INCREASE IN BLOC AID TO NORTH VIETNAM (CB 61-11)

Created: 3/2/1961

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INCREASE IN BLOC AID TO NORTH VIETNAM

dispute between the USSR and Communist China hasNorth Vietnam byreater display of concern for its economic well being on the part of the disputants. oncrete manifestation of this has been the extension during the past year by the USSR and Communist China of large new credits amounting0 million for support of the first Flve-Year Plan of North.

AlthOUgh there are n0 indications that either China or the USSR is attempting toonopolist in providing aid to North Vietnam, it is apparent that neither is willing to leave tho field to the sole influence of the other. It is of common interest to both the USSR and China that North Vietnamoll rounded economy, and the two large Communist powers have committed themselves to assistomprehensive and diversified economic plan. But, in view of its own economic deficiencies, the fact that China is providing any economic assistance at all to North Vietnam indicates concern that it not be deprived ofin this bordering state; and the largeness of its program suggests tho degree of its concern. Thus, the newven though they may have resulted from motives to which the Chinese could not object, have prompted China toadditional credits in order torominent economic role in the economy of North Vietnam.

Economic assistance extended to North Vietnam by the Bloc5 has totaled2 million. Of this amountChina has7 million and the Soviet5 million. Of the total,een in the form of credits, with the Soviet Union providing aboutercent and Communist China roughlyercent of the total. These two countries have also been the major sources of grants, supplying together aboutercent of the total grants2 million. Communist China, however, has supplied aboutercent and the Soviet Union aboutercent of total grants. Other Bloc countries have given the remaining grants and credits to Northubstantialothers in token amounts (see

Extensions of economic aid to North Vietnam have increased greatly in recent months. The most recent agreement was announced on1 and callsong term credit from China amounting7 million, the largost credit extended byChina to any Bloc or Free World country, for the construction or expansion ofndustrial and transport enterprises. 1/ Aidumber of the enterprises covered by thisby China under an earlier economic assistance agreementin Under the new credit, to be used1hina will provide aid for raising the output of the Thai-Ngyuen iron and steel plantons per year and for

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tho construction of sovoral smaller iron and steel enterprises Other assistance will bo provided to the chemical and cementand for railway and bridge installations. In the field of light industry China will construct throe mills for theof sugar, paper, and cotton yarn.

Inommunist China signed Its first Scientific and Technical Cooperation Agreement with North Vietnam. 2/ Under the agreement China will send to North Vietnam scientists and technicians, furnish technical data in various industrial fields, and train Vietnamese technicians and students in China. In the field of agriculture China had agreed in0 to build eight farmsiddle agricultural technical school. 3/

On0 the Soviet Unionredit5 million to aid in the realization of North Vietnam's Fivo-Yoar Plan. 4/ Under the terms of the agreement the Soviet Union will provide economic and technical assistance over the planfor the construction ofew industrial enterprises and projects. Soviet aid will be used to expand the fuel and power Industry, lay the foundationsodern machine-buildingand strengthen tho scientific research institutes in the country. This aid will include the construction of eight thermal and hydro-electric stationsotal capacitythe expansion of the Hongay-Campha coal mines; tbeof eight machine-building factories; tho construction andof three ccientific and research training institutes; and the exploration of mineral resources; as well as the planning of other industrial works. Soviet specialists will be sent to North Vietnam while Vietnamese workers will rocoive training in the Soviet Union. In addition to this credit, the Soviet Union oxtended at the samorant ofillion for medicine, insecticides and equipment, and specialists for an anti-malaria program. Also during1 protocol of the Soviet-Vietnamese Commission on Scientific and Technicalwas concluded under which the Soviet Union will provide North Vietnam with assistance in the machine tool, electrical equipment, automotive, construction and other Industries. 5/

Inhe Soviet Unionreditail-lion for expanding the production and processing of tropical crops (coffee, tea, rubber, fruits) in North Vietnam. 6/ The agreement envisages Soviet assistance in the sotting upState farm, tho reconstruction of existing State farms, the organization of supporting workshop facilities, and the construction of factories for processing tea, coffee, and fruit. Soviet specialists will bo sent to North Viotnara and Vietnamese are to bo trained in the Soviet Union so that eventually they may take ovor full operation of tho projects.

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Although Communist China has striven to maintain asole as the Soviet Union in the development program of North Vietnam, there has boon no apparent effort to compete directly with

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the USSR. Id fact there are many Indications of cooperation ln planning and administering an ovorall aid program that will yield maximum benefits to the economy of North Viotnam. Aid and advice are given in tbo areas most appropriate to tho capabilities of the contributing nations. The Communist Chinese assumed arole in the early rehabilitation of North Vietnam'sand communications facilities as well as in theand development of its irrigation system. In more recent years, Communist China has undertaken the construction of several Important light industrial projects, includingice husking plants, two sugarigaretteatch factoryubber-goodsoap factory,nitted-goods factory. hlneso creditillion, extended lns being used to finance construction of several heavyplants, Including the Viet Tri and Thai Ngyuen power plants and Thai Nguyen iron and steel plant. In addition to tho material assistance provided, the Chinese havearge number of technicians to install equipment, to manage operations, and to train indigenous personnol. 7/ It is estimated thathinese advisors, nd laborers were working in North Vietnam Moreietnamese workers and students have gone to Communist China for training during the past five years.

While the Chlnose have furnished large quantities of basic materials and manpower, the Soviet Union has sent machinery and equipment in the heavy industrial field. Soviot advisers have beon particularly active in the mining and manufacturing Soviet aid projects include the Hanoi Machine Tool Plant, tho Lao Kay apatite mine, the Tlnh-Tuc Tin mine, the Long-Can coal mines, and the Viet Tri super-phosphate plant. 8/ oviet advisers and technicians were present ln North Vietnamndietnamese wereat higher educational institutions in the Soviet Union.

Aid from Bloc countries other than Communist China and the Soviet Union has boon small by comparison. Poland hasugar refinery and several power plants; East Germanyed hospital, some modern fishing trawlers, andtelephone equipment; and Czechoslovakia has givened hospital,and technical aid in theof two zinc mlnoslant for concentrating zinc ore.ho other Satellites have given lesser amounts of technical aid, raw materials, and consumer goods.

Bloc aid to North Vietnam has averagedorcent of North Vietnam's GNP ovor the. Only because of this continuing large net inflow of goods and services from the Bloc has North Vietnam been able to support an investment program of increasing significance. The new credits will enable North Viotnam to continue toiversified constructionand greatly Improve the chances of succoss for the first Flvo-Year Plan.

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V I' I I' i

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B

H p

BLOC CREDITS AND GRANTS PROVIDED TO NORTH VIETNAM, BY YEAR OFMILLION OS DOLLARS)

China (of which credits)

Aid

8

25*

Union (of which credits)

7

>

Poland

(of which credits) Rumania

East Gormany

Bulgaria

Hungary (of which credits)

4

(2)

16 8*

4*

15*

4*

2*

Albania

insig insig* insig*

Total 8 7

Total

Grand

a. Grants are followed by asterisks.

FBIS, Dally Report (Far East), no.. OFF USE.

.FF USE. ATmy, Hong Kong, State Jt.AFF DBS.

FBIS, Daily Report (Far.FF

FBIS, Dally Report (USSR ando.9FF USE. State, Moscow,,FF USE. CIA. FDD, External Economic Relations of Bloc Countrios

Sum no. ov 6Q, OFF USE. JPRS: he Democratic Republlc_of Viet Nam Economy

and foreign Trade, by VU.anof

8 Ibid 9. TFIcT

pemokratlcheskaya Respubllka1 yneshnyaya Torgoviya,js. Avaenov.

19CI

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