Foreign Relations of the United States, 1958–1960, Volume III, National Security Policy; Arms Control and Disarmament, Microfiche Supplement

17. National Intelligence Estimate¹

NIE 100–58
(Supersedes NIE 100–3–57)

Washington, February 26, 1958

ESTIMATE OF THE WORLD SITUATION

TABLE OF CONTENTS

I. INTRODUCTION

II. CHANGES IN THE WORLD SITUATION

A. The Strategic Situation

B. Soviet Progress and Policy

C. Psychological Impact of Soviet and US Policies

III. KEY AREAS OF US-SOVIET COMPETITION

A. Cohesiveness of Power Groupings

• The Sino-Soviet bloc
• The Western alliance system

B. Europe

• Possibilities of Negotiation
• General Prospects

C. The Underdeveloped and Uncommitted Countries

• The Middle East
• Asia
• Africa
• Latin America

IV. ECONOMIC PROSPECTS

V. OVER-ALL PROSPECTS

• Likelihood of General War
• Evolution in the Communist World
• The Free World Problem

ESTIMATE

I. INTRODUCTION

1. The year 1957 saw some improvement in the world position of the USSR, and some setbacks to the US; the two movements together were great enough to constitute a significant—though not necessarily a continuing—trend in world power relationships. Sino-Soviet bloc influence continued to rise in parts of Asia and the Middle East, largely as a result of mounting respect for the power and policies of the two principal Communist powers. The USSR became increasingly regarded in certain underdeveloped and uncommitted countries as a new political champion and example of progress. Remarkable Soviet scientific achievements—coupled with widely publicized initial US failures with the earth satellite—caused US power, leadership, and guarantees to be subjected to close scrutiny. US policies were more closely questioned and more often challenged, and doubts were expressed as to the wisdom of relying so heavily on US protection in the future.

2. A year ago² it was clear, as evidenced by the Suez affair, that the Western alliance system was under great strain and that the USSR was making inroads in areas of the world where previously its political assets were minimal. These developments, serious though they were, seemed less grave than they do at present, because the Soviet bloc itself was suffering severe strains. The exposé and repudiation of Stalinist terrorism created unrest in the USSR and in the European satellites, and shocked many Communists in Western countries. The change of regime in Poland and the uprising in Hungary added to Soviet difficulties. The Communist world, in the aggregate, appeared to have weakened.

3. However, during 1957 the Soviet Union regained much of its lost ground. Control was restored in Eastern Europe, and the entire Soviet bloc took on an appearance of more unity and strength, dramatized at the 40th anniversary celebrations in Moscow during November. The USSR’s achievements and its comparatively unruffled emergence from major changes within its leadership have contributed to an air of recovery and self-confidence.

4. It was not in re-establishing the equilibrium of the bloc, however, that the USSR made its most formidable gains. The principal developments of 1957 were the Soviet demonstration of scientific achievement in the field of rocketry, and the extraordinary impact which this demonstration made on the world. In underdeveloped and backward countries, for example, the Soviet accomplishment was widely acclaimed as proof of the intellectual, economic, and military progress which the USSR—itself so recently an underdeveloped country—had made. Throughout the world during the year 1957 the prestige of the USSR was enhanced.

5. The prospective Soviet achievement of an ICBM capability has brought into the minds of statesmen and peoples, for the first time, a general sense of US vulnerability to Soviet attack, and consequently a sense that a major change in the world military situation is impending. It is now generally believed that the USSR will, during the next year or two rather than at some time in the distant future, be able to inflict instant and crippling damage on North America, with a consequent deterrent power as effective as that which the US has exercised. The implications of this development are not yet fully understood, but there is some belief—mixed with hope—that a general war will be rendered less likely by the mutual capacity of the two great powers to destroy each other. Corollary to this belief in the existence of a condition of mutual deterrence is a strengthened conviction in the free world that, while it is vital not to allow the USSR to attain military superiority, it will not be possible to prevent a further expansion of Soviet influence simply by strengthening the free world militarily.

6. Under the cover of this condition of mutual deterrence, the USSR apparently intends to wage against the US a vigorous contest for world leadership. This contest, already under way, is taking place against a background of accelerated social and economic revolutions in many parts of the world. Both sides possess many assets capable of exploitation, and the contest seems likely to go on for many years. In the following paragraphs we discuss the changes which have occurred and the basic forces and attitudes with which the US must contend.

II. CHANGES IN THE WORLD SITUATION

A. The Strategic Situation

7. The leaders of all the nations in the West have long been aware of the fact that the USSR had some capability to strike the US with nuclear weapons. They have also realized that the time would come when the USSR, through its growing nuclear weapons stockpile and as a consequence of its development of long-range aircraft and ballistic missiles, would develop the capability—barring some revolutionary development in defensive arms—to inflict critical damage upon the US. Heretofore Western statesmen and Western peoples have thought of this largely in terms of some vague future date, and many of them hoped that somehow something would intervene which would prevent this prospect from materializing or from becoming unmanageable if it did. Now, as a consequence of recent Soviet developments in the missile field, the general public has had dramatically brought home to it a realization that the USSR will be able, within the next year or two, to bring the US under direct nuclear attack with ballistic missiles.

8. Since the end of World War II, US military capabilities, and particularly the capability to deliver nuclear weapons on the USSR, together with US assurances and US demonstrations of its intention to protect victims of aggression, have created some sense of security among peoples who feared Communist internal or external aggression. What made US actions and assurances persuasive to these peoples was a conviction of US superiority over the USSR in nuclear weapons and delivery capabilities and a belief that the vital centers of North America (including its retaliatory capability) were relatively safe from severely damaging Soviet attack.

9. To many observers Soviet progress in ballistic missiles appears not merely as a gradual improvement in military capabilities but as the portent of a new military situation. They foresee a situation in which the US—although it will retain the power to deliver nuclear weapons on the USSR if the latter engages in political or military aggression—will become increasingly inhibited from doing so because of the knowledge that the USSR could reply in kind. Thus, some of the nations now under US protection fear that the US will no longer be willing to threaten nuclear retaliation in order to deter Soviet pressure or Soviet action in matters of vital concern to them. They also fear that, even if the US did attempt to make such a threat clear to the Soviets, the latter would not necessarily believe it. One special and immediate stimulus for these fears is the belief, recently induced, that the US will not achieve an effective ICBM capability until a year and a half or more after the USSR has done so. This fear is not wholly offset by recognition of the deterrent effect of IRBMs on African and European bases.

10. This is not to say that US nuclear capabilities have ceased to have deterrent effect on the actions of the Sino-Soviet bloc. We think, and we believe that most of the free world also thinks, that Soviet respect for US nuclear power will continue and that the Soviet leaders will not pursue courses of action which in their judgment seriously risk general war. Indeed they appear to believe that much safer methods will yield sufficiently profitable results. Yet even comparatively “peaceful” methods of Communist aggrandizement lead from time to time to sharp international crises, in which the relationships of military power are likely to be all-important. As the USSR through the development of advanced weapons systems enlarges its capability to inflict major nuclear devastation upon the US, the Soviet leaders will judge that the US will risk such devastation only for the gravest reasons and that the scope of the actions which the USSR can take without serious risk of general war is somewhat expanded.

11. In this situation, many leaders of the free world are increasingly concerned with the problem of deterring minor thrusts and local aggressions, and believe that it is necessary to develop a capacity to deal with them by means short of a full counteroffensive. This involves difficult decisions. No one can be certain about how to mix and to balance nuclear and non-nuclear forces in order to gain the widest deterrent effect, or how best to prevent limited engagements and local quarrels from expanding into major war. In any case, implementing any new decisions regarding force structure, weapons, and deployment would be extremely costly, and no one could be reasonably satisfied that these decisions, once made and implemented, would not need comprehensive and costly revision at an early date. In considering how to deal with this new situation, there is much confusion and hesitation throughout the free world—as indeed there must be in the USSR.

B. Soviet Progress and Policy

12. Even before their publicized successes in the scientific field, the Soviet leaders were pursuing a policy marked by greater flexibility and innovation than in the days of Stalin. They have sought, through a less hostile posture, to dispel the image of aggressive Soviet intentions. They no longer display Stalin’s tendency to regard as hostile everyone not subservient to the USSR, and they have seized upon the aspirations and needs of the emergent Asian and African countries to undermine Western influence and to expand their own. They appear to be acting on the assumption that it is more profitable to pursue a course of “peaceful competition” with the West, and particularly to exploit weak points in the free world by diplomatic, economic, and subversive methods, than to attempt to follow the dangerous course of territorial expansion by military means.

13. The Soviet leaders, after several years of this policy, probably look upon their present position as quite favorable. They probably attribute this in part to their improved military capabilities, but primarily to the developing world situation and to their own skill in manipulating existing opportunities and issues—especially in extending economic aid to selected countries, exploiting world desires for disarmament, supporting nationalist causes in Asia and Africa, and expanding diplomatic, cultural, and commercial relations throughout the world.

14. In addition to its obvious bearing on their military capabilities, recognition of continuing Soviet scientific and economic progress has greatly advanced the Soviet political position, both directly and through its psychological impact. In mathematics and the physical sciences, including nuclear research and its applications, the USSR has amply demonstrated its high degree of skill; in other scientific fields it is making rapid progress. The output of scientifically-trained personnel already exceeds that of the US and the gap appears to be widening. Moreover, because of extensive governmental control over the use of manpower and resources, the USSR is able to concentrate its scientific personnel on activities directly concerned with foreign and military policy objectives.

15. Soviet economic progress has been continuing at a rapid pace. Soviet gross national product has recently been growing nearly twice as fast as that of the US. Currently Soviet GNP is about 40 percent that of the US, but consumption in the USSR is only at about 25 percent of US levels. The USSR—by restricting consumption and concentrating on priority objectives—is already even with the US in one or two important areas of production and is rapidly approaching equality in some others. The USSR allocates its resources in such a way that, in terms of resources available for national policy, i.e., for research, defense, industrial investment, and foreign aid, its aggregate effort already approaches that of the US. Soviet defense expenditures in recent years, when converted into dollar values, appear to be of roughly the same magnitude as US defense expenditures, and annual Soviet industrial investment is presently about 85 percent that of the US.

16. Although the Soviet rate of economic growth is slowing down somewhat, we believe that it will continue to be faster than that of the US, and will enable the USSR to achieve along with other economic and military programs some modest gains in consumption at home. These gains will be tangible, though they will not satisfy consumer expectations, particularly in view of the continued housing shortage. While rapid advance on all these fronts at a time of reorganization, experimentation, and labor problems will cause difficulties, the size and shape of the Soviet economy is such that—even though less than half that of the US in terms of GNP—it will be possible for the USSR to utilize it extensively to advance its political and diplomatic objectives.

17. In these circumstances, the USSR has a wide range of policy choices open to it. Because of its increased military strength, it is in an improved position to engage in threats and blackmail, and it can negotiate from a stronger position than in the past. Alternatively—or even at the same time—it can soft-pedal such policies and proceed with the less dramatic business of gaining influence and prestige through diplomacy, cultural exchanges, expansion of foreign trade, grants of economic assistance, propaganda, and subversion. We do not believe that the Soviet leaders have made a decision to follow any particular line to the exclusion of others. Their entire approach has been too pragmatic and flexible to justify clear prediction. We believe that they will keep open the possibilities of negotiation on virtually every issue in the hope that they will gain something by negotiation that would not be attainable so quickly by other means. We believe they will press vigorously their campaign to gain influence in underdeveloped areas by political, economic, and diplomatic means. On the whole, we believe that the Soviet leaders will seek to avoid policies which they believe would clearly lead to serious risk of general war.

18. Nevertheless, the Soviet leaders probably believe that they can pursue bolder policies than in the past without a corresponding increase in risk. As time goes on, they might again utilize war-by-proxy to gain local objectives, particularly in situations where they calculated that the US or its allies would be unlikely to use nuclear weapons to defend their position. They almost certainly foresee that crises will develop from time to time as a consequence of Western resistance to the expansion of Soviet influence. In these situations we expect the Soviet leaders to be firm—and occasionally bellicose.

C. Psychological Impact of Soviet and US Policies

19. As a result of Soviet scientific achievements, some of the world’s ideas about the US were shaken. There is now doubt in many quarters that the US can produce anything it wants better and faster than anyone else. To the discovery that the USSR, too, is highly advanced industrially, the Soviets have sought to add another element: the belief that the USSR is more interested than the US in the independence, development, and security of the newer nations of the world. The USSR has also, and with some success, continued to attempt to establish itself as the symbol and proponent of change, movement, progress and development. The US, on the other hand, tends to be regarded, particularly among some of the newer nations, as standing for slow and cautious amelioration or as defending what they regard as the evils of the past.

20. The US, of course, possesses great moral, material, and political assets. For many people throughout the world, it continues to represent the most important force standing for political freedom and constitutional government. It is widely admired for its achievement in using its rich natural environment in the creation of an advanced industrial society and spreading the benefits among all classes of people. Other nations seek to benefit from US technical experience and economic resources. Many present and potential leaders in underdeveloped countries have been profoundly influenced by American institutions and ideas. Wherever people favor moderate, as opposed to extreme solutions, US objectives are highly regarded—even where US methods and actions are criticized.

21. Nevertheless, during the past several years the USSR has appealed more successfully than the US to the emotional needs of many of the earth’s peoples. It has gained more credit for advocating the cause of disarmament; it has become more closely identified with the interests of the colored peoples; it has more consistently supported Afro-Asian nationalism against colonial rule; finally, well-advertised Soviet and Chinese Communist economic progress since the end of World War II has appeared as a demonstration of the effectiveness of “socialist” methods.

22. In many respects it has been less difficult for the USSR and Communist China to raise themselves in world opinion than it has been for the US to retain or advance its position. A higher standard of behavior for the US has been set in men’s minds nearly everywhere; because we are richer, we are expected to be more forthcoming with aid; because we threw off colonial rule, we are expected to give undiscriminating support to nationalist causes. Moreover, our shortcomings are—because of our democratic processes, freedom of speech and the press—more obvious to the world. We cannot with the same ease as our competitors hide our race problems, adjust our trade policies to our foreign policy objectives, or commit ourselves in foreign policy without regard to competing domestic and foreign interests. Unfortunately, some of our most cherished traditions—our regard for the rule of law, our desire not to offend our old friends, and even our high regard for human life—are often regarded as unrealistic in those countries where the struggle for existence and the social tradition do not encourage such attitudes.

23. While the educated classes almost everywhere have some familiarity with the Western tradition, many of them resent the high level of American consumption and deplore what they see as a US preoccupation with military security. Although not necessarily pro-Communist, and often opposed to Communism, they join many past critics in looking upon US policy as too inflexible and moralistic, and too exclusively concerned with the struggle against Communism. Thus, despite the intellectual and realistic justification of US policy, the simple formulas proposed by the USSR—European zonal demilitarization, a ban on nuclear tests and on the use of nuclear weapons, industrialization, anti-colonialism, peace, and so on—often have a greater appeal even when they are little better than slogans.

24. As a consequence, the Communist states are gaining ground as advocates of peace and social progress, while the US is increasingly accused of indifference to these causes. Whether these images of the Communist states and of the US grow more firm depends largely upon the interplay of US and Soviet policies in the years to come. The Soviet leaders are doing all they can to sharpen these images wherever the US and the USSR confront each other in both the developed and the underdeveloped areas of the world.

III. KEY AREAS OF US-SOVIET COMPETITION

A. Cohesiveness of Power Groupings

25. Although the nations of the world may be divided, for purposes of analysis, into three main groups—the Sino-Soviet bloc, the Western alliance system, and the uncommitted areas—we must recognize that the boundaries between these three are indistinct and changeable. Some allies are closer allies than others, some countries are less uncommitted than others, and there is frequently considerable ebb and flow in the positions and strength of individual states or regional associations. Moreover, both the USSR and the US are engaged in efforts to break existing ties in the other camp and to prevent new accretions to it.

26. The Sino-Soviet bloc. The solidarity of the bloc rests primarily upon the military power of the USSR and upon a strong identity of interests and ideology among the various ruling groups—the latter consideration applies especially to Communist China. Since the death of Stalin, there has been a trend toward redefinition of relationships. Moscow’s monopoly of Communist thought and power has been diminished by Yugoslavia’s maintenance of an independent position, by the emergence of a semi-independent Poland, and by the growing power and influence of Communist China.

27. These changing relations have created problems for Moscow. They have released forces of instability in Eastern Europe and in satellite relations with the USSR. They have added to Peiping’s stature and given the Chinese Communists a greater latitude for independent action, especially in the Far East. But they have also created the appearance of a more flexible and less monolithic group of states with which other states might think they could associate themselves without wholly losing national independence.

28. Recent Soviet successes in pulling together the Communist world have not resolved the problem, but they have stabilized a situation which for a time threatened to become disastrous. A full return to Stalinist police-state methods and enforced conformity would not only be difficult, but would be inconsistent with the more flexible approach which dominates present Soviet policy. The Soviet leaders apparently believe that they can gradually and judiciously accede to the national sensitivities of their bloc partners and still retain sufficient authority and influence to preserve Communist solidarity.

29. We see little chance that during the next several years, short of major changes within the Soviet regime itself, any of the Communist states will alienate themselves from the USSR to an extent which would damage the Soviet world position. Indeed, if the USSR grants some greater autonomy for Communist states, this might even add to Soviet stature by contributing to the Soviet pose of flexibility and respect for national aspirations. Nevertheless, we cannot overlook the possibility that some popular uprisings, perhaps on a local scale, might occur.

30. The Western alliance system. This system, consisting essentially of a group of multilateral and bilateral arrangements built around the US and UK, was developed largely upon three basic propositions: (a) that there was a danger of Soviet bloc external and internal aggression, (b) that alliance with the US was an effective way to deter, or if necessary to counter, such aggression, and (c) that because of Soviet bloc intransigence and determination, there was no acceptable alternative to creation of a counter-bloc. We believe that the fundamental validity of the three propositions is still generally accepted, but that the force and impact of each of them has diminished since the alliances were created. Thus, while the possibility of Soviet bloc military aggression continues to be recognized, such aggression has for some time appeared to most of the NATO partners to be much less imminent than when NATO was formed. Accordingly, NATO has lost much of the impetus which was initially supplied by an urgent sense of immediate danger, though it is still valued by its members as the chief counterbalance to bloc military power.

31. The second proposition has been weakened more recently by the developments mentioned in paragraph 9 above, relating to new weapons and the growth of the Soviet deterrent. Among our allies there is a declining confidence in the deterrent effect of US military power. This doubt has produced two contradictory results; one is a desire to knit the alliances more closely together and the other a desire to achieve greater independence from US policy. In support of the view that alliances with the US should be tightened are a variety of important considerations: the inescapable fact that the US and its allies have a common interest in preventing Soviet aggression, the mutual importance of each other’s territories in maintaining and further developing deterrent and defensive military power, doubt that any one nation or even a regional grouping independently could create an adequate deterrent or defensive capability, and the gains to be achieved through sharing costs and responsibilities.

32. On the other hand, some influential political groups in allied countries see dangers in developing a closer association with the US. Some of them in particular are concerned over their inability to influence US policy, and they fear that their national interests will increasingly come under US control, that they will be unable to take independent action to support their own interests, and that they will be unable to disassociate themselves from the US when the US takes action in its own interests.

33. Finally, in its recent diplomatic offensive the USSR has encouraged an element of doubt respecting the third proposition which originally underlay the alliances: that there was no acceptable alternative to the creation of a counter-bloc. Through a variety of formal and informal proposals—such as the Soviet disarmament schemes, the ideas of a European security pact and of nuclear-free zones—and through other suggestions contained in the various Bulganin letters, the USSR has appeared to be offering an alternative worth consideration. The Soviet leaders apparently hope that some of these suggestions will produce political rifts within allied countries and reduce allied ties with the US, especially in Europe.

34. Some of these Soviet suggestions have struck a responsive chord, even in moderate Western European opinion. At the moment, public interest in talks with the USSR is still at a high point. This European responsiveness is partly the result of anticipated changes in the military situation and of lessened confidence in US power and US leadership, but primarily the result of a growing conviction that Western Europe’s only hope of survival is to explore fully and patiently every possible opportunity for living at peace with the USSR. At the moment the strongest forces favoring negotiations with the USSR are political parties, predominantly socialist, who do not now exercise effective political power. But these parties, even when out of power, exercise a strong influence upon their governments, and some of them may gain power, or come to share more effectively in it, during the next three to five years. We believe this pressure will continue and that it will eventuate in high-level talks with the USSR. However, we also believe that most European leaders do not expect significant results from such talks, since they see no indication that either side is prepared to make substantial concessions.

35. On balance, we believe that the potentially disruptive forces within the Western alliance system have been stimulated more than the cohesive forces by the recent changes in the world situation. In Europe, these changes have led to much soul-searching about the military and political adequacy of NATO, and about the role each country should play in it. Despite widespread interest in various proposals for national or collective disengagement, the alliance remains essentially intact; but its character is undergoing a gradual change in response to the changing world power situation and the increased military vulnerability of the US. The UK and the major continental powers have asserted a more independent position within the alliance, and we believe this tendency will continue.

36. Over the next decade, France, or more likely several continental European countries jointly, will almost certainly try like the UK to develop a capability in nuclear weapons and ballistic missiles sufficient to constitute in their view some independent deterrent to Soviet aggression. In some respects, the achievement of such a capability would strengthen the alliance. On the other hand, it would enable the European allies to pursue somewhat more vigorous policies in defense of their individual interests, with effects which may or may not further the interests of the alliance. Moreover, they could then afford to be more flexible in dealing with the Soviet Union; and they would be better able, if so inclined, to remain neutral in the event of a local conflict in which their vital interests were not engaged (for example, in the Far East). A gradual transformation of the Atlantic alliance could thus come about, although we do not believe that the major European powers will wish to stand alone against the USSR without a US security guarantee.

37. Trends toward neutralism will probably occur among the allies in the Middle East and Asia, with certain notable exceptions, such as Turkey and Australia. Some of the members of the Baghdad Pact are already beginning to question the advantage of maintaining their membership. In various countries, domestic groups who favor a more neutral position are becoming increasingly vocal. Japan’s relationship with the US also seems likely to undergo considerable change. The Japanese are restive over restrictions upon trade, both with Communist China and the US, and they will become reluctant to withhold recognition of Communist China. While the Japanese value US protection, they are also clearly seeking a more independent position, and their deep aversion to nuclear weapons suggests that they would make great efforts to extricate themselves from any threatened conflict in which such weapons might be used.

38. In general, we believe that the US will encounter increasing trouble in retaining overseas bases on terms assuring their availability and effectiveness in case of need. In particular, the US may well encounter new problems over the next few years in its attempts to increase allied military strength through the establishment of missile bases or the further deployment of nuclear weapons overseas. Although our Western European allies have agreed in principle to the installation of IRBMs, some of them will refuse to accept them in their own countries, and others—believing that the US considers their establishment crucial to its own defense for a period of time—may attempt to exact a stiff price for accepting them. These difficulties will be especially serious in those countries where it is believed that establishment of such bases would substantially increase the likelihood of Soviet attack in case of war, would make disengagement impossible if international tension increased, or would hinder negotiation with the USSR to settle outstanding issues. The IRBM issue may become a symbol which will divide those people who seek early negotiations from those whose principal concern is to maximize the military strength of the alliance before negotiating. The issue will certainly offer opportunities for exploitation by the USSR in both Europe and the Asian-African world and for maneuvers designed to delay the installation of IRBMs.

39. Beyond these considerations the dual control provisions of the IRBM agreements will introduce new elements into the operation of the NATO alliance. On the one hand, these provisions may stimulate closer coordination of political decisions affecting East-West relations—a process which may be used to influence the US toward adopting positions agreeable to its European partners. On the other hand, joint decision may lead to hesitation in major crises, with consequent slowing and weakening of Western response.

B. Europe

40. Even though the Atlantic alliance has declined in vitality, the Soviets still must find Europe the most frustrating of the areas of competition between the US and USSR. Despite ten years of Communist control, the vast majority of the Eastern European peoples are still anti-Soviet. In Western Europe, the Communists have retained significant support in the labor movements of certain key countries, but they have been conspicuously unable to gain political strength. Nevertheless, the Soviet leaders have remained faithful to their belief in the inevitability of the Communist victory; while they have turned some of their attention to other areas of the world where opportunities have been greater, they have not given up the effort to find some way to bring about a Communist victory in Europe. Thus, the XXth Party Congress acknowledged the possibility of different roads to socialism, an attempt to provide doctrinal justification both for a more liberal evolution in Eastern Europe and for acceptance of parliamentary methods in Western Europe.

41. In spite of these new doctrinal approaches, there does not seem to be any likelihood that Soviet Communism per se will gain any greater acceptance in either Eastern or Western Europe than it has in the past. The greatest political concern of most Eastern Europeans is to escape from the Soviet yoke; although some of the social and economic changes which have occurred have been welcomed, few Eastern Europeans would willingly have paid the price for them which has been extorted by Moscow and the local Communist leadership. Despite the pressures which exist, it does not appear to us that substantial changes in Eastern Europe will occur, although minor modifications, for example through a more liberal evolution, are possible.

42. Possibilities of Negotiation. In Western Europe there is great anxiety to find some way to escape from international tensions, the build-up of armaments, and the dangers involved in the confrontation of US and Soviet forces in the heart of Europe. Although repeatedly frustrated by Soviet intransigence, the desire to explore the possibilities of a settlement is readily revived at every suggestion of flexibility in the Soviet position.

43. There are many uncertainties about Soviet intentions, and US policy will affect the development of the situation. The greatest problem will be that of developing an arrangement for Germany which will be acceptable to both sides. Since the USSR almost certainly considers that it occupies a position of considerable strength, we consider it most unlikely that the Soviet leaders would give up very much without very great concessions from the West. Yet they must realize that, unless they are prepared to make substantial concessions in East Germany, no settlement will go very far toward the reduction of international tensions. These concessions they are unlikely to make because of fear that the release of Soviet control over East Germany would weaken Soviet authority in other parts of Eastern Europe, and because of a longer-run fear of a revived nationalistic Germany backed by the US and determined to establish hegemony in Europe.

44. West German governments will continue to regard the achievement of reunification as a major political goal and they will seek support toward this end from their allies. In general, bloc proposals on the present scale are recognized as attempts to consecrate the political status quo and to divide and weaken the alliance; Soviet leaders have made it perfectly plain that a loosening of the Soviet grip on East Germany and the other satellite countries will not be permitted. In the unlikely event, however, that the USSR should make a serious proposal for a complete mutual withdrawal from Germany—especially if coupled with an unequivocal assurance against Soviet re-entry, and with a specific US guarantee—European reaction is likely to be more favorable. As modern weapons development progresses, the European governments, and the West German government in particular, may come to believe that withdrawal of US forces from Germany and German withdrawal from NATO would no longer represent a critical loss to NATO’s overall strength. The time may come when they would be willing to pay this price for the withdrawal of Soviet forces from a broad central European area, even without a simultaneous agreement on German reunification, in the hope that reunification and a general detente would follow in due course.

45. General Prospects. In the internal politics of Western European countries, there seems generally to be taking place a gradual shift of the political center of gravity toward the left, but it is not so great a shift as to be likely to produce strongly leftist governments—certainly not popular front governments. During the next few years center parties, where they are predominant, may be obliged to rely more extensively upon socialist support; socialist parties, where they are in power, will need to pursue moderate policies in order to retain power. While these shifts seem to presage somewhat less responsiveness to US influence and somewhat greater interest in social programs at the expense of military programs, they are not likely to produce major changes in foreign outlook.

46. The coming into effect of recent agreements for European economic integration appears likely to enhance political and military cooperation among the continental countries. Already France, West Germany, and Italy are more closely concerting their foreign and military policies, and this trend is likely to continue. However, the schemes for economic cooperation and the European atomic community are not likely to mature fully for many years. A number of important and complex issues have yet to be resolved, including the extent to which concessions to special interest groups—particularly in France—may exert a restrictive influence on the cooperative effort. In addition, the problem of assuring preferential British access to the continental market in a way which will not damage Commonwealth ties or upset the carefully negotiated arrangements among the continental countries is likely further to complicate relations between these countries and the UK. Nonetheless, these developments reflect a strong European desire to make integration a reality, and the US will probably be dealing with a more unified continent than in the past.

C. The Underdeveloped and Uncommitted Countries

47. Most of the peoples of the underdeveloped countries have one primary political and social aim; they want to modernize their countries. They are not greatly concerned with what we regard as the evils of Communism. What we regard as the advantages of democracy and capitalism are associated largely in their minds with the evils of colonialism. The methods of Communism, judging by the great success they have had in the USSR and appear to be having in Communist China, often appear more relevant to their problems than the methods of democracy and capitalism.

48. Most of these countries are undergoing social and economic revolutions in which the methods and the leaders of the past are under attack or being cast aside. Many of them are unstable politically and socially; some are coming increasingly under authoritarian control. Many are also interested in increased military strength and prestige, and thus frequently threaten regional stability. All have grave economic problems. Population growth frequently exceeds the growth of the economies; Western civilization, with its improved standards of health, has sometimes brought greater poverty. There is a widespread lack of capital and a shortage of administrative and technical skills. In some countries the indigenous Communist movement is weak, in others it is strong, but in nearly all there are serious internal divisions based upon class, religious, ethnic and other factors.

49. The world has witnessed during the past fifteen years the rapid emergence of many new and often very populous states. The process has not much farther to go. There are still a number of important areas in Africa which will probably gain statehood during the next five to ten years, but the big increase in the number of sovereign states has already occurred. The uncommitted and underdeveloped world is a problem, not so much because there are still people under colonial control as because so many people have so recently emerged from such control.

50. Most of the leaders in the new countries of Asia and Africa look upon the US and USSR as engaged in a world power struggle which is of no direct concern to them, except as it might engulf them or as they might use it to advance their economic development. These people tend to believe that the safest and most advantageous course for them to pursue is one of neutralism. The USSR is generally playing to this belief by making no ostensible efforts to recruit them into its camp. Offers of foreign aid have been made without apparent strings, and indigenous Communist movements—where they are significant—have appeared more nationalist than pro-Soviet. The US, on the other hand, has appeared to them as opposed to neutralism and as attempting to force them into the Western alliance system. This many of them interpret as an effort to prolong colonial sponsorship and authority and as an effort to block their further development as independent states. Many of them are becoming increasingly susceptible to Sino-Soviet influence. It appears to us that the principal choice which will increasingly confront underdeveloped countries in Asia and Africa will not be between East and West but between neutralism and pro-Communism.

51. The Middle East. Most of what we have described in the preceding paragraphs applies with particular force in the Middle East. The politically-conscious majority throughout the area, and especially the leaders of the revolutionary governments of Egypt and Syria, are deeply suspicious of the West. Despite US condemnation of the attack on Egypt, the US is predominantly identified in the popular mind with Israeli “imperialism,” support of the colonial powers, and exploitation of oil resources. The US is regarded as not genuinely interested in Arab objectives, but primarily desirous of mobilizing the area against the USSR. The Soviet leaders, on the other hand, have skillfully represented themselves as ideologically and emotionally on the side of the Arab nationalists. They have created the impression of wanting to help the Arabs because they support their general objectives. The radical Arab nationalist leaders believe they can accept a considerable amount of Soviet assistance without danger to themselves and that they can replace their traditional social and economic institutions with a state socialism of their own contrivance.

52. The Arab nationalist movement, with its devotion to Arab unity, to economic change, and to its various conceptions of neutralism, appears to be here to stay. It aims to extend its influence widely through those parts of the Middle East and Africa where the inhabitants are Moslems. We see little chance that the pro-Western conservative Arab governments will be able to direct the movement in channels satisfactory to them; indeed some of them will have difficulty in preventing their own overthrow.

53. Asia. The US has greater assets in Asia than in the Middle East. Respect for Communist China’s power and economic progress is tempered by fear of its growing military capabilities and by dislike for certain Communist methods. In some countries there is a recognition that US assistance was essential to the establishment and maintenance of independence. In some countries, especially those which have experienced Communist pressure or aggression, there are strong and vigorous anti-Communist sectors in the society. Nevertheless, the Communist countries, and particularly Communist China, have achieved some successes in expanding their influence. Having failed notably to expand their influence further by insurrection and invasion, the Communists have shifted to the less obvious methods of diplomacy, propaganda, subversion, cultural exchanges, and economic inducement. This growth in influence seems to us likely to continue, although we expect it to be gradual.

54. The greatest difficulties in Asia are not directly associated either with Soviet or US policies, but with the multitude and magnitude of the problems which confront many countries in attempting to establish political stability, carry on economic development, and build viable states on the rubble of insurrection, subversion, ethnic differences, and political ineptitude. In addition, the unresolved problems of Korea, Vietnam, and China are a continual irritant to relations among states within the area and a constant source of apprehension over the future.

55. Africa. Except perhaps in North Africa, nationalist and revolutionary movements are not as advanced as in the Middle and Far East. Nevertheless, in Tropical Africa, knowledge of the outside world, detribalization, better facilities for transportation, the growth of market economies, urbanization and industrialization, are proceeding apace. As in Asia, questions of increasing national prestige, obtaining freedom of action and implementing sweeping internal reforms are urgent issues in the newly independent African states. In the colonial areas the drive for self-government is being spurred by the example of the independent states, the moral encouragement of the United Nations and world opinion, and support from Egypt and the USSR. Relations between African territories and their former or present European metropoles will be transformed in varying ways and degrees over the next decade. In many areas under British and French control there is likely to be a rapid emergence of new native states during the next few years. If the European powers implement liberal colonial policies, they probably still have sufficient time to exert a moderating influence on nationalist movements. However, the determination of European settlers to maintain control in some areas will probably provoke extremist African response.

56. As they achieve independence, Tropical African dependencies will be confronted with enormously complex problems. The creation of political stability is likely to be critically hampered by frustrated popular expectations and by internal disputes between rival factions reflecting ethnic, tribal, religious, and linguistic differences; the experiences of such independent countries as Liberia and Ghana illustrate the difficulty of overcoming factionalism by other than authoritarian means. The problems will be particularly difficult in those parts of Africa where there are mixed racial societies in which a smaller white minority dominates a much larger native population. Virtually all Tropical African territories will continue to be highly dependent on foreign economic assistance. Whether free of colonial control or not, many of them will turn increasingly to the US—among other possible sources—for financial aid in the likely event they are unable to obtain sufficient sums from the colonial powers.

57. The USSR will make an increasing effort to establish diplomatic and economic relations with the new African governments. Since the latter, like the USSR, maintain a high level of governmental participation in the economy, government-to-government trading is facilitated. Many African territories are dependent upon the sale of one or two primary commodities for an important share of their national income and foreign exchange, and thus are highly vulnerable to world market price fluctuations. By absorbing commodity surpluses and extending credits for development in selected countries, the USSR could gain substantial benefits both in prestige and in the opportunities thereby offered for gaining greater influence on the continent.

58. In North Africa, despite several years of a highly revolutionary atmosphere, Communism and Pan-Arabism have made comparatively little headway. Throughout the three areas of Morocco, Algeria, and Tunisia the current prevailing attitude, while strongly anti-French, is not anti-West. This is due in part to the cultural affinity for the West of the Moroccan and Tunisian leadership and in part to the US policy of extending support to Morocco and Tunisia. Even in Algeria, Communists have gained little leverage within the revolutionary organizations. In all three territories, however, there are serious potential dangers. Unless the Algerian rebels are soon able to gain some kind of acceptable conditions from France, a gradual continued radicalization of the revolutionary movement and a rise of Communist influence seems unavoidable. Moreover, in both Tunisia and Morocco, there are radical forces in opposition to the present moderate leadership. If the situation in Algeria should further deteriorate or if the Tunisian and Moroccan governments cannot make noticeable progress toward solution of their serious economic problems, they are in danger of replacement by forces less sympathetic to Western interests.

59. Latin America. Although Latin American society has generally been more developed and better organized than that of other underdeveloped areas, it also is passing through a social and economic revolution marked largely by industrialization and urbanization. These changes have produced serious economic problems—inflation, exhaustion of foreign exchange reserves, and labor and agrarian unrest. Traditional ruling groups, particularly the military and the landed aristocracy, are coming under increasing attack by new social forces. These forces are dominated variously by an urban and educated middle-class, by military elements with a more modern and liberal orientation than in the past, and by labor. The common denominator in most of these groups is the desire to break with the forms and the stagnation of the past. Often the groups are in conflict with each other as well as with the traditional elites. As a consequence of all these factors, many of the governments and the societies are unstable.

60. Basic antipathy for the US is relatively limited. Anti-US attitudes tend to vary with time and circumstances. These attitudes are consistently maintained by the Communists, but in a number of countries they are also the stock-in-trade of some politicians who exploit the growing nationalism in the area. The Communists constitute a danger to the US largely because of their discipline and their alertness to opportunity. Over the longer run, the revolutionary pressures in Latin American society are irrepressible, and the society is destined to be gradually transformed. Insofar as the US is identified with the forces of change, as for example in Bolivia, it appears likely that US influence will be enhanced. In some cases, however, some unpopular ruling classes in Latin America—often supported by US citizens—have been able to retain power and have become identified in the popular mind with “Yankee imperialism” and “dollar diplomacy.”

IV. ECONOMIC PROSPECTS

61. A current source of concern is the emergence of weaknesses in the free world economy. By and large, the developed economies of the West have enjoyed unprecedented prosperity for the past several years. It now appears, however, that these economies are growing more slowly and that world trade is expanding at reduced rates. In some of the developed countries, a rise in consumption without corresponding rises in production has resulted in inflation and, in some instances, balance-of-payments crises. More pronounced inflationary pressures have occurred in most of the underdeveloped countries as a consequence of ambitious development programs. Late in 1957 the US entered a period of economic recession, and fears have been expressed abroad that the recession will develop greater intensity. Since the US accounts for about 40 percent of free world production, the economic prospects of other countries are greatly affected by the manner in which the US deals with its own problems.

62. If the US recession should terminate by mid-1958, other economies may not find it too difficult to make a satisfactory adjustment. On the other hand if the US recession is prolonged, some other countries will face increasingly serious economic and political problems, much of the blame for which they will place on the US. In any event, there is danger that some governments will seek to correct internal difficulties by raising trade barriers, which would reinforce tendencies toward world recession. Thus far, however, greater concern has been expressed abroad regarding the course of US trade policy than about the now anticipated recession in US economic activity.

63. The probable decline in the international economy during 1958 would increase the vulnerability of many underdeveloped countries to Soviet bloc economic penetration. In times of actual or expected declines in prices and foreign exchange earnings for their major export commodities, the receptivity of these countries to Sino-Soviet propaganda against the West increases, as does their willingness to expand trade relations with the bloc. Communist propaganda certainly can be expected to capitalize on the lower levels of economic activity which are in prospect.

64. Over the longer run, prospects for economic growth are favorable for many areas of the non-Communist world, but rates of growth in most cases are likely to remain well below that projected for the USSR. In Western Europe, it appears likely that, barring a severe US recession, gross national product and levels of consumption will continue to increase at only slightly lower rates than during the last five years. Although long-term inflationary pressures are likely to persist, the application of various schemes for trade liberalization and economic integration will tend to moderate these pressures, since they will oblige the European countries to adjust their economic and fiscal policies to those of their neighbors. To the extent that these inflationary pressures are moderated, the European competitive position in other areas will be improved. The outlook is equally favorable for those underdeveloped countries which are rich in resources relative to their sparse populations (e.g., Australia, South Africa, and much of Latin America).

65. For the generally over-populated and poverty-stricken countries of Africa and Asia, the outlook is less favorable. Most of them lack the degree of political and economic organization necessary for achieving desired rates of economic growth. They are nevertheless committed to ambitious economic development programs which, in the absence of a strong indigenous business community, are largely state-conducted and state-financed. Government revenues and private savings are in general grossly insufficient to provide for these programs; in many countries inflation is rampant. Economic and political uncertainties, and in some places hostility to foreign investment, are discouraging private foreign lenders and investors and to some extent foreign governments and international institutions as well. In these circumstances, many underdeveloped countries are becoming increasingly disposed to accept Soviet economic offers. Over the longer run, some of them may see no way to realize their ambitions for economic development, except by adopting the methods which appear to them to have been so conspicuously successful in the USSR and in Communist China.

V. OVER-ALL PROSPECTS

66. Likelihood of General War. Despite the pride which the Soviet leaders take in their achievements and the confidence with which they seem to view the future, they still have and are likely to retain a healthy respect for US power. Even when the USSR acquires a substantial capability in ICBMs it will still be faced with great uncertainties about its capacity to wage successful warfare against the US. Moreover, like the leaders in the West, the Soviet leaders have a keen appreciation of the extraordinary destructiveness of nuclear weapons and of the dangers which they pose to victor and vanquished alike. We believe it unlikely, therefore, that the Soviet leaders, for at least the next five years, will deliberately initiate general war or embark upon a course which they believe involves a serious risk of general war.

67. During the foreseeable future there will be a constant jockeying for position between the US and the USSR. This will create for the world’s leaders a most difficult problem in calculating the risks involved in their actions—or their inactions—in particular situations. Failure to calculate accurately could lead to various conceivable forms of local war or even to a general conflict. We do not see any easy way to determine whether local wars will break out and whether, if they do, they can be kept limited, or to determine what techniques, weapons, diplomatic warnings, and maneuvers are most likely to contribute to a limitation of such conflicts. We believe that all the major powers will attempt to keep wars limited if they do occur, but the various pressures on chiefs of government in particular situations, the rapidity with which events often occur, and the great importance of timing and of time, often confuse and distort the intentions of the parties involved. The circumstances of today with respect to the importance of surprise and with respect to the widespread destructiveness of war are unprecedented in human history. We are not persuaded to believe that wars would remain limited simply because it would be sensible not to allow them to expand. On the contrary, we can conceive of a variety of ways in which they could expand even though it was the initial intention of the parties to limit them. Consequently, we believe that the chances of keeping wars limited, whenever major areas or causes might appear to either party to be affected, are at best not too promising.

68. The United Nations, judging by its performance during the Suez crisis, might prove in some instances a useful instrument in preventing or limiting conflicts. For example, if a country is prepared to compromise rather than to fight or to extend a conflict, the UN can provide a means to do so with less loss of prestige. In most cases, however, the UN probably will not be effective in halting a conflict unless the US and USSR happen to be agreed on such an outcome.

69. Evolution in the Communist World. One of the most important factors shaping the world will be the manner in which the Soviet bloc evolves. Despite some current tightening of controls, we foresee a continuation of the trend toward greater flexibility in bloc relations and toward greater recognition of individual differences among the bloc members. In the case of Communist China, this trend will be fortified by that country’s growing power, self-sufficiency, and national pride. In Eastern Europe, it will probably be favored by the survival of a semi-independent Poland and an independent Yugoslavia. But we think that prolonged development in this direction would be necessary before serious differences arose within the bloc on questions of relations with the Western powers; here the cement of common interests and a common ideology among the various regimes is exceedingly strong.

70. Because the USSR will remain the keystone of the bloc structure, the most important changes will be those which will occur within its own borders. More widespread and better education, the growth of a professional and managerial class, greater personal freedom, expectations of higher living standards, and more contact with other countries are indications of significant changes within Soviet society. These changes might in the long run alter profoundly the content and structure of Soviet political life, possibly through a dissipation of the Communist party’s unchecked monopoly of power, more likely through a change in the political climate within the ruling party. However, the party has lately reasserted its monopoly status against incipient challenges from several quarters and its near-term position appears to be completely secure.

71. The liberalizing tendency within the USSR and in intra-bloc relations could not be reversed without considerable difficulty, but the Soviet leadership has been generally successful in controlling its pace and course. We do not believe that such tendencies will significantly weaken the bloc during the next five years.

72. The Free World Problem. Assuming that the evolution in the Communist world is so gradual that its impact upon Soviet policy will not be significant for some years to come, the free world faces a prolonged period of cold war with intermittent upsurges and declines in intensity. Coincidental with these shifts in intensity, there seems likely to be a periodic rise and fall in the extent to which free world nations—both the committed and the uncommitted—will alternately fear for their futures or hopefully try to arrive at settlements for co-existence with the Soviet bloc. The combination of increasing Soviet military power with flexible Soviet diplomatic tactics will make it difficult for individual countries to determine the policies most consistent with their own long-term interests. This uncertainty will probably induce additional nations to seek refuge in neutrality.

73. In spite of the confusions and uncertainties which have been described in earlier sections and the strong desire to relax international tensions by negotiating with the USSR, there seems to be an inclination among the more powerful and thoughtful Western nations to strengthen the deterrent to general war and to improve the common defensive posture. But these objectives, if achieved, will only establish the background against which will continue to be waged an intensive and world-wide competition between the Soviet bloc and the US. In this competition, the Soviet bloc will wage vigorous economic and political offensives; it will take advantage of world trouble spots; it will exploit the nationalistic and revolutionary emotions of peoples now rapidly emerging from poverty, ignorance, and foreign control; it will vigorously pursue such profitable themes as disarmament and peace. It seems to us that the USSR and Communist China will have some measure of success in these efforts, and that this will generate increasing nervousness in the West over real or imagined losses of position.

74. While some further losses of position for the West seem likely to occur, we do not consider that there is any irreversible trend in this direction. Even though the Sino-Soviet bloc will almost certainly become an increasingly formidable opponent, its leaders must cope with major problems and difficulties in exploiting their strength. We believe that the general course of events in the East-West contest will depend more than anything else on the manner in which the West mobilizes and employs its political, economic, and military resources.

1. Source: “Estimate of the World Situation.” Secret. 17 pp. DOS, INR–NIE Files.
2. See NIE 100–3–57, Estimate of the World Situation,” 29 January 1957. [Footnote is in the original.]