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23 January 1958

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Egyptian Air Force jet strength increases.

Indonesia will acce t 60 Soviet.

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Venezuela - Armed forces oust President Perez.

Guatemala - Leftist Revolutionary party probably polled at least 25 percent of vote.

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OTHER ITEMS Soviet bloc may announce countermeasures to recent NATO decisions. King I-lussayn plans countermeasures to proposed Syrian-Egyptian union

Hammarskjold suggests bilateral US

Hammarskjold pushing plan for Arab

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CENTRAL INTELLIGENCE BULLETIN 23 January 1958

. DAILY BRIEF

* Venezuelan armed forces ousted. President Perez early on 23 January after two days of widespread. violence resulting from a civilian-“backed general strike. A military junta replaced Perez and has announced. its in- tention to restore "peace and rapprochement" among all elements of the population. Perez is believed. to have left by plane, possibly for the Dominican Republic, soon after he was deposed.

The junta will probably continue Venezuela's pro-US, anti-Communist policy, give civilian factions a substantial voice in the new government, and gradually relax Perez's tight controls over individual liberties and political activities. The possibility exists, however, that sporadic or even widespread. violence may occur, particularly if mil»- itary and civilian groups vie for control. This could. en- danger American residents and private investments in Ven- ezuela even though not inspired. by anti-= US sentiment, There is no indication of a threat to US interests at present,

The new regime may expel former Argentine President Peron, whose use of Caracas as a head.quarters for plotting against the Aramburu regime caused. a break in Argentine- Venezuelan relations last July.

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CENTRAL INTELLIGENCE BULLETIN ::= ..; 23 January 1958

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DAILY BRIEF i§ Elri

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I. THE COMMUNIST BLOC

The USSR and its Warsaw Pact allies may be plan- = ning to announce countermeasures to the December NATO

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. Th So 'et ilit att he i W s w ng .e sions e v1 m ary ac n ar a said that Khrushchev and Gomulka in their recent secret meeting considered the interrelationship among Warsaw Pact arrangements, the Ra acki plan, and the decisions at the Paris NATO meeting. LP ‘(Page 1)

New Soviet supersonic interceptors are probably in pre-series production and may soon appear in Soviet fighter units. These aircraft with maximum speeds ranging up to Mach 2 will be a considerable advance over the transsonic

A/0 FARMER (MIG-19) which they will replace. a<Page 2) (Graphics)

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II ASIA AFRICA

Indonesia intends to accept a Soviet offer, made in December, to provide 60 small ships to solve its critical interisland transportation problem after current

the Japanese have broken down3 =*»>

The Indonesian Government may soon be faced with the loss of one of its most important sources of foreign exchange Anti-Diakarta authorities in Sumatra are ap parently planning to sequester oil export earnings In - nesian authorities have initiated measures aimed at thwart- in barter tr d etween Sumatra and Sin a ore g P use 4»

King Hussayn of Jordan wants to discuss with King Saud possible countermeasures to the proposed Syrian- Egyptian union I-Iussayn plans to revive his proposal of a confederation of the three Arab monarchies--Jordan

E) Saudi Arabia, and Iraq Mutual suspicions and differing ambitions will probably prevent the three states from act ing effectively on such a pro]ect (Page 5)

UN Secretary General Hammarskgold plans to push ahead with his plan for a Middle East development fun financed by oil revenues, as the only approach in his view now possible for preventing serious deterioration in the area His preliminary discussions with Britain and France, as well as with selected Arab statesmen, have evidently led him to believe that there are some prospects for success However, Arab inability to work together on combined pro]- ects as well as strong local self-interests will be difficult obstacles to overcome ‘(Page 6)

Recent information indicates that Egyptian Air Force (EAF) strength on MIG-type fighters has increased to 120

23 Jan 58 DAILY BRIEF

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(80 MIG-17's, 40 MIG- 15's) from a previously estimated. 90. In addition, Egypt has another 28 older British jet fighters for a total jet fighter strength of 148. Estimates of IL-28 jet light bomber strength have been raised from 35 to 45. These figures compare with 106 jet fighters and no jet light bombers credited to the Israeli Air Force. Despite some improvement in combat capability, the EAF is still considered to be inferior to the Israeli Air Force.

III. THE WEST UN Secretary General Hammarskjold suggests bilateral

US-USSR disarmament talks under cover of a February meeting of the Security Council at the foreign minister level, with Britain and France occasionally included. Hammarskjold thinks his plan might be accepted. by the USSR as a me ans of bringing about bilateral talks with the US and that such discussions might eventually lead. to a summit conference.

Clarification of Guatemalan election returns awaits Con- gressional review beginning 23 January. The leftist Revolu- tionary ty has already emerged as an important political force, a may have polled at least a quarter of the total vote.

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2%%7/ 23 Jan 58 DAILY BRIEF

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Approved for ReIe_a§_e:_?_0_12/08/20 C03015?00_

I. THE COMMUNIST BLOC

Secret Khrushchev-Gomulka Talks

At an Argentine Embassy reception in Warsaw on 20 January, the Soviet military attache told the US military attaché that ..he understood the; recent ';KhI'11--I

shchev-Gomulka talks dea1tl...with. a consideration of the interrelationship of the Warsaw Pact arrangements, the Rapacki plan, and the December NATO decisions, Re- ports that several Soviet and Polish generals were present suggest that military affairs were a major topic. The discussions may have ranged. over other subjects, includ- ing party affairs and economic aid to Poland...

Khrushchev told an American journalist in November that the decision to equip Warsaw Pact forces with nuclear weapons and missiles "will depend on the line to be followed" by NATO countries. The Soviet leaders may be urging the Poles to agree to Warsaw Pact countermeasures to the NATO decisions. Gom.ulka, however, may have serious reserva- tions about the stationing of advanced weapons in Poland, and probably maintains that a Warsaw Pact meeting now would. be ill timed in view of current Western discussion of the Rapacki plan.

Polish officials have been close-mouthediabout the talk. I

British Foreign Office officials have commented that the length of the talks suggests considerable disagreement, a view supported by the fact that no official comment has been made. They feel that Moscow's lead in announcing the meeting may indicate that it was sought by Khrushchev.

23 Jan 53 CENTRAL INTELLIGENCE BULLETIN Page 1 Approved for Release: 2019/08/20 C03015200 -

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New Soviet Fighters Two new Soviet supersonic interceptors are probably

in pre-ser.ies production and may soon appear in operational units. Several observations of the factory airfield at Plant 31, Tbilisi, during December established. the presence of as many as eight delta-wing fighters, believed to be Mikoyan- designed FISHBEDS:

\Plant 31 at Tbilisi and PlanFZ1 at Gorfiiy were engaged in production of a new Mikoyan aircraft in two different versions. Since the Tbilisi plant is apparently producing Mikoyan's delta—wing FISHBED, Plant 21 at Gorkiy may be producing his swept-wing FAC-EPLATEO

\ _ \

a new Mikoyan- designed. aircraft was undergoing service testing as early as April 1957 when nine MIG-21's were scheduled for flights from Shuli airfield, a possible test center in the Crimea. On 16 November, two MIG-23's were scheduled to fly from Shuli. The Soviet numerical designations have not been equated to the new planes seen by Western observers. Developments since the first appearance of the FISHBED and FACEPLATE in the 1956 Aviation Day air show indicate that these interceptors--capable of Mach 1.5 speeds--should soon appear in operational units.

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Ase- ries production at Plant 120 at Komsomolsk of a new koi- designed. fighter which .should also reach operational status in the near future. This new aircraft may be the swept-wing FITTER or the delta-wing FISHPOT--capable of speeds on the order of Mach 2--which were first displayed in the 1956 air show.

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23 Jan 58 CENTRAL INTELLIGENCE BULLETIN Page 2 .


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II. ASIA-AFRICA

Indonesia Plans to Accept Soviet Offer of Small Ships

Indonesia intends to accept a Soviet offer to provide 60 small ships to solve its critical interisland. transportation problem when negotiations with the Japanese break down

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Tokyo over the Japanese o er of ships has been empha- sized by the Indonesian Government largely to justify ac- ceptance of bloc shipping. The Soviet offer was made in December, but Indonesia hesitated to accept it publicly until it was first made to appear that the government had no other choice. .

This maneuver is part of the Indonesian Government's elaborate plans to avoid the appearance of a direct tie with the Communist bloc. It hopes to have all purchases trans- shipped through Egypt and to have actual deliveries made by ships of non-Communist countries through the port of Surabaya. In this way, the government hopes to make the shipments acceptable to non- Communist elements in Java and to avoid giving regional areas a pretext for taking sep- aratist action, but their plans to disguise the origin of the shipments are not likely to succeed.

Sixty ships suitable for Indonesia's needs could be quickly supplied. from the Soviet Far East merchant fleet, but only at the risk of disrupting normal shipping operations in that area.

\ ‘

4-»--E-s- 23 J8-I1 53 CENTRAL INTELLIGENCE BULLETIN Page 3


Approved for Release: 2019/08/20 C03015200 .I. .I-.ll..lJ s M

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Indonesia's Economic Problems

The seriousness of Indonesia's economic problems has again been underlined by the report that Finance Minister Sutikno Slamet, one of the few competent members of the cabinet, intends to resign unless barter trading by the outer regions is stopped. The regions have made no move to reduce this illegal trade since the government's 11 January decree ordering all such trade to cease, and Djakarta's ability to enforce its order is limited.

Indonesian authorities are nevertheless attempting to check illegal trading between Sumatra and Singapore. The Indonesian consul in Singapore has informed local shippers that bank guarantees would be required to cover the value of ships as well as cargo for all transactions under the so-called. "legal barter trade." This action is apparently designed to prevent ships engaged in this trade from deviating from stipulated routes and ports of call. Evidently as part of this effort, eight Singapore-registered vessels are being detained by Indonesian authorities, pre- sumably on grounds of illegal trading.

Meanwhile, Sumatran authorities have asked an Amer- ican oil company to import 5,000 tons of rice monthly, pre- sumably against oil export earnings hitherto paid to Djakarta This could eliminate one of the largest sources of foreign exchange still controlled. by the central government.

23 Jan 58 CENTRAL. INTELLIGENCE BULLETIN Page 4 Approved for Release: 2019/08/20 C03015200


King Hussayn Concerned Over Egyptian-Syrian Union Plans

Jordan's King Hussayn considers proposals for Egyptian-Syrian union highly dangerous to Jordan, Saudi Arabia, and Iraq, and desires to discuss possible countermeasures with King Saud. In an attempt to offset the en- thusiasm such a union would evoke in Jordan, Hussayn" plans to revive his proposal for a confederation of the three pro-.-Western Arab monarchies, despite earlier coolness to the idea from Baghdad and Riyadh. Hussayn will point out that propaganda by the Syrian Baath party, a principal in- stigator of the union scheme, has already carried antimonarchical themes. ~

King Saud and Iraqi leaders would probably be reluctant to follow Hussayn's lead in challenging Nasir, although they will be ready to join in covert activity against the union proposal. King Saud. will probably feel that he must publicly welcome an Egyptian-Syrian union as a move toward Arab unity, although he would fear its antimonarchical over- tones and the strengthening of Nasir's leadership. Iraqi leaders would probably be concerned that their long-cherished. hope of Syrian-Iraqi union appears lost and that their domestic prestige would.be reduced while Nasir's stock. woulfd rise.

_SEC‘RE"F—

23 Jan 53 CENTRAL INTELLIGENCE BULLETIN Page 5 Approved for Release: 2019/08/20 C03015200

Approved forfielease: 2019/08/20 C03015200

Middle East Development Fund.

UN Secretary General Hammarskjold plans to push ahead with his plan for a Middle East development fund as the only approach now possible in his view to prevent serious deterioration in the area. To start the project rolling, a UN Secretariat study on the possibility of chan- neling Middle East oil profits into a central banking sys- tem for Arab development will be privately circulated to interested UN members. Hammarskjold hopes that issu- ance of the study will induce the Arabs to ‘call a meeting to organize such a bank. His preliminary discussions with Britain and France as well as with selected Arab statesmen have evidently led him to believe there are some prospects for such economic cooperation among the Arabs. Arab inability to work together on common projects and strong local self-interests, however, will be difficult obstacles to overcome.

The idea of utilizing Middle East oil revenues to finance inter-Arab development sche-_ines has been discussed periodically for several years. The Arab League "decided" in 1956 to form an Arab Development Bank, and last Decem- ber Egyptian Foreign Minister Fawzi indicated that a preliminary agreement had been reached by Egypt, Saudi Arabia, and Iraq. However, the principal oil-producing countries have so far been reluctant to make significant cash contribu- tions»

III. THE WEST

No back-up material.

§sseR1s4; 23 Jan 58 CENTRAL INTELLIGENCE BULLETIN Page e


t\4"\-_'I'I-II“I'\‘Ifl'_'l'I'I1I‘ A I’ Approved for Release: 2019/08/20 C03015200

DISTRIBUTION 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 Office of Defense Mobilization Operations Coordinating Board Board of Consultants on Foreign Intelligence Activities Special Assistant for Foreign Economic Policy

The Treasury Department The Secretary of the Treasury -

The Department of State The Secretary of State The Under-Secretary of State The Counselor The Deputy Under-Secretary for Political Affairs The Deputy Under-Secretary for Economic Affairs The Deputy Under-Secretary for Administration Director of Intelligence and Research

The Department of Defense The Secretary of Defense The Deputy Secretary of Defense The Secretary of the Army The Secretary of the Navy The Secretary of the Air Force The Chairman, The Joint Chiefs of Staff Commandant, United States Marine Corps 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 Assistant to Secretary of Defense for Special Operations Deputy Director for Intelligence, The Joint Staff Assistant Chief of Staff, Intelligence, Department of the Army Director of Naval Intelligence, Department of the Navy Assistant Chief of Staff, Intelligence, Department of the Air Force Supreme Allied Commander, Europe Commander-in-Chief, Pacific

Federal Bureau of Investigation The Director

Atomic Energy Commission The Chairman

National Security Agency The Director

National Indications Center The Director

United States Information Agency The Director


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CENTRAL INTELLIGENCE BULLETIN 23 January 1958 -

DAILY BRIEF

* Venezuelan armed forces ousted President Perez early on 23 January after two days of widespread. violence resulting from a civilian-backed general strike. A military junta replaced Perez and has announced its in- tention to restore "peace and rapprochement" among all elements of the population. Perez is believed. to have left by plane, possibly for the Dominican Republic, soon after he was deposed.

' The junta will probably continue Venezuela's pro-US, anti-Communist policy, give civilian factions a substantial voice in the new government, and gradually relax Perez's tight controls over individual liberties and political activities. The possibility exists, however, that sporadic or even widespread violence may occur, particularly if military and civilian groups vie for control. This could en- danger American residents and. private investments in Ven- ezuela even though not inspired by anti-US sentiment, There is no indication of a threat to US interests at present,

The new regime may expel former Argentine President Peron, whose use of Caracas as a headquarters for plotting against the Aramburu regime caused a break; in Argentine-

‘ Venezuelan relations last Ju1y.I Z I

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§\\ t.CfarificatiQn of Guatemualan election returns awaits Con- V

gressional review beginning 23 January. The leftist Revolu- tionary party has already emerged. as an important political

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