NIE 63-59 PROSPECTS FOR NORTH AND SOUTH VIETNAM

Created: 5/26/1959

OCR scan of the original document, errors are possible

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PROSPECTS FOR NORTH AND SOUTH VIETNAM

THE PROBLEM

To analyze the current situations in North and South Vietnam and to estimate probable developments over the next two or three years.

CONCLUSIONS

prospect of reunification ofNorth Vietnam (DRV) andSouth Vietnam (GVN)remote. In the DRV the full range of Communist techniques is used tothe population, socialize the economy, impose austerity and direct investment to economic rehabilitation andThe DRV maintains large armed forces. In South Vietnam, despite the authoritarian nature of the regime, there is far more freedom. Local resources and US aid are devoted to developing the armed forces, maintaining internalandelatively high standard of living, with lesser emphasis on economic development. (Para. 9)

In South Vietnam political stability depends heavily upon President Diem and his continued control of the instruments of power, including the army and police. Diem will almost certainly beor many years. The regime willto repress potential oppositionand depend increasingly upon the effectiveness of the Can Lao, the regime's political apparatus, which is run by Diem's brothers Nhu and Can.)

The capabilities of the GVN armed forces will improve given continued US materiel support and training.of the present level ofis threatenedecent finding of the International Control Commission (ICC) that the US Temporary Equipment Recovery Mission (TERM) should end its activities byn any event. GVN forces will remain incapable ofmore than temporarily the larger DRV forces. The internal security forces will not be able to eradicate DRV supported guerrilla or subversive activity in the foreseeable future. Army units will probably have to be diverted to special internal security assignments.)

The GVN is preoccupied with the threat to national security and theof large military and security

forces. It will probably remaintoignificantly greater share of resources and attention to longer range economic development. AssumingUS aid at about present levels, modest improvement in South Vietnam's economic position is likely. However,will lag behind that in the North, and the GVN will continue to rely heavily upon US support to close the gap between its own resources and its

here is little prospectignificant improvement in relations between South Vietnam and Cambodia so long as the present leaders of the two countriesin power. Relations with Laos will probably remain generally friendly. Continued suspicion that the French are intriguing in the area to recapture aof major influence will probablyan improvement of Franco-GVN

Despite widespread popular discontent, the Government of the DRV is in fullof the country and no significantthreat to the regime is likely. With large-scale Bloc aid,rogress has been made in rehabilitating and developing the economy with major emphasis on agriculture, raw materials and light industry. The regime will probably soon have laid the foundations for considerable economic expansion.

The DRV has no diplomatic relations with any country outside the Bloc and its foreign policy is subservient to the Bloc. We believe that it will continue its harassment of the GVN and of Laos,ilitary invasion of cither is unlikely. )

INTRODUCTION

4 "provisional military demarcation line" dividing Vietnam at the nth parallel hasxed boundary separating twoand hostile governments, theof Vietnam (GVN) In the south and the Communist Democratic Republic of(DRV) in the north. The all-Vietnam elections called for under the4 have not been held, and the divergent conditions demanded by bothpreclude the holding of suchTo date the GVN has been preoccupied with the threat to internal security posed by DRV subversion and guerrilla warfare and with the threat that the Communists'superior armed forces will one day invade the south. However, there are no Indications that the DHV Ls willing to assume the risks of US mtei vention and attempt to conquer South Vietnam by military invasion. ecision would probably be made by Peiping and Moscow rather than by Hanoi.

eanwhile life on the two sides of the boundary is marked by an IncreasingThe north Is organized along strictlines. The standard of living is low; life is grim and regimented; and the national effort is concentrated on building for theThe DRV claims It has reduced itson Bloc aid to about one-third of its national budget. Its large army is almost entirely financed domestically, except for arms delivered by the Bloc. Both its foreign aid and its Spartanly acquired domestic capital are devoted to restoring and increasingcapacity in agriculture and industry. In the south the standard or living is much higher and there Is far more Irccdom and gaiety. However, south Vietnam's economic development is still at an early and uncertain

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stage, and basic economic growth has been slower than that of the north. The GVN still depends upon US aid to finance about two-thirds of its national budget, including most of the support for the armed forces.

TRENDS IN SOUTHPolitical Trends

resident Diem continues to be theruler of South Vietnam; all important and many minor decisions are referred to him. Although he professes to believe ingovernment and democracy. Diem isthat the Vietnamese are not ready forolitical system and that he must ruleirm hand, at least so long assecurity is threatened. He also believes that the country cannotolitical opposition which could obstruct or dilute the government's efforts totrong and secure state. Although respected for his courage, dedication, and integrity. Diem hasomewhat austere and remoteto most Vietnamese and has not generated widespread popular enthusiasm.

regime reflects his ideas. Arepresentative government isthe government is in fact essentiallyThe legislative powers ofAssembly are strictlyjudiciary is undeveloped andthe executive; and the members ofbranch are little more than theagents of Diem. No organizedloyal or otherwise, is tolerated, andthe regime are often repressed.centralized regime has providedand stable direction to nationalit has alienated many of theelite ond has inhibited the growthand political institutionscarry on in Diem's absence. Theof power and responsibility isery small circle mainlyhis relatives, the most important beingNhu and Can. Nhu isIn international affairs and inrelative to the southern half of theCan is more concerned withand the northern half of the country

An increasingly important and effective mechanism employed by the Diem regime to maintain control over the affairs of South Vietnam is the Canemicovertapparatus. Its structure, like that of the Kuomintangommunist party, Is based on the cell and cadre system. The Can Lao is organizedegional basis. The southern region is run by Nhu, an articulate, pragmatic activist. It is loosely organized andThe northern region is ruled with an iron hand byithdrawn eccentric feared by most Vietnamese, who seldomfrom his headquarters in Hue.there is considerable rivalry andbetween the two brothers, there is no evidence that either is less than completely loyal to Diem. Diem apparently finds itto continue the divisioneans of controlling the ambitions of Nhu and Can.

Can Lao members are active at virtually every level of Vietnamese political life.is becoming Increasingly Important for professional advancement. One-third of the cabinet members and over one-half of the National Assembly deputies are probably Can Lao men; the actual figure may be higher. The Can Lao controls the regime's massparty, the National RevolutionaryIt apparently has its hand in mostbusiness transactions in Southand is engaged in dubious businessRecently the Can Lao has stepped up its campaign to recruit key officers in the GVN military establishment, probably toontrol mechanism within the onlyin South Vietnam strong enough to challenge the Diem regime.

Although the popular enthusiasmon the achieving of independence and the end of colonial rule has subsided and some disillusion has arisen, particularly among the educated elite, there appears to be littlepublic unrest. There is someamong military officers largelyof increasing Can Lao meddling inaffairs. The growth of dissatisfaction is inhibited bv South Vietnam's continuing high standard of living relative to that of its neigh-

bors. the paternalistic attitude of Dicm"stowards the people and the lack of any feasible alternative to the present regime.

B. Infernal Security

The Communist apparatus in Southis essentially an operating arm of the North Vietnamese Communist Party (Laout there have been recent indications of Chinese Communist participation in its operations. It Ls estimated that there arective guerrillas They are in small units scattered along the Cambodian border, the south coast, and in the remote plateau region of the north. There areseveral thousand others, now inactive, who have access to arms and wouldin guerrilla activities if so ordered. The guerrillas are able toorce ofhundred men for major hit-and-run raids, as they demonstrated twice8 They have recently stepped up theircampaign, assassinating local officials in remote areas, terrorizing local populations and disrupting government operations. Thearmed remnants of the religious sects are largely broken up.uchsurrendered to the government8 and the few hundred remaining in the Jungle are probably now absorbed orby the Communists.

The government has been able to restrict but not eliminate the subversive andactivities of clandestine Communist agents. It is probable that Communists have penetrated .some local army and security units, village councils, and local branches of the government There Ls no evidence, however, that such penetration is sufficient to hamper government operations seriously or that Itto the higher echelons of theThere isidespreadunderground in the urban areas,Saigon, and Communist Intelligence of GVN pluns and activities is probably good. Communist agents are also stimulating unrest among the tribal minorities in the centralelatively inaccessible and sparsely populated area which the government is attempting to settle and develop, primarily for securily reasons

an army,1by the Civil Guard, theand 'the police services, is capableeffective Internal securitythe most remote jungle andUntilhe army hadresponsibility for Internalhad considerable success. By thatresponsibility for internal securitygiven to the provincial Civiland the village Self-DefenseThese organizations have proveninadequately trained and equipped forand units from the armed forcestin ued to be called In to meet specialThe size and scattered distributionCivil Guard and Self-Defense Corpsthe problems of training andand of coordinating their activities,regions, they are infiltrated byThe police services, which includeVietnamese Bureauan police force stationed Incities, have had considerable successdown subversives and terroristsdeveloping into efficient organizations.

C. Economic Trends in South Vietnam

Vietnam has made onlytoward basic long-term economicin the five years sinceUS aid during that period,equipment and training, hasone billion dollars. The bulk ofhas been provided to finance Importswhich have been soldMost of the local currency accruinggovernment has been used to supportforces and to financeelugecs from the north.meets, out of Its own limitedone-third of the totalincluding aboutercent ofbudget. The GVN does not haveadditional financial resources toa significant economic

'See Military Annex.

Basic economic development is alsoby the GVN's preoccupation with South Vietnam's problems of internal security and military preparedness It continues to regard programs for long-range economic growth as of lower priority than the building of defense strength. Moreover, for political reasons, It ls reluctant to take any measures which might reduce the country's relatively high standard of living. Consequently, tlie GVN devotesmall part of available resources to long-range economic development. Diem is hopeful, however, that resources for development will be provided from external sources, principally the US and the Japanese reparations settlement. There is littlefor private foreign investment, primarily because of the unsettled security situation, uncertainty regarding GVN economic policy, and other factors creating an unattractive economic climate.

Another aspect of the economic situation has political aa well as economiconsiderable amount of US aid Is In the form of grants of dollars which are used to import commodities. This practice has tended tothe development of local consumer goods Industries, although steps are now being taken to encourage domestic industries. It hasa standard of living higher than the country could maintain on its ownignificant cutback in the standard of living would probably create serious politicalfor the government. The present slow pace of economic development holds little promise that the gap between the present living standard and the capacity of thewill be closed in the foreseeable future.

Nevertheless, South Vietnam is making some economic progress. The heavilytransportation network is being repaired. After on initial period of frustration and delay, considerable progress is being madeodest agrarian reform program.ersons from crowded urban and coastal areas have been relocated on land development projects in the Mekong delta area and in the sparsely populatedhighlands. The economic viability of these last mentioned projects has not yet been proved. The resettlement of refugees from the north is about completed. Riceis9 levels, but increased domestic consumption has kept rice exports far below prewar levels. Rubberevels and has replaced rice as the nation's major export.

constructive long-rangebeing taken. The GVN Is attemptinginternal revenues bytax system and is trying to restrictconsumption and total imports toamounts. If the mam part ofburden is carried by the US, It Isthat over the next few years theand planned by the GVN willproduction to expand and thusthe balance of payments deficit onservices, which washe planned development ofwould make possible overfive years the lowering of Importbyear. Inperiod the trade gap shouldillion If landrice productivity programs produceresults. Even if these resultshowever. South Vietnam willlarge foreign trade and Internaland continue to depend upon US aid.

D. South Vietnam'% Foreign Relations

South Vietnam's foreign policy is based upon fear of and rigid opposition toandonscious dependence on the US as Its major source of assistance and protection and as its principal International sponsor. The GVN leaders desire to maintain and to assert their nation's independence, which they believe to be endangered mostby the activities and military strength of North Vietnam. They are also concerned over what they consider the weakness and pro-Chinese Communist orientation ofand the machinations of the French.

DRV: In responding to persistent DRV bids to "regularize" relations, GVN policy is to impose conditions It is sure will beBy this means the GVN seeks to improve its propaganda position, while maln-

taming intact its opposition to closer contact with the DHV. Although the GVN may agree to limited discussions with DRVsuch as the proposed negotiationadministrative problems of the De-militarlrcd Zone, it is not likely to enter Into any broader discussions (whether or not held under the auspices of the InternationalCommissionnd even less likely to agree to the establishment of regular official contacts with the north.

ambodia; Relations between the GVN and Cambodia have become acutely strained. Diem is convinced that Cambodia's Prince Sihanouk is untrustworthy and Is tolerating, if not supporting, anti-GVN operations on the Cambodian border area by both Communists and non-Communists. The GVN leaders have little confidence in the ability of Cambodia to resist Communist pressures and they are convinced that Cambodia's recent recognition of Communist China shows that there is little will to resist. The GVN is fearful of atakeover in Cambodia which wouldase for subversive operations orGVN leaders were closely involved in recent anti-Sihanouk plots, and probably will continue activities designed to stir up anti-Sihanouk feeling both Inside and outside of Cambodia and to lead to Sihanouk's downfall.

aos: South Vietnam's relations with Laos areenerally friendly basis, especially since the Lao Government has indicated greater awareness of the Communist threat and has become more outspokenly pro-West In its foreign policy statements. The GVN has undertaken to advise the Lao Government on an anil-Communist program, has offered to train some Lao troops, and in other ways is seeking to stiffen the anti-Communistof the Lao Government. However, GVN worries have been only partially relieved by recent Lao Government measures to check Lao Communist political activity; the GVN continues to feel considerable disquiet because of North Vietnamese pressures along the DRV-Laos border

he GVN leaders continue tothe French of intriguing to overthrow the Diem government and lo increase their influ-

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ence in South Vietnam. French businessmen and officials in South Vietnam arc carefully watched and the scope of French commercial, cultural, and educational activities isThe GVN leaders also believe that the French are at least partially to blame for Cambodia's apparent drift towardsChina and for the failure of recent anti-Sihanouk plots. Although many Southleadersultural affinity for France, GVN-French relations arc likely lo remain cool.

Although we do not expect theclose GVN-US relationship to bethe GVN's sensitivity to Itsthe US Is likely to grow and todealings with it. Nhu and somehave expressed resentment atconsider US attempts to dictate toto restrict their freedom of action atabroad. Diem has indicated thatexpects the maintenance ofaid and special consideration from thea reward for its steadfast support.receive such special considerationDiem totance ofis the US. However,of Diem's strong aversion to thein the absence of any acceptablesource of support, he will almostjeopardizing basic US-Southduring the period of this estimate.

E. Outlook for South Vietnam

prospects for continued politicalin South Vietnam depend heavilyDiem and his ability tocontrol of the army and police. Theefforts to assure internal securitybelief that an authoritariannecessary to handle the country'sresultontinued repression ofopposition elements. This policy ofwill inhibit the growth ofthe regime, and we believe thatwill grow, particularly among thosepolitically conscious. The power andof the Can Lao, ifprobably prejudice the prestige of the gov-

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and of Diem himself. However, the controls available to the government,its apparatus the Can Lao, will probably enable it to prevent dissatisfaction In the country from eruptingerious threat to the regime at least during the next few years.

It seems almost certain that If Diem,emains alive and active, he will continue as President for many years to come. The National Asscmiy elections will probably be held in the fallnd elections forand Vice Presidents scheduled. Neither election is likely to produce anychange. Diem will probably remain unreceptive to proposals to widenin the top councils of government.

In the event of Diem's death. ViceNguyen Ngoc Tho would probablythe presidency; real political power,would probably remain in the hands of the Ngo family, particularly Can and Nhu. We believe that the strength of family ties and the advantages of cooperation would prevent an open struggle between Nhu and Can. Neither of these two men shares Diem'sand humanistic outlook to any great extent, and with either or both of them in positions of top power the GVN's reliance upon authoritarian methods would probably be accentuated.truggle for power were to develop between Can anderiod of political instability would follow. Theof Ihe army would probably be thefactor. Although the army might split badly, the major part of it would probably back Nhu.

If armed forces of the present size are maintained, there is little likelihood of any substantial reduction in the need for US aid over the next few years. Assuming continued US aid al about present levels, modestin South Vietnam's basic economic position is likely. However, Diem willnot be willing toignificantly greater share of resources to long-rangedevelopment. Diem will continue to oppose any significant cutback in the stand ard of living, largely for political reasons. Economic development will lag behind that in

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the north, and the OVN will continue to rely heavily upon US support to close the gapits own resources and its requirements.

The capabilities of the armed forces will improve, given continued US materiel support and training. Training activities arc carried out by both MAAG and the US Temporary Equipment Recovery Missionhich are of about equal size. The continuance of TEHM is threatenedecent finding of the ICC that TERM should end its activity byevelopments In Laos, such aswith the former Pathet Lao troops or disagreements as to the role of the US military mission ln Laos, could bring the Genevaand the ICC into prominence andrejudicial effect on the maintenance of TERM. Any significant reduction in the number of US military instructors would have an adverse effect on the GVN armed forces.

In any event, the GVN forces will nota match for the much-larger Northforces within the period ofar between the two parts of Vietnam, the GVN forces would be capable only ofelayingore widespread war in the Far East, we do not believe that relativeof the two armed forces are likely to be tested over the next two or three years at least. The Communist armed action against the GVN will probably continue to be limited to irregular forces and unconventional warfare.

The GVN will not be able to eradicate Communist guerrilla or subversive activity in the foreseeable future. Indeed the DRV Is capable of stepping up such activity in the south, and will probably do so from time to time, such as during the national election campaign. The Self-Defense Corps and Civil Guard will probably increase gradually lnbut not to the point of being capable of efficiently assuming fullfor internal security. From time to lime army units, occasionally up to regimental size, will probably have to be diverted from their training programseeiu) internal security assignments. This might disrupt training schedules, but It will have the ad- ^

of keeping the military In close touch with the most immediate threat to theot Southsubversion, and guerrilla warfare.

is little prospectignificantof relations between Southand Cambodia so long as theof the two countries remain Inbetween the two are now soa break could occur at any time.both sides should decide to attempt totensions and improve relations, as isby recent reports, mutual suspicionantagonism are so great that anycould leadenewal ofand hostile acts.

II. MAJOR TRENDS IN NORTH VIETNAM A. Political

Communist regime in Northhad little success in generating publicThe regime retains somehaving won military victories overand having attainedthere is dissatisfaction amongminorities, the several hundredCatholics, the intellectuals, and thepopulation. They resent their drabexistence and the regime'sAlthough widespread, thisis unorganized and not channeledknown resistance movement. Theis, in general, passive and apatheticface of the regime's widespread andsystem of controls. Public unrest orwhile not forcing the regimeits basic programs, has undoubtedlyfactor influencing the regime'sin the socialization ofThe development of significantlo the regime Is unlikely.Catholic and tribal minoritiescontinue to be centers ofability to undertake organizedvery limited at present and Is likely toas the regime further perfects itsDisaffection among the peasantrycontinue to trouble the regimeunlikely lo prevent the regime fromout its basic program.

The leaders of the party and government are all veteran Communists wilh considerable experience both as revolutionaries and asThere is no firm evidence of any serious antagonism between cliques or persons within the leadership group. Ho Chi Minh as President of the government andOeneral of the Lao Dong (Communist Party) Is unchallenged as top man. Ho Is apparently In good health, and makes many public appearances. Despite the generaldissatisfaction with life in North Vietnam, Ho apparently continues to enjoy considerable personal popularity.

There is no clear successor to Ho Chi Minh. If Ho should die, control would probablybe exercised by some form of collective leadership. The three strongest leaders in the second echelon are Premier Pham Van Dong, Vice Premier Truong Chlnh and party secretary Lc Duan. The latter two haveapparatus of their own within the party, and one of them would probably rise eventually to Ihe top of the hierarchy.Vo Nguyen Glap. military hero of the revolution, appears to have little poUUcal strength, bul as Commander-in-Chief of the armed forces he would probably haveInfluence in the selectionuccessor tohange in the top leadership would almost certainly not result in any change in the nature of the regime or Its orientation.

B. Economic

Vietnam's economic planningto be generally realistic andto the economic potential of theIn contrast to South Vietnam, theIs on present sacrifice for promisedbenefits, and the standard of livingkept very low in order lo squeezefor investment. In contrast toUSSR and Communist China, theseem to have begun theirfull attention to the basic importancein their economy. As aare emphasizing investment inthe production of fertilizer andImplements and the processing ofcrops By controlling consumption

and Increasing production, North Vietnam has ended its rice imports and has even exported small amounts. Plans for industrialization tend to emphasize mining, light industry, and the production of consumer goods.

he period from the signing of the Geneva Agreements47 was devoted to rehabilitation of the prewar economic plant. At the end of this period the First Three-Yearas introduced. In the first year of the) production waswell above) levels inpower, cotton cloth,umber of food-crops, including rice, but the output of coal had recovered only about0 production goals" for industry do not appear unattainable, but the agricultural goals are much more ambitious and less likely to be achieved. In fact the output of grains has tended to level off during the past three years,ajor increase in production must be achieved if orderly economic progress is to be continued. In light of the relatively large amount of capital and labor currently being devoted to agriculture, we believe that the DRV will achieve adequate success and that by the end0 it will haveirm base for considerable economic

"The principal source for economic data on North Vietnam Is the DRV. The relatively small amount of information from other sourcesn most cases to support the official DRV claims.Comparisons of present figures with prewarhowever, are exaggerated in favor of the former, because prewar statistics omitted anamount of locally produced and consumed goods.

' Secnd B.

Hanoi is following Peiping's pattern offairly closely. Bybout half the peasant households of North Vietnam had been organized into labor-exchange teams and about five percent had moved beyond this stage into cooperatives. This is about parallel with the development in Communist Chinahe Three-Year Plan requires that by the end0 all peasants be organized into cooperatives of at least an elementary form. This speedup in agricultural socialization will be resented by the peasantry and is likely to bo met with at least some passive resistance, but the controls available to the party and government will probably enable the goal to be met. Despite the regime's statements that they do not intend to institute Chinese-style communes now, their general adherence to the Chinese pattern as well as some of theirtheoretical writings indicate that they may do soew years. The general trend of North Vietnam's economic development is toward closer economic integration withChina, producing food, raw materials, and consumer goods and exchanging with China for the products of heavy Industry.

4 the economy of North Vietnam has been bolstered by0 million worth of aid from the rest of the Bloc. Aboutercent of this has come as outright grants, and of the total, roughlyercent has come from Communist China,ercent from the USSR, and the rest from the Satellites.this aid has amounted to more than one-third of the total budget, and it hasmainly of capital equipment, rawfor light industry, and the services of advisors and technicians. Whatever military

A

NORTH VIETNAM: OUTPUT OF SELECTED AGRICULTURAL PRODUCTS (FROM DRV SOURCES) In thousands ot metric tons

Rice Maize Potatoes Cotton Sugar Cane

(Annual Plan)

(Three-Year Plan Goal)

CHART B

NORTH VIETNAM: OUTPUT OF SELECTED INDUSTRIAL PRODUCTS (FROM DRV SOURCES)

7 8 (Annua! (Three-Year

Plan) Plan Goal)

Power

kwh

tons

tons

tons

tons

M

J

has been received has been in addition to these economic aid figures. Economic aid at about the present levels will be needed for the next few years and will almost certainly be forthcoming. More than three-quarters of North Vietnam's foreign trade is with the Bloc, Communist China being the chiefpartner.

is certain that military aid is beingfrom the rest of the Bloc in violationGeneva Agreements, but preciseon types and amounts is notBloc military aid will almostto arrive each year, and, in thelarge-scale hostilities, the Northalmost certainly be supplied bywith logistical support as needed.

C. Foreign Relations

Bloc: The DRV reliesCommunist China for support andbut there is considerable Sovietwithin the top ranks of theParty and Soviet advisors arein the DRV's mining and industrialThere is no evidence of anySino-Soviet competition for influenceDRV. On the contrary, the entireto be contributing aid and advice inmost appropriate to the capabilitiescontributing nations.

Military Annex

Non-Communist Countries: Nonation has as yet formally recognized the DRV. However, the UK, India, andmaintain consulates and the Frenchmall mission ta Hanoi. The fewwho staff the Western missions have been subjected to petty harassment, the scope of their activity is very limited, and in8 their right to transmit radio messages was rescinded. The DRV has made efforts toIts contacts abroad and has had some success particularly through the trips of Ho to India and Indonesia.

CVN: Hanoi appears to have abandoned for the present its hopes of unifyingommunist regime by overt means. Although it has the militaryto overrun all the states of formeragainst indigenoushe DRV probably is convinced that this would mean war with the US. In any case, the ultimate decision forenture almost certainly rests with Moscow and Peiping. For the next few years, at least, the DRV is likely toto rely on propaganda, subversion, and paramilitary action to promote its aims in South Vietnam.

Laos: The DRV Is taking an increasingly aggressive stand toward Laos. It is applying pressure on the Lao Government by military probing of the ill-defined border areas, by de-

mands for reconvening the ICC tn Laos, andhreatening propaganda barrage in the DRV press and over Radio Hanoi. Inside Laos, the DRVajor asset in the Neo Lao Hak Zathe legal political party which replaced the Communist dominated guerrilla army, the Pathet Lao. The DRV gives basic policy direction to the NLHZ and almost certainly continues to support anda Communist underground apparatus in Laosuerrilla force on the DRV side of the border. If the Lao Government makes substantial Inroads against the NLHZ. the DRV may direct the Lao Communists toto guerrilla tactics. We think it veryhowever, that within the period of this estimate the DRV or its Sino-Soviet mentors will attempt to seize Laos by an overt DRV military invasion.

ambodia: Relations with Cambodia have been amicable, especially since Sihanouk'sof Communist China In Junehere are indications that Pelplng's embassy in Phnom Penh Is providing some guidance and advice to DRV agents In Cambodia, and the DRV news representative in Cambodia promotes Lao Dong interests andegal address for communications. This "oasc-facilitates DRV subversive work among theietnamese residents in Cambodia. The jungle areas of eastern Cambodia have been usefulrimary route for Communist cadres dispatched to South Vietnam and have servedase andfor guerrilla penetrations by Vietnamese dissidents (nearly all under the guidance of the DRV) into South Vietnam.

hailand: The Government of Thailand hasarget of abuse by the DRVIn line with general Communistajor Issue among Thailand and North and South Vietnam is0 Vietnamese community in Thailand.0 of these arc North Vietnamese refugees from the Indochina War, most of whom tend to be sympathetic to the Hanoi regime.is anxious lo remove this potentiallygroup from the area of Itsfrontier and seems willing to negotiate(through the Red Cross societies) with the DRV to this end. However, it is highly improbable that Thailand would agree to direct negotiations with the DRV on this or any other issue.

MILITARY ANNEX

SOUTH VIETNAM

regulars

ivil0 Self-Defense Corps

personnel

ubchasers (PC)

small subchasers (SC)

old coastal minesweepers

1 landing ships (LSM.LSSL.

anding craftmall cargo ship (AKL)ervice craft

AIRersonnelilots)

iston-englncd aircraft

NORTH VIETNAM

regulars

rovincial0 militia

personnel (est.)

ooden-hulled patrol craft (est.)

AIR FORCE: No reliable figuresappears to be in incipient stage of organization.

ANNEX

VIETNAM

The South Vietnamese Army has beenof many of its police and internalduties although it is still called upon for special anti-Communist operations. With more time available for training andthe army's capabilities for regular combat have beenarge number of its officers and NCO's have had considerable combat experience. There have been reports of dissatisfaction ln the armed services,among higher officers,esult of the Increasing influence of the Can Lao in military affairs and the rapid rise of certain younger officers with greater political than military talents. However, suchis probably not widespread nor of serious proportions. There has been someinfiltration of the lower ranks, and the conscription program, which has createdproblems of discipline and morale, will probably increase the opportunities forsubversion.

The South Vietnamese Air Forcemall, untried force, currentlyraining phase and possessingimited militaryIts primary military value lies in Its capability to support ground forces. South Vietnam hasirfields with runways ofeet. Including two capable of supporting limited operations by jet medium bombers, and two others capable of supporting jet light bomber and precentury jet fighter operations. The South Vietnamese Air Force is prohibited from having jets by the terms of the Geneva Agreements.

South Vietnamese Navy isobsolescent ships and maintenance ofis deficient by US Navy standards.other hand, training has improvedpast several years and prospects arethe continued improvement of trainingover-all capabilities. The SouthIs considerably larger than theof North Vietnam and training isThe river forces of the navyof supporting amphibiousground forces against dissidents. Theyin this type of warfare andquite successful.

NORTH VIETNAM

The North Vietnamese Army is the largest and most powerful military force in Southeast Asia and it has the capability to overrun all of former Indochina if opposed only by existing Indigenous forces. Hanoi has recently begun to build up its trained reserve forces and to regularize the flow of manpower to its armed forces through national conscription. We believe that, as the trained reserve forces are increased in size and potential, the size of the regular army will gradually be reduced. This will add manpower to the labor force and make good "peace" propaganda.

The North Vietnamese Navymall force with only local capabilities. Recentincluding the sighting of air forcesuggests that an air force has also been formed, but we know nothing of Its combat capabilities, if any.

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