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DUUi button:
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GOVERNMENTAL PROGRAMS ON NATIONAL SECURITY AND INTERNATIONAL AFFAIRS FOR1
PRORIl.M
roposed substantial reduction of appropriations for governmental programs in national security and international affairs foro estimate
A. The effect upon the non-Soviet world in
nd subsequent years
B. The effect upon the security position of thc USis the USSR
As of the end of
As of the end of
ASSUMPTIONS
It is assumed
A. That the proposed substantial reduction for1 will become public knowledgo In thc course of
D. That over-all economic activity within the US will remain at approximately Its present level for the period under
existing governmental programssecurity and international affairsImplemented in0 inpresent form.
thc objectives and aims ofwith respect to the USSR andinterests of the United States arcIn
BEARING
t was estimated infhat the global security position of the US relative lo the USSR had slightly improved In twelve months This conclusion was based on the favorable trends that had beenin Western Europe and which wereto have outweighed on balancetrends in the Far East. It was stated, however, that the trends were sothat they indicated opportunities for development and not accomplished fact. It was accordingly considered that the more favorable position could not be validlybeyond the short term.
While no significant positive change has taken place in the position between April andhese favorable trends are being modified by the adverse trends noted inelow.
Note: Tbe intelligence organtzatloos of tbe Air Force have concurred In this repor as of
HE PROBLEM
The categorical summary of the position, as given inowever, remainsthe same: Europe- definitely more favorable to the US; NearFax East (China and Southeastless favorable to the USlight improvement has taken place In Southeast Asia since; Far East (Offshoreless favorable;unchanged for the US, definitely less favorable for the USSR
he following unfavorable trends, which have originated outside the problem, arcnow to be overtaking the favorable trends noted inhey arc:
A. The deterioration of the international financial position of the UK and the effect of this deterioration on the capacity of the UK
Department* of State. Army, Navy, and thcased on information available to CIA
2
support ils present role in the maintenanceombined US-UK security position.
tendency, enforced by presentof states or groups of states inintermediate to the US and the USSRautarchic economic policies, andof this development on the USin the economic and politicalsuch states and in the maintenance ofeconomy of the US.
expanding Communism of the
or iin- purpose of estimating, it Lithat currently operative forces and trends continue in effect The possibleof these forces and trends by events or actions which are conceivable, but not pre-
dictable, has not been taken intoIt is to be noted, however, that the intensity of the reaction to the proposedas well as the development of the unfavorable trends listed inbove will be governedarge extent by (a) theof such action as may be taken to check these existing unfavorable trends, (b) theto which present and prospectiveof US aid can be persuaded to accept the ideaondition of permanentupon US resources is neither possible for the US nor desirable for the recipients, and (c) thc degree to which the US convinces thc non-Soviet world that its military force and potential will continue to be available for use in restraint of Soviet aggression.
DISCUSSION
For discussionec Enclosurediscussionec Enclosure
proposed reduction will significantly reduce, withinhe capacity or the US to pursue the objectives and aims staled Innd may ln the critical yearsto1 invalidate those objectives and alms.
Within0 the principal effect of the proposed reduction will be the definitely unfavorable psychological reaction of the non-Soviet worldoncurrent boost to the Soviet world. This reaction will tend to give support to already existing adverse trends such
deterioration of thc relativeposition of thc UK.
tendency, enforced by presentof states or groups of statesautarchic economic policies.
expanding Communism of thc
It Is estimated that there willeconomic consequences inandt Is not consideredwill inevitably and of themselves leadserious deterioration of thc US securitywithinf the countriesgiven ample time and are able to prepare
compensatory adjustments. It is noted,that such adjustments would probably take the formreater dependence on bilateral trade agreements. Including anIn East-West trade, some reductions in standards of living, delays in implementing investment programs, and firmer patterns of economicof action which, for the most part, would run counter to US international economic objectives, and the full development of which might well have an adverse effect on over-all economic activity within the US ln1 and subsequent years.
he interaction of psychological factors and economic adjustments, initiated inill develop, ln the course ofnto positive trends unfavorable to theUS security position vlsa-vis the USSR. These trends will be supported, in part by the unimpeded development of alreadytrends in the Far East; in part by the psychological, economic, and politicalof Western Europe; In part by thetrend toward Instability which will have been introduced into the situation in thc Near and Middle East; In part by the decline In US
military strength; and In part by the Soviet-Communist exploitation of thc opportunities that will have been opened. Thcof the over-all US security position may not. however,ritical point withinrovided that the current situation in various key strategic areas, such as Germany and Greece, is kept under control.
The years subsequent to1 will be critical In terms of the US security positionis the USSR, unless effective counter-measures have been devised and axe beingAt that time, the accumulating effects of unfavorable trends abroad and of Soviet exploitation of enhanced opportunities, will come Into Juxtaposition with the fullof reductions In programs related to US national
The military capabilities of the US will begin to depreciate before thc close of0
and will decline at an accelerated rateComparatively, mobilization capabilities will be more affected than the forces in being. The substantial reduction in US militarywill heavily Up the internationalof power in tbe direction of the USSR which is expected to maintain its present capabilities and even to add to them byefforts to Improve weapons and produce atomic bombs.
f the adverse developments noted inndbove continue uncheckedoint where Uie US decides that it is necessary to attempt to redress the balanceis the USSR, tbe restoration of Uie situation in terms of Uie aims and objectives of US policy as set forth in4 would be more difficult and more costly than Uie maintenance of Uie present situation with respect to those alms and objectives.
1U1 JlTu*Ti tee
enclosure
The eflect upon the non-Soviet world in FT nd subsequent years
DISCUSSION
In0 thc reaction to the proposed reduction will be primarily psychological. It will take many variant forms, and it will be most profound in the countries that consider that their interests and objectives have been equated with US support. Certain common features will be generally present: anof US policy as undependablc, or reverting toear that USstrength willonviction that national policies, free from dependence on the US. must be quickly found and vigorouslyThis initial reaction will guideand political adjustments. The effects of these adjustments will develop slowly and not become significant beforen general, they will tend to shape uprend unfavorable to the Interests and security position of the US and resistive to theand alms of US policy. In thc absence of counter-measures, they can be expected to lead, in thc years subsequent toritical deterioration of thc over-all US security position.
2. General Rcaclions, Regionally Considered.
the UK, reactions to US foreignpolicies will already have beenthe outcome of the Septemberineduction ofaccording to the terms of theInvolving as itmallfinancial assistance ln relation to UKcould not be expected tomarked additional popular reaction,substantial economic effect.will probably conclude, however,has become essential to develop aof being largely ImplementedBloc and non-dollar area
Scandinavia, there will be ato thc concepteutral bloc, accora-
panledrowing lack of definition in foreign policy. However, no drift towardaccommodation with the USSR ls to be anticipated.
Western Europe, the reaction willtake the form of diminished* and rireumspection inthe US, less capacity to resistInternal Soviet-Communist pressures.
the Near and Middle East, It willtake the form of questioning thcof the USounter-forceexpansion.
the Far East, it will generallyformeduced capacity and willthe Communist pressures which areexercised outwards from China andin individual countries. Thiscapacity will show in two ways:acceptance of compromise by presentof authority, and popular Identificationaspirations with Communistdynamism.
Latin America, there willossIn the US, less willingness toleadership,earch forof action, particularly on the partand, possibly, Chile.
3. Economic Repercussions and Adjustments, Regionally Considered. A. Western Europe.
Economic activity, especially Industrialhas probably been sufficientlyto cushion to some extent theand short-term effects of the proposedThere should be no purely economic consequences inut in1 the effects of the reduction upon the international financial positions of the Western European countries would have considerable adverse economic repercussions. If the proposed re-
G
were notifieday that gave time lor compensatory adjustments, the purely economic changes that would take place should not produce Ofignificant adverse security trend withinthat the adjustments arc notby serious labor troubles. The more thoroughly and successfully theseare made, however, the greater the possibility of their working to restrict over-all economic activity within the US.
The types of adjustment wouldeduction of purchases in the dollar area and an Increase In bilateral agreements and trade restrictions;urtherof the prospect of re-establishing aof multilateral trade.
n expansion of East-West trade,as on exchange ot industrial goods for foodstuffs and raw materials; with aweakening of the US policy otexports to the Soviet-Satellite Bloc.
an acceleration of the long-standing trend toward economic autarchy.
and, as far as continental Western Europe ls concerned, economic-militaryinvolving demands for specificfrom tho US for tbe use of bases and strategic Installationsowering of tbe presently negligible military potentialas lt ls applicable to the maintenance of US security.
These adjustments would be accompaniedowering of standards oflowing down of investment programs, and bycompetition between social welfare expenditures and presently projectedprograms. In these connections,repercussions will develop and, hence, it will not be valid for1 to isolate purely economic consequences. (Seeelow.)
For example, the reactivation of economic activity has derived from more than USassistance. One of Its conditions has been the encouragement and securityby alignment with the industrial and military potential of the US. This haseasonable assurance against Soviet military action and Communist political subversion.
The possible destruction of, or even theof momentary doubts concerning this intangible factor make it unrealistic,to estimate consequences hi purelyterms.
and Middle East
Even Inreece and Turkey will be faced with major economic problems as aof the reduction of US aid. Elsewhere in the area there will simply be an over-all slowing down of the entire process of creating economic stability. (Seeelow.)
East.
The economic problems and consequencesroposed reduction will be essentially psychological and political, with the impact falling chiefly in Japan and Southeast Asia inuringowever, areduction of Imports in Japan might well lead to Internal disturbances requiring increased security measures. Thc relation between US aid to support Japanese economy and Japanese vulnerability to economic and political pressureommuruzed Asiatic mainlandirect one.
America.
More strenuous efforts will be made tocountry and regional economic autarchy and to enter bilateral and limited area trade agreements.
B. Inter-regional Stockpiling Programs.
The proposed reduction in stockpilingwould probably result in aof development programs in theareas. It would also resulteduction in dollar earnings of the owning countries (especially the United Kingdom and the Netherlands) to the extent that purchases were curtailed. These reductions would have unfavorable political repercussions in thecountries and would add to theadjustments which the European colonial powers will be obliged to make.
olitical Repercussions, Regionally
A. The OK. There would be no significant political repercussion in the UK. The major political parties would react in identical ways: an immediate concern with the psychological
1
political effects In Western Europe, and an effort to reduce UK dependence on the US.
Europe. In France andwould be greatlys the moderate governments,rested upon US subsidies and havethemselves by US-supportedcooperation, come under seriousboth Right and Left Thegovernments will be required tovery probably lead, duringpolitical polarization. Thedirection of political change will be,of coalitions, to governments of thestage will be set, ln theor an Increasing strugglebetween extremist groups.basic political struggle in theScandinavia, WesternAustria will still be betweenof the Right and LeftheSPD).
and Middle East. NoIs valid for this region. Greece,Iran, because they are adjacent toterritory, areewly formed State, hasThe Arab countries arethemselves. The Indianremote from the operation of regionalIt Is ln the parts of the regionUSSR that an unfavorable reaction Incan most rapidly develop into aInnd that theof tho US can be most speedily
reece. Thc situation in Oreece is so potentially unstable that It ls consideredubstantial reduction cannot safely beuntil six to twelve months after the guerrillas have been reduced to "manageable" proportions.. Reduction prior to this time would stimulate fresh Soviet-Satellite pressure while reducing Greekto oppose such pressure. The immediate reaction ln the circumstances wouldreakdown of civilian and military morale, the fall of any coalition government, and probable attempts to form an authoritarian regime. The speedy disruption of even the presentof political unity would be followed by
further decline in thc already low standard of living, by disaffection among refugees, andeterioration in internal security.
Turkey. The immediate eflect wouldightening of- political- controls with power concentrated In reactionary groups.development would be checked andallocatedising scale to the armed forces. The value of Turkey as awould graduallyasic shift to neutrality, with the implication ofwith the USSR would not occur, however, unless Greece and Iran fell under Soviet domination.'
Iran, Currently obsessed withUS aid, the government, especially the Shah, would receive word, of the proposedwith apparent anger .and alarm. Even without US aid, efforts would probably be made to build the military establishment to unrealistic proportions at the expense of programs for economic development. The present anti-Soviet sentiment, however, would probably not change. The US would find it much more difficult to exert its influenceIncreasing Internal stability throughand social development, and Iranian vulnerability to Soviet pressure would steadily increase.
Israel. The immediate effect would be to strengthen pro-Soviet political parties. MAP AM, the largest, would beosition to press to enter the government. The present policy of neutrality would be tacreasinglyOf slower development would be the delayed effect of world-wide economicon the capacity of Israel toiable state.
Arab States. Denial ofheand resettlement of Arab refugees would Intensify unrest in the area. Denial of aid to Saudi Arabia would lead toin connection with thc Alrbasebut would not be critical ln the long term. Tbe other states would probably move to rebuild their relations with the UK and France. Economic stability and.internalwould probably worsen slowly lnwith the rate of adverseertain extent on the situation in Turkey and Iran.
ndian Subcontinent. No significant reaction since the area is fairly wellto the Idea that large-scale material aid will not be forthcoming from the US in any circumstances. There would, however,iminution of US Influence.
D. The Far East
With the exception of the costs ofand assisting Japan, already approved US expenditures In the region are relatively small. Korea and the Philippines are the otherrecipients. The Republic of Korea is wholly dependent on US economic andaid for its survival. The severeeffecteduction would leadtraight line to Communist domination. It is considered, however, that the ultimate com-munlzation of Korea can only be delayed, not prevented, and that tho essential question here is the value of delay In relation to the general security position of the US inhole.
Inore complex issue will be raised. Japan continues to be essential to the maintenanceS security position in the region. Yet the cost of maintaining Japan cannot be reduced without permitting the Japanese government to re-establish many of its prewar economic relations abroad, thc most important of which were with the now com-munlxed Northeast Asia mainland. Anyoutside this context will generate political and socialand socialwill incompromise USrend of this kind. If initiated Ins likely torapidly inn conjunctionenerally worsening security position in the Far East, efforts to check or reverse the trend in the years subsequent to1 will involve granting Japan greater freedom of action ba the region.
Although the proposed reductions will be politically used In the Philippines to whip up anti-US sentiment, it ls not considered likely that US influence will be significantly affected during tbe period under discussion. Present commitments are contractual or authorized through
In Southeast Asia, the psychologicalwill reduce the US capacity to Influence tbe course of events, and the tendencyaccommodation with Communism will increase. (For effects of reduced Stockpiling Programs, see, above.)
B. Latin America. US Influence willin1 and subsequent years, more in consequence of psychological factors thanexpenditures. This lessened Influence will be marked in more remote countries, scarcely noticeable in those of the northern area. Diminishing confidence hi US power relative to the USSR will strengthen theof neutrality in the East-West struggle and will open thc way forneutral" bloc that will tend to trade its influence in International organizations uv stead ol uniformly supporting the US In major US-USSR issues.
S. Soviet-Satellito Reaction.
Is considered that the proposedwill be interpreted as indicating thathave been opened for
ts considered thatully developedwith themes designed to:
confidence in USand economic strength;
Insecurity, distrust, and fear;
create psychological Impediments to rapid and successful adjustments;
vindicate the Communist views ofdevelopment and thc superiority of the Soviet system.
Is considered that this campaignaccompaniedaximum use ofeconomic weapons.
Increased political and economicand industrial subversion by localParties.
Diplomatic and economic pressures to conclude political and trade agreements with the Soviet-Satellite Bloc.
Financial manipulations anddumping to impede economic
T^fgagSgtWWC
effect upon the security position of the USis thc USSR:
of the end of
of the end of
It is considered, for the purpose of this problem, that the basic security interest of the US for the indefinite future, as set forth ins to keep the dispersed power resources of Europe and Asia from being drawnoviet power system; and that the maintenance of this interest requires that states In the areas intermediate to the US and the USSR should identify to thotheir political aspirations and security interests with those of the US, and that the
economic and social structure of the US should be kept viable and adaptable.
t is further considered that the relative power of the US and the USSR has been kepttate of precarious balance6 by the fact that Soviet force In being Is weighed against US industrial potential, USabroad, and certain technologicalof which the US possession of the atomic bomb and the ability to deliver it ls perhaps the most important.
as of thc End of
t ls considered that, within the terms of the problem and assumptions, the adverse trends noted in para.agere likely to develop more rapidly and comprehensively than would otherwise be tbe case. It ls not, however, consideredundamentalof the global security position of tbe US relative to the USSR Is likely to occur withinrovided the existingin certain key strategic areas (Central Europe, and Greece-Turkey-Iran) isin at least its present form. Regional modifications in relative positions are likely to occur, most notably In the Far East; and, while such modifications may have significant long-term security Implications, they do not necessarily threaten US security In the short-term, nor need their short-term effects beas representing irrevocable losses or bTeversible trends.
n continental Western Europe theof an unfavorable psychologicaland the compensatory economic and security adjustments that will be Initiated, lay the groundwork for renewed political instability. In the UK, intensified efforts toosition of maximum economic in-
dependence from the US will probably result. Inrowing uncertainty Inpolicy will develop, as well as Increased supporteturn to the concept of abloc. In Central Europe, the proposed reduction will be exaggeratedly interpreted and will be over-empbatlcally reacted to. In Western Europe, generally, tne desire forand political Integration will continue, but practical progress in this direction will be checked by tho type of adjustment thatstates will make to reduced US aid. Although military cooperation at planning and technical levels ls likely to be speeded up, military readiness will be reduced Into the degree to which US aid isOver-all relations with the US willof necessity In their present pattern, but will be marked by hesitation, circumspection, and diminished confidence. The area ofcooperation with the US in collectivewill tend to be narrowed to thosethat are of Immediate concern to the states of tho region.
n thc Mediterranean region and the Middle East, it is considered that the relative US security position will continue In Itsform, provided the local situation in
10
Is not permitted to deteriorate. Tbe present uncertain internal stability of theis, however, likely to become moreif the factors producing instability are given freer rein by the development of doubts about US intentions. While no large-scale programs designed to check such factors (excepting ECA In Italy and subsidies in Oreece and Turkey) are in operation,of aid have been created by both US and UK policy. The proposed reductions will tend to weaken US, and indirectly. UKand the existing partial checks onInstability will be diminished.
n the Par East, although the generally unfavorable position developing ln this region arises from factors unrelated to the problem, it is considered that this development will be given added Impetus. An unfavorablereaction will occur, mostin those countries that feeldirectly exposed to Chinesemore diffusely ln those countries that believe themselves in danger of Communist subversion. This reaction will generally work to supplement an already adverse trend byendency to compromiseegionally successful force and by encourag-
ing nationalist movements to place their hope in Communism rather than in US promises.
The military capabilities of thc US will begin to deteriorate before the close ofs soon as news of the proposedfor1 becomes public, the KME will lose many key and specialized personnel This loss of the personnel and thc preliminary preparations for closing out or reducing many activities and functions of the NME willimpair the effectiveness of theireven before the beginning of
Assuming that specific events or effective counter measures have not reversed theunfavorableategoricalof thc estimated global security position of the USls thc USSR ut thc end ofan read:
should be no fundamentalthe basic US security position providednumber of key strategic positions
ultimately unfavorable to theposition, will be present and willat an Increasing rate.
will be Increasingto the USSR for exploitationcold war."
as of the End of1
Within the terms of the problem, and in the absence of comprehensive counterIt is considered that thc global security position of the US relative to the USSR will, ln the course ofegin to approach the point at which serious deterioration can set in. It is not considered, again provided that key strategic positions continue to be maintained, that obviously significant changes will necessarily have taken place; but simply that the structure of US security as presently conceived will have been weakened. The chief factors working toward this end will be the accumulating effects of adverse trends that have been recognized as operative in0 and thc exploitation of these trends by Soviet-Communist action.
n Prance and Italy, political instability will probably develop toward political polari-
zation. Political authority will tend to shift toward the Right. The line of cleavage of political forces will beationalist Right with dictatorial overtones and anLeft under Communist dircction. The pattern of economic adjustment andand financial policy will complement the political tendency. The pattern will probably be controlled, defensive, andThe pressure of Insecurity maystep up the degree of militarybut the economy will not be able tothe equipment needed to make defense plans realistic- Cooperation with the US may well be limited to those precise respects In which US objectives can be equated with local security Interests. The Intangible guidance which the US now gives In answering asecurity problem will become dispersed
Ti-
ineffective, and agreements will more and more depend upon bargaining and well-defined quid pro quos.
lsewhere in Western Europe,in the United Kingdom, poliUcalwill be much less serious than in France and Italy, and win stern, from generalmaladjustment rather than from Uie reduced appropriations which constitute Uie terms of this problem. There will be nopoliUcal polarization. Communist Influence will not appreciably increase, nor will right-wing authoritarianism gain any substantial following. The British willtry to carry further the development of an integrated, non-dollar trading area, which will include Uie Commonwealth and Empire (excepts much as possible of West-em Europe, andewecalcitrant dollar problem, such as Argentina. Discriminatory trade practices against the dollar area will be pursued. But military cooperation with the US willbecause US and UK strategic Interests are virtually Identical. The British ability to maintain armed strength and overseashowever, will not improve.
n the Mediterranean, Near, and Middle East, regional Instabilities will probablyas the indirect consequences of thereduction are more widely felt. The decline of US Influence will encourage Uie states of Uie region to seek alternative sources of strength externally or to develop artificial appearances of strength within themselves. In Greece, Communist elements, even if Uie guerrillas have been liquidated, may betoew test of strength. Turkey and Iran will probably interrupt their plans for economic development and allocate their resources to military uses. The value of TurkeySnd the Internal stability of Iran will be reduced byhange. The Arab States will probably try to revive their UK or French connections; but. even if these were wholly re-established, the UK and France would not be able to provide the material assistance needed to check the forces creating Instability. Positive innQ ol alignment toward Uie USSR are not indicated. An increase in the opportunities opened to Uie
USSR for subversive action designed to make Uieeaker element in Uie structure of US security t? indicated. PoliUcal. social, and .economic instability will probably spread from -Uie Near, East along Uie North African littoral. The French, particularly If policy Is increasingly directed by the.Right,.will meet this challenge to then: control with repressive measures. These developments will tend to make it more difficult to utilize theregion in support of the presentlyUS security position
IS. In Uie Far East, where adverse factors arc already, in vigorous operation, Uie most likely trend will be towardore rapidof Communist Influence on theIn this connection, Uie situation In Japan will become Increasingly Important. The re-cstabllshmcnt of Japaniable state becomes essential to Uie maintenanceinimum US security position in thc region. It is. recognized, however, that the conversion of the Asiatic mainland from an area from which Uie US has been excluded to an area constituting an offensive threat to Uie over-all US security position will not take place within Uie period under consideration.
ithinhere willecline in US military capabilities. The multiple and diverse activities associated with Uie reserve forces, Uie improvement of weapons and equipment, and the general plans and opera-tibfts in preparation for the expansion of the NME in time of national emergency will be seriously curtailed. Reductions in Uieadjuncts ofUie MAP and Uie strategic stockpilingfurther adversely affect Uie military position of Uie US and the Western Powers. These substantial reductions in US militarywill tend to shift Uie internationalof power hi thc direcUon of Uie USSR, which Is expected to maintain Its present capabiUUes and even to ndd to them byefforts to improve weapons and produce atomic bombs.
The Western Powers, which have beenby the US toirm stand "sgtti^st Soviet aggression, will be discouraged by Uie>cospectecline in US military capabiUUesttrtd in the amount of direct US
assistance in building up their own military forces. Their determination to resist Soviet aggression will weaken accordingly,onsequent weakening in the basic USposition
gain assuming that specific events or ctTcctive counteraction have not reversed the current unfavorableategoricalof thc global security position of the USis thc USSR, as of the end of1 can read:
definite reversal of the existingsituation in Western Europe.
more rapid development of theunfavorable trend in the Far East
progressive Instability in the keyregion of the Mediterranean, Near,East
increase in the number andSoviet-Communist pressures and afor points of weakness in theposition.
of the Probable
Subcontinent.
eduction in the US capacity to influence events in this region, no significant change Is considered likely In0r in consequence of the proposed reduction.
America.
In connection with this region, important for the general support of the US security position rather than because of any danger of Its falling immediatelyoviet power system, it ls noted that US influence willdiminish through the period under con-
Situation in Other Regions
sldcration The most sigruficant consequence will probably be the development of neutral positionsendency to use the Latin American voting strength in international oiganizations for bargaining purposes rather than uniformly to support US objectives in major US-USSR issues.
C. Africa.
Except for the North and West Africanwhich has been considered above, this region is considered to be comparatively Irrelevant to the problem stated and for the period under consideration.
Original document.
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