Created: 3/28/1961

OCR scan of the original document, errors are possible

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national intelligence estimate


/outlook iiN;iiiUimi'AMD

- southeast asia ;






A. Conditions and Trends ArTectlng Internal

H. Conditions and Trends Affecting International Orientation




The Military ond Political

H. South




outlook in mainland southeast asia


analyze the baste political and social conditions and trends inAsia;1

identify potential political-military crisis situations and to estimatedevelopments over the next year or so in domestic stability andof the countries of the area; and

estimate the probable effects on the peoples and governments ofin the event there were significant Communist gains In Laos or


Southeast Asian countries are either now experiencing or will encounter in the next year or two serious political crises arising out of foreign intervention, domestic strains,omplex of factors attributable to their basically unstable and unhealthy political, social, andstructure. By far the most serious problems are the deteriorating situation in Laos and the mounting Communist threat and precarious governmentalin South Vietnam.

The Pathet Jao probablyreater military capability than they have yet chosen to exercise. They could sharply step up the action at any timeeries of local victories.

'taos. South Vietnam. Cambodia. Thailand,and Malaya.

This would increase the likelihood of the disintegration of the Laotian Army and the subsequent collapse of theposition. The Laotian crisis hasatter of contention among the major powers and its resolution restsIn non-Laotian hands.)

n South Vietnam, the situation of the Diem government seems likely to become increasingly difficult, not only because of rising Communist guerrilla strength and declining internal security but alsoof widening dissatisfaction with Dicm's government. Since the coupofiem hashis control of the government and made some cautious moves toward government reform; he has taken action

to improve the anUguerritta capabilities ot (tie auny and stepped up militaryagainst the Viet Cong.the factors which gaveto the0 coup attempt atlli exist, and we believe that the odds favor another coup attempt by non-Communistin the next year orewould attempt to exploit any new efforts to unseal the government. We are not confident that the auny would be able to keep the situation from gelling out ot hand. )

There is deep awareness among the countries of Southeast Asia thatin the Laotian crisis, androfound impact on their future. The governments of the area tend to regard the Laotian crisisymbolic test of intentions, wills, and strengths between the major powers of the West and the Communist Bloc,

Those countries which arc in close alignment with the US favor stronger measures to assure aton-Com-muntst and preferably anwestern-oriented regime In Ij*os; neutralist Burma and Cambodia, as well as Malaya,eutralist but not Communist-dominated government. These latter governments favor some form of international political agreement to end the crisis. They would be alarmed if Laos were lost under conditions which Indicated to them that the US position In the area had gravely weakened

The loss of Iaos to the Communists, or perhaps even the division ol thewould almost certainly Incline the Thai toward accommodation topower in Southeast Asia. ACommunist-controlled Laos would vitally threaten South Vietnam's independence: it would greatly extend the Communist frontiers with Southit would bring substantially greater Communist military power lo bear on the crucial Saigon defense complex; and it would greatly facilitate Communistand subversion. The close proximityommunist state would make more difficult Western efforts to starch up local resistance. In short, the loss of Laos would severely damage the US position and its influence in Thailand and South Vietnam.

7 The future course of all of the countries of Southeast Asia would be stronglyby the actual circumstances in which the loss or divisionos hadas well as the local appraisal of the attitude and actions of the US into the situation. The extent to which these countries would go inBloc pressures nr In withstanding local Communist threats would depend in great degree on whether they still assessed Uiat the US could stem furtherexpansion in the area. They would feel more keenly thantrong temptation toeutral position between the two power blocs, even though they recognized that the US is the only country with sufficient power tothe Communist Bloc In the area. Although they probably would be deeply disillusioned regarding US resolution after the loss or division ot Iaos, they would nonetheless welcomeof US firmness and might inmodify their appraisal of their own future in due course.

U If IfrTrrr


Although the Communist threat to South Vietnam has reached serious pro-portions, lhe chancesommunist takeover in the next year or so areless than they areos Nevertheless. 1'eiping and Hanoi almost certainly attach greater importance to then efforts in South Vietnam than they do to their efforts in Laos. US prestige and policy are particularly deeplyin South Vietnam. Diem's policy of close alignment with the US is on trial in the cur icnt crisis. All countries of the area would attach great Importanceailure of the South Vietnamlo rope successfully with the rising tempo of Communist subversion and aimed Insurrection. If South Vietnam were to fall to the Communists or be forced to swing toward neutralism, the Impart upon the countries of Southeast Asia would be similar in kind hutmore severe than that resulting from the loss or division of Laos.



their histories tbepeoples ot Southeast Asia haveIn tlie crossfire of outsideearly times they lived in the shadowsgreat civilizations of India and Chinathey derived many characteristicsdiverse cultures and social orders.the period of colonialcivilization lert its stamp onand political institutions of therecently,sia has beenin the competition between Uic twopolitical and Ideologicaltotnlitananism anddemocracy.

he peoples of Southeastbeen involvedevolutionarywhich has few parallels In historyscope, and speed. During thisSoutheast Asia has experiencedthe military defeat In World War IIWestern colonial powers by ana disillusioning occupation byereat upsurge of nationalism, the defeatin Indochina, and the rapid growthpressures and Influence.end of the Second Worldarehas swept mainland Southeast

Asia, leaving in Itsumber of newles. Traditional social andpatterns and values have beenchange. Economic and politicals have multiplied In number and increased In complexity. Every slate in Southeast Asia, except Thailand, has experienced Communist Insurrection or Invasion. Their Immediate neighbor- Communistemergedew and threatening Asian power, and lhe us, partly in response, has greatlyIts activitiesesence ir. their 'area. Thus, regardless of the wishes of the peoples and governments of the area, the Issues of the global cold war between two great world power blocs have focused sharply In Southeast Asia. Historically, the peoples and leaders of Southeast Asia, when caught betwten overwhelming outside forces orhave taken the line of least resistance and have accommodated to superior power,

here Is great political, cultural, ethnic,historical diversity among tho countries and peoples of SoutheastThere Is among them no sense of regional unity. Moat Of the peoples of the area identify themselves with their ethnic groups. More recently, and thus far only within limited circles, they hate begun to Identify themselves with their na-

lions. Despite their groat diversity Ihe peoples andea late Ina number of basic problems concerning economic development, political stability, ethnic antagonisms. Communist pressures, and national jccuii'.y. They also share,lo varying debtees, an emotionalcompounded of anttcolonialism. racism,rowing demand for equality, respect, and prestige among nations.


A. Conditions ond Tr*nd: Affecting Internol Development

No strong sense ot national unity has yet developed among the diverse peoples within the countries of Southeast Asia. They all contain sizable unassimilaled ethnicIn Malaya, for example, the population is split chiefly between the indigenous Malays and the Overseas Chinese. The ethnic Lao constitute only about half the population of Laos; the remainder are made up of aof ethnic and tribal groujts. several of which overlap into the adjoining countries of Burma. China, and North Vietnam. Kven In Cambodia and Thailand, which have the advantage of considerable linguistic, cultural, and ethnic homogeneity, there are large unas-slmllalcd Chinese and Vietnamesewhich wield economic Influence dispro-porlicnato to their size. The historicand antagonisms among tho various ethnic groups continue, and there are very few Instancesrend toward mutualor assimilation.

None of the nations cf Southeast Asia has yet firmly established Institutions and traditions necessary for peaceful and ordeily political change. British tutclaga hasromising impact on the political life of Malaya and But ma, but this is largely offset in the former case by the potential forwhich exists in the communal nature of Malaya's society. Throughout the area there exists an unwillingness among the moderate and conservative national leaders to submerge their individual or groupand rivalries for the sake of national welfare. We can discern no trend towardcohesion among the moderate and conservative leadership groups.

Despite postwar efforts lo establishdemocracy, the present trend is lor political authority to become Increasinglyin veiy small groups. In mostpolitical power also means economic power and personal gain, and In manypolitical power is regarded as the means and economic power the end. The groups in power aremall pait of Ihe educated elite in each country. Although the elite groups are at least superficially attracted to Western political concepts, tlie political and social realities in their countries retard, and in some cases preclude, the development of conceptsoyal opposition and an orderly transfer of governmental authority.

Thereast intellectual, economic, and social gulf between the leadership elites and governing circles on the one hand and the mass of the population on the otner. In all the countries ot the areaoercent of the population aio peasants or villageFor the most part they are illiterate, suspicious of central authoilty, and out of touch with national and internationalMany of them live outside the national money economy. Although most of the peasants tend to be politically apathetic, they arc often resentful of local and provincial officials, and Ihcy are gradually becoming aware of the vast difference between their lot and that of the leadershipgap exists between tho elites and Hie bulk Of the people who live in the urban centers, where the dissatisfaction growing out of tho situation is more acute. The smallgroups arc under increasing pressures from the educated elites and. to some extent,om the masics whose politicaland economic expectations are on the rise. Conscqucr.tly, governments in the area are finding It increasingly difficult to evoke positive public support.

he military has generally come to play an Increasingly important political role in the area except in the cses of Cambodia and Malaya. Thailand lias been ruled almost con-


?ilitary juntaleaders throughout the area accountignificant part of the educated elite, and they arc becotnlnr: increasingly conscious of their potential political power and increasingly dissatisfied with the performance of their civilian governments. Their grievances In elude governmental inefficiency andand dissatisfaction with themnni of dealing with internalwithin the military.esult, the governing groups cumrot count so heavily as they once did on military backingime of political crisis. For their part,ldcis In the Southeast Asia countries are prone to factionalism. In general, the nrore they become Involved In political andaffairs, the wider spreads the circle ot corruption among their ranks and the more acute their factiaial riralrles tend to become.

matter how well motivated, thers have at limes shown themselves toinept and incapable ofpolitical action. Moreover, theybeen able to overcome theof the peoples of the area lomilitary with suspicion and hostility.other hand, despite their shortcomingsinstruments, the armies of theA<lan nations lurve been Importantforces on the national scene andIn Inhibiting Communist'-onsttlute the largest and best organelement in the society of Ihese nations.

onditions ond Trends Affecting Inlsrnolionol Orientation

of the peoples of Southeast Asiavaguely aware ot developmentslocal communities. Among theand stmlcducatcd groups in thehowever, there lias developed anIn International affairs. Ingroups are highly nationalisticsensitive to real or imagined slightsnation'* sovereignty. Many of theparticularly those dissatisfied withor political lot, are attracted to

Marxist and Socialist economic theoriesin many instances undcistanding them. Anllcoloniaf and anliwhlle sentiments arc likely to be strong and vocal among these urban groups.

The peoples ol Southeast Asia arewith their own problems andThey have no desire to tecattlefield in the cold war feed resent being treated as pawnse major powers. Thererowing tendency among them to view the Communist Bloc as on the rise and the West as on the wane in the thythrn of history. They have no real enthusiasm for alignment with cither the Communist bloc or the West, and among them thererowing tendency to beheve that neutralism provides greater security and freedom of action at less risk than close relations with the West.

To the educated elites and the smallgroups alike, the proximity ofChina, with its vast population and growing military power. Is an omnipresent fact ol Hie. The foreign policy questionbefore the Southeast Asia governments Is how best to deal with the looming threat of China- whether to depend upon Western policy arid strength, or to make some degree of accommodation with Communist China. In cither case, the intent is thenational Integrity andand the method isavoid complete commitment and to maintain the maximum flexibility.

In sum, while the Southeast Asians are In no hurry to place themselves at the Bloc's mercy, they are in general becoming more reluctant totrong stand Into China In the absence of certainof swift, successful, and painless Western protection. This is caused principally byto offend an Increasingly powerful China; growing concern over involvement In modern war; uncertainly, fed by recent eventsna, as to US consistency and promises ofelief that they can survive and successfully play of! East and West through neutralist tactics; and concern that growing Sino Soviet power may deter the US fromeffec-

f T.

live action to prevent an eveiitu.il Chinese Communist hegemony in Southeast Mia.


he following series of brief countryconcentrates on the two or BUMIn each country which have reached crisis proportions or arc likely to do .so in Ihe near future Except for the situations in Laos and South Vietnam, the most pressingate the result of particular in term Ilather than Communist activity.

he Communist threat in Ijios is critical and has reached serious proportions in Svuth Vietnam. Elsewhere in mainland Southeast Asia the immediate security situation is reasonably good The protracted Communist insurrection in Malaya is virtually liquidated and the major Communist cfToit there has shifted from aimed "national liberation" to the establishmentase for futuie political activities. Tn Thailand, Communist assets are sill) quite limited. Local Communistwithin liuima and Cambodia appears to be proceedingow key.

A. loos1

The nd foltoot StluoiioM

aosountry divided by twofactions. The pro Communist forcesXieng Khouang. Sam Neua. Thong Saly, and large parts ofabang provinces. They aie consolidating ihelr political andauthority in these areas without effective resistance. Tlie Pathet lao and the Bloc capitals still claim Souvanna Phouma to be the legal Primeovernment ilvallug that at Vientiane has been InstalledXieng Khouang. with Khamsouk Kcolaas Premier while Souvanna remains out of the countiy. The Pathet Lao have begun

.bo. 8NIKTht Situation and Shod-Turn Outlook Inecember 1KQ:JOOli Communist Intentions" tf-ited tt December IBM; and. "Probable Cor.inuinl.il Reactions loouuei of AeUon WIUi Retpccl lo Low; datedo organize the tenitoiy under Iheir contiol along Communist lines

he Laotian Government of Prince Boun Oum and General Phouml is iuclTcctlvc and has become Increasingly corrupt II isroadly representative government and Its efforts to generate non-Communist suppoit have been largely Inept and unsuccessful. The National Assembly delegates arc for the most part apathetic, neither opposing Ihenot providing it strong support Badly needed social and political reform pio-gtams have been pushed into the background by the exigencies of the militaiy situation

he military situations hasinto sporadic civil war. Military action has been characterized by repeated Pathet Lao probing actions. Laotian Army withdraw-is. and subsequent reciouplngs.heong le forces seired the l'lalne des Janes In January they have concentrated much of their strength In that area and appear to naveajor training effort The logistic buildup has reached substantial piopoitioni. The Soviet airlift Into Laos, especially Into Xiengvince, continuesigh and sustained rate Additional supplies are being brought In bj truck from North Vietnam Some North Vietnamese artilleiy crews ate working with the Pathet Lao forces. InNorlh Vietnam it providing training as-sijtar.ee and tactical guidance.

Iflollan Government forces arein number to Ihe Pathet Lao and haveamount of equipment availableHowever, problems of internaltransportation prevent them fromtheir strengthiotlanpoorly led and in generalillIt has been very slow to initiatemilitaiy operations and will beto retake the Plaino des Jarres andIn the near future.


Pathettactics appear toconsolidate, politically and militarily,In the norlh. However, the Pathet

I.aoreater military capability in both llic Plaincs des Janes and Plateau des Bolovcirs areas than they have thus lar chosen to exercise. They could sharply step up their military activities at any lime and coulda variety ol tactics. They could expand their attack on such governmentas Lusng Piabang with sizable lorces or they could launch widesptead guerrillathroughout Iiaos. .Southern Laos isvulnerable at this time to suchactivity.

A dramatic, though limited, vicloiy by theo.eries of local victories, could occur at any yme. In turn, such acouldollapse of theposition, leadeneralof the Laotian Aimy, and toro-Communist "neutralist" regime in Vientiane.

Assuming that the laollan Army does not dissolve under mititaiy pressure or lose all its will to resist. It Is possible that, in time, some basis for negotiated settlement maysolution" to the laotlan crisis hasatter of contention among the major powers. Any agreement which would end the armed struggle In 1ao% and resolve the political Impasse In thatrests primarily In non-Laotian hands.

B. South Vietnam 1

extremely critical period forDinh Diem and the Republic ofimmediately ahead. During the pastthe internal security situationto deteriorate and has nowproportions. Communist Northhas stepped up Its covert directionof tlie Viet Cong. Its paramilitarySouth Vietnam, and intensified its political

and propaganda pressures on South Vietnam. During this same period, non-Communistopposition to Diem and his regime has developed markedly, and there are Increasing signs ol dissatisfaction within lhe Vietnamese military establishment. Both factors were in-

' 6upp!rmcnts, "Short-Term Trends ir- Southated J3

volved in the abortive coup d'etat of last

The Internal Security Problem. Tiicphase of the North Vietnamese drive for "reunification" has been proceedingslng level sinceince that lime, the size of Vict Cong guerrilla-terroiist apparatus In South Vietnam has Increased greatly and now numbersesult of infiltration and Increased locall^cal recruits and sympathetic or intimidated villagers have enhanced Vict Cong control and influence over Increasing areas of the countryside. For example, more than one-half of the entire rural region south and southwest of Saigon, as well as some areas to the north, are under corisldcrablscontrol. Some of these areas are In effect denied to al) government authority not immediately tucked by substantial armed force. The Vict Cong's strength encircles Saigon and has recently begun to move closer In on lhe city. There has been an Increase in guerrilla activity in the central highlands, notably in regions directly bolder big on Laos. The guerrillas have increased their terrorist attacks on viUagers and local officials.often In sizable groups ofor more, they have moved with growing boldness against the Vietnamese Army itself.ivilians, mostly government officials and sympathizers, were assassinated or kidnapped by tire Viet Congespite growing Vietnamese Army aggressiveness andcasualties Inflicted by the army, the Viet Cong guerrillas continue to retain the fnllia-tive in the field.

Political Problems. The deterioration in the position of the Diem governmentew extreme in November when army para-troop officers joined forcesumber of civilian oppositionistsarrowly defeated attempt to overthrow Diem. On the surface, Diem's position appears to have improved somewhat since then. He has reasserted his control of the government, made some cautious moves towaid government reform, and proceeded with plans for the presidential election to be held In April. He has taken action to Improve the antlguerrllla capabilities

c- mmm

t IJ

of the army and slipped up military activities Dg3inst the Vict Cong. However, thef 'i gaveo the coupave not been sciiousiy dealt with andwith tlie Diem government continues to be prevalent among intellectual circles and.esser degree, among labor and business groups. There has been an Innrasingwithin official circles and the army to question Dient's ability to lead in this period. Many feel that he is unable to rally the people in the fight against the Communists because or his reliance on virtual one-man lule. his toleration of coiiLption extending even to Ills immediate entourage, and his refusal toigid system of public controls. Moreover, the people tn the countryside ate becoming increasingly disillusioned regarding theability lo protect litem fromand taxation by the Viet Cong.

he November coup attempt encouraged the North Vietnamese to strengthen theirand propaganda drive against Diem. New efforts are being made by the Communists to stimulate "unitedction byand groups in South Vietnam which are known to oppose Diem. The objective is to Intensify and exploit anti-Diem sentiment, and to supplement their gueirllla activitiesolitical campaign against the leglmc.

he Vietnamese Atmy has also beenby the present politicalignificant part of theoup group came from hitherto trusted auny units. In view of this and tlie apparent hesitancy of come top military leaders to act quickly In his suppoit, Dlcm Is now more suspicious of the armyotentially serious source of antlgovernment activity. The coup attempt has probably opened Uw eyes of many army officers to their political potential


he key Issue facing the Memover the next six months arises from the Communist internal threat. If the army lj able to make substantial progress toward subduing the Vict Cong guerrillas, theposition of the government will beImproved. However, If there is noImprovement in the internal scurltj situation and Diem continues lo be arbitrary in dealing with the military and government leaders. Ihrlr suppoit for Dlcin will become increasingly uncertain, 'i.ould Inlikelihoodefinite split in the army and government leadeishlp between those backing Diem and those opposed to him.ituation would substantially add to the regime's instability and Increase thelor another coup attempt.

liven Dlem's precailous politicaland the strength of Communist guerrilla and subversive pressures, we believe that the oddsecond coup attempt sometime In the next year or so. The Communists would like lo initiate andoup against Diem, and tlicir armed and subversive opcrn-tions including "unitedefforts aretoward this purpose. It is more likely, however, that any coup attempt which occurs over the next year or so will originate among non Communist elements, perhaps aof disgruntled civilian officials andand army elements, broader than those involved in the November attempt Ifoup appeared lo have good profpects of succeeding, various groups such as the sects and labor uniom probably would Join in. Wc believe that If this were to happenoup attempt wouldetter than even chance of succeeding.

ny coup gioup not primarily sponsored and supported by the Communists would be likely to maintain South Vietnam's pio-US oricnlatlon and to seek IIS help in resisting Vict Cone attempts to capitalise on the coup. The leaders of any anil-Diem coup originating within the present government or the army would probably maintain Vietnam's pro-US orientation. Nevertheless, Hanoi would seek to exploit the confusion Attending achange of government in Southand It Is uncertain that the army would be able to keep tlie situation from getting out of hand.

lem's removal from office would probably resultcramble for power. Under such circumstances. Vice President Nguyen Ngoc Tho would seem tolightly better than


Ualnos Johnson lAbrar,

even chance of Miccorrtins Diem. Tho is the constitutional successor. He is piim rallywithin the government and considered to be one ol Us most Inllucntlal incmbers. Moreover he has wmc Mipporl within lheand he ha* been on good terms with two of Diems brothers. Ngoycn and Koinnn Catholic Archbishup Ngo Dinh Thuc. However, Tbo or any other successor would probably exercise less pctsonat power than Diem, and would have to control orto the power of the army which willcertainlyajor role in any new government.

presidential election nowearly Aprilotentialexplosive developments on theThe Vict Cong almost ceitolnlyto exploit the confusion thatelection campaigns In Souththey may seek to force the governmenttho elections. They mayactivate their announcedublicly establishing It interritory In south Vietnamsupport to all antl-DiemOn the government skle.Dicm's regime will probably tamperelections andesult his victoryan overwhelming one. if these effortsmajor demonstrations and riotsIn Saigon.

C. Thoilond

Minister Sarit Thanaiat7ilitary coupIs the undisputed leader or thegroup. Througlrout the couise ofSarit has kept Thailand closelythe US and the Wesl. The US inbeen instrumental in building up theestablishmentajor sourcepolitical strength) and In helpingthe Thai economy. Tlierc Is somewith live existing political order,among urban and educatedthe majority of the Tlial people,those In the countryside, feel with tire political activities In

Ilangkok. and tend to locu. their loyalty on lhe King.

PotlUcat. The Immediate course ofevents within Thmiund hangs primarily upon Prime Minister Sarifs uncertain health. If Sarrl should depart from the political scene because of Incapacity or death, it is probable that General Thanom Kitlikachorn, IVputy Vi irne Minister and Minister of Dclnise. would succeed to the Premiership, lhanom. who served as Prime Minister foronthsas Ven named by Sarit as the heirHe appears at this time lo have tlie support oi the poweiful and ambitiousof Interior. Otneral Praphat Charusa-Ihlen.

Members of the middle grade officer cclie-Ion are dissatisfied with their present status and their share of the graft available loof the regime Another weakening of Sarifs physical condition conceivably could encourage an attempt lo grab power by some of Ihcse officers.

Sarits death or Incapacity would almost certainly bo followed by Increasing tensions within the ruling military group. Latentbetween Generals Thanom and Pia-phat could developerious schism. In llic eventerious power struggle within the ruling group, prospects would beelatively biter period of government insta-bUlty, followed by the eventual assumption ofby one of the contending factions and the continuation of military control of the government essentially along present and nasi lines.

oreign Policy. Thai foreign policy It highly sensitive to the Thai assessment of developments in the Far Fast, particularly those Involving Laos, and of US reaction to these Developments. Neither lhe present leadership nor any successor military ruling group Is likely lo divest ilsclf ol Its close ties with the U3 and the West as long as Itthai these connections provide adequate assurance of Thailand'* survivalree and independent nation. On the other hand, If Thai leaders should reach the conclusion that the US is eitlrer unwilling or unable to Kuaran-


Ifrton Raines Johnson Llbmy

lee Ihe security of the kingdom, they would probably seek an accommodation with (he Communist Bloc. Thai society in general is not sympathetic to communism: Thailand's traditional enemy is China. Communist or non-Communist. Nonetheless. Thailand'spolicy is pragmatically based, and the Thai would reacteal or apparent swing ot the balance ol power in favor of thein the Far Kast,

US-Thai relations remainsince the0os have at times strained IheThe Thai leadeis not onlyneutralist and Coimnunist-iiiHuenccd Laosto Thai security, but alsoosest of US intentionsin Southeast Asia. Theyrivatetheiralignment with thethe West, ond they have madethe USSR which werearning to the US.have apparently concluded that thenot arrived for any significantlear hardening of attitudeUSumber of top ThaiSarit, who believe that theirwith the US has not beenA perennial source ofto the Thai is the US policy oflarge amounts of aid toparticularly to neighboringto convince Sarit and most otherleaders that US assistance toeven Cambodia, benefits the FreeThailand, have met with

D. Burifia

the past year, since control ofwas relumed to Primeand the politicians by General No WinBurmese military, economic andIn Burma have generallylevels have begun to rise again,rates are up, and the security ofhas worsened. The rulingIs showing signs of coming apart atand local Communists are againactive.ime of unprecedentedapprochement with Communist China, US relations with Burma have become inflamed over Ihe Issue of the Chineseirregulars in Burma.

Political.0 electionsreat personal triumphu who icturncd loovernmentwo-thirds majority In the Chamber ofu's personal prestige throughout Burma remains high despite growing factional dissension within his own Union Party and despite accumulating unresolved political problems, many of them involving the ethnic minorities. Tlie mostthreat to the stability of Nu'slies In the increasing factionalism within the Union Parly, and the scramble among competing group3 for control of partyandu will probably be able to avert an open break In the party, but Internal disputes will probably continue. The unsettled condition of the Union Parly will continue to detract from the government's ability to act decisively.

Probably the most difficult problemU Nu arises from his electionpromise to make Buddhism the staleThis has caused growing unrest among many Christian and non-Buddhist tribal groups In Burma, particularly the Ka-chins in the north. There has been aresurgence of political activity by Communist and left-wing elementsu returned to power and dropped themeasures directed against them. The Burmese political scene wilt probably be marked by Increasing turbulence andover the next year.u will probably continue to head the government at least for tho next year.

he Army. During0 considerable pressure built up within the army for new political action to reinslitute army control. Tins pressure was leadingeriousbetween General Nc Winumber of army political activists. Ne Win wanted no change In the political situation, at least until tho China-Burma bordernow underway was completed, while the other army group ^'pfjyed that a

Lyndon Balnea Johnson Libra)?

new move against the government was needed immediately. The matter Apparently was settled In1 when General Ne Win summarily directed the resignationubstantial number o( the army's most senior olllcers An attempt by these officers to counter Ne Win's actionwould not succeed.

We believe that Ne Win will continue to dominate army policy and that he will not for the time being choose to involve the army directly in national political affairs. Hiscould changeartyand serious political instabilityto be threatening the country. If thai happened Ne Win would probably move to shoreu's position and effect someairangement with liun which wouldarmy participation In government and administration.

Foreign policy. The Nu government has made no major changes In llur mn's traditional foreign policy of nonalignment in the cold war and of general cooperation with theAsian countries. However, owing partly to the personal Initiative of Uwho strongly desired to rcafiirm "peacefulas the cornt-rstone' of Burmeseand to complete the settlement of the Sino Burmese border question Initiated by General Nchas establishedmore friendly diplomatic relations and closer economic ties with Communist China than have existed heretofore.urma signed an agreement on economic and technical cooperation providinghinese Communist long-term Interest-free loan of about M4 million to financeequipment and technical advice foreconomic development projects. This loan agreement, the largest Communist China has offered to any non-Communist country, Is to come Into force Inith repaymentyear period beginning

Utilization of Communist China'sassistance In Burma's Four-Year Plan may give Pclping substantial influence over the general orientation of Burma's econoinlc planning efforts Closer Slrro-Bunnesc trade relations will probably develop If, as expected. Burma concludes trade arrangements forrice exports to China during the next months. However, in keeping with Burma's avowed policy ol accepting aid from bolh Blocs, the Nu government will probablylo draw on existing US grant and loan aid. Burma will probably also seek economic, and perhaps military, assistance from theUnion sometime in the near future.

S-Hunnese relations have recentlysharplyesult of developments involving the Chinese Nationalist irregulars in northeast Burma. Actingecret agreement providing for joint action tothe learns engaged in demarcating the Sino-Burmese border, the Chineselaunched an attack into Burma against the Nationalist units inhe Burmese Army later joined in. Bylie forces of the two countries hadin capturing the major Nationalist bases and driving most ot the irregulars across the Mekong into Laos and Thailand, although this was apparently done at the cost of severe casualties to the Burmese Army.quantities of Nationalist arms andmuch of It US made, were captured by the Burmese. As news of Die fighting and Die capture of US-manufactured arms In the hands of the Nationalist Irregulars became known, an army-inspired press campaign began to grow, aimed in part at the Taiwan regime but chiefly at the US as the country primarily responsible. The fact that Chinese Communist troops helped the Burmese Army In the attack on the irregulars has been kept from the Burmese publicu hasand emphatically denied the presence of any Chinese Communist troops on Burmese soil.

n February, the Burmese Government brought to the attention of the UN tbe matter of the Nationalist Irregulars and theirsupport from Taiwan. Whipped up by the press campaign, student and labor groups have led anti-US riots In ltangoon andumber of the US advisers to the Burmese Army have been requested to leave prior to the expiration of tCflPHours In

Lyndon Balnea Johnson Libr.


April. US relations with the Burmesewhich once were quite close, havea sharp declineuwkhes to ovoid sciiou* damage to US-Uurniesc relations, he probably will seek to exploit public and army feeling over theUS rote in supporting the Chineseirregulars in order to force theof the problem posed by the Itrcgulars. To this end Ihe Mmtncse Oovernment will probablyenerally anti-US line over the next several months.

E. Combodio

ambodia Is dominated by PrinceSilutnouk.year old ruler who lias been variously King. Prime Minister, and Chief of Slate of his country. Whatever hisat any given time. Sihanouk Is In fact the center of power within Cambodia.he fully controls Cambodian foreign policy. As his views of the world scene have changed, Cambodia's relations with Ihe Kast and West liave changed. His dominance has been responsible for the many sharp swings, right and left, of Cambodia's foreign policy in the past. Tlie one constant throughout Sihanouk's rule has been his conviction that tho key to Cambodia's domestic stability and international security lies Inolicy of neutrality.

Although Sihanouk professes neutrality, Several factors have combined al times to make hbn Incline toward the Soviet Bloc. These factors include Cambodia's proximity to Communist China; Sihanouk's apparent feeling that comuvjnism and Communist China represent the "wave of the future,"In Asia; his fear of Communist strength and rulhlessness, particularly that Of Chhu; and Cambodia's traditional enmity with Thailand and Vietnam, accrnluated in modern days by their differing foreign policies. At the same time, Sihanouk takes great care to assure the Soviet Bloc that his acceptance or US or Flench military assistance does not modify his basic policy of ncutiallty.

In domestic policy, Sihanouk attempts lo keep left-wing and Communist influences In Check. From time to time he has suppressed domestic Communist nclivity nnd Communist-orientcd newspapers. Sihanouk's fen ofsubvcision, both Communist andfhim toigh state of internal vigilance. This fear, and that of kxing Westem economic and military aid. have probably been the main reasons for his continued refusal to accept miliiary aid from theoc.

Although Sihanouk has been careful lu watch out for subversion in i's militant forms, he has been lenient in other fields wheic the danger ismmediate. Thus Communist propaganda, despite occasional suppression, is widespread and Iserious impact on the increasing number of literate endCambodia'.s. Bloc economic aid Is well publicized and contributes to an effective pro-Coinmnnist Impact. Sihanouk himself, by his public tirades against the West at times of tension with Thailand and South Vietnam, has also contributed to this Impact. His desire to enlist the support ot leftist-orientedyouth leads him to overlook thedanger they pose to his neutralist policy abroad and nationalist policy at home. While Sihanouk may be Justifiably confident at this time of his ability to control or direct public opinion, he or his successor may In time have to be responsiveublic opinion Increasingly favorable to the Communist Bloc, an opinion which he helped lo create and permitted to develop.

Sihanouk will continue to dominate the political scene In Cambodia for the foreseeable future. Kconomic eonskteratlons are not likely lo provoke significant Internal political pressures. Sihanouk will continue lo steer Cambodiaiddle course, committed to iiellliei major powerand seeking aid and assistance fromithin the limits of his neutralistnanouk will turn his smiles or tliadcs toward the Weil or Ihe Bloc and hack again, according to his feeling for the situation. The balance between Fait and West In Southeast Asiaost Important determinant for Sihanouk, and this could be affected greatly by

tfanHainan Johnson Lli-

Sihanouk would probablyreadily to almost any resolution ofcrisis, the solution he wouldprefer wouldeutralen and Cambodia, guaranteedgreat pOWfO. Me wouM not like tounder Communist domination, butclearly lie with theSouvanna Phouma has sdvocatcdSihanouk probably places uo.mFhoumi In the same general calegoiyand Sartt. hisantagonists InAsia nrea Sihanouk's proposalH-nation conference to negotiate athe Laotian crisiserious effortpart ton endituationregardserious one for Cambodia.

F. Malaya

Malaya is one of the most prosperousin Asia andtable and conservative government. Under Prime Mmlstcr Tunku Abdul Rahman, the niling Alliance Partytiong majority in Parliament. Rahman has shown considerable ability since Malaya gained Independence7 in managing lhe governmentompetent and efficient manner.ember of the British Cwn-monwealth. Malaya has generallyro-Western foreign policy and has shown little sympathy for Communist causes. It Is further tied to the West by theDefense Agreement, concluded at the time of independence, which specified that the UK will provide assistance for Malaya's aimed forces and lorxternal dertnse. Although Prime Minister Rcbman has recentlythe admission of Communist China to the UK along with an Independent Formosa, Malaya has refused to establish diplomatic relations with members ol the Communist Woe.

year long state of emergencyfrom the anncd Communistwas officially ended by the government onhe rebel force has now been reducedew hundred Individuals confined largely to the Mataya-Thailand border region, and Communist tactics have shifted from aimed Insurrection to clandestine political organization and the penetration of labor and studenthe Communists hope thereby toase lor political and national front activities.

jHtical Implications ofHi-valiy. The racial composition or Malaya Is its most important political determinant. Onlyercent ot the Federation'sIs Malay;ercent Is Chinese, andercent Indian and Pakistani. Although the Chinese and Malays have lived In relative harmony it act Independence, racialarc nonetheless deep seated. TheChinese, who control much of theeconomic life, tend to look down on the Malaya as indolent, inefficient, and culturally inferior. Many still regard mainland China as their motherland, an attitude which has been enhanced by China's growing Interna-tktiial hnpoitance. The predominantlyMalays In turn regard the Chinese as pork eating foreigners, atheists, and economic exploiters.

he economic and cultural differences ate further complicated by the fact that, by con-stitutionnl mandate, the Malays are assured of control over the civil and security services and ate given special consideration In land development as well. The constitutionMalay as the national language but provides for the use of English as an official language forears. It requires for cltlscnshlp that non-Malaysnowledge of Malay and meet certainrequirements. These conditions tend lo discriminate against lhe Chinese. Therelear tendency among the younger elements of both racial groups toward radicalism-the Malays attracted to extremist nationalistic movements and the Chinese youth attracted lo left-wing causes and groups. The older, more moderate Chinese and Malay leaders, who now dominate the government and lhe majcr political parties, appear lo be unable lo halt the trend towaid political polarisation. Any serious Infringement of Chinese economic status would sharply increase Chineseof Malay domination ond thus accelerate this trend. Although frictionthe Malays and the ChrgiralcrtlU^lnMauJototfoniiLibrt

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probably spark occasionalajor communal showdown is not likviy lor several years. Over the next year, Malaya's prosperity will piobably continue to submcrce the nation's racial differences

C6 llefotians with Singapore. Singapore, whichcm(autonomous stale within the British Commonwcallhants to meigc with Malaya, but its advances are not welcomed by the Federation's Malays who (ear Chinese domination. The Chinese, who are in an overwhelming majority in Singapore, would constituteercent ot the populationombined unit while tlie Malays would be reduced lo aboutercent of the total. Initial Malay suspicion of the leit-wing People's Action Party government fonncd In Singajioic9 has added to the difficulties between tlie two areasesult, lhehas sought to eliminate its historicupon Singapore's financial and port facilities by setting up its own. Singapore's economic and political prospects, withoutto the Malayanould be extremely poor over the long nm.

At present, thererend among top officials of the Federationore sympathetic approach to Singapore'slargelyesult of their growing if .dilation of the threat which instability in Singapore would pose for the Federation. Representatives of the two governments have been meeting from time lo time to explore the prospectsimited common market. There are. In addition, some bidicatlons that lhe Prime Minister and Deputy Primeof the Federation have been exploring the possibilityimited merger, but one which would preserve Malay hegemony.no striking developments arc likely daring lhe coming year, there will probably be closer cooperation between the two areas than In the recent past. Over the long run there mayignificant moreonfederation of Malaya and Singapore that would also include Brunei, Sarawak, and British Borneo.

Economic Vulnerabilities. Although the Federation of Malaya Is lhe most prosperous nation In Southeast Asia, the economy is heavily dependent on rubber and tin. which account forercent of the not Ion's export:-and finance the import of essential foodstuffs About CO toercent of the total population is dependent on rubberivelihood. The prices which Malaya receives for its rubber are largely determined ty non-Malayans. Since' rubber trees take at least six yean to mature, production cannot be shifted quickly in the eventrice collapse. Malaya is stillbut hard limes for* the rubber industry,onsequence of competition fromrubber, for example, could resultenerally depressed economic situation. This in turn could bring to the surface many of the Federation's now dormant political and social problems. However, the demand for natural rubber is expected lo remain high during the coming year. Consequently, no seriousIn the Fedn ation's economy is envisaged during this period.


here Is deep awareness among theof Southeast Asia that developments In Uic Laotian crisis, and its outcome, willrofound Impact on their future. Tlieof the area tend to regardlan crisisymbolic test of Intentions, wills, and strengths between the major powers of the West Md the Communist Bloc. They fear the possibility that the hostilities, byor design, may spread to their own territory. In one way or another they all icgard the US as responsible In large degree lor Ure present stale of affairs In Laos. The governments of South Vietnam and Thailand, for example, are convinced that If tho US had given the antl-Communlst elements bold and prompt support,otian crisis would not have leached serious proportions and would long ago have been resolved. However, Diem and Sarit both leserre their most severefor lhe attitudes of Fiance and lhe UK. They believe that the two Kuropeon powers have restrained the US and made decisiveby SRATO unlikely if not Impossible. The governments of Cambodia. liiCGHC and

LyndonJohnson IA

Malayaolitical settlementeutralist Laos.

n short, the general altitudes of Iheof mainland Southeast Asia aie split along the lines ol Ihelr general foieign policy orientation: those in close alignment with the US favor stronger measures to assuic ation-Cominunisl and preferably an auti-Oommunist, wrslein-orlentated regime in Laos; and the neutralist governments, as well as Malaya,eutralist but notgovernment. Thegovernments, rccognh-ing that the course of events in Laos will be determined by the major powers Instead of the Opposing Mot lan factions, favor some Horn ofpolitical agreement to end the crisis, such as UNew conference among the powers which negotiated the Oeneva agreements,roader international conference such as that proposed by Sihanouk. Thailand and South Vietnam would welcome some form of UN representation in Laos, butimitedo stop Bloc aid to the l'athet Mo-Kong Le forces.

Cambodia and Burma would view with satisfaction an International politicalof the Motian ctlsis which providedos and reduced the posjlbimics that the armed conflict would spread.both countries realizeontinuing sliong US posture and Influence In the area Is necessary to keep In check Chineseexpansionist aspirations and to enable Cambodia and Burma to maintain flexibility in their neutralist policies. Consequently, they would be alarmed If Mos were to bo lost to the Communists under conditions which would seem to Indicate that the US position In the area had been seriously weakened.

The loss of Ito the Communists oreven the division of the country, would almost certainly Incline the Thai towardto Communist power InAsia. Depending upon where the line might beivided Laos would pose almost as many difficulties for Ihe Thai asompletely Communist Laos,If Thailandommon border with the Communitt-controllcd portion of

redominantly Communist con trolled Mos would vitally threaten Southindependence: Il would greatly extend theentiers with South Vietnam. It would bring significantly gicalcrmilitary power to bear on the crucial Sat-eon defense complex; and it wou'd gieatly facilitate Communist Infiltration andThe close proximityommunist slate would make more difficult Western efforts lostarch up local teslstnnce. In short,ivided LaosredominantlyLaos would severely damage the US position and lis influence In Thailand and South Vietnam.

he future course of all of the countries of Southeast Asia would be strongly Influenced by the actual clicumslances In which the loss or division of Mos had occurred as well as Ihe local appraisal of the atliludc and actions of the US In response to the situation. Theto which these countries would go InBloc pressures or In withstanding local Communist threats would depend in greaton whether they still assessed that the US could stem further Communist expansion In the area. They would feel more keenly thantrong temptation to lake aposition between the two power blocs, even though they reeognlied that the US is the only country with sufficient power to oppose the Communist Bloc In the area.they probably would be deeplyregarding US icsolutlon after the loss or division of Mos, they would nonetheless welcome deiiwtistraUom of US firmness and might in response modify their appialsal of their own future in due course.

lthough the Communist threatouth Vietnam has reached serioushe chancesommunist takeover In the next year or so aie considerably less than they are in Laos Nevertheless. Pelping and Hanoi almost certainly attach greater importance to their efforts In Soulh Vietnam than they do to their efforts in Mos. US prestige and policy are particularly deeply engaged In SouthDlem's policy of close alignment with

the US Is on trial In the. current GftSt All Lyndon micas Johnson Ml

countries of the area would attachailure of the South Vitlnuin Government to cope successfully with the rising tempo of Communist subversion and aimed insuireclfon. If South Vietnam were to fali to the Communists or be forced to swing toward neutralism, the impact upon theof Southeast Asia would be similar in kind but considerably more severe than that resulting from the loss or division of Laos.

Original document.

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