SHORT-RUN OUTLOOK FOR THE LAOTIAN COALITION GOVERNMENT

Created: 9/26/1962

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APPRQVIOFDR BiLiASt datliah fill

by

DIRECTOR OF CENTRAL INTELLIGENCE

Concurred in by tha UNITED STATES INTELLIGENCE BOARD Ai Mkotad crwWcrf2

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Tha Mowing intelligence orgomzafioru porficipofea' in the preparation of this estimate:

Tho Central Intelligence Agency and the intelligence organisations of ihe Depart, menti of Stole. Defento, me Army, me Navy, the Air Force, and The Joint Slaff.

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Director ol Intelligence and Re*eorch, Deportment of State Director. Defente Intelligence Agency

Aitltlanr Chief of Staff for Intelligence, Deportment of the Army Aulitant Chief ol Naval Operation!epartment of th*

AiiiWont Chief of Staff, Intelligence. USAF Oireclor for Intelligence. Joint Staff Director of the National Security Agency

Navy

WARNING

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The Atomic Energy Comminion Representative to the USIB, and the AwbwntFederal Bureau of Inveitigaton, the subject being ooisld* of their jurisdiction.

SPECIAL

NATIONAL INTELLIGENCE ESTIMATE

Short-Run Outlook for the Laotian Coalition Government

SHORT-RUN OUTLOOK FOR THE LAOTIAN COALITION GOVERNMENT

THE PROBLEM

To estimate the prospects for the Souvanna Phoumagovernment in Laos over the next six months or so

CONCLUSIONS

Souvanna Phouma coalition government hasno progress in establishing effective controlLaos. let alone in implementing Its policies.of the three factions remain in control of andthe areas they held prior to the formation of (Para. 1)

coalition regime will almost certainly not beestablish any significant political authoritycountry during the period of this estimate."principle of unanimity" requiring concurrence offactions on all government decisions will preventresolution of most key Issues. Nevertheless.as the instrument of both East and West for ain tensions in Laos, is not without leverage

coalition government will be forced to seeknot only for economic development, but for theimmediate, acute financial problems It will acceptfrom all countries, though Souvanna will probablyto the US for budgetary and foreign exchange

Communists will seek to expand theirpower in Laos with the ultimate aim of achievingcontrol over all of the country. To this end, they will

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nominally support the Souvanna-led government, proceeding toward their goal mainly through political and subversive means.

will probably continue to cooperate withhowever reluctantly, in the conduct ofwill play an important role in the coalition, having aover those actions of the government which areto him.

Communists will almost certainly seek tomany North Vietnamese forces and military advisersas they can do with safety. Souvanna will almostbe unable to prevent Communist use of southerna corridor for assisting the Viet Cong effort In

the absence of an acceptable compromisea successor, Souvanna'a disappearance would probablyin an increase in the strength and influence of theLao Hak Xat (PL/NLHX).

Souvanna coalition will probably still be insix months from now. The longer the coalition isstay in existence, the greater its chances forthe new status quo. Nevertheless, Communistcontinue to grow, especially in those areas wherehas military control, unless vigorous efforts are madeand strengthen the non-Communist elements

DISCUSSION

The Souvanna Phouma coalitionIn Vientiane has made virtually no progress In establishing effective control throughout the country, let alone inits policies. Although the three Prince* agreed to unify their armed forces at their meeting in Zurich onheir forces still remain in control of and administer the areas they held prior to the formation of theespite the government's decision that "in principle" there would be freedom of movement throughout thethe Pathet Lao (PL) continues to deny access to areas under its control. TheCommission for Supervision andIn Laos (ICC) has stationed inspection teams at the withdrawal checkpoints, but has been given an opportunity to observe theof onlyorth Vietnamese personnel. In spiteormal commitment to workease-fire, clashes continue between PL and FAR (anti-Communist) forces, and the North Vietnamese and PL continue to attack tribal Meo guerrillas. Although some Northtroops and technicians appear to have been covertly withdrawn, we believenumbers still remain in Laos. Moreover, the US Government probably will not be able to ascertainhe withdrawal deadline, how many have left the country.

* See map at Annex.

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eanwhile, the three factions In the coalition government remain widely divided and Premier Souvanna Phouma avoidson touchy questions. Souvanna's establishment of effective government Isinhibited by the agreement to theofeached by the three Princes prior to the formation of theUnder this "troika" provision, allmust have the concurrence of the three major factions. Although the actualof this principle has not yet beenworked out. this rule will almostprevent or postpone resolution of most key issues.

effect. Laos is at present virtuallyin the segments it controls, theLao Hak Xat (NLHX) is consolidatingunmolested while attemptingto disrupt stabilisation of tho newand sow discord among theImmediate prospects In Laosupon Communist Intentions,Souvanna Phouma's ability toneutral and effective government.

Communist Intentions

The fact that the Communist Bloca settlement rather thanilitary solution in Laos appears to indicate its desire to avoid the risk of large-scale US-Communist hostilities in southeast Asia, and to win Laos by political-military nibbling. Although the Communists are confronted with some obvious problems and difficulties, aof factors Justify an optimistic Communist outlook: the country is divided andense of nationhood, the Communists control and are indoctrinating many areas, the anti-Communist armed forces are weak and will be further weakened by the withdrawal of the US military presence, the coalitionIs feeble, and the economy of theis In serious straits.

in Laos isto appear to respect the Oeneva Accords, to profess support of Souvanna, and toshowy economic aid to his government; to avoid the development of such sudden.

^jbrupt challenges to the Laos "solution" as

might lead to the establishingajor US military presence in or near Laos; to hold and consolidate those areas, including theto South Vietnam, nov controlled by the PL; to expand such control Lnio other areas wherever possible; and to bring about anCommunist cast to the coalition government's domestic complexion andorientation. The Communists will seek to retain both PL and North Vietnamese military forces In Loos for some time. The FL/NLHX will continue to depend chiefly upon Hanoi tor support and guidance, though an Increased Soviet and Chinese Communist presence in Laos will probably occur, and. with it. more Soviet and Chinese contacts andwith the PL/NLHX. Sino-Sovietevidently have notignificant effect upon the coordination of Bloc policy regarding Laos.

Facfori Affecting Souvanna Phouma't Ability toeutrol and Effective Government

he Neutralists. The success or failure of the coalition government will, in large measure, depend on Souvanna's ability totable and genuine neutralistand induce the other two factions towith that center sufficiently to permit the government to function. This is an enormously difficult task which willkllirul balancing of conflicting Interests. Even the neutralists do not agree on the same definition of "neutralism" for Laos. Some, like Foreign Minister Qulnlm PhoUena,ong history of anti-West sentiment andwhich has led to clearly pro-Communist views and affiliations; others whoolicy of neutrality for Laos have found their views compromised in varying degree by their association with the PL and by Bloc blandishments; and the attitudes of still others remain basically hostile to

The neutralist military forces are beset by differences and there is friction andwithin their ranks. Souvanna's present relations with Kong Lc are not clear but Kong Le appears to have drifted closer to the PL-Neutralist General Khammouane Bouphastill loyal to Souvanna but his troops are confined primarily to Phong Saly Province and Ills ability to provide effective military support to Souvanna is, therefore, limited.

Despite this lack of neutralist cohesion and strength, Souvanna is not without assets. He is the Instrument of both East and Westecrease of tensions in Laos. Both the anti-Communists and the NULX recognize that heey element in the situation, and Souvanna isosition to pressure them by threatening to resign. He has someof maneuver in manipulating NLHX and Bloc support to his own ends. There Ispublic support in Laos for neutrality, however vaguely comprehended, which pro-ides Souvannaarge, latent, andreservoir of potential backing. He enjoys the support of the US Government and of remaining French personnel and French interests In Laos. He has alreadythat he can at times work with Phoumi and the anti-Communists in offsetting pro-Communist pressures. PL, NLHXand influence is probably still minimal in many outlying areas, including certain places where they claim military control. Neutralist or antl-Communlst elements thushance to counter Communist influence In many areas of the country. Moreover.appears determined to prevent atakeover.

The Phoumt Faction. Thefaction of General Phoumi Nosavan joined the coalition government with great reluctance. Only the insistent pressure of the US brought Phoumi to the negotiating table. He Is almost certainly not In sympathy with the policies of Souvanna, and his

sonal prospects In the new order of things must appear limited to him. Phouml'sremains questionable and his Intentions ambiguous. His popular support is limited and restricted to those areas under the control of his military forces. He does, however, hold many cards. Heeto power over those actions of the government which areto him. Ho is the unquestioned leader of the anti-Communist faction. He and his forces continue to occupy important strategic areas inMekongwill attempt to consolidate control there in the face of PL NLHX pressures. For the moment at least, he dominatesman FAR, through the personal loyalty of the army leaders, and he has not despaired of some continuing US support.

e will, therefore, play an important role in the coalition government. He will probably continue to cooperate withhowever reluctantly, in the conduct of government. He will insist on reciprocity by the PL/NLHX in any concessions he may be willing to make, and is not likely to give up control of areas now held by his forcesequivalent territorial concessions from the Communist side. Like Souvanna, he may occasionally seek to exert pressure by threatening to withdraw from the coalition. Be will almost certainly continue to maintain close, covert contacts with the Thais, and Marshal Sarit's counsel will carry considerable weight with him. Phoumi will also continue to turn to the US for guidance and support, but will not necessarily follow US advice and on occasion will ignore It. He might evenoup, but his control of the FAR and his overall influence in Laos will almost certainly decline as American support is channeled to the coalition government rather than to him directly.

The NLHX. The Communist presence in Laos is far greater than it was inhen the NLHX participated in an earliergovernment, also headed by Souvanna Phouma. Since that tune the Communist side has defeated the anti-Communist FAR, greatly expanded those areas In Laos under Communist domination, effected ansettlement which by no meansfurther Communist penetration in Laos, more than doublednd influence in the government, and opened the way for direct Soviet andCommunist Influence in an area formerly delegated to North Vietnamese activity. The leadership of the PL. NLHX appears to rest with certain "old guard" Lao Communist Party leaders, mostly civilians, who have worked together for many years, and NLHX participation In the government means direct Communist Influence. The top-rankingin Laos, and real leaders of the PL/ NLHX, appear to be Nouhak Phoumsavan. Kaysone Phomvinan. and Phoumi Vongrichit, Minister of Information in the coalitionThe exact status of Prince Sou-phanouvong. titular head of the ni.hx. is not clear, but he appears to be more than aIn any case, his national reputation, leadership ability, skill in administration and negotiations, and family relationship with Souvanna Phouma are valuable assets to the Lao Communist movement.

The NLHX is currently by far the strongest political organization in Laos. It has province, county, district, and villageIn many of the areas dominated by the PL; and itlandestine hierarchy of "politico-administrativeIn some areas occupied by neutralist or anti-Communist forces. It also has aradio broadcasting facilities, and is able, as demonstrated during the supplementary electionso turn out the vote.there Is some doubt as to how complete NLHX control Is in many PL areas and the

extent of its Influence in neutralist territory. Harsh PL occupation measures havealienated many villages, and North Vietnamese Intervention has associated the PL, NLHX with the much disliked Vietnamese.

Prospects

Communixt Policy. The objective of the Communists will continue to be to expand their influence and power in Laos with the ultimate aim of achieving effective control over all the country. To this end. they willsupport the Souvanna-led government as the best alternativeotentiallyrenewal of hostilities. They willproceed mainly through political and subversive means since sharply Increased Communist military pressures might cause Souvanna to oppose actively the PL NLHX

It is likely that the Communists win be able to maintain this strategy for some time. Ramifications of the Sino-Soviet dispute,couldignificant effect on the conduct of an agreed Communist policy In Laos. Because of the key role of North Vietnam In the area, both the Chinese and the Soviets are concerned to exert their influence overeterioration of Sino-Soviet relations probably would intensify thisand Moscow might find It expedient to give North Vietnamese views greater weight, even if this meantolicy of greater risks. At present, however, the Soviets out of consideration for their broader East-West interests and their stakeLaosill probably resist any Chinese or North Vietnamese pressuresore militant line in Laos and continue toautious and flexible tactical approach. On the other hand. Moscow will be reluctant to apply unilateral restraints on the PL and North Vietnam in Laos, unless it was convinced the risks of substantial US military Involvement were high.

The Souvanna coalition will probably live out the period of this estimate. Souvanna may make some headway in asserting hiswithin the cabinet and, possibly, in extending his government's activities into some PL areas in fields such as health, public works, and transportation. The government will almost certainly not be able, during the period of this estimate, to establish anypolitical authority In those areas of Laos now under the control of theoose, informal partition of Laos will probably persist, unacknowledged by any of the principal.', but probably notto all for the near future.

Political Orientation. Souvanna will attempt toolicy of genuinein foreign affairs during the period of this estimate, but because of Communist pressures within and upon Laos he may find thisdifficult. The government will establish formal diplomatic relations with most Communist states and other countries which wish to have relations with thegovernment.

The Economy. Souvanna must resolve the serious financial situation confronting the government before any approach to the formidable economic problems of the country is possible. Even In the unlikely event that substantial demobilization of military forceseduction of military expenditures and the coalition governmentigh, and most un-Lao, degree of financialit will continue to need substantial foreign aid to stabilize the economy and to avoid headlong inflation. The fact that Phoumi is Finance Minister while NLHX Prince Souphanouvong is Minister of Economy and Plans does not suggest prompt andaction in financial and economic matters. The coalition government will be forced to seek foreign aid not only for economicbut Tor the relief of Immediate, acute financial problems. It will accept this

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from all countries, though Souvanna will probably look especially to the US for bugetary and foreign exchange support.

Withdrawal of Foreign Communist Armed Forcei.ew moreand noncombat personnel may check out through the ICC. it is highly unlikely that all North Vietnamese forces in Laos will beTheLHX almost certainly will obstruct and obfuscate both the issue Itself and ICC verification of the presence of North Vietnamese forces. As many Northforces and military advisers as thebelieve they can safely retain In Laos will almost certainly remain Illegally to train and otherwise assist the PL, to establish arms caches, and to support the infiltration ofand military equipment into southern Laos and South Vietnam. Many Northcombat units will probably be moved surreptitiously to North Vietnam or areas of Laos bordering North Vietnam where they could be quickly reintroduced Into key areas of Laos. The North Vietnamese will continue to support the Communist forces in Laos.

Withdrawal of Western Military Forces. The Geneva Accords provide that the Laotian Government mayrench Military Mission (FMM) to train the armed forces of Laos. Unless arrangements with the French are worked outhe date by which Ihe US MAAO is to be withdrawn, there williatus In the Western military presence in Laos Whether or not the FMM Is established, the removal of US forces from Laos will substantially decrease Western mill-tary influence on the Laotian Armed Forces.

Demobilization and Integration. It is unlikely that any substantial progress toward the demobilization and integration of the various Lao armed forces will be achieved in the next sixoken Integration of some forces of each faction may take place, but PL leaders and Phoumi will almostobstruct the solution of this Issue, each side insisting on terms which would provide itelatively favorable position In anmilitary force. Throughout the period under review, both the PL and Phoumi will probably disperse veterans in their military forces throughout the country to engage in political action.

Use of the Corridor. Souvanna will almost certainly be unable to preventuse of southern Laosorridor for assisting the Vict Cong effort in SouthIt Is unlikely that the ICC will be able to carry out effective Inspection in this area. Although Communist activity in the corridor would be made somewhat more difficult by the occasional visits of ICC teams, we do not believe the Communist capability to support Viet Cong operations In South Vietnam is likely to be seriously impaired.

Tribal Mmonties Despite Souvanna's assurances that minorities would receive better treatment in the future, it is unlikely that this will come to pass. The principal sufferers will be the Meos and the Khas who have successfully maintained armed bases within PL territory. Tho PL will continue to attack thearticular, refusing to recognize them as part of the FAR, although they might agree to their disarmament and resettlement. Souvanna will probably seek to effect this latter solution, but Its prospects are dim.

General Elections. The three factions have pledged themselves to eventualgeneral electionsational Assembly, but we do not believe there will be national elections within the period of this estimate.

Souvanna's Departure. In the event Souvanna disappeared from power, because of death, disability, or voluntary withdrawal, the coalition would probably collapse andmight again break out. Inase, the danger of the Communists taking over all of Laos would be great. East-West interest

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in preventing Laos from becoming an arena of international conflict might suffice toa compromise candidate to continue as Premier but no one on the Laos scene at this time, Including the King, appears readilyto all interested parties as aThus, Souvanna's disappearance from power would probably result in an increase in the strength and influence of the PL. NLHX.

n sum, during the period of thiswe see virtually no chance of theIn Laos of an effectivelycoalition government exercising power throughout the country. At the same time, there is no sufficient reason to estimate that so long as Souvanna remains, the present coalition will collapse, or that Laos will be-

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ommunist state in the near future. The Souvanna government will probably still be in existence six months from now. This estimate is based on tho fact that all the principals, local and international, seem at the moment reasonably satisfied with thearrangement. Moreover. Souvanna hasemarkable ability to survive politically The longer his coalition is able to stay In existence, the greater its chance for continuance as the new status quo.Communist influence will grow,in those areas where the PL hascontrol, unless vigorous efforts are made to unify and strengthen the non-Communist elements in Laos.

SEC

ANNEX THE LAOS SETTLEMENT

new phase In the struggle over Laos opened when the coalition government of Prince Souvanna Phouma was sworn in on2 afteronths of intermittent negotiations, in Switzerland and Laos, among the three contending factions. The formal agreement on the coalition cabinet was signed onune. The negotiations, which had been interrupted by Souvanna's departure for Prance In late March, were renewed after his hasty return to Laos in May when thetown of Nam Tha fell to Communist forces. Prior to his departure, thehad been deadlocked over theof key portfolios in the coalition cabinet. After consulting with the Kingune, Souvanna reopened talks at the Plaine des Jarres with Prince Bonn Oum representing the Royal Laotian Government (RLG) and Prince Souphanouvong. the Pathet Laonune, compromises finally brought about agreement on thendividuals to fill the cabinet posts.

Seven of the posts are held by Souvanna's Xlcng Khouang neutralist group, and four each by the Vientiane neutralists, General Phouml's right wing faction, and Princes leftwing faction represented by the Neo Lao Hak Xathe political arm of the PL. In addition to hisas Prime Minister. Souvanna holds the portfolios of Minister of Defense, Minister of Veterans Affairs, and Minister of Civic Action. General Phoumi and Prince Souphanouvong are both designated Deputy Prime Ministers and fill the posts of Minister of Finance and Minister of Economy and Plans respectively.

The international aspects of the Laotian settlement were concluded in Geneva on2 with the promulgation of the Geneva Agreements on Laos. These agreementsof twoDeclaration on the Neutrality of Laos" which is made upStatement of Neutrality by the Royal Laotianesponsive declaration by thether nations participating in the conference,Protocol to theon the Neutrality ofheof Neutrality" by Laos and the"Declaration on the Neutrality of Laos" together are regarded as constituting anagreement.

The Declaration provides for theto respect the sovereignty,neutrality, unity, and territorialof Laos. It containsncluding respect for the wish of Laos not to recognize the protection of any militaryor coalition, including SEATO; annot to introduce or connive In theof foreign troops or militaryinto Laos; and an undertaking to the effect that Laos win not be usedorridor for infiltration into South Vietnam. The Declaration docs notommitment by Laos to demobilize and integrate Its armed forces or to refrain from taking reprisals against Laotians, including the Meos, for their activities prior to the agreements. However, Souvanna, in his address to the final plenary

session of the Geneva Conference, pledged his governmentolicy of militaryand "elimination of enmities of the recent past"

he Protocol consists ofrticles and is primarily concernedith the terms of reference for and functioning of the International Control Commission for Laosowever, it does contain other significant articles;bliges all parties to withdraw all foreign military personnel, both regular and irregular, from Laos androhibits the Introduction of such personnel. As an exception to this rule.rovides for an arrangement to be made between Prance and Laos for thein Laos of French military instructors. If the RLG considers it necessary.rovides that the cochairrnen of the Geneva Conference "exercise supervision over theof this Protocol and thelacing responsibility on the Soviet cochair-man to see that the Communist signatories abide by their commitments. In spelling out the functions of theumber of the concernedArticlesndthe qualifying phrase "with the concurrence of the Government ofhis concurrence is considered to have been given upon signature of the Oencva Agreements by the coalition government.

he principal policies of the coalition government had been previously outlined in the Zurich communique issued by the three Princes onhese policies have been reaffirmed subsequently by the leaders of the three factions and the coalitionItself. They are: (a) to establish andease-fire; (b) to enforce democratic liberties benefiting the people and, specifically, to restore7 electoral law; (c) toand secure respect for the Independence, neutrality, unity, and sovereignty of Laos; id) to assure Justice and tranquilityiew to national reconciliation withoutfor ethnic or political reasons; (e) to unify the armed forces of the three factionsational army; and (f) tothe economy and raise the standard of living.

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