\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\Y

§\\\\\\\\\\\\\

/////////////////////////////////////////////////////y * ‘ Approved for Release: 2019/08/20 C03169391 3.5(C) / '

I 1 TT'|'T'='€|T:_r 1 - *6 V 3.3(h)(2)

(

/'>§?I-| ~

/"/HENT_\‘"‘\._\

/'€g$\®

C

R4(4p

74»

wfip

7 February 1958

Copy No. jig;

I

. e _... I-.4:-~_¢-a

DC='3lJiVE""iTi£O. _

NU CH$‘.{'i-.;E IN’ CL/X35. [1 DE(JL..¥‘\i,-5i5iFiED

CLASS. CHANGED T Z Ti 5 D NEXT REWEW DATE; .

AUTH: H 0-

//////////////////6'r>_5r9'v§d_'1‘Q?§e§%§$€ 5059105/21> _@Q'31'69'1’>§17/////////////A

Approved for Release: 2019/08/20 C03169391 QQQ annually

F5,

-ro\n canal; Approved for Release: 2019/08/20 C03169391

| I

7 FEBRUARY 1958

I. THE COMMUNIST BLOC '

USQR treat

‘if’

K/L ..\

'\

/ " 1 / J mp (1‘

Approved for Release: 2019/08/20 C03169391

r "“

. .\ / .,_- '7: ‘- ,4 . >3,» -:4 /» -

/,_,.~f;~'-:T_‘7§fl,--__ -._... I,/" 2‘ , ~ _ » ' “'“\

/" ,7 J; -1;. ‘

G)

/ f X . 1 W} \ \ x ">5 / _4

, 4 4' _V

‘ '_ .- ,~_t "H1-‘_\**

\ _k '~\ 1, \_-5; / \\‘yI>.."///i‘:‘€/[I e; /.5/e ~»\ \ \ . / V»

_. Ff, .5; i ,-’

<. \% > \ / fl (1 V ' —~ ,_ ______.‘:.--—’ \\ \ __

\ r’ ‘ ‘

-

'

1 ;

* "' 1‘ ~ J

, I

A/P

/ ; _, ,5./_,.>_\. \\

k Q.

,. ( “J

:1

km‘ ».fi 1‘:

USSR reports 1957 industrial l \~ ‘~ ‘

H ‘- p an

overfulfllled.

X) ,

ill 1

I - _

\

s proclamation of United Y, __

" Arab Republic with reserve. W W”

:0

1 ~~¥l> s **~ii‘%iT \\ a \iM/Jlip K

\ ‘ » w ‘

Q __\_\

\\\r<‘

,\

-

1 ; .\ 0

E

73*

Kl

Q)Ԥ,

I-Vi-'"'

""47-'k—

A

\ \

. \

eeeeeee Wi~%FM% z »

! z

0

as 1

\

‘

,

‘_;__:‘7“V

-/~""<f’*”a"<_,.”A'T"’.T"..~>~~. J-a\ 1’ /’ .> >< ,/ \___ _‘/ , ,?;\\//4/ A”/_~ /I ’ J _,

\\ ax’ ‘x. / V’ _ ‘

—‘..___—_';_i_ _ _>__,_ /fj— '

.;_ }_ ’

7 >4 7' ‘\_ ,— 1~ e .» /

4; .-L‘. -vi '~~. 1, ‘"">_

/r /, 41' / Q-;.-*>~ ‘ j_.—._ ~_ ~

/,3 9"<»~~-)1-‘””-‘J1!/’ "- ,, 1'. “'\

,_ ’*.__ {~»_:._ /

/4 V

/ .\_. , / / '

, / /

1

= _.»>;»< I I ASIA- AFRICA

5'"

' _ Sumatra — Moves by dissidents

_ (17 L_ '

‘ ____ , ,4f*, i \_

/ \ 0 r‘ "'1 \ \‘ will / 0 ’@» %@

t 4 \ ‘ i / x‘ 1' H, 1; ( '

Y

= /\ JR- “ ~,

C3) in;‘

,/_ Ti Vi__w~ AJW B 4 ',,,_,~»/ \\

\ , ___,_ >9

~_ .

~/F‘ "4 \

_

/'

I

0‘

(

$")‘\ l

r kx ‘

\ , ,~ ‘

' ‘ "'a\

_ , “$2 I \

J“ 1 »

i i ¢ / /

\\ \ y _, /" \ // /

\ ‘ \ /

" F ,, /

\ X /_ /____ n..__ W... ,‘_____‘ “\ / 1,; / /

\\ /-/' I’

\\ / \,> 0W

\\ \\_V/

\__\ _\\ \\ ‘ ,>\

' V __ \\ ‘\\§;:§//,:~_\\\ -\\\ /‘\)\\ \\

‘ -, //' /‘/_/‘ ‘

//_\\ //

; \

.5

‘<\

‘_#

-_i_

W,,1,a¢e eeeeee X/;__:'~ X \ Xx‘

X .

K /”

/ W \

//1 Y” AX!"K

2,

V , 4.; ~‘_-\ \ A v_ \_

,§_f,l~,\

___i__-__l._j____o

Qiliil

‘

3*»?

SJ.

>—§4'?@_4____.

-._-»-

"

_ _‘\’

/ 37*“ 7

Z / I45»- wiY

\\ ea \

.- ,.- , ;_ A /

pro’

1’

///

\\

' Indian financial scandal threatens \_

Finance Minister Khrishnamachari\

\ Iran - Shah appears satisfied with WWW Baghdad Pact meeting decisions. @ | <

‘K4 1 Nasir remains concerned about US attitude to

III. THE WEST Guatemala - Peaceful presidential succession now likely.

//

/ .<;>~*

/

/,

./

"K

/ / / //‘

,/ \/ //

\

/

>(/

//‘

/ /

t

//

,/

/

/

¥‘fT/// \ Z

,""/ /,.

:1" ‘ /// fl__ R

l'l'1f\ I\ rv I"lrur\ rlrlw Approved for Release: 2019/08/20 C03169391

_ /_/ toward rival Indonesian government.

\\

- , .-r‘ ‘, '

I

Q. ‘J <3, -Y“

Q) ~1»\ i

' ‘~1;”t A *‘ 1 \ £1 i k v /

‘fl é

“ /

I?-axk; ® \\ \ \ ’

1 K2 \ 4 /-/'/

/ / ""' :1,

* ‘ ._, A \ \ ' t

/ = * \. .1 \ \ /’ / / 7 \'\ /<.\ ‘R, \ >\ - 0/ / /e_ /V

0

/Y 0 eeee e I i 1 ~\ e

I / , _ V / i v~' , .\ Y = \ /a \. \ / ,/ ' '/

> M k-if .8 , ,_~¥/ \ \ / , /11 xr \ \ -

‘L \ »’ \

/ / //

/ J "T F _ S \

\\‘

5, /

/ 0 =

' w \ @ / 1

* ~+ \,

I

t

J,

ward United Arab Republic. @ ,_ ~,.-_,.' _ "‘_ J‘

la. -

~%

;%

Z % a Approved for Release: 2019/08/20 C03169391

\

CENTRAL INTELLIGENCE BULLETIN 7 February 1958 \

DAILY BRIEF

K "’ I. THE COMMUNIST BLOC

Egyptian;Syr@n uniqn-jsoviej view: The Soviet lead» ere" E7tinI1e' to treat the proclamation of Egyptian»-Syrian ‘\ unio ith reserve and have failed to take advantage of t \

7M “ nnortunities to endorse the union. In a conver- For= _

eign Minister Gromyko confined himself to stating that union is a question which Fconcerns only Syria and Egypt. *“‘*‘\\

\ \

(Page 1.)

Sovietecgnomic growth: According to _I_>ravda, the USS'R"s rate of ifidustrial growth in 1957 was well above that of the US and well above plan, although slightly be- 1o th 1956 le e1 Th ambitisous housin plan was over- w e v . e g

f;_'2/ fulfilled for the first time in Soviet history, reflecting'

some shift in priorities more favorable to the consumer. On the other hand, raw materials difficulties continue. ,

The disappointing harvest in 1957 makes less likely the achievement of Khrushchev's milk and meat goals. \

(Page 2) (Chart)

II. ASIA-AFRICA *Edonesia: The dissidents seem on the verge of decisive

action in view of the speech on 6 February by Lt. Col. Hus- 7Z0 sein, head of the Banteng Council in Central Sumatra. His

A

lengthy condemnation of the Djakarta government was apparenitl-y

=§s‘.\\\\

gs -e.\

///%/%% ~.~

>9? Q} %> .\

\

\

\\ §\\ §\ K‘

_@>§§ I ~. . \ ,

. Approved for Release. 2019/08/20 C03169391

intended to pave the way for either an ultimatum to Djae - >\§>@\;? karta or the proclamation of a rival government.

A

\\

W4)

\é

On the basis of findings by its Watch Committee, the Intelligence“ Advisory Committee concludes that there is no evidence of Sino -Soviet intention to become militarily involved in the Indonesian situation. Continued failure to resolvethe basic differences between the central gov-= ernment and the dissident leaders, who may soon pro~ claim a rival government, could lead to disorders and thus to a situation even more favorable to the Communists on Java

\ A Watch Committee footnote points ouffhat unconfirmed press reports indicate the rivalgovernment may have been proclaimed on 6 February.

lndian cabinet scandal: Nehru may soon be forced to dismiss his clapablelfinance minister, Krishnamachari, as a result of a widely publicized scandal over ma1fea= Sauce now being officially investigated. The investigation of Krishnamachari, who has been responsible for nego- tiating major foreign loans for.India's. Five -Year Plan, is a serious embarrassment to Nehru and the Congress party. (Page 3) _

Iran: The Shah's apparent satisfaction with results of the recent Baghdad Pact meeting in Ankara appears inconsistent with his desire for massive military aid. Should he be misinterpreting some of the decisions of the Ankara meeting, his eventual disillusionmen could .

induce him to renew his threat to withdraw. a e

Egyptian‘-S rian union: Nasir apparently remains con- cerned %6ut i§ie_AmeriE'an attitude toward the new United A

§§‘\g

Arab Republic. He is reported to be anxious to smooth gt

the way for formal recognition of the union by other coun- 5

tries, which the.Syrian foreign minister states will be

'7 Feb 58 _

DAILY BRIEF ii

:><¢:§:“§$

Q5.-:,:§§\ “T-1?3§:?.§'~‘; . :c:.'\"-'3‘

. l \_u§3::}‘§

§£;~§2"-;\\t~ \ -

\\ >113 \

\*.§~‘~:2T\§.~ \\ »:~,—;~x

*\:&§§ :;_§.\\. \Q 21"? ‘ -

"‘*§W

=8; 119:3

\ \ *3:\

\Q

\3 est

.»_\ \\\\

. \\\\‘ \\ .~.~\~\ ; \\\&<\ ¥ <$:“!I$?~2 21?.-1::-t{ r __ \_

\\

5§§‘S‘\

:<<<\\\\ :\ :;:_§\: ..»->.»;;__

;:‘;§¢\‘e \

\ §\\\

\ \~

\\

\

.;4\“¢€ '

\\> \;-*\~ :<;~, -\\

;»:»I<>;‘.\,Y: :=: '-:;;5<

=».-_-.\-;~:-.\

»~\~v- \

_»:<:1::.'§§

_::\\*:»:\~: >_\‘\\\'§\i$!

~\‘ T -\ ‘\.\

i{5$S§§

==—.»:~»\

\\ r ._. A_\\, r \\§ ">r>t'\ \

:—-;:.:::‘>. ';:‘:1,1‘Q

-

xi .»\\\-.- l1iT.T.-15' Q‘\

\\§ \\ \\ \ \§

\\

\

x 5_<;<‘\‘v~ t;\~;_\_\~, ~.

»'.,_-it

. .-1» ~l%1§ ~\‘=>.é\' K tr.» \\, 7»-=e:€¢§

I 1% :1-*~:§§E-Q

“

:>V:.“:‘:>:;§ ~¢ :~:=\~>_ _-_-.>.~.-<<\ ,5.-:.<;1,<>§

'.-

§e*»;~:\ \\\\ \\

Pia

lo

Approved for Release: 2019/08/20 C03169391

~

expected immediately after the scheduled plebiscite on 21 February. The Iraqis, who intend to withhold recog- nition for the time being, continue to hope for support, es.pecial1y from Saudi Arabia and the United States.

\

KPagé 5)

On the basis of findings by its Watch~C0mmittee the Intelligence Advisory Committee concludes that a delib-

~ aerate initiation of hostilities in the Middle East is unlike» ly in the immediate future. Tensions in the Middle East, augmented by the proclamation of the SyroeEgyptian United Arab Republic and by recent I-sraeli-Syrian border developments, continue to create possibilities for serious

‘

» gm ‘we \\

III. THE iWEST F Guatemala: Prospects for a peaceful presidential

succession now appear good. General Ydigoras is be- lieved tofhave sufficient support in congress to as-sure his selection as president-elect, probably on 15 Feb- ruary. The government is planning the inauguration for 2 March. The leftist Revolutionary party will have only five seats in the new 66-man congress”

7 Feb 58 DAILY BRIEF iii

$3 ‘Q

\

\ \\ I\ X‘

L__ §

:.;:1:€:::'\ ‘é

'»':‘§'»\‘\ \<_—

ezitkfir an *1-é»\%'§_

:11-§ssas; —Z=Z$é\§“\‘{\'_

_» ;.--.~\»>_~. -._». = \. Q.

5‘ <'

t;e_¢‘\\\ ~i

\;

rrn n c nnn cw-' Approved for Release: 2019/08/20 C03169391

I. THE COMMUNIST BLOC

Soyiet Reaction to AEg'ptian-§yrian_ Union The USSR ‘continues to

' ' - ' ve For-

eign Minister Gromyko confined. himself to stating that "the question of union concerned Syria and Egypt a1one."_ Deputy Premier Mikoyan at a Ceylonese Embassy reception on 5 February declined to discuss the union,

The Soviet press and radio have carried without com- ment factual reports of the unity proclamation and of the announcement by the King of Yemen that his country wished to join the new federation. The TASS Cairo correspondent continues to send to Moscow the enthusiastic assessments of the Egyptian press, but Moscow Radio does not transmit them. Newspapers in Warsaw, Prague, Bucharest, and Tirana, however, have greeted the new " '

step" toward unity of all Arab peoples.

—F6P—SE6R-E-'1-"3

7 Feb 58 ¢/:.5;;;;véa'f<s;raise;§@1§i>87zo*¢a§1s@391 Page 1

Approved for Release: 2019/08/20 C03169£’§_l

_Auu'uKi ;pé;éznitAeE 5

1|~icp;A§§s uguiusmv RTED

0

M are_

_

- . . <w5:~ss

., AVERAGE I 956 1957 1 _ PLAN

GRQSS INDUSTUAK PRODUCT|0Nl \3.1 10.7 10.0 7.1

.“ O -

'_ .uuoa. Paobucwivnve 6 .9 6.5 5.4 " 0 coal ~ ‘-

| 8.4 10.0 7.9 ’ 6.3

13.3 l "

e1s¢1§1g_ Pewzi 0

‘I 0

T1310 9.1 ‘

9.9<

11.1 Route steel 7_-0 5.3 3.9 "- 3". ,_

W

*1‘

cnuo: , srpsp no .1 Yrbw 4.9

{ 6.0

.

__ A {J41} Iii 1¢g0\\z4 5' QUDEIQK H’ ]3;3 I I 8_0 113 ‘usa <arzanuAnv19ss__ P‘ ,

-Approved for Release: 2619/os/20 003169391

B0204

I\4'\'lfI'1‘I"I'\‘I'fI‘lT'l‘I’TI' J ‘I’ Approved for Release: 2019/08/20 C03169391

Soviet Economic Development in 1957

The USSR's industrial goal for 1957 was overfulfilled, according to Pravda. The rate of growth was well above that of the US and well above plan, although slightly below the 1956 level. The housing plan, which was ambitious, was overfulfilled for the first time in Soviet history, re- flecting some shift in priorities in favor of the consumer. At the same time, continued raw m.aterial difficulties are reflected in the small increase in steel output. The 1957 harvest- -without the unusually favorable weather of 1956-- was lower, making less likely the achievement by 1961 of Khrushchev's meat and milk goals.

The announced rate of increase in total industrial pro- duction fell from 10. 7 percent in 1956 to 10. 0 percent in 1957; in many cases growth rates for major items were below 1956 rates and below those needed to achieve the original goals for 1960, now abandoned. The rate of in- crease of national income, influenced by the fall in agri- cultural production, dropped from 12' percent in 1956 to 6 percent in 1957. Industrial productivity rose 6. 5 per- cent in comparison with 7 percent in 1956.

Plans for expanding the productive capacity of the coal, 1 du t iron ore, cement, and ferrous metallurgica in s ries

were underfulfilled, as they were in 1956. This roblem remains a major one for Soviet planners.

7' Feb 58 ¢A'BTo'F§>$$d' ro'r‘§1éTé§s'§ 5553/'58/'§b"o'c§>,'1'€§391 Page 2

Qflilufs I-III! Approved for Release: 2019/08/20 C03169391

I I. ASIA— AFRICA

Nehru May iBe Forced to Disrnisslndian Finance _l\fIinister_ Indian Prime Minister Nehru may lose the services of

able, pro =-Western Finance Minister Krishnamachari as a result of a major scandal over misuse of government funds which is seriously embarrassing Nehru and the Congress party.

The government, under heavy pressure from critics in Parliament, is conducting a judicial inquiry into charges of malfeasance involving an investment made by the nation» alized Life Insurance Corporation, under direction of the Finance Ministry, in an Indian industrial firm of dubious standing. Personal responsibility for the investment is still in doubt, although testimony damaging to both. Krish.;¢-- namachari and his top aide has created a nationwide sensa- tion. It is likely that the inquiry's report will implicate Krishnamachari to some extent, and may force Nehru to accept the resignationi

Nehru will be extremely reluctant to dismiss Krishna- machari, who has been under heavy fire from the Commu- nist party for his recent loan negotiations in Washington, since his resignation would be treated as a Communist propa- ganda victory. A shake =up in the Finance Ministry could also disrupt the operation of the. Second Five =Year Plan. However Nehru may feel compelled to fire Krishnamachari in order to keep the Congress party

\

—SE€R-E-T-

7 Feb 58 ‘ABBFJFQE'r0FEZ|'é;LZ§§o?'Q€s/56'&b'§Té'§E>.91 Page 3

_fiEab.t."_'f"_ ' Approved for Release: 2019/08/20 C03169391

Shah of Iran Satisfiedwith Recent l§aghdadAPactW1\[Ieeting

Iran's, earlier threat to. withdraw from the Baghdad Pact has been sidetracked, temporarily at least, by the ShahFs apparent satisfaction over the outcome of the re- cent pact meeting in Ankara. The decisions at the meet- ing concerning military aviation, air defense, and naval

please the Shah, \ \

He is particularly happy that completion of the first phase of the air force program is limited only by Iran's capability to provide sufficient pilots. -He reasons that acceleration of the pilot training program could per- mit a more advanced phase to begin before 1960. The Shah apparently realizes that the question of ground force strength is subject to further study by the pact's mili- tary committee. ‘ The..rShah's satisfaction with the Ankara meeting ap- pears inconsistent with his desire for massive military aid. Should he be misinterpreting some of the decisions of the pact meeting, his eventual disillusionment could induce him to renew his threat to withdraw.

\ \

t

. %EGR-E—T—

FMTDAI‘ lMTl=l!|f1l=l\If‘l= DIIIICTIIU 7 Feb 58 (Approved for Release: 2019/08/20 C03169391 Page 4

III-|1'ur\ I-15'! Approved for Release: 2019/08/20 C03169391

Egypt and Syria Bid for US Recognition of United Arab Republic

A A

_

President Nasir, apparently anxious about the Ameri- can attitude toward the new United Arab Republic, sent a personal emissary to the American Embassy in Cairo on 4 February to sound out the possibility of recognition. The emissary, Egyptian publisher Mustafa. Amin, advised Am- bassador Hare that he believed Nasir hoped for immediate recognition, "without either endorsement or criticism." A

Syrian Foreign Minister Bitar has queried Ambassador Yost in Damascus on the same subject. Bitar said recogni- tion of the new state would be in order soon after comple- tion of the plebiscite to be held in Syria and Egypt on 21 February, and that new credentials should be presented in Cairo, where the new capital will be located. He added that Egyptian and Syrian missions abroad would. be merged and missions in Damascus would be given consular status.

An expression of the American attitude toward. the union is also being eagerly sought by the Iraqi Government, which now plans not to recognize, the newstate. Iraqi Prime_Minis- ter Mirjan has requested American assistance in ascertain- ing the position _of King Saud on this issue.\

III. THE WEST No back-up material

61'-Z-GRE-'F

7 Feb 58 Ctggszeaf.;:e:z.T.;;.;aaaasm8r2'd'¢aa'a§391 Page 5

Approved for Release: 2019/08/20 C03169391 M _

v .|. 1.5;“ E _

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 Special Assistant for Security Operations Coordination 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 Deputy Under Secretary for Political Affairs The Deputy Under Secretary for Administration The Deputy Under Secretary for Economic Affairs The Counselor Director, International Cooperation 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 Sec/retary 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

i United States Information Agency The Director

Approved for Release: 2019/08/20 C03169391

l\:<+»>=:s

_:~n~¢'-‘ '\&

“N,

Approved for Release: 2019/08/20 C03169391

\

»\,\\ $E~§\.\§:\\;‘§

?§‘£3.~E£~i£1<1

s<<.‘&es.»=

$$‘>:\>\

‘G¥\ \ .

;\\

>»\\

;}>x \\ >§\ ck I‘i 31*‘

»>~\

\.;»:.~t§\ ,"“"—': " "—~ \\\ _ \ " '

*5$:1:'I "-. 5 ~:'>.<>\ \ .

‘1\‘4\\N \ .\“,.¢‘.\

sack

Y‘-'§~\,\, , .».~\- _ . ‘>\*<\x\§

\’\‘—§.\\\

~_\>.\\\ . _.,.

».-li__D8J?ty. 3) to/_. t p

' " E‘ pprove or eease: \ CENTRAL INTELLIGENCE BULLETIN

'7 February'1958

DAILY BRIEF

I. THE COMMUNIST BLOC union--Soviet view: The Soviet lead==

ers"cpfitinIie to treat the proclamation of Egyptian-Syrian union with reserve and have failed to take advantage of several opportunities to endorse the union. In a conver-

A

e

page 1;>

Soviet economic growth: According to Pravda, the USSTTs"raté’ of industrial growth in 1957 was well above that of the US and well above plan, although slightly be- low the 1956 level. The ambitiaous housing plan was over- fulfilled for the first time in Soviet history, reflecting some shift in priorities more favorable to the consumer. -

On the other hand, raw materials difficulties continue. The disappointing harvest in 1957 makes less likely the achievement of ushchev's milk and meat goals.

z> <¢h-W

IL ASIA-AFRICA ilndonesia: The dissidents seem on the verge of decisive

action in view of the speech on‘ 6 February by Lt. C01. Hus- sen, head of. the 1.a..§§.n:;:alaamatra- His lengthy the D] akarta governifientowas aooarerfitlv intended the way for either an ultimatum to Dja==

‘

kartaor the proclamation of a rival government.

On the basis of findings by its Watch Committee, the Intelligence Advisory Committee concludes that there is no evidence of Sino -Soviet intention to become militarily involved in the Indonesian situation. Continued failure to resolve the basic differences between the central gov=» ernment and the dissident leaders, who may soon pro-J claim a rival government, could lead to disorders and thus to a situation even more favorable to the Communists on Java

7-\ Watch Committee footnote points oufthat unconfirmed press reports indicate the rivalgovernment may have been proclaimed on 6 February.

lndian cabinet scandal: Nehru may soon be forced to disniiss His lcapablezfinafice minister, Krishnamachari, as a result of a widely publicized scandal over malfea= sance now being officially investigated. The investigation of Krishnamachari, who has been responsible for nego- tiating major foreign loans for.India's. Five-Year Plan, is a serious embarrassment to Nehru and the Con ress

:~_§~ =‘

\

\

> ;;\\\\ Q

"¢\§&‘§ 1%;-.\

\

\

On the basis of findings by its WatchCommittee the Intelligence, Advisory Committee concludes that a delib- erate initiation of hostilities in the Middle East is unlike-~ ly in the immediate future. Tensions in the Middle East, augmented by the proclamation of the Syro-Egyptian United Arab Republic and by -recent Israeli-Syrian border developments, continue to create possibilities for serious incidents

\

III._ THE WEST "

- Guatemala: Prospects for a peaceful presidential succession now appear good. General Ydigoras is be- lieved to have sufficient support in congress to as-sure his selection as president--elect, probably on 15 Feb- ruary. The government is planning the inauguration

n

for 2 March. The leftist Revolutionary party will have only five seats in the new 66-man congress.

tqgg‘ ‘§

§$~\\ ‘i

3‘§7‘\ 1