 over

The reasons behind the

Pathet Lao's willingness to en-

ter into negotiations are un-

temporary detente to gain time

for broader military ventures,

or they may be hoping to under-

mine the neutralist-rightist al-

liance by offering minor con-

cessions to the neutralist fac-

tion.

While fighting on the plain

has slackened, the cease-fire is

unlikely to end all fighting

Occasional shellings in

violation of the agreement have

been reported.

In other areas, there are

reports of continued military

activity.

Near Xieng Khouang

town rightist units have taken

commanding positions in nearby

hills, while to the north

are persisting in their efforts

to recapture a key mountain post

at Tha Lin No1.

In the Vang

Vieng area, neutralist forces

are pressing their efforts to

drive the Pathet Lao troops

from the town.

Farther south,

near Nhommarath, Pathet Lao

and neutralist forces continue

to jockey for position. (CON

FIDENTIAL)

CHINA

PHONO SALY

BURMA

NANTHE

LUANG PRARANG

-, Luang

Prabang

XIENG KHOVANG

Tha Ln

Plaine des

Jarres

Xieng

Khouan

Mang®

Vieng

VIENTIANE

VIENTIANE

Ahammarat:®

THAILAND

SAVAN

34980

Fis: 7

CAMBODIA

.22 Nov

63

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CHINA

SOUTH

VIETSAY:

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Asia-Africa

ARMY TARES OVER IS IRAQ

Following a week of maneu-

vering among factions of the

ruling Baathists, the army took

control of Iraq on 18 November.

The political complexion of the

new regime is still not clear,

however.

President Arif, a non-

Baathist "Arab nationalist" with

past ties to Cairo, was evidently

able to achieve united army ac-

tion against the former govern-

ment by playing or almost uni-

versal army disgust with the

role of the natioral guard--the

paramilitary organ of the Baath

Party-in the events of the pre-

ceding week. Arif has himself

assuned most of the executive

power of the state.

tary governor general, also a

non-Baathist, remins

post and bas

taken over the

Interior Hinistry.

Arif has issued appeals of

friendship to both Egypt and

Syria, and Baghdad radio has

broadcast songs praising Nasir.

Egyptian spokesmer have welcomed

the coup. At Bagidad's request,

Cairo has also agreed to supply

radio and television propaganda

materials to Iraq.

However, the new regime

still retains sove Baathist

coloration.

There appear to

"...

have been no changes in command

in the army, and Baathist offi-

cers continue to bold positions

of considerable importance in

the military.

The regime's

second in command is General

Hardan Tikriti, a Baathist of

long standing who played a major

part in last Febriary's coup.

Former Premier Bakr

has been

appointed vice president in the

new government, and the new

premier cooperated closely with

the Baath during its period of

ascendancy.

It is not certain,

however,

if these elements con-

sider themselves bound by the

decisions of the Baath Party

international command.

The new cabinet is a coa-

lition of Arab nationalist ele-

ments and is dominated by the

military.

Arif probably expects

to play off contending elements

in the coalition to maintain

his present powerful position.

The army takeover appears

to have made a dead issue of

any meaningful union between

Irag and Syria.

the Syrian

Army forces stationed in northern

Iraq are concentrating, prelim-

inary to withdrawal. However,

Syrian leaders may expect to

reach some accommodation with

the new regime. Syrian Premier

Hafiz and other members of the

Baath Party international command

caught in Baghdad by the coup

have flown to Damascus, where

talks on the Iraqi situation

are under way.

A modus vivendi with the

Iraqis would reduce the Syrian

regime's present isolation and

probably improve its short-term

chances for survival. However,

Cairo is calling

for a "nation-

alist revolution" in Syria,

similar to what occurred in

(TOP SECRET DINAR)

JEK Act

6(1) (B)

22 Not 63

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TOP SECRET DINAR

Asia-Africa

AFRICANS DEAL WITH ALGERIAN-MOROCCAN DISPUTE

The territorial dispute be-

tween Morocco and Algeria has

been temporarily shelved fol-

lowing the selection of a con-

ciliation commission by the

Organization of African Unity

(OAU) --meeting in Addis Ababa

from 15 to 18 November. The

respite will allow both

onists to improve their military

positions.

The seven-nation commission

--Ethiopia, Mali, Senegal, Ivory

Coast, Sudan, Tanganyika, and

Nigeria--will seek to fix re-

sonsibility for the outbreak of

hostilities on 8 October and

nake recommendations for a solu-

tion of

the territorial dispute.

It will attempt to win agreement

from the disputants to an out-

line of a bilateral accord.

connission will meet initially

in Ivory Coast on 2 December and

may be prepared to report its

findings in February to the next

meeting of OAU foreign ministers

in Nigeria.

Ethiopian Acting Foreign

Minister Ketema, who played a

leading role at the conference,

has informed the American ambas-

sador that a "kind of understand-

ing" was reached on a limitation

of arms during the cooling-off

period.

The intervening months

nevertheless will provide time

for Egyptian and other foreign

instructors now in Algeria to

train Algerian forces in the

use of equipment supplied in

the past six weeks by Egypt,

cuba, and the USsR, and for

Morocco to pursue its own train-

ing programs.

At the conclusion of the

Addis meeting the prevailing

mood among most of the 32 OAU

members was one of general self-

satisfaction over what they re-

garded as a demonstration of

the organization's ability to

function in a crisis. As for

the future, the delegates

ably widely shared Ketema prob-

view that the commission's rec-

ommendations,

while not legally

binding, would in fact become

mandatory because

of the Africa-

wide moral pressure which would

be bebind them.

The conference pushed the

soaring prestige of Ethiopia's

Haile Selassie still higher.

Ghana's frenetic Nkrumah, on

the other hand, once again found

his spokesman's efforts to pre-

empt a prominent role for Ghana

thwarted.

Meanwhile, the four-power

commission--Mali, Ethiopia,

Algeria, and Morocco--set up

at

Bamako last month to establish

a demilitarized zone along the

border is just getting organized.

In the face of Morocco's adamant

refusal to pull back its forces

from Hassi Beida and Tinjoub,

and Algeria's insistence that

it do so, prospects are not

bright that it can be effective.

i dontrolate so on born un

tions reveal continuing aerial

reconnaissance and a general

strengthening of forces along

the border.

(TOP SECRET DINAR)

JEK Act 6 (1) (B)

22 Nov 63

CURRENT INTELLIGENCE WEEKLY REVIEW

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## Page 26

Aden

FRENCH

SOMALILAND

50

Djibouti

Gulf

or aden

Diredama®

Adis Araba

ETHIOPIA

G

SOMALI

REPUBLIC

Indian

O ceran

КЕНА

SOMALI TRIBES

EAST AFRICA

33050

MILES

300

і тол 1

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TOP SECRET DINAR

Asia-Africa

NEW SOMALI-ETHIOPIAN TENSIONS

Fighting between Ethiopian

security forces and Somali

tribesmen in Ethiopia's Ogaden

region has recently increased

sharply.

Although full-scale

hostilities between Ethiopia

and the Somali Republic--which

claims the Somali -inhabited areas

of the Ogaden--are not likely,

serious incidents could occur

at any time.

tension will probably lead to

a renewal of vituperative prop-

aganda exchanges, with the

Somalis seeking international

support for their territorial

claims.

JEK ACt 6(1)(B.)

Somali dissidents, weft arwea

and frequently wearing captured

Ethiopian uniforms, have attacked

both Ethiopian Army troops and

police outposts in several areas.

On 6 November, 29 Ethiopian

soldiers were

killed in an an-

bush--the largest number yet

noted in a single attack.

Ethiopians believe that some of

the dissident bands number 300

or more.

Ethiopian commanders admit

that they are hard pressed to

maintain order.

One division

commander recently requested

too additional battalions and

as many vehicles as possible,

because "the security situation

is getting worse from day to

On 9 November, Addis

Ababa replied that a

force of

brigade strength would be sent.

Addis Ababa, convinced

that the dissidents are receiv-

ing aid from the Somali Govern-

ment at Mogadiscio, has reacted

sharply both to the stepped-up

attacks and the $40-million arms

aid--reportedly to include

MIG-17 aircraft--which Mogadi-

scio recently accepted from

Moscow.

The Ethiopians appear

to

be planning reprisals against

the Somali population in the

area of the ambush, Addis Ababa

apparently having concurred in

the local commander's recommen-

-dation that the area be "thor-

oughly devastated by air and

by land."

On 13 November Em-

peror Haile Selassie told the

US ambassador that the Somali-

Soviet arms deal could have

"grave consequences," and the

Ethiopian press and radio are

charging it is evidence of

Somalia's intention "to achieve

territorial aggrandizement

through the sheer force of arms."

According to a reliable

clandestine report,

however,

the Emperor has given firm

orders that Ethiopian troops

will not violate the Somali

border, or take actions that

would permit Mogadiscio to

make the situation "a cause

for international concern."

Local Ethiopian commanders

might still be goaded into in-

cursions on their own initia-

tive along the largely unmarked

border.

have,

in fact, spoken of diss1-

dents being "assisted" with

rations and secretly delivered

materiel, but on Somali terri-

tory.

Such support might soon

become overt, as the Mogadiscio

government is deeply committed

to Somali irredentism, and

faced with difficult municipal

elections later this month and

general elections, in March.

(TOP SECRET DINAR NO FOREIGN

DISSEM)

22 Nov 63

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TOP SECRET DINAR

Europe

NEGOTIATIGNS FOR A CABINET IN ITALY

Disagreements over the pro-

spective government program are

retarding the negotiations in

Italy for a center-left coali-

Several of the current dif-

ficulties seem to relate to the

proposals for decentralizing

Italy's administrative structure.

The most important problem

is that of decentralizing the

large organization which controls

the bulk of the nation's agricul-

This organization is

dominated by the confederation

of small farmers which is power-

ful in the Christian Democratic

Party.

Secondly,

a compromise

previously reached on setting

up regional administrations

been complicated by an accord

reached a few days ago in the

Aosta Valley region, where So-

cialists and Conmunists have

agreed to continue their cooper-

ation in the government at this

level.

A third difficulty

centers on the urban redevelopment

program.

The negotiations are being

conducted in an atmosphere of

rising tension as powerful oppo-

nents of a center-left regime

on both right and left continue

to maneuver to block its forma-

tion.

The Communists sparied

two more strikes this week and

be counted on to miss no

opportunity to embitter rela-

tions between the socialists

and Christian Democrats, even to

the point of provoking violence.

Right-wing Christian Deno-

crats have been no less assiduous

in trying to prevent a rapproche-

ment with the Socialists.

this end, they are attempting

to exploit the Socialists' unwill-

ingness for the government to

undertake further MLF commit-

ments during its first few nonths.

President Segni earlier this

month went so far as to send word

to the Socialists that the Us

was pressing for a definite LF

commitment "now." This particu-

lar ploy seems to have been

scotched, but the two sides

are still unable to agree on a

policy statement concerning the

MLF.

Premier-designate Moro also

is under direct pressure fron

rightist elements in his party.

These are suggesting that he

is bargaining away too much of

the Christian Democratic posi-

tion and that, in so doing, he

could turn the country over to

the Communists. Thus, even if

a center-left government is

eventually installed in office,

it is bound to be in for rough

sledding during its shakedown

period.

(SECRET)

22 Nov

63

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CONFIDENTIAL

NO FOREIGN DISSEM

THE MANSHOLT PROPOSALS

ie Mansholt proposals are designed to pave the way for free trade

in grains and derivative products within the European Economic Community

by harmonizing the support-price levels for grains in the six member countries.

Price levels now vary from about $82 per metric ton for wheat in France to

about $108 in West Germany. Commissioner Mansholt proposes to effect the

adjustment in one step to a level which, in 1964, would be roughly 11-15

percent below the German price, but 8-16 percent above the French price.

The single Community price would be subject to annual adjustments, taking

into account agricultural incomes, production costs, consumer prices, and -

supply and demand.

To assist producers hit by the proposed price reductions (i.e., farmers in

West Germany, Italy, and Luxembourg) the Mansholt plan provides for various

kinds of compensatory payments totaling $206 million in the first year, but

declining somewhat in subsequent years. These payments would be financed

initially from the Community budget--presumably out of receipts from the

variable levies on imports of agricultural products. Mansholt also proposes

that the Community assume from the member states the costs of subsidizing

exports of grain, flour, poultry, eggs, and pork to nonmember countries.

As a leading supplier of grains to the EEC, the United States is concerned

primarily about the plan's expected impact on production in France, where

the expansion potential is greatest. US experts believe that total returns to

the French producer under the plan are likely to exceed considerably the

specific increase in French prices and that a sharp increase in production is

therefore probable. While part of this increase will be absorbed by the expand-

ing intra-EEC market, one official US estimate suggests that net annual EEC

imports of grains from all sources are likely to decline from the 10.6 million

metric tons of the recent past to 8.5 million metric tons by 1970.

This particular study notes, however, that continuation of the present

rate of inflation in France might well produce about the same price/ production

with or withou

pattern in the demition the Manshole Moreover, with one to later

to mean considerable adjustments in the EEC's trade relations with its present

major suppliers.

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TOP SECRET DINAR

Europe

MANSHOLT PLAN FOR SETTLING EEC GRAIN CCNTROVERSY

EEC Commissioner Mansholt's

proposals for early unification

of grain prices in the Common

Market appear to hold increasing

promise of averting a crisis over

agriculture, but perhaps at the

expense of causing one in the EEC's

relations witi the US and other

major agricultural producers.

The member states have begun

an intensive study of the complex

proposals in preparation for for-

mal discussion scheduled or mid-

December.

Whatever comes of it,

there is general recognition that

Mansholt, a

former

Dutch minister

of agriculture, has been ingenious

in his efforts

to find a solution

to the Community's most vexing

problem.

From Mansholt's point of view,

Bonn's mildly favorable initial re-

sponse--auspite the vigorous and

continuing opposition from West

German farm groups--has been par-

ticularly gratifying. This posi-

tive reaction appears due, at

least in part, to effective lobbying

by EEC President Hallstein, who has

warned Chancellor Erhard

Bonn is certain to be outvoted in

the EEC in 1966 when the majority

rule comes

into effect on the grain

price question.

Under these cir-

cumstances Erhard's Christian Demo-

cratic Union could not expect to

deliver on any promises it might

nake in the 1965 elections not to

reduce support prices...

The Mansholt initiative is

potentially of great importance to

the broader question of European

union.

Under his proposals a

degree of agricultural integration

would be achieved in the next year

or so which the EEC treaty had not

envisaged before 1970. Such a

rapid advance would probably

necessitate acceleration in other

fields.

The prospect of an EEC

bureaucracy spending several

hundred millions annually on a

farm program would, for example,

make more imperative than ever

the establishment of an effective

European Parliament.

These wider implications

deepen the dilemma for outsiders

who are committed to support

progress toward European union,

but who may stand to lose in the

way of trade.

The US is concerned

that increases in EEC production

consequent to the rise in French

grain prices will reduce EEC

grain purchases from the US.

More-

over,

US trade officials seriously

question whether the Mansholt

scheme will be the subject of

bargaining in the Kennedy Round,

or whether it is the EEC intention

merely to offer not to increase

the new and higher level of

the plan is believed to

involve.

The immediate tactical and

substantive problems these pos-

sibilities raise are difficult ones

indeed. Past experience has

shown

that

the

EEC

would

find it extremely hard to make

any major adjustments in the plan

once it has been negotiated through

the complex EEC machinery. It is

almost equally doubtful, however,

that the Kennedy Round can go ahead

at all unless some more or less

final settlement of the EEC's

agricultural policy is

reached.

(CONFIDENTIAL NO FCREIGN DISSEM)

22 Nov 63

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Europe

NiC

CHANGING BRITISH LABOR PARTY DEFENSE POLICY

Leaders of the British

Labor Party have recently indi-

cated that there has been some

modification in the party's

flat opposition

to the ALF and

retention of an "independent"

British nuclear deterrent.

factor pushing them in this di-

rection may be a growing nervous-

ness over how well they could

defend their position against

sharp challenges by the Conserv-

atives in the approaching elec-

tion campaign or, beyond that,

ministers in a Labor govern-

Patrick Gordon Walker,

presumptive foreign secretary

in such a government, delivered

a carefully worded statement.on

defense early this month in

which he put new emphasis on the

role of conventional forces in

Britain's future defense estab-

lishment. He was silent, how-

- ever, on

the question of

Labor would eliminate Britain's

deterrent when it came to power.

Gordon Walker went on to

reject the idea of British par-

ticipation in any effort to form

a purely European

nuclear deter-

rent force, proposing instead

the establishment of a four-

power NATO directorate--includ-

ing Germany--which would formu-

late the Alliance's nuclear

strategy. In this scheme, the

US would retain the ultimate

decision on the

weapons.

On 14 November, George

Brown, the party's deputy leader,

repeated the usual Labor

asser-

нето іг.ві д-ій

tion that the British deterrent

is a spurious one, but left the

party leeway to change its posi-

tion. He said that an incoming

Labor government would under-

take an extensive review of

existing weapons development pro-

grams before deciding whether

or not to proceed with them.

mentioned, as examples, Britain's

Polaris submarines and

its con-

troversial TSR-2 plane--which

are designed to give Britain a

nuclear delivery systen through

the next decade.

Brown also intimated that

Labor might be amenable to pool-

ing Britain's existing nuclear

weapons in return for a greater

sharing of command and control.

over NATO's nuclear arsenal.

Such an arrangement, he felt,

would eliminate pressures for

nuclear

proliferation.

Party leaders still oppose

the MLF, but appear to have

become less rigid on this issue.

Denis Healey, the defense spokes-

man, is on record as saying that

a Labor government might even-

tually commit the UK "to join"

the MLF but only if party lead-

ers were satisfied that no other

method of sharing control of all

nuclear weapons within the NATO

framework is feasible.

Accord-

ing to Healey,

this view was

shared by party leader Harold

Wilson and by

Gordon Walker,

although Healey added that, for

obvious reasons, it could be

found only in the "small print"

of the party's statements on

the MLF.

(SECRET NO FOREIGN

DISSEM)

22 NOv 63

CURRENT INTELLIGENCE WEEKLY REVIEW

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HUNDECKET

LINAK

AREA NOTES

The British Communist Party

has expelled a small pro-Chinese

faction which issued a manifesto

bitterly criticizing some of the

party's top leaders for supporting

Moscow in the Sino-Soviet ideolog-

ical dispute.

The specific charge

is that these leaders have aban-

doned Marxist-Leninist principles

and are turning the party into

nothing more than a radical ap-

pendage of the British Labor

Party.

The decision of the pro-

Chinese to bring their dispute

Europe

with the hierarchy into the

open probably stems in part from

growing frustration over the

party's consistently poor showing

at the polls--in the recent Luton

by-election, the Communist

date came in last with 490 votes

out of 44,000. Any widening of

the cleavage among British Com-

munists may force the party to

recast its plans to put up a rec-

ord

number of candidates in

next year's general election.

(CONFIDENTIAL NO FOREIGN DISSEM)

Canada: - The Pearson govern-

ment continues

to stress its inten-

tion of lessening US "domination"

of Canadian industry and stemming

Canada's balance-of-payments

deficit with the US.

In the opin

ion of Ambassador Bütterworth,

Ottawa's concern with the "domina-

tion" question has

reached the

point of obsession, and only vig-

orous countermeasures are likely to

forestall increasing

in the operations of Anerican-

owned subsidiaries.

Canadian officials believe

that the country's basic economic

problems of slow growth, idle

capacity, and continuing trade

deficits are attributable--directly

or indirectly--to the policies of

absentee US owners who control the

bulk of Canada's secondary industry.

The measures the government is

searching for would encourage the

expansion of such industry but as-

sure at the same time that US-

owned subsidiaries exported more

while Canada as a whole imported

less.

Western Remisphere

"The government on i November

instituted a tariff rebate scheme

designed to encourage some $200

million in sales abroad of auto-

motive products manufactured in

American-owned subsidiaries.

This plan calls for Canada to

remit import duties on parts im-

ported from the US if exports of

the finished product exceed a cer-

tain level, thus avoiding the

need to raise tariffs and risk US

retaliation.

While the profits

of such increased sales would ac-

crue to the US parent

companies

the sales would at the same tine

bring more US dollars into the

Canadian treasury.

The Department of Industry

is reportedly being flooded with

requests from other manufacturers

to be included under this kind

of rebate scheme.

Despite offi-

cial assurances that this specific

plan would not be extended to other

products, the US Embassy is con-

vinced the government is attempting

to devise other forms of inter-

vention to produce similar effects

on other industries. (CONFIDENTIAL

NO FOREIGN DISSEM)

22 NOv 63

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Western Hemisphere

ARGENTINA ANNULS OIL CONTRACTS

President Illia's annul-

ment of Argentina's petroleum

contracts with

nine foreign

and two Argentine companies

fulfilled one of his party's

chief electoral campaign commit-

ments, and thus came as no sur-

prise.

Illia, however, acted

in haste out of deference to

his more nationalistic advisers.

The explanatory clauses

of the annulment decrees under-

score the Illia administration's

contention that the Frondizi

government used inappropriate

procedures in negotiating the

contracts and assert that

Frondizi had no legal right to

approve them by executive action.

They also state that there is

ample legal precedent for annul-

ling an executive decree by

simply issuing another.

The State Oil Company (YPF)

is authorized to take any

measures necessary to maintain

normal output of petroleum.

The foreign companies continue

to operate, and some are reported

to have worked out temporary

arrangements with the YPF.

One of the most trouble-

some aspects of the annulment

action is the call for a de-

tailed report by the Treasury's

attorney general on the commenies'

operations and financial counts.

This report is to provide a

basis for determining compen-

sation due the companies, but

could also be used as a bargain-

ing weapon

in

negotiations for

new contracts.

The report is to include

a rundown on such imprecise

matters as "economic damage"

caused by "inefficient" manage-

ment and the amount of taxes that

had been excused by the Frondizi

regime. In accordance with

Illia's decrees, the attorney

general filed a petition in

federal court on 18 November

asking the court to determine

the financial position of the

companies vis-a-vis the govern-

YPF President Suarez

said that three drilling con-

tractors were excluded from this

petition, since their work was.

completed. Presumably these

would be the Italian state oil

company and two US firms mentioned

in the second decree.

While leftist groups have

hailed the annulment action,

there has been strong criticism

from other elements over the

way Illia went about it, partic-

ularly his failure to seek a

prior court decision on the

contracts' validity.

The in-

fluential independent press

points out that the action re-

flects adversely on Argentina,

and might result in a reduction

of foreign investment and of

US aid, not only in Argentina,

but in all of Latin America.

Army and air force officers

are worried about the disruptive

effect the oil controversy

may have on US-Argentine re-

lations, but indicate an

intention to try to stay out

of the matter. (CONFIDENTIAL)

22 Nov 63

CURRENT INTELLIGENCE WEEKLY REVIEW

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MOVIMIENTO INDEPENDIENTE PRO-CANDIDATURA

LEONI

PRESIDENTE

CALDERA

ARTURO ES EL HOMBRE

VENEZUELAN

ELECTION

POSTERS

BEDI

RAMOS GIMENEZ

EL MEJOR

VOTA VERDE

UN PRESIDENTES JOVEN

PARA UN PUEBLO JOVEN

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Western Hemisphere

THE OIL CONTROVERSY IN PERU

Peru's President Fernando

Belaunde Terry appears to be

adopting a more conciliatory

position in his handling of the

controversy which has

arisen with

the US-owned International Petro-

leum Company (IPC) .

On 29 October, Belaunde

sent a bill to congress calling

for a new, much higher tax sched-

ule for the company. IPC offi-

cials claim that the proposed

schedule would result in "eco-

nomic confiscation" since the

taxes

would amount to more

than

100 percent of the

company's

gross profits. Belaunde countered

by threatening to turn over the

company's entire $190 million

worth of assets to the state pe-

troleum corporation should Con-

gress pass the bill and the com-

pany refuse to abide by its terms.

Congress was quick to act

on a

part of the President's bill.

It passed, almost immediately,

that portion nullifying a 1922

internationally arbitrated deci-

sion which has permitted the IPC

to operate under relatively len-

ient tax schedules.

This fulfilled

a Belaunde election pledge to "do

something" about a matter which

has

been a Peruvian political is-

sue for over 40 years.

The IPC

continues to operate under the

1922 tax schedules pending the

establishment of new ones.

Congress, however, has been

much slower to act on the admin-

istration's proposed tax schedules.

This is because the APRA party--

which controls the largest bloc of

congressional seats--opposes the

measure, fearing the international

repercussions which could result

fron the President's stringent tax

revision program.

Thus, the pros-

pects are that the bill

will lan-

guish in various legislative con-

nittees for weeks and perhaps months.

APRA congressmen hope that in the

interin the government and IPC will

negotiate a compromise which will

obviate the need

for congressional

action.

Belaunde, in recent days, has

indicated a tendency to back away

from taking precipitous action

against IPC, also largely because

of the adverse international reac-

tion it would provoke.

He now seems

to be acutely aware that such reac-

tion might spoil Peru's prospects

for new and badly needed foreign

private investments.

It might,

for

example. upset current negotiations

with automobile firms for

the establishment of assembly plants

in Peru, or jeopardize talks with

two other US oil companies which

have expressed an interest in in-

vesting in the country.

Belaunde

also may be concerned that a move

against IPC could disrupt pro-

posed US aid programs.

For the moment, the Presi-

dent appears to be satisfied to

allow his bill to be

subjected

to prolonged congressional re-

view, and has said he expects no

legislative action until after

the municipal elections which

are to be beld in mid-December.

Moreover, Belaunde's new-found

caution is reflected in a repor

which quotes him as saying that

if IPC could prove to Congress

that the government's bill would

force the company to operate at

a loss, then adjustments "ob-

viously" would have to be made.

(SECRET)

22 Nov 63

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Western Hemisphere

VENEZUELAN PRESIDENTIAL ELECTION ON 1 DECEMBER

Wore than 3 nillion Venezue-

lan voters will go to the polls on

1 December to elect a successor to

President Betancourt from among

seven candidates.

The main issues

in the campaign are national pe-

troleum policy, acceleration of

reform programs, and unemployment.

Casting a pall over what other-

wise promises to be a colorful

event--for the benefit of the il-

literate, each party has sought to

associate its ticket with a dis-

tinctive color combination--is the

rising tempo of Communist-inspired

violence aimed at disrupting the

elections.

There also remains the

tacit threat by military leaders

to intervene if the electorate

choses an unacceptable candidate.

The front-running candidate

is still Raul Leoni of Betancourt's

Democratic Action (AD) party. Lea

ni's chances of victory

based

more on the AD's excellent party

organization than on his lackluster

personality.

As president, Leoni

probably would continue existing

policies, but without Betancourt's

imagination or skill.

Leoni's chief rival is Jovito

Villalba of the Republican Deno

cratic Union (URD), the AD's erst-

while coalition partner.

Villalba

is a popular candidate of moderate

socialist tinge, who is backed by

a party machine

second only to

that of AD. URD leaders have at-

tempted unsuccessfully to induce

other opposition candidates to pull

out of the race in his favor.

though the Communists have vowed

to boycott the elections, they

might vote for Villalba should

they come to believe that their

support would turn the tide against

Leoni.

Independent Arturo Uslar Pie-

tri is in third place, thanks to

an unexpectedly effective campaign.

He is considered a rightist be-

cause he does not favor nationaliza-

tion of the oil industry.

He may

carry Caracas, but be has little

hope elsewhere.

Regardless of who wins the

presidency,

no party will have

a majority

in the new congress.

Thus, the viability of the new

governnent will depend

primarily

on the future president's skill

in creating and maintaining a

working coalition. (SECRET)

Democratic Action (AD)

Ropublicon Democratic Union (URD)

Social Christion Party (COPEI)

Venezuelon Cornetunist Party (PCV)

National Unification Front (FLAN) a ras

Poputor Densocratie Force

AD - Opposition (AD-ARS)

National Action Movement (MAN)

VENEZUELAN ELECTORAL PATTERNS

1958 Presidential Elections

Condidate

Votes

1958

1963

Percent Congressional Presidential

Seats

Condidate

Ramulo Betancours

Wolfgang Lorrazobod *=

Rofool Caldera*•=

1,284,092

903,479

423,262

49.2

34.6

16.2

---

105°

aul Loo

45

vito Villalbo Gutierr

25

Rafool Caldora

0

Wolfgang Larruzabal

Ramos Gimenez

German Borrogales

Before the 1960 split into AD - Government and AD - Opposition.

*Also upported by the National Independent Electoral Movement (MENI) and the Venezueian Communist Party (PCV).

*Also supportad by the Socialist Workers Party (PST) and ite Republicon Integration Party (IR).

asto A coolition of nine minor parties. The leoders hope that otter groups will join ithe FUN and back Uslor.

22 Nov 63

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