NIE 63-7-54/PROBABLE DEVELOPMENTS IN SOUTH VIETNAM, LAOS, AND CAMBODIA THROUGH

Created: 11/23/1954

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NATIONAL INTELLIGENCE ESTIMATE NUMBER

PROBABLE DEVELOPMENTS IN SOUTH VIETNAM, LAOS, AND CAMBODIA THROUGH6

Submitted by.theCENTRAL INTELLIGENCE

ollowing organizations participated in tlie 'preparation of this estimate; The Central Intelligence Agency and the intelligence organizations of the Departments of State, the Army, the Na'cv.pie Air Force, and The Joint Staffs' Concurred In by the INTELLIGENCE ADVISORY COMMITTEE

ofnd the The Atomic Knergy Commission Representative to the 1AC and theto the Director, Federal Bureau of Investigation,the subject being outside of their jurisdiction.

SjjGRtT ASSISTANT DISCCTOfi, ONE

probable developments in south vietnam, laos, and cambodia through6

the problem

To analyze the present strength and weaknesses of South Vietnam, Laos, and Cambodia, and to assess the outcome in these countries of internal stresses andpressures and inducements.

CONCLUSIONS

situation in South Vietnam has steadily deteriorated since the conclusion of the armistice. On the basis of present trends, it is highly unlikely that South Vietnam will develop the strengthto counter the growing Communist subversion within its borders; it almost certainly would not be able to defeat the Communists in country-wide elections. Even before the elections scheduledtrong pressures may well arise in South Vietnamoalition government with the Viet Minh.

onsequence of the presentfor political power which eruptedas soon as Premier Diem came to office, government functions have been paralyzed and the government's authority throughout South Vietnam has become progressively weaker. Deterioration in the Vietnamese National Army has been such that it lacks the capabilityto perform internal security functions and the French are reluctant to commit their own forces in internal securityfor fear of further antagonizing the population. The capability of theFranco-Vietnamese forces fora full scale Viet Minh invasion is low and will decrease as French forces are withdrawn over the next year.

In contrast, the Viet Minh isconsolidating its control over North Vietnam, is greatly increasing its armed strength by various measures including the evasion of the armistice terms, and is continuing to develop networks of agents and political cadres in South Vietnam, Laos, and Cambodia.

We believe that the Viet Minh now feels that it can achieve control over all Vietnam without initiating large-scale warfare. Accordingly, we believe that the Communists will exert every effort topower in the South through means short of war. Should South Vietnam appear to be gaining in strength or

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should elections be postponed overobjections the Communistswould step up their subversive and guerrilla activities in the South and if necessary would infiltrate additional armed forces in an effort to gain control over the area. However, we believe that they would be unlikely openly to invade South Vietnam, at least prior tohe date set for national elections.

French policy willajor factor determining developments In Southduring the period of this estimate. To date French actions have not clearly indicated whether they believe that their local and international interests will be better servedtrong anti-Communist government in South Vietnam withpostponed if necessary, orolicy of accommodation with the Viet Minh which they might hope woulda French position in Indochina. In spite of Mendes-France's recentlydesirestrong Southwe believe that the French are more likely to adopt the latter course unless the UK agreestrong anti-Communist policy for South Vietnam and the USits intention to shoulder the major military burden inommitment to employ US forces if required.

We believe that the Diem government will continue to lack wholehearted French support and that accordingly it will be unable to establish its authoritySouth Vietnam and its tenure of office will remain precarious. No effectiveto Diem is in sight. Those who could be expected to enjoy full French support have little popular following, yet without suchouth Vietnam government would lack the power toauthority. Progress in training,and revitalizing the National Army will be slow so long as the political situation remains unstable.

The Communists will probablyto exercise considerable control in the northern provinces of Luoa and willapability for subversive activity against the Lao Government. However, we believe the Laotians can limitpolitical advances and that an anti-Communist government will remain in power providing it continues to receive outside assistance and the Viet Minh do not invade or instigate widespreadwarfare. We believe that theof Communist aggressive action against Laos will be moderated by the Communist desire to continue their "peaceful coexistence" line in Asia,directed toward Indianandesser degree by theof US counteraction.

Communist capabilities againstare somewhat less than against Laos, and the Cambodians will probably be more resolute in resisting subversion. Given outside assistance and theof Western support, Cambodia is likely to maintain internal security and its an ti-Communist orientation during the period of this estimate.

The fall of South Vietnam to the Viet Minh would greatly increase Communist capabilities against Laos and Cambodia. The extent to which the Communists would exercise this capability wouldalmost entirely on their estimate of the probable reactions of the Manila Pact powers and of the neutral countries of South and Southeast Asia.

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south vietnam

SITUATION

he political situation in Vietnam south ofh parallel is one of almost total paralysis, caused primarily by the struggle for political power between Prime Minister Ngo Dinh Diem and his supporters on the one handotley array of opposing elements on the other.

the extetlng situation problems ofurgency have been neglected, andof the South Vietnam statenominal. The governmentlargely ineffective in meeting vitalas maintaining domestic order,the normal functions of civildealing with the extraordinaryby the armistice, andproblems such ascorruption.

The Vietnamese National Army isand disorganized, and its capability even for dealing with Internal disorder is low. It lacks trained leadership and an aggressive spirit.

On the other hand, the Vict Minh In North Vietnam appears to have adjusted to the post-Geneva phase with continuing and unimpaired confidence. The Viet Minhfrom the Geneva Conferencerecognition and greatly enhanced power and prestige. It is methodicallyits control over North Vietnam and continuing to plan for the extension of this control over South Vietnam as well. The Communist psychological offensive against the free areas of Indochina continuesand the Viet Minh is continuing to develop networks of agents and political cadres throughout South Vietnam, Laos, and Cambodia.

II. FACTORS AFFECTING DEVELOPMENTS IN SOUTH VIETNAM

South Vietnamese Capabilities

Political Factors

The conclusion of the armistice greatly weakened non-Communist Vietnam morally and materially. Partition ath parallel Is abhorred by all Vietnamese, who regard unity of the three regions of Vietnamrerequisite of nationhood. Thestate has been shorn of largeimportant resources, and above allonsiderable segment of its moreand energetic population, particularly the Catholics and nntl-Viot Minh nationalists of Tonkin.

Moreover, efforts totrong state in South Vietnam are hindered by geographic and ethnic differences and wide social,and political heterogeneity. Cochin-china, rich and populous,ixture ofand divergent political, social, andforces: the apathetic rice-growing masses of the Mekong Delta; the largepopulations In cities like Saigon;dherents of the Caodal anddherents of the Hoa Hao.politico-religious sects which control large areas; the strong and homogeneous groups of Catholics; large overseas Chinese and Cambodian minorities;estitute refugees from NorthMoreover, coastal south Annan has been in Communist handsnd has consequently been subjected to prolonged CommunistFinally, the mass of the southhave seenuccession of crises in the last decade that they have become in effect Inured to political developments and unresponsive to appeuls.

Leadership elements In South Vietnam are drawn broadly from the following groups:

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(a) monarchists and court followers close to Bao Dai; (b) rich merchants and landlords whose interests are linked with those of French economic groups In Indochina; (c> former administrative officials;en and intellectuals, nationalistic but not given to action;mall number of professional politicians and intriguers; (f> leaders of the politico-religious sects,who exploit every opportunity for wealth and power; and (g> army leadershipby Generalnew-comer group whose influence is not completely known. These elements have for yearsthemselves to French control andorld of half-peace, half-war. In this climate, expediency has in most Instances substituted for Integrity and personalfor devotion to public service.

Power in South Vietnam is spread among the heterogenous elements just described and the French, who still possess the principal military force, the Expeditionary Corps, and who continue to control foreign exchange and central banking. The Vietnamese National Army remains primarily an instrument of the French High Command. Althoughgovernments hold office by virtue of the authority conferred upon them by Bao Dai, they continue to rely upon French power in Vietnam to back their authority. Prime Minister Diem's blatantly nationalistic and openly anti-French attitude has caused many of the French On the scene, confusedack of direction from Paris, to assume aattitude toward Diem and to work openly toward depriving him of the power which had supjx>rted former Vietnamese Governments.

The present struggle for political power in South Vietnam erupted almost as soon as the Diem government was formed. Tho Soulh Vietnam sects, which had not beenin the government, were first to oppose It, primarily because it seemed to jeopardize their independent existence. Somewhat later, the army leadership under General Hinh broke openly wiih Diem. Although analliance came into being beiween the sects and General Hinh, it fell apart when Diem, under pressure to compromise,his government to admit representatives of the important Caodal and Hoa Hao sects. However, the third of the sects, the Binh Xuyen, continued to support Hinh and toDiem. General Xuan, aCochinchlncsc and former Primeis associated with the Army-Blnh Xuyen faction. Other Individuals in opposition to Diem and contending for powerformer prime minister Buu Loc. who has some support in Paris and among elements In Bao Dai's entourage, and former primeNguyen Van Tarn, father of General Hinh, who appears lo have tho support of many French officials in Saigon. Prince Buu Hoi, cousin of Bao Dal, has influential support in France at present. He has in the pastthe Viel Minh ond partlcljwled into bringegotiated end of the Indochina war.

Diem, the leading lay Catholic inis honest, austere, and widely respected for his integrity and nationalistic zeal. He has spent many years abroad and has not been associated with any of the previousin Vietnam. He has the popular backing of most Catholics and some following among lhe people at large, the unorganized support of most nationalist intellectuals, and lhe backing of the dissident Caodai General Thlnh Minh The. He also has the support of other Caodal and Hoa Hao leaders, who have joined his government, but this support Is not very Arm. However, Diem is rigid, unwilling to compromise, andIn the rough and tumble of politics. He is acutely suspicious of his colleagues on the political scene and Is Inclined tomall group of relatives and close friends who, for the most part, areof proffering sound counsel.

None of the groups opi>osing Diem has any broad-based popular support. It is the weakness of Diem rather than any genuine political strength of their own that enables them to prolong Uie political crisis in Saigon. The Binh Xuyen has discipline, wealth, and control of the National Police and Surete. but it is totally corrupt and numerically weak. The army leadershipby General Hinh is dependent upon French backing and does not have solid support from the masses

troops nor from the people; moreover, it Is divided in itself. There Is no widespreadfor any individual contenders for power; each has numerous and strong enemies.

The intentions of Bao Dai, who remains in France, are difficult, to assess. His first intervention in the political struggle was on the side of Hinh, the Blnh Xuycn, and General Xuan, against Diem. He was thwartedbecause of strong US representations. More recently he hus Intervened on the side of Diem. Bao Dai's popularity is now at its lowest ebb and his circle of supporters isto be narrowing dully. However, he still has political Importance because of hissition and because he can, as chief of state, give the cachet of legitimacy to his appointees. Hehrewd politician, but is weak, venal, infusedense of his own grandeur, and wholly Incapable ofresponsible action.

The present key to political power in South Vietnam is held not by Vietnamese groups or combinations of groups, but by the French. Under present circumstances, only the French can provldo to the legitimateauthority In Vietnam the power it now lacks, and force the coalescence of the various factions, groups, and Individuals. US support keeps Diem in office, but the fact that the French have withheld full support deprives him of the power to govern.

Military Factors

Vietnamese National Army hasstrengthegulars andauxiliaries. Nuval and air strength isThe regularsombat battalions, ofare infantry,ightrtillery, and oneThe regroupmentby the Geneva Agreements hasunits to leave their home provincesfirst time, resulting in aof desertionsune (up toof the total army strength).and other semimilltary forcesdemobilized, with the exception offorces of the South Vietnam sectsguard and militia elements. The Vietnamese General Staff has become soIn political affairs that it has neglected the required planning of an adequate internal security program. This neglect haspirit of insubordination and irresponsibility throughout the army. The army in somehas been incapable of executingand pacification operations In areas formerly under Viet Minh control. Almost all units, particularly those fromeriod of intensive training and reorganisation to bring them up to strength and improve their effectiveness.

Advisory and training aid Is provided byrench officers and NCO's currently serving In the French Militaryto Vietnam. This mission is toy the endhese individuals serve in command, staff, androles on the Vietnamese General Staff, in the territorial command structure, and in training establishments. Aboutercent of Vietnamese infantry units andercent of support and technical units arc cadrcd at least partially by the French. The army is still under French operational control and continues to be completely dependent on the French for logistic support.

A major reason for the Ineffectiveness of the Vietnamese National Army is its lack of adequately trained officers. Only about one percent have received training roughlyto thatS army officer of field grade, and virtually noneomparable background of staff and command experience. Very few of these Vietnamese officers would be competent even in assignments justified by their training and experience, and even fewer are capable of an adequate performance at the higher ixwitions of responsibility which they now hold. Their background is one of subordination to French command, and they are inclined to rely heavily on French advisers even when given positions of authority and responsibility.

The other serious deficiencies in the South Vietnamese national forces. Ineffectiveand training and absence of logistics and teclinical services, are related to the lack

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of leadership and stem from the same basicrench failure to train and develop qualified leaders. This situation can beonlyeriod of time and only if an intensive program for the progressiveof an effective officer corps is soon initiated.

Few details are available on the pattern of loyalties within the national forces. The General Staff is apparently divided. Certain elements have been pushing Hinh tothe governmentoup and toa military dictatorship. Other officers have attempted to help mediate Hinh'swith the government. Still others are reported to support Diem. However, there is no officer, except possibly General Vy,acting chief of staff, who could command the loyalty and confidenceajority of the army in the event Hinh were removed against his wishes.

Wc have little Information on the strength and status of other semimilllary and police forces. The sect armed forces, althoughinadequate according to generallymilitary standards, are the mostThereotal of0 armed Caodai troops. Ofre largely under control of General Thinh Minh The and the remainder areVietnam and French Army control. The Hoa nao forces totalf whichre in Vietnamese or French army units, anded by Ba Cut, an ex-army officer, who is engaged in generalaction against both the VietnameseArmy and the Caodal. The Binh Xuyen have an independent forcermed troops. In addition to the urban police forces under their control which number. These forces are little more than local militia and are in effect private armies for these groups.

South Vietnam's mobilizable manpower pool is estimatedhysically fit, military-age males, of which aboutercent are now under arms. Anould probably be mobilized withoutcurtailing essential economic activities. The Vietnamese government would be almost entirely dependent upon foreign aidorce.

The Diem government proposes to expand the armyy the endndy the endy lhe latter date, the army would includeivisions pluserritorial battalions. The cost ofthese forces5 has been estimated alf whichall would have to be provided by external assistance. Tlie French have supported this proposal as being required toower balanceis the Vietroposul for developmentational Guard under the Ministry of the Interior has been postponed pending the outcome of French-Vielnamcse-Unlted Slates discussions.

On the olhor hand, the United States is considering the reduction of tlie Vietnamese army toombat light divisions. These reduced forces would have primarily an internal security mission.arge-scale Viet Minh Invasion, they would serve onlyelaying force. Cost of maintaining the forces at the reduced levels has been tentatively estimated ater year. This estimated cost is in addition to financial, economic, and mililary support funds, which might0 per year.

French Armed Forces

French Expeditionary Corps inis composed of0 auxiliaries.'call for the further reduction of thecomponentAir Force in Indochina hasandt is planned to reduce. The French Navy,Naval air,ersonnel5 it is planned toto. At thotho French Expeditionary Corpswithout external reinforcementVietnam against Viet Minh aggression.

' The regular* in the French Expeditionary Corps are made up of0oirlKii0 West0 North African,0 Indigenous troops.

Communist Capabilities and Intentions*

While South Vietnam has beenmounting instability since Geneva, the Communists in the North have continued to grow in political and military strength. There has been no evidence of dissidence within the top leadership of the Viet Minh regimeesult of the armistice and the Geneva accords.

The Viet Minh isonciliatory line toward France, thus seeking to exploit French hopes of retaining their economic and cultural interests in North Vietnam. Ithopes that French susceptibility to an arrangement with the Viet Minh will increase and consequently reduce French willingness totrongly nationalistic state in South Vietnam.

The Viet Minh is consolidating andits armed forces by groupingIndependent regular and regional units to form new divisions with augmented firepower. Tliis augmented firepower resulls principallyigh level of Chinese Communist aidncluding illegal aid since theWithin the period of this estimate the Viet Minh will probably have at leastrnfantry divisions, two artillery divisions, and one anti-aircraft division. Thesewould more than double the prc-Geneva combat effectiveness and capabilities of the Viet Minh regular army. The Viet Minh is expanding and improving itsand communication facilities,rail and highway links with South China.

During the current transition period. Communist tactics in the south are being shifted from the "armed struggle" to the "political struggle" stage. The main facets of Communist policy appear to be ostensible compliance with the Geneva armisticeand continued development ofsubversive capabilities in the south.substantial Viet Minh forces are being evacuated from South Vietnam, we believe

'The general topic of Communist courses ofIn Asia7 is covered In.

that large numbers of trained military and political personnel remain. Furthermore, refugee groups evacuated from Northwere probably Infiltrated by Communists who will almost certainly seek to exploitinduced by the harsh conditions of resettlement

is likely thai Communist elementsan important role behind thethe present political crises in Southseeking to bring to power elementsbe amenable first to the resumptionrelations and later tooalition regime. Furthermore,pro-Communist groups are makingin Saigon, the most prominentis the "South Vietnam MovementDefense of Peace."

French Capabilities and Intentions

Since Geneva, French actions in Vietnam have been confused and contradictory and have encouraged the present paralysis.at least, the present general lines of French policy are expressed in the French-US understanding reachedhis understanding was reaffirmed and clarified in the recent Washington talks between the French Premier and the US Secretary of State. The French agreed to support the independence of the three Associated States and, within the framework imposed by the Geneva accords, to oppose the extension of Viet Minh influence and control. France further pledged to coordinate with the US in the planning and Implementation of economic and military aid programs to strengthen the independence of these slates. Finally, the French agreed to support Diem Introng, anti-Communist regime in Vietnam. Despite this agreement, the French have not given wholehearted support to Diem.

The French appear to have threeobjectives with respect to Indochina:

a. To maintain to the maximum degree feasible the French position In Indochina;

o avoid involvement in hostilities and the financial burden of maintainingforces in Indochina; and

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To avoid Jeopardizing US-FrenchThe fact that these three objectives contain elements of mutual inconsistency pases real problems lo French policy.

In pursuit of these objectives two general lines of approach are open to the French. They can decide to support the reunification of Vietnam through elections held pursuant to lhe Geneva accords. The French interest in promoting the international detente in the Far East which they believe was inaugurated at Geneva would tend to lead to this decision, and this tendency would be strengthened if France became convincedommunist takeover was inevitable. The French might also believe that their desire toreferred position in Indochina would beserved by an accommodation with the Viet Minh thantrongly anti-French South Vietnamese government. If they adopted this approach, the French wouldevents to driftommunist victory or wouldthe establishment in South Vietnamovernment that wouldto or facilitate the formationom-munist-Icd coalition of all Vietnam.ourse would permit tho French to achieve their objective of avoiding the resumption of hostilities and reducing their militaryin Vietnam. However, the French would hesitate to adopt this policy if they believed that it would severely strain theirwith the US. Their final decision would be greatly influenced by whether or not they were confident of UK support.

On the other hand, France may decide that its relationship with the US is thefactor, and that to preserve this relationship it is essential to support an antl-Conimunist South Vietnam, postponingif necessary. The French would feel, however, thatourse wouldubstantially Increased risk of renewedwith the Viet Minh. Moreover, the French probably estimate that,trongly nationalistic South Vietnam, France could not retain more than the vestiges of its position.

Present French actions in Indochinathat the French have not fully made up their mind which course to follow. On the one hand, the French government continues to support, though without enthusiasm, the attempt to strengthen the Diem government. On the other hand, the French appear to be considering possible substitutes for Diem who, at least in the past, have had pro-Vlet Miuh sympathies and who might facilitate aof Vietnam. Moreover, ihrough the appointment and activities of Jean Sainteny, the French representative in North Vietnam, the French have clearly indicated theirof maintaining political contacts with the Vict Minh, preserving, insofar as possible, their economic and cultural interests in the area, and of continuing trade relations with North Vietnam.

iii. future prospects in south vietnam

French policy willajor factordevelopments in South Vietnam during the period of this estimate. Wethat the French estimate that South Vietnam cannot be held over the long term, except at very high coat. We further believe that the French would be unwilling tothe elections unless the UK agreed and unless Uie US was willing to shoulder Uiemililary burden in Indochina.ommitment lo employ US forces if required.

The poliUcal situation In South Vietnam has steadily deteriorated since the conclusion of the armistice. Prime Minister Diem will probably remain In office only so long as the US continues to give him strong backing. If Diem had the full support of the French, he might be able gradually toense of national will and purpose in South Vietnam; in this respect, he Is probably unique among Vietnamese leaders In that his strongrecord might enable him to use suchwithout being subject to the onus ofwith the French. However, the French are not likely to provide Dlera with full and positive support. Therefore. Diem will probably not be able to reestablish the authority of the government throughout South Vietnam and to tackle effectively the multitude of pressing problems now facing the country.

Should the Diem government fall, it would probably be succeeded by un uneasy coalition drawn from the self-Interested Individuals and groups now contesting Dlcm's position.certainly, however, any successor to the Diem governmenl would be hampered by the incessant political Intrigues which have plagued Diem. Moreover, no successoris likely lo be efTccllve. Atied closely to and politically supported by the French can have littleovernment which does not have the benefit of the maintenance of public order by the French coupled with Frenchin the local political scene, is not likely to be able to maintain itself for any length of time.

The internal security situation will remain precarious. The French will continueto commit their forces In Internal security operations, believing that such action would antagonize the population and In the end might create greater problems than it would solve. Moreover, during the period of this estimate, Vietnamese forces will lack theto maintain order unless the present political deterioration Is reversed.

At the present time, the combined forces of the French Expeditionary Forces and the Vietnamese National Army could onlyull scale invasion of Viet Minh forces; they could not stop it without reinforcements from outside. The over-all Franco-Vietnamese capability in this regard will be diminished in the next year as the French forces are

We believe that the Viet Minh willto gain in political strength andand. with Chinese aid, to increase Itsstriking power in North Vietnam. The Viet Minh probably now feels that it can acliicve control over all Vietnam withoutlarge-scale warfare. Accordingly, we believe that the Communists will exert every effort to accomplish their objectives through means short of war. Vict Minh agents will continue to subvert ull susceptible elements of the population, to Intrigue to prevent the coalescence of the various factions and the building of any strength In the south, and Viet Minh "shadow-governments" andnetworks will be establishedthe failure of the national government or the French to impose controls leaves thea vacuum in which to operate.esult of their activities and probable degree of penetration In South Vietnam, it isthat the Communists will succeed inmost Vietnamese in the south of the inevitability of Communist control.

If. on the other hand. South Vietnam should appear to be gaining In strength or if elections were postponed over Communistthe Communists probably would step up their subversive and guerrilla activities in the South and if necessary would infiltrate additional armed forces In an effort to gain control over the area, However, we believe that they would be unlikely openly to invade South Vietnam at least prior tohe date set for national elections, because: (a) they would consider that their prospects of gaining control over the area without resort to invasion continued to be highly favorable; (b> they would be concerned over theof US military counteraction; and (c) they would probably fear that invasion would induce the neutral nations in Asia to move toward open alignments with the West.

We believe, on the basis of present trends. It is highly unlikely that South Vietnam will develop the strength necessary to counter growing Communlsl subversion within its borders: it almcwt certainly would not be able to defeat llir Communists In country-wide elections. Even before thehe probable growth ofinfluence In tho South may result In strong pressures within South Vietnam for coalition with the North.

SECle^T

LAOS

present situation

Is principally threatened atthe Communist-dominated Pathctwhich occupies and controlsnorthern provinces of Phong SalyNcua. The Pathol Lao isember of theroyal family. Tlie Pathcten, and at presentsupported by Vict Minhwhich probably had not beenfrom Laos by the agreed

Laos Is also threatened by an allegedly non-Communist "Free Laotian" movement of unknown dimensions which is probably led by Princeretender to thethrone, who is now an exile in Thailand. This group probably was responsible for both an abortive Laotian Army cadet mutiny in4 and the assassination of theDefense Minister In September. Thai-Laotian relations have been strained because the Laotians claim that the Thai police are supporting Prince Phetsaratheans of increasing Thai influence in Laos.

Laos lacks effective political leadership and the population Is In large measureapathetic, There ore strong personal cleavages among tho small group ofexperienced national leaders.Laos probably will continue to be ledeasonably stable coalition of leading non-Communist political personalities with Uie strongly anti-Communist and pro-US Crown Prince Savangalance ofThe previous policies of antl-Communlsm and requests for US and French assistance will probably be continued.

oHan armed forces, organized only to battalion level,urrent strength0 and are augmentedrenchMissionfficers and NCO's, andrench combat troops The army lacks qualified field-grade officers and relies on Uie French army for senior command and staff personnel and for actual direction of army administration. Laos is Incapable of financing its present forces, and the Laotian army will conUnue to be dependent on outside financing, training, equipping, and advisory assistanceonsiderable time to come. The Laotian army has noteal will to light in past operations, and Isofos against any Vict Minh invasion. It is unlikely that the Laotian army can exercise effective control in Uie twoprovinces in which the Pathet Lao are to be concentrated under the Geneva agreement or that it can prevent Communist activities on the local level elsewhere In Laos.

ii. future prospects

Uie period of this estimate,affecting the strength andLaos will be determined primarily byfactors, such as Viet Minh andintentions regarding Laos, theand nature of US and Frenchto the Kingdom, and mostdevelopments In Vietnam.

the outcome ofefforts to demobilize the PathetPathet Lao followers of the Vietprobably continue to exercisein the provinces of Phong SalyNcua. Moreover, the CommunistsUie capability by political andto heighten their influence hi Laosweaken the anti-Communistthe nature of Communistagainst Laos will be moderated bydesire to conUnue theirline In Asia, particularlytoward Indian reactions, and to aby the possibility of USthose conditions, and providingLao Government obtains andoutside assistance, we believe thathniit Communist political advances.

if during the period of UiisSouth Vietnam should fall to theCommunist capabilities for pressure

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against Laos would be substantiallyexploit this situation would dependLaotian will and capability to resiston their estimate of the probablewould be correspondinglyof the Manila Pact powers and ofextent to which the Communistscountries of South and Southeast Asia.

CAMBODIA

current situation

Norodom has kept power2 when the nationalto function. The Cambodianhas credited the King withthe achievement of full independencekingdom. Son Ngoc Thanh, the lastImportant of the non-Communistleaders, rallied to the King inHowever, he retains considerableand the firmness of his loyalty toIs questionable.

The Cambodian armed forces, organized only lo battalion levol,0 National Ouarduxiliaries. The army would be Incapable of defendingarge scale Viet Minh invasion. Thereefinite lack of qualified field-grade officers, and the quality of the army hassince the withdrawal of French cadresoreover, at the present time the effectiveness of the army Is deterioratingof an incompetent defense minister whom the King so for has failed to replace. The army continues dependent on Frenchfor its administration. The greater portion of the Cambodian defense budget must be supplied by external aid.

The Cambodian economy is relativelyand the countryood surplus. Cambodiaavorable balance of trade but Its heavy dependence on exports of rubber and low-quality rice, makes the economyto fluctuations In world demand for these commodities. The CambodianIs greatly Interested In acceleratingdevelopment and will probably request extensive foreign economic assistance.

Cambodia is concerned that its main trade route, the Mekong River, and the portat Saigon are both under control of South Vietnam. Pending conclusion of currentwith South Vietnam, the latter is withholding the Cambodian share of customs duties collected at Saigon.esult the Cambodian financial position remains highly precarious.

Although France has recognizedfull independence and sovereignty, Cambodia's relations with France and its role in the French Union have not been redefined. Cambodia seems intent on broadening itstics and appears unwilling to rely primarily on French aid and advice. Since4 no French or French Union troops have been stationed in Cambodia except the small French Military Mission.

ietnamese Communist troops and their dependents have beenfrom Cambodia, we believeizable Viet Minh cadre has been left behind.the Cambodian Communist armed bands, although ending their guerilla activities, have felled to demobilize or to turn over their arms.

II. FUTURE PROSPECTS

future political stability of thewill depend largely on the attitudeKing, who Is at the present time thepolitical leader. There arethat the King has beenmiddle course" by whichwould receive the benefits ofaid while simultaneouslythe "good will" of the Communistwe believe that for the nextso, providing outside assistance andof western supjxirt areKing's leadership will not boand the Cambodians willanti-Communist policy and will be ableinternal subversion. Cambodiahave and cannot developarge-scale invasion.

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Future events In Cambodia will beaffected by developments in Vietnam ond inommunist takeover in South Vietnam would increase Communistagainst Cambodia and would impairwill to resist further Communistthough we estimate that thewould be more resolute than would the Laotians under slmiliar circumstances.

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