CENTRAL INTELLIGENCE BULLETIN - 1961/01/24

Approved for Release: 2020/08/11 CO2000179 3.5(c) I VT- ZIC%1CC I 3.3(h)(2) 24 January 1961 Copy No. c � 1 U CENTRAL TELLIGENCE BULLETIN cst LI �4* fr -TOP-SECRET- Approved for Release: 2020/08/11 CO2000179 Approved for Release: 2020/08/11 CO2000179 -TOP-SECRET- TOP SECRET Approved for Release: 2020/08/11 CO2000179 Approved for Release: 2020/08/11 CO200017944 110TOP SECRETI 24 January 1961 CONTENTS I. N 1. Laotian Government continues to press French to reduce military mission. (No Backup) 2. Congo: UAR.'s threat to withdraw its troops prob- ably intended to pressure UN into permitting Cairo's battalion to remain in areas where it can support Gizenga. (No Backup) 3. Developing foreign exchange crisis in UAR may in- crease flight of foreign capital. (Backup, Page 1) 4. Situation in Turkey unstable despite moves toward return of civil government. (No Backup) 5. West Germany continues efforts to improve rela- tions with Poland. (Backup, Page 2) 6. France to continue aerial reconnaissance over Libya despite Libyan threat to break relations; flights are for detection of any arms build-up by Algerian rebels. (Backup, Page 4) 7. Argentina to ask Soviet bloc nations to reduce their diplomatic representation in Buenos Aires. (No Backup) CENTRAL INTELLIGENCE BULLETIN TOP-SEeRE-T- Approved for Release: 2020/08/11 CO2000179 Approved for Release: 2020/08/11 CO2000179 WY�TOP�SEC�REIT� CENTRAL INTELLIGENCE BULLETIN 24 January 1961 DAILY BRIEF E(Laos: No significant military developments have been reported during the past 24 hours. Airlift opera- tions with S -14s continued through 23 January. N oun Sum government and the French rep- resentation in Laos appear headed for a showdown. The Laotian Government, convinced that the French are work=� ing with antigovernment elements for the return to power of deposed premier Souvanna Phouma, has already re- quested the recall of certain French advisers and is con- sidering declaring French Ambassador Falaize persona non grata. Paris eventually may be goaded into withdraw- ing its representation completely, including its economic technicians and military training mission. The withdrawal of the French training mission would jeopardize the status of the American training program, _which operates techni- cally under the French. The 1954 Geneva Agreement speci- fied France as the sole training agent for the Laotian armed forces. Congo: The reported decision by the UAR to withdraw Its troops from the Congo appears related to UN directives ordering Cairo's battalion to move from Equateur to Kasai Province, the ytie, battalion's commanaer received instructions from the UN ----- on 21 January to transfer his unit to Kasai by the end of the month. The commander, pointing out to Cairo that the move would compromise his freedom of action�presumably includ- ing his ability to direct clandestine support to Gizenga�and would place the unit in the midst of "famine and disturbances," stated that he would attempt to stall for time until Cairo sent instructions. In threatening to withdraw its forces, the UAR --T-013--SEC-14ET Approved for Release: 2020/08/11 CO2000179 UI Approved for Release: 2020/08/11 CO2000179v V' TOP SECRET may be attempting to pressure the UN into permitting the battalion to remain in Equateur. *Belgium reportedly is continuing its efforts to aid the regimes of Mobutu and Tshombe. about 100 Belgian military advisers to Mobutu's army re- cently arrived in Leopoldville. Press reports indicate that 50 volunteers for the Katanga armed forces recently were moved from Brussels to Elisa,bethville. Meanwhile, the situation in Stanleyville reportedly is tense, with Europeans in a state of hysteria as a result of continuing intimidation by Lumumha followers IJARI_Many prominent mid-eastern investors are liqui- dating their real estate holdings and bank deposits in both regions of the UAR because they fear a foreign exchange crisis and further nationalization within the next few weeks. By December foreign exchange reserves of the Egyptian National Bank had fallen to the lowest point ever reached, and in Syria the exchange rate of the pound has continued its downward drift. Cairo's efforts to earn foreign exchange by shifting some cotton sales from Communist countries to Western Europe have met with� little success. While a $27,300,000 drawing from the International Monetary Fund may postpone the "crisis" foreseen by Egyptian Finance Minister. Qaysuni before the end of February, a flight of capital, especially to Beirut, is likely fn ennfimul from Syria and increase from Egypi (Back- up, Page 1) Turkey: Despite recent moves toward a return to civil government, which included the establishment of a Constitu- q ent Assembly on 6 January, the situation in Turkey remains unstable. The military regime of the Committee of National Union (CNU) which overthrew the Menderes government last May still lacks unanimity of purpose, full loyalty of the mil- itary establishment, and popular confidence. Four***** ultra- nationalist officers who were ousted from the CNU in mid November and dispersed to foreign diplomatic posts apparently 24 Jan 61 DAILY BRIEF ii TOP SECRET Approved for Release: 2020/08/11 CO2000179 Approved for Release: 2020/08/11 CO2000179' TOP SECRET retain a degree of military and civilian support within Turkey. The two-month-old trial of members of the pre-revolutiori government has failed to promote either popular condemna- tion of those on trial or popular support for the government. Meanwhile, the Turkish economy remains sluggish, largely through lack of public confidence, and continues to be de- pendent on substantial foreign economic aid, which the Turks believe their Western allies should provide. Unless there is marked improvement in the economic situation, Turkey may accept some economic assistance repeatedly offered by the USSR, provided it does not inhibit Turkey's political freedom of action. West-Geri1any7=-Po-faridIterth6ld I3eitz, general manager of the Krupp industrial enterprises, has arrived in Warsaw for further discussion of the possibilities of improving West Ger- man - Polish relations. Adenauer, who wants to appear "flex- ible" on East-West relations in an election year, has, accord- ing to Beitz, authorized him to negotiate the establishment of a West German trade mission in Warsaw--possibly one having certain consular functions. Beitz returned from a similar trip last month convinced that the Poles are willing to establish diplomatic ties without insisting on immediate West German recognition of the Oder-Neisse line as Poland's western bor- der. Poland, however, continues to insist on full diplomatic ties rather than the gradual improvement of relatinnq faunrciri by Adenauef\_ (Backup, Page. 2) e Afr+` France-Libya: France has notified the US that it will again -, -- carry out secret reconnaissance �overflights of Libya on 26-27 (!)-6-7`94' " A January and 2-3 February despite recent protests by the� Libyans against flights they observed on 4 and 5 January. Although the flights have been going on approximately monthly since mid-1959 � the early January missions were the first detected by Libya, \, which immediately threatened that any repetition would lead to) 24 Jan 61 DAILY BRIEF --TOP SECRET 111 Approved for Release: 2020/08/11 CO2000179 N APP1 TOP SECRET rovedfor'elease:2020/08iii c�200017-z-4 L--; rupture of relations with France. The US and UK have re- peatedly warned Paris of the dangers involved in these flights, but the French military have insisted that they are essential as a means of discovering any arms build-up in Libya by Al- gerian rebels. (Backup, Page 4)3 *Argentina-USSR: Argentina intends to ask the USSR to reduce the size of its embassy in Buenos Aires from the pres- ent total of 42 to 20 within the next three months. Notes will be sent later. to Poland, Czechoslovakia, Rumania, Hungary, and Bulgaria requesting reductions ranging from one third to one half of the present legation staffs. Argentina, concerned about Communist penetration in Latin America, appears de- termined to press its request. When a suggestion along these lines was made to the Soviet and Polish missions last Novem- ber, it was rejected as "inconvenient." 24 Jan 61 DAILY BRIEF iv Approved for Release: 2020/08/11 CO2000179 Approved for Release: 2020/08/11 CO2000179 16.00 mrtn orinnEIP UAR' Economic Difficulties Increasing aarge Middle Eastern investors reportedly are disposing of their holdings and closing out their bank deposits in both regions of the UAR. The Deputy Ruler of Kuwait has said that he is liquidating his assets in Syria because he fears increas- ing economic and political instability and further nationaliza- tion moves by Cairo731 Na,sir refused to approve its plan for guaranteeing private and foreign investment in Syria against nationalization. He also characterized efforts by government officials to win the support of the business community for the region's eco- nomic development plan as "begging," and noted that he had dered nor approved such action. [Cairo's efforts to earn foreign exchange by shifting some cotton sales from Communist countries to Western Europe have not been particularly successful, and the foreign ex- change situation is worsening. By December, foreign exchange reserves of the Egyptian National Bank had fallen to$55,000,000 --their lowest ever. On an effort to alleviate the situation, Egypt drew $27,000,- 000 from the International Monetary Fund. This action may have postponed the early "crisis" predicted by Egyptian Finance Minister. Qaysuni, but the loan was practically wiped out by a payment on 1 January of $23,000,000--half to the Suez Canal shareholders and almost half to the Sudan under the Nile Waters Agreement] The situation will deteriorate even further if Nasir carries out a reported plan to require all foreign firms doing business in the Egyptian Region of the UAR to conduct their affairs through an Egyptian "agent0 24 Jan 61 TOP SECRET CENTRAL INTELLIGENCE BULLETIN Page 1 Approved for Release: 2020/08/11 CO2000179 Approved for Release: 2020/08/11 CO2000179 %of SECRET Bonn Seeks Improvement of Relations With Poland LBegotiations for improved West German relations with Poland seem to be under way. Berthold Beitz, general man- ager of the Krupp industrial enterprises, says he has been authorized by Chancellor Adenauer to negotiate the establish- ment of a West German trade mission in Warsaw�possibly one having consular functions. Beitz arrived in Warsaw on 22 Januaryi3 after a conversation with Polish Premier Cyrankiewicz during a visit to Warsaw last month, Beitz returned to Bonn convinced that the Poles are willing to establish diplomatic ties without insisting on immediate West German recognition of the Oder-Neisse line as Poland's western border. The boundary question and the so-called "Hallstein doctrine" by which Bonn refuses to have diplomatic relations with any country other than the USSR which recognizes East Germany have been the major stumbling blocks to an improvement of relations between Bonn and Warsaw-7j CA similar attempt to improve relations in 1958-59 failed because of Warsaw's insistence on immediate resumption of full diplomatic ties rather than following the step-by-step procedure desired by Adenauer. Although Heitz maintains that Premier Cyrankiewicz indicated a willingness to agree to exchange permanent trade missions as a first step, Polish Foreign Minister Rapacki and other diplomatic officials have continued to insist on full diplomatic relations'3 (The undersecretary in the West German Foreign Ministry informed American officials in Bonn that Adenauer had not raised the question of a trade mission with the Foreign Minis- try and that he believed the chancellor would move cautiously in an election year to avoid alienating the expellees and refugees who make up about one fifth of the population. Adenauer, how- ever, may be willing to make at least a gesture in order to convince the German public, as well as his allies, that he can, -SfeRE-T-- 24. Jan 61 CENTRAL INTELLIGENCE BULLETIN Page 2 Approved for Release: 2020/08/11 CO2000179 Approved for Release: 2020/08/11 CO2000179 �isri �SECRET-- irad Ge flexible in dealing with the East and that he is not an ob- stacle to an international detenfe:j lublicly taking a "positive attitude" toward attempts to improve relations with Poland in hopes of remov- ing the impression that the refugees are "disturbers of the peace" in East-West relations. German businessmen have long sought to expand formerly lucrative Eastern markets. The Poles have expressed strong interest in West German industrial products and also wish to increase exports of raw material and agricultural products to West Germany. At present, trade with Poland�a,mounts to less than one percent of all West German foreign.trade statements by Polish leaders have been extremely cautious on the question of a rapproche- ment with Bonn, but there are indications that negotiations are proceeding on the Foreign Trade Ministry level in the estab- lishment of economic relations while playing down the political problems involved3 SECRE� 24 Jan 61 CENTRAL INTELLIGENCE BULLETIN Page 3 Approved for Release: 2020/08/11 CO2000179 Approved for Release: 2020/08/11 CO2000179 France Schedules Further Overflights of Libya Despite Tripoli's Protests a:lespite a recent protest from the Libyan Government, France intends to continue the series of reconnaissance flights the French Air Force has been making over Libya since mid-1959. A French Air Force intelligence officer has notified the US air attache in Paris that flights north of the 30th parallel will be flown on 26-27 January and south of the parallel on 2-3 February Libya has become aware of such overflights only recently. On 9 January Libyan Prime Minister Muhammed Ben Uthman informed the US ambassador in Tripoli that on 4 and 5 January two French military aircraft had conducted 20,-minute low-level surveillance over Ghat and two other villages in southwestern Libya near and on the Algerian border. French officials had pre- viously notified the US that overflights south of the 30th parallel were scheduled for these dates. Uthman charged that a French military land penetration of Libyan territory had occurred also on 5 January, and stated that the French ambassador had been warned that repetition of such incidents would inevitably lead to a rupture of relations. He asked both the United States and Britain to intervene with France. He insisted that the whole matter be handled with the utmost secrecy, pointing out that publicity would generate strong domestic pressure for imme- diate actionD French officials have regularly notified the US of the sched- uled dates and areas for the overflights, and have as regularly ignored US and UK warnings of the possible consequences. The French military justify, the overflights as essential to detect a possible Algerian rebel arms build-up on Libyan bases, and have even claimed to possess intelligence reports that a rebel air force is being formed there. Although arms have been transshipped through Libya to rebels in Algeria, Paris has made no claims that a major build-up has been discovered as a result of the over- flights:3 gf such French activities are again detected, Tripoli may go beyond simply breaking relations. It may invoke its mutual defensei 24 Jan 61 SECRET CENTRA1., INTELLIGENCE BULLETIN Page 4 Approved for Release: 2020/08/11 CO2000179 Approved for Release: 2020/08/11 CO2000179 New SECRET Ctreaty with the UK to demand that British aircraft prevent such incursions; it may also threaten to suspend the Wheelus air base agreement with the United States unless US aircraft assist in orotectine Libyan territory SECRET 24 Jan 61 CENTRAL INTELLIGENCE BULLETIN Page 5 Approved for Release: 2020/08/11 CO2000179 Approved for Release: 2020/08/11 CO2000179 CONFIDENTIAL *10 ^THE PRESIDENT �The Vice President Executive Offices of the White House Special Assistant for National Security Affairs Scientific Adviser to the President Director of the Budget Director, Office of Civil and Defense Mobilization Director, National Aeronautics and Space Administration Chairman, Board of Consultants on Foreign Intelligence Activities Executive Secretary, National Security Council The Department of State The Secretary of State The Under Secretary of State The Under Secretary of State for Political Affairs The Deputy Under Secretary of State for Political Affairs The Deputy Under Secretary of State for Administration The Counselor Director, International Cooperation Administration The Director of Intelligence and Research The Treasury Department The Secretary of the Treasury The Department of Defense The Secretary of Defense The Deputy Secretary of Defense Assistant Secretary of Defense (International Security Affairs) The Secretary of the Army The Secretary of the Navy The Secretary of the Air Force The Chairman, The Joint Chiefs of Staff The Director, The Joint Staff Chief of Staff, United States Army Chief of Naval Operations, United States Navy Chief of Staff, United States Air Force Commandant, United States Marine Corps Assistant to Secretary of Defense (Special Operations) Director for Intelligence, The Joint Staff Assistant Chief of Staff for Intelligence, Department of Army Director of Naval Intelligence, Department of Navy Assistant Chief of Staff, Intelligence, Department of the Air Force Supreme Allied Commander, Europe Commander in Chief, Pacific Atomic Energy Commission The Chairman Federal Bureau of Investigation The Director National Security Agency The Director National Indications Center The Director Approved for Release: 2020/08/11 CO2000179 TOP SECRET '00A �A P;;04 -TOP-SE/CR-ET- ffia/miZiteelldirt Approved for Release: 2020/08/11 CO2000179