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 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110010-2

settling outstanding financial claims, one of the major roadblocks to improved bilateral relations.

The two countries have been more successful in expanding economic and cultural relations. Czechoslovak trade with the United States has been increasing, but educational and cultural exchanges have declined from their high point in 1968-69. Scientific cooperation, which the Czechoslovaks particularly value, has also grown. In 1969 the two countries concluded a civil air agreement.

Although Prague has become more active in the field of foreign relations in 1972-73, its activities clearly remain circumscribed. Indeed, Czechoslovakia is the loudest proponent of a "coordinated socialist foreign policy," a main ingredient in Moscow's efforts to maintain discipline in Eastern Europe. The Husak regime, however, will do what it can to utilize the openings created by the Soviet policy of detente to seek further recognition of its legitimacy.

On the other hand, the potentially corrosive impact of detente will perhaps be felt more in Prague than elsewhere in Eastern Europe. Husak cannot escape the paradox that Moscow's rationale for the 1968 invasion was to counter the danger stemming from Dubcek's inability to resist the alleged subversive influence of Western ideas. Husak inherited this rationale, but it now looks as if he may have to contend with much the same Western influence as a matter of course, treading a tightrope between the impact the West will have on popular expectations and the demands of Soviet-imposed discipline. His success in this is by no means a foregone conclusion.

c. Relations with developing countries

Czechoslovakia has traditionally played an important role in aid to lesser developed areas. Of the Communist countries, Czechoslovakia is second only to the U.S.S.R. in the total amount of aid devoted to the developing countries, and in aid per capita it has fairly consistently been first. Arms aid has been an important part of this program, although in the past Czechoslovak military assistance usually reflected Soviet motives. Since the mid-1950's, substantial Czechoslovak military assistance has gone to Egypt and other Arab states in the Middle East. Africa has been the other principal area of Czechoslovak arms sales. In 1965 Prague tightened its credit demands and began requiring short-term, hard currency payments from recipient countries.

Czechoslovakia has invariably been among the first of the Soviet bloc countries to extend diplomatic recognition to newly independent, formerly colonial nations, and has concluded economic and cultural agreements with these and other developing countries, particularly in Africa and Latin America. The agreements usually provide for Czechoslovak technical assistance in the construction of industrial establishments and for the exchange of machinery, consumer goods, and arms for foodstuffs and raw materials. Cultural agreements concentrate on the exchanges of such official cultural delegations as would best expose foreign leaders to evidence of Czechoslovakia's domestic achievements and concomitantly support bloc propaganda objectives. In 1961 the regime established in Prague a university for foreign students. Czechoslovakia is also a leading Eastern European country in providing scholarships and training for students from less developed nations.

This interest in strengthening ties with the developing nations has not proven overly successful from several points of view. Many of the nations aided by Czechoslovakia are dissatisfied with the slowness of Czechoslovak aid and criticize the quality of the manufactured goods. They often resent the attempts by Czechoslovakia to exploit this aid for political and propaganda purposes. At home, the Czechoslovak populace resents this politically motivated largesse, claiming that it serves Soviet rather than Czechoslovak interests. Domestic shortages are blamed to some extent on the commitment to the developing nations. Sporadic incidents of racial prejudice against non-Caucasian foreign students attending Czech and Slovak schools are a continuing source of official embarrassment.

E. Threats to government stability

The Soviet armed intervention in 1968 to put down a highly popular reformist regime introduced several fundamental destabilizing factors into the Czechoslovak policy that had not existed even during the harshest period of the Stalin era in the early 1950's. The Czechoslovaks, who previously had been one of the few nations in Eastern Europe with no history of direct Russian or Soviet oppression, now have experienced Soviet power first hand. As the only people in the area who had no foreign military forces stationed on their territory after 1945, the Czechoslovaks consider the presence of Soviet units in their country since 1968 as a more direct symbol of subjugation than do the people of other East European states where the Soviet presence continued long after World War II, in some cases persisting to this day. Further, the Husak regime came to power and remains in power only with the most undisguised reliance on Soviet political support and potential

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110010-2