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Beginning with this rssue. Ihe monthly report on Cvmmunlsi Aid and Trade Activities hi Less Developed Couniriei formerly issued by the Subcommittee of International Trade and Aid of the Economic Intelligence Committee will be prepared and issued by Ihe Office of Economic Research. CIA The Subcommittee was abolished
In these monthly publications, the aid and trade activities of (he following Communist countries are emphasized. (I) thehe Easl European countries (Bulgaria. Czechoslovakia, East Germany. Hungary, Poland, andhe Peoples Republic of China. The aid and trade activities of other Communistlbania, Cuba. Mongolia. North Korea, and Northre also covered for certain limited purposes. However, from time to lime activities thai deal with the aid of Communis! countries lo Cuba and Yugoslavia will be included
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CONTENTS AND SUMMARY OF EVENTS
General
'ITiird Quarterly Report on Communist-LDC Oil I
Soviet and East European activities related lo oil developments continued during the third quarter with major economic aid recipients such as Iraq. India, and Afghanistan, while support to Nigeria. Syria, and Bangladesh accelerated. Total Communist oil procurement from Middle Eastern and North African suppliers continuedower level than3
Africa
New Chinese Projects in Mauritania 2
China agreed loeep walcr portihe completion
ntlc road during the September visit of the Mannlanian President to Peking.
East Asia
Chinese-Philippine Trade 2
China has agreed in principle to Supply sizable quantities of petroleum to the Philippines and will conlinm: fo pmchase timber, agricultural products, und copper.
Afgluimian Receives Additional Sovic. Military Equipment
Aboul Soviet medium tanks are scheduled for delivery to the end of thetanksabul in
mid September.
Communist Relief and Development Aid Tor Bangladesh
The USSR and several East European countries have promised relicr assistance to Bangladesh, while the USSR and Romania agreed to construct several projects during Dacca's current five-year plan.
USSR Resumes Military Shipments to Egypt
The USSR has resumed arms deliveries to Egyptour-month interruption.
The Second Session of the Soviei-lndian Intergovernmental
Th* USSR apparently was not responsive to Indian requests for diversion of project aidonproject uses, increased commoditynd debt relief during ihe September session of their joint economic comm.swon
New Polish Projects for Pakistan
Poland will construct four small projects in I'akislan. its firsl development activjiy in the country
New Syrian Economic Agreements wilh Rumania
Syria and Romania signed several accords in September calling for increased Romanian participation in Syria's petroleum .nduslry and (he construction of eight new industrial projects
USSRxpand Port facilitiesII Lalakia
The USSR has agreed to double the berthing capacity and expand cargo handling facilities at the Syrian pon o* LaUJrJi
COMMUNIST AID AND TRADE ACTIVITIES IN LESS DEVELOPED COUNTRIES4
General
Third Quarterly Report on Communist-LDC Oil Activities,
In the third quarter, the USSR and the East European countries continued their involvement in oil developments of major aid clients such as Iraq. India, and Afghanistan.ew development on the Indian scene. New Delhirotocol with Romania in September for joint oil exploration in third countries. Communist support to Nigeria. Syria, and Bangladesh accelerated. In Nigeria, progress was made on the Petroleum Training Institute in Warri, and Moscow began organ^ing and staffing the facility. Chinese teams began surveys in Nigeria during September, and Czechoslovakia has been negotiating an oil concession from Lagos. Ihe first known Communis! initiative ine:iirrangement
In August, afterear of baigaintng. Moscow agreed to paycentsubic feci Tor imported natural gas..ibOuiriceInly the USSR had agreed to payentsubic feet for gas tcond qutiicr aiiostmcni. ict iftcftrprnitUitifKaixxt of ih'n
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Nolc The substance of this publication has been coordinated with Ihe Bureau ol Intelligence and Research. Department of Stale and the Defense Intelligence Agency. Comments and queries regarding this publication arc welcomed
Other Communist Oil activities focused largely on the restoration and expansion of refinery capacity. The USSR agreed lo modcrrme Bangladesh's only oil refinery at ChttlaRong. probably under existing credits. Prague signed an agreement with Syria in Augusl to provideillion of machinery and equipment to icstore and expand the Czechoslovak-bmli refinery atapacityy Ihe end1 Damaged during the October war. this facility is Syria's onlyomanian-Syrian agreement signed in September calls foi constructionefinery at the port Of Banias The rcfineiy may serveucleus for Ihe Syrian petrochemical industry
Afghanistan,igher than the old price. Soviet gas impotts4 arencreaseillion cubic feet. Its cost will double to more0 million.
Moscow agreed lo buy onlyf crude oil from the Arab states during the third quarter. Because of continuing high prices, none of thi> oil was for East European account The USSR apparently intends to meet moref Eastern Europe's total4 crude od needsut of domestic production So far this year. East European countries have boughtf oil from Middle East stipphcis, about the same as
Soviet petroleum sales4 also reflect higher woild market prices. The volume contracted for delivery4 is slightly above3 level. Sales to someDC clients arerazil and India, the largest purchasers, are taking more than one-half of the total During the quarter. Brazil's State-owned petroleum company signed agreementsillion for Ihe purchasef Soviet crude. probably Ihe largest Soviet export deal ever concluded with Brazil. Brazil also has expressed interest In buying Chinese oilriangular arrangement with lapan and Niip-na
Although refusing to lower its oil prices. Moscow agreed in July toillion worth of commodities for sale in Somalia io subsidize Mogadiscio's domestic oil sales This is the first suchaid io an oil .heal.
Africa
AViv Chinese Projects in Mauniamu
The Maurilaman piesidcni announced on hu return from Peking thai China willeep waier port al Nouakchott and assist in the completionile highway under creditsillion Onlyillion is believed to represent new aid. The new agree mcnl probablyillion in outstanding credits dating1
East Asia
Chinese-Philippine Trade Development*
China and the Philippines have exchanged notes formalising lu.lr discussions held during the visit of First Lady lineida Marcos toilr September
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China hasrinciple lo supply suable amount* of crudelo Ihe Philippineslthough Ihe quantities involved were not specified. Manila's initial request will beS. Shipments would increase Inear.aximumhina alio will export rice and will continue to purchase Philippine limber, agricultural products, and copper, Further discussions on prices and other details will be taken uphilippine trade mission scheduled lo visit Peking in the neat future.
Manila probably will move quickly loorma! agreement with Chin* in order to reduce gradually us almost total dependence on Arab petroleum suppliers.orefn crude oil imports came from the Middle East.
At current Chinese petroleum export prices, ihe value of Philippine crude oil imports fiom China5 wouldillion, comparedotal iradc turnover between ihe two oowttrmfillionf this trade consisted of Philippine imports of ir* and olhcr commodities
AfgluiuUan Rmnfl Additional Sand Military Equipment
Seven Soviet medium tanksabulTen more
were expected latei in lite month.dditional medium tanks reportedly will be dcliveicd before the end of the yen Pic recent delivery bringshe number of Soviet unks Afghanistan has received tins yearrrived
Spurred by the deteriorating situation on lb. Pakistani border. Kabul is seeking in match ils armor buildup with increasedeccni exchange of military delegations with Moscow probably was tclalcd primarilyruining
Can.mu.mt Relief and Dc+tlopmtat Aid far Bangladeih
Pivc Communis! countries twvc responded to Isaiigfadeih's call fafrvl lor vrtl.im ot Ihe Auffisl Hoods Tlic USSR ollcrcd io expedite62 credit,rl> slupme.il of pcirokiM products, pig iron, rolled steel, and lood. Moscow alsochannchrtft medicines and oilier supplies through ihe Red Crescent Society East Germany and llnnpry togclhei luve pledgedl S? million in vununoditics and Romania and Poland havetitic'a ms as relief
The USSR and Romania also concluded agreements for projects to be constructed during Bangladesh's tint five-yearangladesh has0 million in previous Soviet assistance which has not been allocated. In addition to6 million of machinery and equipment this year for ongoing Soriet projects, the USSR has agreed to expand Ihe Chittagong steel mill, to modify the refinery at Chittagong to process Iranian crude oil. and toextileoint venture with India toertilizer plant in Bangladesh under Soviet credits also is under consideration. Romania agreed to begin worketrochemical complex and two textile mills during the plan period. Although these undertakings would require additional Romanian assistance, no new credits mn announced.
USSR Resumes Military Shipments to Egypt
The USSR resumed arms deliveries to Egypt in late summerour-month interruption. The shipments probably included badly needed aircraft spare parts. These deliveries probably reflect not only an attempt to improve relations with Cairo (recent statements from Cairo have been favorable to the USSR) but aho Soviet concern about Egypt's efforts to find alternative sources of arms. Deliveries to Soviet economic projects in Egypt apparently weie not affected by the decision lo cease military shipments in Apnl
The Second Session of the Sot-iet-fndian Intergovernmental Commission
The second session of the Soviet-Indian Intergovernmental Commission ended oneptember with Soviet assurances of continued support for India's heavy industrial development. The USSR, however, apparently turned aside Indian proposals that unallocated project credits be diverted to nonproject use. notably for imports or industrial raw materials and components. Moscow also withheld decision on India's urgent requests to increase shipments of petroleum products, fertilizers, and grain above the levels stipulated in4 trade protocol
Mostly because of increased prices of fertilizer and kerosene.4 imde surplus wiih the USSR probably will drop io well below3 level. India's trade surplus roughly equaled lis scheduled debt service io Ihe USSR, which ranged0 million15 million3 New Delhi's debi servicing obliplioni lo Moscow are expected to nse to5 millionriple ihe expected trade surplus Although India pressed lor relief from (his heavy debt burden, there is no evidence of Soviet agreement
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The USSR probably did agreexpedile Soviet assistance for projects under way or being expanded. Moscow also may have agreed to help utilize surplus capacity in Soviet-built plants by increasing purchases from these plants and by arranging to use this output in Soviet-aided projects in third countries.
Most of the items taken up at this meeting had already been discussed during Brezhnev's visit to India last November. New Delhi undoubtedly is disappointed at the joint commission's inability to forge new links in the Indian-Soviet economic relationship. Demands foi increased commodity shipments and more concessionary repayment terms probably will be reiterated during trade talks scheduled for late October
AW Polish Projects for Pakistan
Poland will construct two sugar plants and two sawmills in Pakistan dutine the next two years. Financing will be undci5 million in outstanding Polish credits. Warsaw's aid program in Pakislan has been inactiveugar null in Hyderabad was completed
New Syrian /economic Agreements with Romania
During his visit to Bucharest early in September. Syna's President Asad concluded several economic accords JO continue Romanian assistance to Syria's oil industry. Romania agreed loew refinery, lo undertake studies of iIk:f Syrian natuial gas, and ioassistance in oil exploration. Bucharest also agreed to provide assistance to eight industrial projects,uperphosphate pL.ni andarbon black plant wiih an initial capacityons
FiiunciiU arrangements were not disclosed However,0 milliony w; I- wimlv:iis
USSH io Expand Port Facilities at Latakia
I In- USSR will begin expanding the Syrian pOit of Latakia by the end of iiic year undci an economic agreement signed during President Asad's April visit ioThe project will double Hie number of berths tond willrgo Kindling capacity to accommodate the increasing How of goods ovei the nearlyrnile rail line connecting Latakia with northeastern Syria Tin; priri's construction will take tluee yC-ns to Complete
Original document.
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