SNIE 14.3-64 THE OUTLOOK FOR NORTH VIETNAM

Created: 3/4/1964

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special '* national intelligence estimate

The Outlook for North Vietnam

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DIRECTOR OF CENTRAL INTELLIGENCE

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UNITED STATES INTELLIGENCE BOARD

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-Central Intelligence Agency and the Intelligence organuatfoniof theV- int, ofhe-Army, 'lhe Navy, the Air force, and NSA.

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Chief ofDepartment^ationafiScfUritv .Agency

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THE 1

NOTE 1

CONCLUSIONS 1

DISCUSSION 3

I. 3

II. INTERNAL POLITICS AND POLITICAL PROBLEMS 3

ECONOMIC PROBLEMS AND PROSPECTS

MILITARY PROBLEMS AND PROSPECTS 8

V. THE SUPPORT OF INSURGENCY 11

VI. THE OUTLOOK FOR NORTH VIETNAMESE POLICIES . 12

t

THE OUTLOOK FOR NORTH VIETNAM

the problem

To assess the strengths and weaknesses of North Vietnam (DRV) and to estimate its probable courses of action over the next several months.

note

Firm information about North Vietnam is extremely sparse. Accordingly, analysis of the economic and political situation and especially of the size, structure, and capabilities of the armed forces, is extremely difficult, and the judgments below must be considered tentative.

conclusions

believe that the North Vietnamese leaders look atprospects with considerable confidence. In Souththey probably feel that GVN will to resist ismay feel that the same is true of the US. They mayspeed the processtep-up in current Viet Congpressure and terror. We think Hanoi will stop short ofsizable DRV military units into South Vietnam,bringajor US military retaliation. In Laos,protect the positions they have already achievedPathet Lao efforts to erode the non-Communistwill seek to avoid initiatives lhat would provoke US )

Vietnam's external successes have beenimportant internal problems and vulnerabilities.faces severe and chronic food shortages andamong the populace and even the lower ranks of the 1

Party. The economy is overcommitted to developing heavyat the expense of agriculture and heavily dependent on Bloc aid. The personal dominance of Ho Chi Minh maskswithin tlie leadership which will be sharpened after his death.

problems and vulnerabilities do not threatencontrol at home or materially hamper its presentefTort against South Vietnam and Laos, nor do theysomewhat higher level of such effort. However, the DRVcould not sustain large-scale military involvement, suchinvasion,onsiderable increase in Chineseor Soviet aid. )

Sino-Soviet splitainful dilemma toPowerful motives impel it to avoid taking sidesbut events have moved the DRV progressively closerChinese position. We believe that Hanoi willto maintain as cordial relations with Moscow as )

discussion

he resourcefulness and drive which have characterized theefforts of the "Democratic Republic of Vietnam" (DRV) in South Vietnam and Laos arc well known, as are the situations in thosewhich invite Communist exploitation. But the recent news of Communist successes tends to obscure Lhe fact that the DRV is itself besetariety of weaknesses.

POLITICS AND POLITICAL PROBLEMS

he popular enthusiasm with which the DRV regime was received after its victory over the French4 has long since waned. Since its accession to power, the Lao Dong (Communist) Party has striven to "build socialism"runcated, predominantly agricultural country by doctrinaire and, in earlier years, Draconian measures., there was active revolt against certain "land reform" programs. Since then, Lhe peasantry has shown considerable ingenuity in frustrating the regime's agricultural policies. The regime has taken harshagainst intellectuals. Catholics (who make up about five percent of thend many ethnic minorities. At times, thesehave been tempered and some efforts made to win over these groups, but they remain for the most part alienated. If economic difficulties should substantially worsen, and particularly if tho shortage of food should reach wide-scale famine proportionsesultatural catastrophe, there might be local disturbances, but they almostcould be contained. Though the Hanoi regime appears to have firm enough control over North Vietnam'sillion inhabitants to prevent the outbreak of any serious dlssldence, the populace seemsapathetic to what the Parly considers the needs of the state.

his apathy even extends into the Party itself, at least to the lower cadres, who have lost much of their revolutionary elan. Itource of considerable doctrinal embarrassment to its leadership that Party membership (about three percent of the population) Isurban and intellectual. The stability and cohesion which this leadership has displayed over past decades is deceptive, since it derives almost entirely from the prestige and skill of oneChi Minh. Honique figure in the world Communist movement, truly the last of the old Bolsheviks. The Indochlncse Communist movement was virtually his personal creation; it has prospered under his direction but, significantly, faltered and split whenever he had to turn his primary attention to other matters.

Ho is Ti and apparently lum not designated an heir apparent. Hisenior subordinates who comprise the rest of the Politburo arein longstanding personal rivalries and sharp policyin which the question of Chinese Influence has been an important clenicnt. The "pro-Chinese" group, advocating generally militant policies, is centered around former Secretary General Truong Chinh, who himself was forced to resign tliat position6 because of his excessive zeal In pushing land reform on the Chinese model. Defense Minister Vo Nguyen Glaptrongly anti-Chinese bias and has long attempted to resist Cnlnh's encroachment into the militaryover which Giap seems to have maintained at least nominal control. Another grouping appears around First Secretary Le Duan. upon whom Ho seems to lean heavily In Party affairs, but its political orientation is less cosily Identified

Ho lias successfully kept these rival groups under control, but when he leaves the scene those rivalries are almost cretoin to create serious difficulties within the Party and perhaps Instability within the country. Power within the Party probably will be decisive, although Giap may well seek to use his position In the military to affect the outcome. The Chinese and Soviets will also try lo exercise influence. At this Juncture, First Secretary Le Duan appears most likely to succeed in view of bis position and the fact that he probably is least objectionable to the various contending factions, but the succession is unlikely to be smooth, and might be violent.

III. ECONOMIC PROBLEMS AND PROSPECTS

Structure of the Economy. North Vietnam is anand undeveloped country which does not produce enoughfeed its rapidly expandingorth Vietnam was aarea throughout the period of French control, but itswere easily offset by the transfer of surplus rice from thesolution not now available. The country has many naturalof which were partially developed by the French. Thealso inherited from llieodest industrial plant. North Vietnam'sis inhibited, however, by small domestic capital resources,shortage of indigenous skilled hibor and technical talent,experience in management. These problems are compoundeddoctrinaire leadership, which Is prone lo pursue symbolic andsatisfying industrial goals conceived with little practicalLo North Vietnam's domestic; resources and economic needs.

1 Hanoi hasopulation growthercent per annum hut thlft figure may be somewhat hlfcb.

' Typically, tins admission was couchedn spile of natural disasters the total output of food in terms of paddy wasillionin- regime was projecting an annual outputillion tons5 to keep up with ils population increase. According to North Vietnamese figures, performance in recent years has been as follows tin million metric tons of92.

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Potential Food Crisis. Agriculturallour years of poorack of fertilizers and insecticides,rowing population have led to food shortages in North Vietnam, Tlie current picture is apparently bleaker than it has been for the past five years; Hanoi itself says that the total3 output of food amounted to less than five million metric tons off which over one-fifth consisted of unpopular secondary food crops (corn, yams, and3 food output in per capita terms was close to that7 (the lowest year since the regime came to power) but without the reservesreceding bumper crop.3 per capita output of rice, the preferred cereal, was about one-fifth

The regime is apparently endeavoring to import foodstuffs. It seems to be acquiring only small amounts irom non-Bloc sources, and there are some indications that Hanoi may be having difficulty finding forms of payment satisfactory to foreign exporters. Wc do not know how much food may be arriving currently from the Bloc, but believe that China, even with its own agricultural difficulties,trongto prevent dangerous famine in North Vietnam. The regime's own immediate answer to the3 harvest seems toightening of distribution controls, in on effort to stretch limited rice supplies by ensuring that everyone consumes his fair share of secondary crops. Before the4 harvests, living standards will probably decline further in the cities, and critical food shortages may appear in some of the thousands of villages. Furthermore, prospects for the June rice crops are not bright, since transplanting seems to be lagging behind3 rate.

There Is little prospect of any real resolution of North Vietnam's food problem, at least for some time to come. Hanoi has explicitlythe most practical solutions on ideological grounds by giving heavy industry priority over agriculture. Emphasis on producingexport crops to exchange for food Imports (as urged by the Russians) is considered inconsistent with an "independent socialistince this policy would render the economy dependent on foreign markets and subject to foreign domination. Instead, Hanoi proposes to Increase the yield of existing farm land through investment and technicaland to open up new agricultural areas by resettling ethnic Viet-namese in the mountain regions now sparsely inhabited by minority races. Neither of these programs can be realistically expected to

viate the basic food problem in the near term, indeed, we believe the situation is likely io get worse over the next year orso if the weather should prove adverse.

lichl manulacture accounted for two-lhlrds and mining and heavy manufacture (or one-third of all industrial output by value

' Hanoi KlatUAJ claim Utat industrial production, exclusive olncreased at an average annual rate of aboutercent6hl< figure is probably Inflated, however, and It must be remembered thai North Vietnam beganmall basehe value of agricultural pro due lion still accounted for aboutercent and industrial production 'exclusive of handicrafts* tor onJy aboutercent of North Vietnam's eaUmated GNP

Mana^'enul deficiencies haveource ot concern to the regime for some timerained technicians and skilled workers comprised lew than three percent o( Uie civilian laborthe regime Itself has admitted that the level of competence in this .imall pool of trained talent Is still very low

Transportation. Despite Hanoi's considerable investment in transportation and communications, North Vietnam's transportation system cannot adequately support the industrialization program. This is due not only to the rudimentary structure of the system but also to poor planning and inefficient organization at the national and local levels, the use of large numbers of unskilled personnel, and the lack of maintenance equipment and storage facilities. Only those areas of North Vietnam served by the limited, French-built railroad system have sufficient and comparatively efficient service. The railroad system is vulnerable strategically, since the lines all radiate from Hanoi with no alternate rail facilities available for any one line. Both the rail and the highway systems have many key bridges. The road system is poor, and trucks and gasoline are scarce. Haiphong Is the only port that can handle large amounts of general cargo and petroleum in bulk. The inland waterway system is primitive, and the country has few ships for inland and coastal transport. There are approximatelyight transport aircrafi Lhat can provide limited airlift.

Industry.he Hanoi regimehree-Year Plan, which conformed to Soviet recommendations in stressing light industry and the development of exportable agriculturalndustries inherited from the French were expandedement andnd new ones were developedood processing, enamel-ware, paper, androduction has increased impressively, though in absolute terms industry remains small.1

mphasis was shifted in the current Five-Yearo heavy industry and prestige projects. However, North Vietnam has neither the domestic resources, the capital, the experiencednor the skilled labor necessary to create extensive heavynd the pace of economic development has diminished since the Five-Year Plan was launched. The Plan itself has faltered, and Its goals

were revised downward in6 Considerable construction has been started and some progress has been made, but the quality of North Vietnam's industrial output remains low and its real contribution to the economy is slight. The bulk of the country's heavy industry iswithin the small rectangle formed by the four cities of Haiphong, Thai Nguyen, Phu Tho. and Nam Dinh, and the power essential toproduction comesew keyhere arc indications lhat Hanoi is concerned over the strategic vulnerability of the country's industry and transportation.

example, tlie original Plan called for the productionons of pigercent koiiik to slcei) and the Thai Nguyen plant wasfor compleUon0 with an initial annual capacityons. Thai Nguyen's first blast furnace, however, was not put Into operation until

'Six plants account forercent of the electric power supply of the main grid and supply aboutercent of the total electric power In Northpower to the urban areas of Hanoi and Haiphong.

Trade and Aid. North Vietnam's lack of domestic capital and technical skills, coupled with the regime's desire to Industrialize the country rapidly, have made its economy crucially dependent on foreign trade and aid. In the, the DRV receivedillion dollars of credits and grants from the Communist Bloc, almost half from Communist China. North Vietnam's trade has more than tripled5 and now stands at0 million.f this trade is with the Bloc: roughlyercent with the USSR,ercent with Communist China, andercent with the European Satellites, mainly East Germany, Czechoslovakia, and Poland. The principal Free World trading partner is Japan. The DRV has imported all its POL, iron and steel, railroad rolling stock, and vehicles, and most of its machinery and metal goods, spare parts, industrial chemicals, chemical fertilizers, and raw cotton.

North Vietnam has never had an export surplus and most of its trade deficitillionas been financed under Bloc assistance programs, which consisted mainly of grantsut have been largely credits in the years since then. Bloc aid and technical assistance will continue to be crucial to the Industrialof North Vietnam. Tho USSR has made credits available forand, together with the European Satellites, has providedand equipment for heavy industry, as well as motor vehicles. Soviet and European Satellite economic assistance for the current Five-Year Plan has been scheduled primarily for projects in the fields ofpower, coal and apatite mining, engineering, chemicals, andThe Chinese Communists have supplied largeof basic materials and manpower. They have alsoew heavy industrial plants, assisted in the rehabilitation and expansion

of North Vietnam's transportation and irrigation system, and made appreciable contributions to the growth of light industry. Blocassistance has included not only the loan of foreign technicians and advisers but also the supply of technical data and the training of North Vietnamese abroad."

seriousnessessation or suspension of Soviet andBloc economic aid and technical assistance to Northdepend chiefly on Communist China's willingness and abilitythem, the speed with which this could be accomplished,concessions that China mightutoff in deliveriesand equipment from the USSR and East Europeandisrupt the current industrialization program, at leastThese considerations almost certainly Impose someDRV leadership from associating too closely with Peiping.

IV. MILITARY PROBLEMS AND PROSPECTS

Considerable modernization of the armed forces, known as People's Army of Vietnamas taken placehough progress has sometimes been hindered by intra-Party political maneuvers and, more Importantly, by conflicts between mililary and civil needs. The small pool of Vietnamese technical talent is not adequate for military or civil requirements, let alone both., large numbers of military personnel were diverted to agricultural and economic tasks. Such diversions seem to have stopped1t the time when Hanoi began intensifying ils insurgency effort in Southut army units are still being exhorted to grow their own food.

The Ground Forces. The core of the PAVN is the regular army of perhapshousand men. We believe the army is organizednfantryrtillerynfantry brigades,nfantry unit which may beivisonrigade. There is evidence that the army underwent considerable reorganizationnd that some of this involved "brigading" units formerly structured as divisions, but the details of and reasons for thisremain obscure. What we know of its deployment suggests aposture: Four of its five accepted infantry divisions and its

'The total number of Bloc technicians sent to Nurth Vietnam is unknown, but the number ot foreign advisers and technicians (excluding laborers* lu lhcat any one time probably has been about LOW. Estimates of the number of Soviet technical personnel present in North Vietnam at any one time range. The number of technicians from Eastern Europe in North Vietnam at any one time may be as high. Estimates of the number of Chinese personnel in North Vietnam are larger than those (or Soviet personnel, but the two are not comparable: Chinese personnel in North Vietnam mayear; some of these are technicians, but moat, are laborer? whose levels Of -skill may not be much higher than those of North Vietnamese workers.

only artillery division are believed to be stationed in the Red River delta area around Hanoi and Haiphong. Sincermyhas laid primary emphasis on conventional warfare. Nevertheless, guerrilla tactics continue to receive attention, and wc are aware of special courses for the training of prospective infiltrators to South Vietnam.

The strengths of the army lie principally in its experienced and loyal officer corps, its disciplined and tightly controlled organization, and its reputation as the conqueror of the French. Unlike the Lao Dong Party, the army is primarily of peasant origin. Its individual Infantry soldiers are inured to hardship and highly adaptable. Many have had or are receiving combat experience in the Hanoi-directedmovements In Laos and South Vietnam. Recent evidencethat the army has generally adequate stocks of conventionalthanks primarily to Chinese assistance. The PAVN hasits holdings of light artillery and medium antiaircraft artillery weapons through Soviet and Chinese Communist sources in recent years, but it continues to hold only modest quantities of medium artillery and is not credited with any heavy artillery. There arc some indications that limited numbers of Soviet tanksndave been received to augment the small number of captured US and French armored vehicles known to remain in the PAVN inventory.it is unlikely that the PAVN has yetignificant armor capability.

Supplementing the regular army is an armed militia ofhich, in turn, forms partrained reserve which mayofn all. These figures are based on assumptions rather than evidence. There is also an Armed Public Security Force under the operational control of the Ministry of Public Security and used primarily for internal security functions. This Is conjectured to have aboutattalions and to contain something0 men.

Thehe Navymall coastal defense force with no significant deepwaler capability. Its principal equipment isrommunist Chinese Swatow-class motor gunboats,oviet motorboats,ubmarine chasers. The Navy guards againstand illegal entry or exit, conducts some minelaylng, and participates In some clandestine operations in support or the Viet Cong.

The Air Force. North Vietnam is not believed to have any combat aircraft at the present lime, though the foundations for the creation of an air arm have been laid. Headquarters, maintenance, and support organizations are being developed, and much work has been done on airfield Improvement and construction. The North Vietnamese efforts in this regard derived considerable impetus andterms of equipment and practicalthe Soviet airlift Into Laos,

which began in0 and extended throughhen the Soviets withdrew from tills activity they left most of theirbehind, includingransports which more than doubled the DRV aircraft inventory. There have been consistent but unconfirmed reports over the years lhat Vietnamese pilots have been receiving flight training in China and various Eastern European countries. It isthat China could provide fighter aircraftmall Northair force on short notice.

North Vietnamese Air Defense. The PAVN's capabilities in the field of conventional antiaircraft artillery have improved over the past several years. Defense against modern high speed aircraft is stillineffective, but against helicopters, transports, and propellerPAVN capability would probably be good. Similarly, the present North Vietnamese air control and warning systemimitedcapabilityodern air threat. Thereadar net ofarly warning and fire control installations situatedthe country, but the radars consist of obsolete RUS, DUMBO, WHIFF, FIRECAN, and modified,ew older type KNIFE RESTS. Mainland Chinese radar also covers North Vietnam, though so far as we know It is not at present coordinated with the DRV net. North Vietnam is not known to have any surface-to-air missile capability.

Communist Bloc Military Assistance. The PAVN's program of standardization and modernization has depended almost entirely on Soviet and Chinese Communist technical assistance and provision of materiel for its successful implementation, though no reliable breakdown on such military aid is available. Reports of the presence of Soviet-design small arms, artillery, tanks, and trucks have been received over the past nine years, but the proportion of these which may have been supplied by the Chinese has not been established. It is probable that Soviet aid in the form of artillery and vehicles was predominantut since that date Hanoi is believed to have looked increasingly to Peiping for supply of suchwell as for ammunition of all types. All the mortars and recoilless rifles, other than those captured from the French, are believed to be of Chinese Communist manufacture. Similarly, Lhe slock of small arms such as2 mm rifles3 and2 mm machineguns, although of Russian design, was probably supplied by Communist China. Because of Peiping'sin supplying ils own national needs, it is probable that Northwill continue to depend upon the USSR and the East European Satellites for heavier and more complex itemsrmored vehicles, heavy artillery, and perhapsOL appears to be provided in part by Communist China, with the remainder coming from Soviet or East European sources.

North Vietnam's Military Weaknesses. North Vietnam's major mililary weaknesses derive, directly or indirectly, from its deficient tech-

nologlral and industrial base. The DHV can produce only limitedof mortars, bazookas, grenades, mines, small arms, andbut docs have same capability for arms repair. Majoriipphw ol moderniuipmnit. aol trained specialists, technicians, and qualified Instructors; low levels of education; and present lack of air and naval support and Insufficient armor for conventional operations. Despite the PAVN's efforts to standardize with Bloc equipment, considerable quantities of Japanese. German, French, and US armament arc still in use, greatly complicating maintenance and logistics support. These various weaknesses andwould not be likely to hamper Hanoi's support of orIn Insurgency-type operations. However, we do not believe that Hanoi couldarge-scale military undertaking for anylength of time without substantial continuing assistance fromsources.

V. THE SUPPORT OF INSURGENCY

outh Vietnam. Infiltration from North Vietnam has longthe Vict Cong with political and military cadres and technicians who are usually dispersed upon arrival to lead existing Viet Cong units or serve us nuclei for new or expanded units. We have receivedreports of infiltrated units remaining together as such, bul this seems much more the exception than the rule. Available evidencelhat personnel infiltration is primarily of significance in providing leadership and technical skill rather than contributing appreciably lo gross Viet Cong manpower. The Viet Cong get virtually all their food and nonmilltary supplies locally.

he bulk of Viet Cong ordnance continues to be obtained byfrom Saigon Government forces, by drawing on reserve stocks cached priornd,esser extent, by local Viet CongHowever, the increasing amount of heavier equipment now being captured, together with the apparent steady improvement in the armament of Viet Cong forces, suggests that in recent months morehas been coming from outside South Vietnam. Mosl of this, we believe, comes from PAVN stocks rather than directly from Communist China. Until the past year or so, it was believed lhat most equipment brought Irom North Vietnam was carried overland, mostly through Laos, and perhaps some through Cambodia. There Is evidence that some materiel Is now being shipped by sea, either directly lo southern coastal arras or to be smuggled in from Cambodia. Hanoi's strategy seems still that of winning control of South Vietnam by subversion andbut there are some signs of Viet Cong unitsorelypc being created throughout South Vietnam, particularly in tho central highlands. If such units were established, more equipment would probably be forthcoming from Hanoi.

So far. the cost to North Vietnam of Its support of the Viet Cong insurgency has been relatively slight in comparison to the results achieved. Hanoi could almost certainly substantially step up theof cadres and Introduce PAVN units of up to battalion size. Hanoi could also probablyertain amount of additionalHowever, if the nature of the war came lo require major items ol military equipment, to provide this would probably interfere with the I'AVN'; own needs and require access to foreign supplies.

Laos. In some respects, it has been less troublesome for Hanoi to support Insurgency in South Vietnam than In Laos: The DRV lias to supply food, the Pathet lao are not nearly so resourceful or able as the Vkrt Cong, and PAVN units have been put Into the field and in some cases more or less permanently stationed on Laotian soil. Wc believe that Hanoi can continue the type of activity and support It Is now engaged In, and perhaps increase the quantity of troops andinvolved.

VI. THE OUTLOOK FOR NORTH VIETNAMESE POIICIES

North Vietnam's Orientation. The Slno-Sovlet split poses adilemma for the present Hanoi leadership. Except during the period when It was protected by French armseriod which coincidedValium haseen able to IgnOM Hi DUge northern neighbor, by whom It has twice been occupied, oncehousand years, and with whom It has traditionallylient relationship. Considerable evidence exists of continuing antipathy for the Chinese in the DRV. For nationalistic as well as doctrinal reasons. Ho Chi Minh would obviouslynified world Communistmore or less directed from Moscow to any polycentrlc system in which nearby China could dominate the DRV, Ho has long been aadvocate of unity In the world Communist movement and has used his considerable prestige hi every way possible to keep the breachMoscow and Peiping from widening. Yet it has widened, and the DRV has found It ever harder to stay on the fence. Hanoi cannot ignore China's propinquity and substantial assistance, nor the fact that China's policy Is more consonant than Soviet strategy with Hanoi'snterests In inquiring control of South Vietnam. But it is equally impossible to ignore the longer term disadvantages of opting definitively for either disputant, since either choice could Involve not only the loss of important outside aid but the risk ofhinese satellite.

For the past four years this dilemma has plagued Hanoi, andgenerated considerable bitter strife within the higher councils of the Party.hile. Hanoi sought toecision byand gestures toward both sides. anoi became more

concerned about Moscow's policy of dclente with the West and Inclined more and more toward Peiping. The test ban treaty threwoncrete Issue that could not be hedged, and North Vietnam refused to sign. The communique of the3 meeting of the Lao Dong Central Committee, issuedonth's delay, comes down on the Chinese side on most doctrinal issues, but does not join Peiping's direct attack on Khrushchev himself. Instead, the Lao Dong document carefully"Yugoslav" revisionist hovesy from the erring doctrines of brothers who should be kept within the fold.

o far. Moscow appears to have appreciated Hanoi's dilemma, for there is no sign of curtailment of Soviet and East European trade or aid. We believe that Hanoi, though continuing to side with Peiping on most Issues, will maintain as cordial relations with Moscow aspermit and will seek to avoid toohinese embrace.

The Conquest of South Vietnam. DRV leaders almost certainly view Communist prospects in South Vietnam with considerableand believe lhal their program of increased pressures0 has offset both earlier GVN progress and subsequent US massiveThe DRV apparently estimates Uial It can wear down the South Vietnamese will to resist by harrying OVN forces, demonstrating their inability to protect the villagers, and exploiting legitimate grievances agalnsl Saigon officialdom.

A number of factors0 have greatly aided theseendeavors. President Diem's government grew less effective, and South Vietnamese grievances and vulnerabilities rose. DRV-sponsored gains In Laos provided secure routes for infiltrating additional arms and cadres into the South, and the Laotian settlement2 raised doubts in South Vietnam about US determination. Despite increased US support, the GVN has not yet shown itself able to cope with the political-military Viet Cong threat. The South Vietnamese haveDiem, bul the effectiveness of the present successor rule has yet to be proved. Finally. French championing of neutralism, and the impression in Saigon of growing defeatism within the US, haveHanoi's confidence.

The French Ingrettieni. The Indochincse picture has recently been complicated by French initiatives. Hanoi would not consider any rc-eslablishment of French control or dominance In Indochina, but would certainly prefer French presence to American. It may view Franceossible provider of economic aid, especially If the Sino-Soviet quarrel eliminates lhe USSRource. For the moment, Paris, Hanoi, and Peiping seem to share the common objective of eliminating the US presence in Indochina, but so far the Communists have apparently not given the French neutralization idea much encouragement. At awc believe the Communlsis will make whatever use they can of

French gestures and initiatives to confuse Western opinion, and to increase popular sentiment in the South for neutralism and negotiation.

Neutralism and Negotiation. Hanoi has exhibited little Interest in an international settlement guaranteeing neutralization of SoulhUs official posture has been, and remains, that the Southstruggleurely Internal affair, though it Is In sympathy with the aspirations of the "National Front For the Liberation of Southhich is completely controlled by the Hanoi-directed Viet Cong. Hanoi's minimum condition for settlement (withdrawal ol the US presence) has not changed, but its tactics are probably shilling and becoming more flexible. The "Front" may try to capitalize on Its gains and on war-weariness in South Vietnam by attempting looalition "neutralist" regime in which Itey role. In any event, Hanoi would almost certainly consider any form of "neutralist"as simply an interim step toward complete Communist control, and, whatever agreements are signed, we believe that the Viet Cong apparatus would not be dismantled.

DHV leaders probably believe that the GVN will to resist Ls waning and has been further reduced by the current surge of neutralist talk. They may feel the same Is also true of the US. Hanoi may try lo speed the process by further Increasing the pressure. If so, we believe DRV action would be confined to such steps as Increased Viet Congsupported by belter and heavier weapons, and by heightened Viet Cong terrorism in the cities. Thus they would hope to promote awhere the US would have toace-saving formula for retreat, or be asked lo withdraweutralist South Vietnamese regime. We believe that Hanoi will not undertake an Invasion orajor covert commitment of DRV military units; we see no Indication that the DRV leaders are disposed to stimulate drastic US counteraction.

The Situation tn Laos. Hanoi's goals in Laos have been In many respects more limited than In South Vietnam. North Vietnam already controls enough Laotian territory to further Its objectives In South Vietnam.B, Hanoi, while working to build up the Pathet Lao. was satisfied to see an Independent, though weak and complaisant, central government.anoi seems to have decided that it needed sufficient control in Laos to protect North Vietnam's western flank and to secure lines of communication Into South Vietnam for the real insurgency Hanoi was about to start there. These objectives have long since been achieved.

More recently. North Vietnamese Involvement in Laos has been largely concentrated on protecting their investment and bolstering the position of the Pathet Lao When the Pathet Lao lias gotten into trouble, some increased. If temporary. North Vietnamese participation has often been necessary. For example, the recent FAR Neutralist

capture- of Kam Kcut and Lak Sao was followed by an efTeetlvconce Vietnamese reinforcements became available. We view the North Vietnamese commitment in Laos as being, in their view, somethingideshow, but one paying dividends in combat training, border security, and secure access to the South. North Vietnam will probably introduce whatever PAVN elements arc required to maintain the present Communist position in Loos, but the Communists will seek to avoid initiatives that they would consider likely to provoke US military action However, the Pathet Lao. with North Vietnamese assistance, can be expected to strengthen its hold in Laos and continue to erode theposition of the non-Communists.

t the moment, the situation In South Vietnam and Laos, coupled with increasing international interestegotiated settlement luseems to be hastening the achievement of Hanoi's goals. This may be so, but for reasons Indicated above, we do not believe that North Vietnam Is playing entirelyosition ofecade after Dien Blen Phu, Hanoi is still waiting for the full fruits of victory. The North Vietnamese people hove seen the bright promise of independence laderab existence, worse In most ways than under French rule and enforced by more onerous controls The population Is rising and the food supply declining. The Party has seen brave plans founder, and current development efforts require conditions for success which may not obtain If present pressures continue. We do not anticipate any imminent collapse in North Vietnam, but the eventual departure of Ho will probably Introduce severer strains than any the regime has yet faced.

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