NIE 63.1-3-55
Probable
Developments
to July 1956
in Vietnam
11 October 1955
PROBABLE DEVELOPMENTS IN VIETNAM TO JULY 1956
THE PROBLEM
development of a Vietnamese government with
the capability to defend itself against internal subversion and uprisings and with
sufficient authority and administrative ability to deal adequately with the many prob
lems facing it, including those posed by the Geneva Agreements.
To estimate the
prospects
for the
CONCLUSIONS
1. Since he became Premier in
Ngo
July 1954,
Dinh Diem has made considerable
progress toward
establishing
iy independent
Vietnamese
the
cerning elections,
he would insist
con
on con
the first ful
ditions which he felt certain the Commu
government.
nists would be unable to
of the South
that such
capability
develop an effective gov
which can survive during the
(Paras.
years is still in doubt.
Nevertheless,
direct consultations with the DRV
a
position
will
accept. Aware
probably cause
Vietnamese to
the Viet Minh to increase their efforts to
ernment
destroy his government, Diem will prob
ably seek to bind the US more specifically
to the defense of Vietnam.
(Para. 49)
next few
9, 12)
2.
Assuming
Diem survives and
provided
he continues to receive wholehearted US
support,
we
believe he will
probably
be:
able to cope with non-Communist dissi
dent elements and to remain in office dur
period of this estimate. More
over, providing the Communists do not
exercise their capabilities to attack across
the 17th Parallel or to initiate large-scale
guerrilla warfare in South Vietnam, Diem
will probably make further progress in
developing a more effective government.
(Para. 54)
ing
the
3. Diem will almost
not agree
to hold national elections for the unifica
tion of Vietnam
certainly
by July 1956.
Diem, under pressure from
Powers, might reluctantly
Although
the Western
agree
to in-
Minh, despite their relative
quiescence, present the greatest potential
4. The Viet
threat to Diem.
Should the Viet Minh
openly to invade the south with
regular forces, they are capable of de
featirig the VNA and any French forces
(if committed) now present in South
Vietnam.
Moreover, with an estimated
10,000 military personnel in South Viet
nam, the Viet Minh have the capability
to undertake local sabotage and terrorist
actions, and small-scale but widespread
guerrilla warfare. The Viet Minh can re
inforce these forces by infiltrating into
elect
South Vietnam.
political influence in many
throughout South Viet
(Paras. 24, 2729)
ently
exerts
areas
scattered
nam.
The Viet Minh appar
1
2
5. We believe that the Viet
Minh, at least
will
continue
probably
July 1956,
primarily on a political
struggle designed on the one hand to
exert pressure for implementation of the
Geneva Agreements and on the other to
bring to power in the south political per
until
to concentrate
and
provided they estimate that such ac
provoke Manila Pact coun
teractions.
(Para. 30)
tion would not
7. Should the Viet Minh initiate
largeguerrilla operations supported by
substantial infiltration from the north,
the South Vietnamese government would
sonalities amenable to coalition govern
be hard pressed to do more than maintain
Their tactics
ment with the Viet Minh.
control in the Saigon-Cholon area and in
will probably be to maintain and in
If the
a few other major urban centers.
their influence in the villages,K
crease
operation were prolonged, the govern
hamper government administration, dis
ment probably could not survive without
credit Diem and the government, to sub
military assistance from outside. (Para.
vert the command elements in the VNA,
36)
and
incite
and
infIltrate
to
elements
particularly
groups
to oppose the
sects
dissident
of
the
government. (Para.
31)
6.
scale
8. While the French will continue to seek
to
salvage
as
much
commercial and
possible of French
cultural interests, we beas
lieve French interests and influence
However,
Communists
the
estimate that unless
lenge
the
probably
they effectively chal
of the Diem govern
position
ment the latter will
and stabilize its
gradually strengthen
position. They might de
cide, despite the presence of the Inter
Commission, to initiate
national Control
small-scale but
fare
was
widespread guerrilla war
in the south, provided such action
consistent with over-all Bloc policies
in
decline
South Vietnam will
progressively
during the period of this estimate. Ex
cept for training personnel, possible air
and naval bases, and perhaps some token
forces, the French will have withdrawn
the bulk of the FEC by July 1956.
French forces remaining in South Viet
nam will almost certainly not be com
mitted against the Viet Minh, except in
self-defense or possibly as part of a mul
tilateral Western action.
(Paras. 40, 51)
DISCUSSION
The most
I. INTRODUCTION
significant
articulate
ment of the bulk of the
9. When
mier
he faced
ing
Ngo
DinJ-i Diem
was
a
basically
situation.
population
of
area
some
a
tional
government, and
gional loyalties
principal concern
government,
was
the
war-weary,
was
divided
religious opinion.
was
by
re
Their
to better their economic
and preserve their
bol
of
Vietnamese
combined with
Minh
Nationalism.
a
the sym
The small
as
educated
of identification with the Na
and
antipathy for the French
personal regard for Ho Chi
under the admin
12 million
lacked
sense
Pre
July 1954,
unstable and deteriorat
In the
istration of the Vietnamese
position
appointed
Chief of State Bao Dai in
by
political senti
population was an
newly-found peace.
minority who were concerned with
national politics, were primarily power seek
ing opportunists. The existence of armed
politico-religious
ficulties
of
sects contributed to the dif
establishing central government
authority throughout South Vietnam. Many
French were still trying to preserve their
sj-~P
vested interest in the economic and
life of
ment
the
country
that
feared
political
and the French govern
the establishment of an
government in the
might involve French forces in renewed
fighting with the Viet Minh. The prospects
effective anti-Communist
south
made
were
darker
even
the Viet Minh
appeared
by
the
to be
ease
with which
consolidating
its
control of the north.
tional
as a
forced to
was
patriot,
move
considerable
Although possessing
prestige
he
was
na
inexperi
enced in administration and
was
at the outset
of Bao Dal and
the
by
intrigues
confronted
other self-interested individuals and
who
in
cases
many
support.
ment in South Vietnam is still in doubt.
sanctioned
constitutional
basis
for
the
re
benefited
from
groups,
French
(c) the elimination of armed opposi
tion and the extension of government authori
ty throughout all areas of South Vietnam; (d)
the
government
was
in doubt and
suppression
litical
II. THE
of Viet Minh
military
capabilities remaining
nam; and
(e)
in
and po
South
Viet
the restoration of the economy.
INTERNAL POLITICAL AND SECURITY
SITUATION
Moreover, the loyalty of the army
to the central
Al
though Diem has established control over the
apparatus of government, he has dealt only in
part with such fundamental problems as: (a)
the development of an effective administra
tion, particularly on provincial and local
levels; (b) the institution of a popularlygime;
10. In this situation Diem
slowly.
3
The Diem Government
General Hinh, its Chief of Staff who also held
a
commission in the French Air
Force,
was
openly maneuvering for political power. The
national police and security services were
commanded by Bay Vien, the leader of the
Binh Xuyen gang who had bought them from
Bao Dal in April 1954 and who was hostile to
Diem.
Finally, Diem was handicapped by a
lack of trained administrators at the national
and
Vietnam.
levels.
provincial
13. At present, Diems greatest assets are his
reputation for honesty and unsullied nation
alism, his control of the Vietnamese National
Army, and the moral and financial support of
the US.
In addition, Diem has gained con
siderable popular following, especially in ur
ban centers and in recently pacified areas and
has the loyalty of the refugees from North
US
11. In
the
difficult
and
confused
situation
government, Diem
concentrated on eliminating or neutralizing
the most important groups and individuals
challenging the authority of his government.
excluded General Hinh
successively
and
Bao Dai from the political scene, won the sup
port of the army, and established the inde
pendence of his government from French in
fluence.
By bribery, persuasion, and finally
force, Diem virtually eliminated the Binh
Xuyen and the most important elements of
the Hoa Hao sects
At the
the
strongest
tions,
As
Diem
popularity
as
time, he
same
alliance.
as
a
threats to his
authority.
maneuvered the Cao Dai
of the sects
into an uneasy
result of these successful ac
gained prestige and increased
a symbol of Vietnamese inde
pendence.
12.
Nevertheless,
to establish
lapse.
the national
confronting
He
However, should he lose army or
support, his regime would probably col
a
the
success
of Diems
efforts
viable anti-Communist govern-
14.
Diem also has the
instances the active
sympathy and in many
support of the estimated
1,000,000 Catholics
in
South
Vietnam
(in
cluding about 500,000 Catholic refugees from
the north), who represent an anti-Communist
with
considerable political potential.
core
However, in order to avoid aggravating the
religious issue, Diem, a Catholic, has been
careful not to appear to champion the Cath
olic
cause.
15. Diem is still in the
early stages of organi
zing a political machine. His cabinet is com
posed primarily of loyal technicians who lack
political stature, Most well known political
figures of the pre-Diem period have been al
ienated by Diems unwillingness to trust them
and by his insistence that unquestioned ac
ceptance of his leadership is the only basis
for cooperation.
Diem has depended heavily
4
unpopular brothers for advice and en
trusts them with positions of great responsi
bility. His tendency toward one man rule,
his dependence on his brothers for advice, and
his rejection of Vietnamese leaders whom he
does not trust, has denied his go\ernment
on
his
many of the few trained administrators.
16.
Although
Diem has established firm
con
with his failure to
organize his gov
effectively, has been largely respon
delay in the implementation of
promised reforms in government procedure
and agrarian policies.
Projects for agricul
tural development and land reform, under the
guidance of US advisors, are still largely in
the planning stage.
Even with US assistance
ernment
sible for the
and
its
own
the Diem
best efforts,
govern
completed only about 47,000 hous
ing units accommodating approximately 40
percent of the 650,000 refugees from the
ment has
north.
Diem has made
creasing
the
number
administrative
ernment.
some
of
guidance
Civic
representatives
progress in in
under the
villages
of
the
central
of
have been trained and sent out to
about 10
gov
teams, composed of
the various ministries,
action
villages
in
S
provinces.
17. Diem has made
galvanize
a
considerable effort to
popular support behind his
Initially, he concentrated on ex
program.
ploiting popular antipathy for Bao Dai and
the French; more recently he has sought to
develop strong anti-Communist sentiment.
Although there have been instances of un
controlled
and
mass
manifestation
xenophobia, Diem
ceeded
in
has
of
on
popular
anger
the whole suc
keeping popular passions
within
bounds.
Communist
influence.
Non-Communist
are
a
Vietnam:
(a)
simple public
an
early
referendum
for
a
choice between Diem and Bao
as
formation
of
a
delayed into 1956.
Opposition
Dai, the most powerful
sects, aspires to political control of
Vietnam and is
of the
South
potentially
portant non-Communist opposition.
most im
trols
relatively
a
Diems
sizeable rural
area
and has
a
It
con
cohesive
religious following of some 1,500,000
Vietnamese, including a trained army of
about 15,000.
While the Cao Dai spiritual
leader, Pope Pham Cong Tac, has cooperated
with other sect leaders opposing Diem, most
Cao
Dai
military leaders have supported
Phuong, the Commander-inChief of Cao Dai forces and probably the sects
most influential political leader, has entered
into an agreement with the government to
integrate the bulk of his troops into the VNA
Diem.
and
General
to
Phuong
the
disband
remainder.
However,
has continued to
intrigue to obtain
better terms and the agreement still has not
been fully implemented.
20.
the
During
the Cao Dai
spring
sought to
litical force in South
to
capture
mittee
This
the
spring of
Xuyen crisis.
during
Binh
control of
(RC).
and
of
summer
1955,
become the
major po
Vietnam by attempting
the Revolutionary Com
committee
formed
was
1955 at the time of the
It resulted from
a
mer
brother Nhu, Cao
ger of followers of Diems
Dai generals The and Phuong, and Hoa Hao
General
Ngo,
all of whom
ends.
It
sought
serve
to
their
use
the
own
po
likely that much of the
extreme nationalist activity of the Commit
tee during April and May of 1955 reflected
Cao Dai efforts to undercut Diem and to give
the RC the political initiative.
However,
Diems
supporters have thwarted Cao Dai
is
efforts.
Chief of
State; (b) a referendum on a
new constitution coupled with elections at the
communal and municipal levels; and
(C)
as
be
19. The Cao
litical
currently planthree-phase program to obtain a pop
ular mandate for his regime and eventually
to form a representative assembly in South
fling
The
force of nationalism tO
18. Diem and his advisors
national
a
To what extent
through will de
pend largely on Diems judgment as to his
own appeal in the south and the extent of
over
coupled
Dai
the end of 1955 for
by
with limited powers.
this process will be carried
representative body may
the army and security forces, he has
This fact,
not established internal security.
trol
elections
sembly
21.
During the period of
tegration of Cao Dai forces
this
estimate, in
into the VNA will
5
continue.
probably
This
may
process
be
by considerable political jockeying
and some local armed flare-ups may occur.
Because Phuong and other Cao Dai leaders
lack popular support, we do not believe they
Communist
Opposition
marked
to
elect
will
resist Diem
such
they adopt
a
by
Should
force.
believe
we
course,
they
would not pose a major threat to the con
How
tinued existence of the government.
would
forces
their
to
effort
the
suppress
ever,
disrupt
army training and divert attention
including the sup
from other critical tasks
pression
24. The Communists pose the ultimate threat
independence of South Vietnam. The
to the
regime in North Vietnam possess
stronger army, a more experienced ad
ministration, greater cohesion of leadership,
and greater drive than the government of
Communist
far
es a
South Vietnam.
there will be
estimate.
we
do not believe
the
political strengths during
of
Considerations
military
period
and
of this
over-all
bloc
apprehension concerning possi
certainly pre
and
strategy
of the Communists.
However,
direct test of
a
ble US intervention will almost
22.
Although
the Birth
Xuyen
and
some
ele
ments of the Hoa Hao sect still retain the
limited
power to wage guerrilla warfare in
government by
areas, the
has
drastically reduced the
force and
bribery
potential
of these
groups to challenge its authority.
lowing is the disposition of the four
forces of the Hoa Hao:
Ba Cuts
lieved to be reduced to about
scattered and in
hiding after
The
fol
principal
unit is be
1,000,
evading
who
VNA
are
en
group has been badly disor
result of VNA operations and
circlement; Soais
ganized as a
probably does not now total more than 1,500;
Nguyens force of some 2,500, though osten
sibly rallied to the government, is in fact
neutral; and Ngos unit of some 3,000 is co
operating with the government. The Binh
Xuyen have probably ceased to be an effec
tive force following the recent VNA operation
against their swamp hideout. However, the
remaining forces of Bay Vien, Ba Cut, and
perhaps Soai will probably continue to oppose
the government during the period of this esti
mate and may be tempted to cooperate with
On the other
open Viet Minh attack.
almost
will
Diem
Premier
certainly not
hand,
relative
of
to
test
a
popular strengths in
agree
vent
an
national elections.
25. The
by their agents
combined
across
26. Since the
these groups will continue to
position
lieve
the
in
an
effort to
majority
terms with
Diem as
secure
for
we
be
power,
gradually come to
they become convinced
will
that he cannot be removed
neuvers.
maneuver
by political
ma
Vietnam, by the
diploinatic and
possibly by troops
Bloc
of
facilities, and
the 17th Parallel.
cease-fire and the
evacuation of most Viet Minh
subsequent
military
units
north, the Communists in South Viet
have concentrated on methods of poLiti
to the
nam
cal
struggle
designed
on
the
one
hand to
exert pressure for nationwide elections accord
ing to the Geneva Agreements, and on the
other to infiltrate and subvert the institutions
of Free Vietnam with
a
view to
bringing
to
power in the south political personalities who
would be amenable to a coalition government
with the north.
27. We have little
intelligence
strength, activities,
political groupings are
to
Diem
and
are
opposed
composed primarily
of intellectuals and political opportunists.
They have little popular following. While
in South
resources
propaganda
infiltrated
now
the Viet Minh.
23. Most of the other
will be indirect.
struggle, therefore,
On the Viet Minh side it will be carried out
Vietnam.
We
on
Viet Minh
and intentions in South
estimate,
South Vietnam there
are
however, that in
10,000 armed
about
Viet Minh
military personnel in addition to
political cadres and
several Communist front groups.
Military
personnel are probably organized as skeletal
units.
Unit locations are not fully known,
nor is the identity of their leaders.
However,
an
the
unknown number of
strongest groups
and most extensive activ
ity appear to be centered in the coastal
tains of Southern Annam, the interior
moun
moun
6
tains of Central Annam, the Plaine des Joncs
area adjacent to Cambodia and the Laotian
in the Ca Mau
borders, and
probably engaged
intelligence activity, organizational and
These elements
China.
in
region of Cochin
training functions,
are
prote&ting
in
and
local
headquarters and base areas. They are also
probably encouraging and perhaps assisting
those Binh
Hoa Hao forces in
Xuyen and
opposition
tinued
to the
con
Avail
government.
able information indicates that the Viet Minh
ty
continued
capabili
campaign of
assassination, sabotage,
in South Vietnam retain
a
for armed action and for
mass
intimidation,
a
the
tively challenge
and stabilize its
probably
to
position.
would
28. The Viet Minh
probably
exercises effective
concluded that Diem will not agree
unification schemes which
or
favor
the
Communists.
take-over of the south
force
might
decline.
in areas which are
ministration.
include
These
which the
of
to establish its
own
pockets
in
through open invasion
troops across the
successful
plateau and foothill areas of South-Central
Vietnam, the Camau peninsula in the extreme
southern part of Vietnam, and the Plaine des
The Viet Minh also
Joncs in Cochin-China.
probably exerts influence in rural areas where
government administration is present but still
or
in
by infiltrating
would
policies
and risk
weakening
in the south but also
support.
31. We believe that until
July
primarily political.
They
where
are
29. There appears to be little Communist in
filtration in the higher echelons of the Viet
namese
there
National
are
government
indications of
fairly
the army, but
extensive pene
or
tration of lower units of the administration,
possibly
including
regional and provincial
certainly the village
With respect to the South Vietnam
governments,
councils.
and almost
politico-religious
from
Vietnamese
sects,
recent
information
suggests growing
probably successful Communist efforts to
penetrate the factions of these sects which re
main hostile and in armed opposition to the
sources
and
government.
30. The
Communists
are
serious dilemma in their
lish Viet Minh
They probably
control
confronted with
campaign
over
a
to estab
South Vietnam.
estimate that unless
they
effec
over
might lead not only to
exposed organization
to a drastic loss of public
government control is greatest, the Viet Minh
working primarily through front organi
zations, such as labor unions, social service,
and peace
groups.
areas
to
of their
a course
urban
quickly
warfare without substantial infiltra
tion from the north
munists will follow
In
jeopardize
provoking
and may there
undertake widespread
national
ineffective.
suffi
government
fore estimate that to
the
use
either
17th Parallel to insure
South Vietnam
throw the Diem
guerrilla
Vietnam
In addition, the Commu
presently have sufficient
not
may
strength
realize that the
liberation
US intervention.
Communist
short of open
On the other hand, the.
cient
ad
the
Under these
a
means
probably
against South
force
un
government
by
Communists also
nists
political control only
derpopulated and in
has made no attempt
gradually strengthen
Moreover, they have
circumstances the chances for
a
Diem gov
elections
current Bloc peace
and terrorism.
position of the
ernment the latter will
1956 the Com
of action which is
did not seize upon
the crisis of last
and
warfare
ments
spring to initiate guerrilla
their propaganda pronounce
from
Hanoi appear to direct
followers in the south to continue their
cal actions.
Their
objective appears
their
politi
to be the
preservation
of their pose as th defenders of
Vietnamese unity and independence and as
the
provisions of the Geneva
south, they will probably
work in both the villages and urban centers
to exploit local grievances, to hamper and sab
otage government administration and reform,
to subvert the command elements in the VNA,
to discredit Diem as a nationalist, to encour
supporters
Accords.
In
of the
the
dissident groups in armed opposition
against the government, and to increase sup
port for plausible Communist proposals for
unification.
By these measures, which may
age
involve terrorism and violence short of
certed
con
the Viet Minh could
guerrilla action,
seriously hamper government efforts to ad
minister the rural areas.
They would prob
7
ably hope by
the
this tactic to force
change in
a
of South Vietnam
government
or
to de
35. The morale of the VNA has risen
as
a
Hao and Binh
velop widespread antipathy toward Diem.
with the halt in demobilization and
together
32. However, the Communists might, despite
the presence of the ICC, decide to initiate
widespread guerrilla
small-scale but
south, provided
in the
such action
sistent with over-all Bloc
they
policies
and
The
counteraction.
US
provided
Communists
presumably
vention if they believed that they could con
duct successful guerrilla operations with suffi
cient support from the south to make unnec
essary obvious and extensive support from the
north.
III. VIETNAMESE MILITARY AND SECURITY
SERVICES
has
an
sive of
National
Vietnamese
estimated
8,00010,000
some
of
strength
Army (VNA)
147,000, exclu
sect forces in
the
composed
of 159 combat battalions, including 148 in
fantry-type, 2 armored, and 9 artillery battal
As a result of recent reorganization
ions.
most of the battalions have been regrouped
to form 4 field infantry divisions; 6 light
infantry divisions; 13 territorial regiments;
The
and 3 independent infantry regiments.
process of
integration.
The VNA is
remainder of the battalions
The
are
larger elements generally
formative
stage,
and
are
not
independent.
are
still in the
yet operational.
The Vietnamese
government hopes to increase
the VNA to a strength of 200,000, whereas
current US-approved force levels, including air
and naval forces, call for a total strength of
about 150,000 by July 1956.
34. In recent
operations against sect forces,
the VNA displayed major weaknesses in staff
work, particularly in logistics, and the tactical
control of units
several
key
poor. Since October 1954,
officers have been purged,
was
VNA
and much of the
present army leadership is
required for the new team
to grow
into their positions, but with experi
ence and the scheduled training of VNA offi
cers in US service schools, the army leader
ship should improve gradually.
new.
Time will be
of
sense
would be less fearful of US inter
33. The
government
French, has given the VNA a new
independence and confidence.
the
against
con
estimate that such action would not pro
voke
the firm nationalist stand of the
warfare
was
sharply
operations against the Hoa
Xuyen dissidents. This factor,
result of its
36.
the VNAs
lack of experience and
probably has the capability of
maintaining the government in power against
potential armed opposition now located south
Despite
it
training,
of the 17th Parallel, and of maintaining con
trol of major urban centers and lines of com
munication.
Should
Viet Minh
the
initiate
major guerrilla operation supported by sub
stantial infiltration from the north during the
period of this estimate, the government would
be hard pressed to do more than maintain
control of Saigon-Cholon and a few other
major urban centers. If the operation was
prolonged, the South Vietnamese government
probably could not survive without military
a
assistance from outside.
Provided US assist
continued, and conditions permit the
implementation of planned reorganization
ance
is
training programs, the VNA in another
two years should be able to maintain a large
measure of internal security even in the event
and
of considerable infiltration of
the north.
guerrillas from
Moreover, against external aggres
sion, it should be able at that time, with out
side naval and air
delay
support, to provide a 60 day
withdrawing to the general vicinity
Dalat
Nha Trang, and
Me Thuot
in
of Ban
to conduct
a
Saigon-Cap
37. Vietnam
defense for
St.
Jacques
has
a
some
months of the
area.
small
air
force
with
an
personnel strength of about 3,000 (in
over-all
cluding 78 trained
90 pilot trainees,
officer and enlisted
pilots,
approximately 1,100
other skilled and semi-skilled personnel), and
an aircraft strength of about 100 liaison/train
ing and transport types. The Vietnam Air
Force (VNAF) has minor capabilities for per
forming artillery observation, target spotting,
battle
area
sions.
No
bilities is
estimate
VNAF is
and
liaison, and
air
evacuation mis
increase in VNAF capa
during the period of this
significant
expected
although a larger and more effective
planned for the next 23 years. Any
8
capabilities
substantial increase in air force
will
and
primarily
training
the
depend
re-equipment programs
upon
of the US spon
Relations Instruction Mission
Training
(TRIM) and MAAG.
sored
operational
under
is
control of the Chief of Staff of the VNA and
under the administrative command of a sen
sists of 1,618 men, with
men
and
new
In
the
with
apparently
more
(PC), 3 coastal
Police, under
effective
leadership,
improvement
in the
morale, equip
and effectiveness of these forces is
ment,
during
merger
of
militia,
and
tral
likely
period of this estimate. A Civil
currently being organized through a
the
Guard is
former
direction
of
local
provincial guards,
suppletif
elements under the
the
Minister
of
Interior.
organization with an estimated 65,000
men still lacks cohesion, skills, and necessary
equipment. Of these, 25,000 will be trained
US
a
program
now
tainly
being
instituted.
Expeditionary Corps (FEC)
reduced to a strength of about 45,-
000, because of
concern
situation,
Vietnam,
Vietnamese
tiations
a
are
Vietnam and
role
and
now
pressures.
proceeding
between
Nego
South
France concerning the future
status
South Vietnam.
of
the
or
part
as
cer
Viet
of
a
The French will
personnel
continue to
France and will
addition,
training
the VNA in Vietnam.
will
the French
the turnover of
plete
also
probably
participate, although reluctantly,
with the US in
In
facilities for VNA
provide training
in
probably
com
and installations
depots
to the VNA.
IV. ECONOMIC
41. Vietnams
proved
economic
in the
economic
position has not im
past year. Formidable basic
problems
still confront the govern
country is dependent on foreign
aid to finance imports and the defense budget.
Acreage under cultivation is still far below
prewar levels and the position of the peasant
There are also serious
needs to be improved.
immediate problems.
Despite adequate pro
duction of rice for domestic consumption,
ment.
The
distribution
and
difficulties have
marketing
a dramatic rise in the price of this
commodity in the large urban centers. Un
employment is rising as a result of the closing
of the French enterprises and military in
stallations and is
bilization
of
aggravated by the
VNA
problems may
political effects and
months to
and
sect
come
armed
demo
forces.
to have
add to
significant
instability in the
come.
for the North African
general loss of interest in South
and
against
Minh, except to protect itself
These
40. The French
has been
the
forced
cen
This
under
The
The FEC will almost
committed
be
not
continue to
consists of about 4,500 men, at least half of
Con
whom are in the Saigon-Cholon area.
siderable
seek to retain
con
a
on
component pos
National
Vietnamese
and
probably
principal missions of the FEC at the present
time are to protect the ICC in Vietnam and
French nationals and property.
Only some
token forces now remain in the vicinity of
the 17th Parallel.
minesweepers (MSC (0)), 7 amphibious ves
sels (1 LSSL, 2 LSIL, 4 LCU), and 49 smaller
amphibious and patrol craft. The Vietnamese
Navy has limited effectiveness, but is capable
of undertaking river patrol, and minor coastal
Both the navy
and amphibious operations.
and marines depend upon foreign logistic sup
port, and will require considerable additional
training before they can perform effectively.
39. The
French forces,
all
multilateral Western action.
chaser
submarine
1
con
men.
serve
naval
The
basis.
tractual
Corps of 2,470
Forces, Far East,
Naval
French
the French will
lar,
Coast Guard of 82
a
Vietnamese
550
addition,
sesses
Marine
a
component
Its naval
ior naval officer.
of
the French may continue to maintain some
In particu
token forces in South Vietnam.
naval and air bases in South Vietnam.
Navy
38. The Vietnam
the withdrawal
mand
French
military
in
Unless the Vietnamese de
42. Rice
output, Vietnams principal
resource,
roughly 2,100,000 metric tons for the cur
rent crop year, representing virtually no gain
is
over
recent years and little
more
than half
pre-World War II production. This level
should provide a small export surplus of 150,-
of
9
The dislocations
000 to 200,000 metric tons.
of war and the continued lack of security in
one-third of the
many rural areas have left
Rice, rub
prewar rice acreage uncultivated.
ber, and other exports
earn
for
pays roughly
South Vietnams imports.
which
major
source
43. Local
about 30
al
of
percent
of
are
now
for the
to
expected
the
area.
cover
of the estimated 1955 nation
US
$52 1,00~30O.
$325,000,000 which will
The French
military and
at about
programmed
economic assistance is
ance.
US aid is
foreign exchange
resources
budget
$94,000,000 a year,
only one-third of
most of the bal
cover
now
provide only
aid and this will
$34,000,000 in foreign
ably diminish as their military
forces
are
about
prob
and French
source
of
still controls the
capital
manufacturing and plantation agri
culture.
However, Franco-Vietnamese eco
bulk of
weakening because of mutual
mistrust and suspicion and the shift to direct
Vietnams
US dollar aid.
Foreign Exchange
Office has limited franc imports and has cur
nomic ties
are
tailed the flow of remittances to France.
new
traditional preferential rates for France, but
at sharply reduced levels.
Under these con
ditions, French enterprises will curtail the
scale of their operations and general trade re
lations between France and
South Vietnam
improve.
45. Vietnam is also
losing its traditional trade
Cambodia, which formerly
used the port of Saigon to channel its imports
exports,
is
credit, currency reform, foreign
becoming increasingly
oriented
toward Thailand
as
ferry
Moreover, trade with Cam
the result of
new
to alleviate the economic sit
designed
uation will not pass beyond preliminary
during the period of this estimate.
47.
economic
Despite
the situation is
long
ment
to become critical so
On the other
US aid continues.
as
there is little
conditions
stimulus to
strong
popular support
48.
Recognizing
on
US aid and
continue to
that his regime is dependent
support, Diem will probably
follow a foreign policy marked by
cooperation with the US. At the same time,
Diems
foreign policies will bear the mark of
rail and
quently
lead him to
his closest allies.
the
development
isms under
the
of action, and may fre
misunderstandings with
Diem will continue to urge
of effective defense mechan
Manila Pact, while
diplomatic support through
wider
stubbornly refusing
monetary
Relations between
these countries have also been troubled by the
failure of South Vietnam to turn over Cam
bodias
lected
full share of the custom receipts col
by the Indochinese customs. Tracli
Diem
has
opinion.
shown
He is
probably
in Asia.
recognize or ad
Agreements,
sensitivity
concerned
election consultations and
cooperation
disrupted primarily because
imposed restrictions.
of the
self-
little
to
seeking
recognition
to
world
by Indian,
British, and French pressures, with which the
US has been to some degree associated, to hold
tional trade with North Vietnam has also been
of Vietnams
the
V. EXTERNAL FACTORS
here to the terms of the Geneva
unions at the end of 1954.
for
government.
49. In
and
improve
provide a
to
of
customs
hand,
of sufficient
prospect
economic
in
stages
Vietnam,
in
stagnation
unlikely
bodia has been curtailed since the dissolution
Indochinese
rice
However, institutional reforms and other pro
government, particularly
the
a
surplus for export. The Diem government
has recently established a new central bank,
initiated independent control over foreign ex
change resources, and undertaken develop
mental planning.
The government probably
will be successful in permanently settling sizeable numbers of refugees, in initiating effec
tive import policies, and in regularizing its
trading relations with Cambodia and Laos.
of his
facilities.
com
mercial relations, and the recreation of
strong independence
within Indochina.
and
such
rural
The
Vietnamese tariff schedule continues the
will not
depend largely on the
government efforts to deal with
problems as unemployment, land tenure,
of
success
grams
44. France continues to be the chief
economic conditions in
in
Improvement
South Vietnam will
with
drawn.
imports
46.
have
possible
on
publicly
with the ICC.
declare his
But he is fearful
effect that consultations
public opinion
and
on
his
might
public sup-
10
clearly
He
port.
believes that any
recogni
in the
government
north would have adverse political conse
Consequently, although Diem will
quences.
the DRV
tion of
as
a
to moderate the disfavor of the ICC
attempt
and the Geneva powers, he will probably
tinue to resist external pressures to hold
to
some
will
probably
cause
their efforts to
position
the Viet Minh to increase
destroy
his
government, Diem
more specif
seek to bind the US
will
probably
ically to the defense
50. Because he
of Vietnam.
recognizes
concern
attempt to imple
Agreements.
policy may lead India into conflicts with
government and may lead India to
propose the dissolution of the ICC in Vietnam.
However, Indias policy toward South Vietnam
is
likely to be moderated
succeeds in
Diem,
to the extent that
establishing
strong
a
presence of the International Control Com
mission in Vietnam exerts some deterrent
and
popular regime and replacing Ho Chi Minh
the symbol of nationalism in Vietnam.
as
53. Canada, though a member of the ICC
along with India and Poland, has consistently
US
supported
efforts
anti-Communist
to. establish
government
generally parallel
policy
a
to that of the US in the area,
even
in the event of the
The
UK,
on
strong
a
in the south and
may be expected to continue to follow
that the continued
to
area.
ment the terms of the Geneva
the Diem
form of indi
Aware that his
accept.
To effect this, India will
This
which he felt certain the Communists would
be unable to
prevent
toward Viet
its
the outbreak of hostilities in the
con
rect consultations, but in such circumstances
he would
vigorously press for conditions
principal objectives
largely by
will be dictated
nam
con
sultations. However, under pressure from the
Western Powers and Asian neutralists, Diem
might reluctantly agree
52. Indias
the
of the ICC.
break-up
other
hand,
has
had
pro
possible Communist designs, Diem
will probably continue a grudging and re
How
luctant cooperation with that body.
ever, he will reject any .efiorts by the ICC to
inject itself into the question of elections in
found
Vietnam, even if his refusal should lead to the
departure of the ICC from Vietnam.
hostilities in the Indochina area, the UK has
consistently urged upon Diem a technical
force
on
51. The French have decided to withdraw the
bulk of their forces from South Vietnam and
to reduce their financial contributions to the
Vietnamese
government because of commit
North Africa, popular sentiment in
ments in
France,
and
Vietnamese
pressures.
the French will continue to seek to
as
much
cultural
While
salvage
possible of French commercial and
interests, we believe French interests
as
give
The French will
than
lip
probably
man
guarantees.
service to the
54.
they
will
attempt
to avoid involve
port,
give
While the French gov
verbal
government, it will
in
co-chair
deep
fears of
renewal of
a
provisions.
The.
to
Indications
refuse
are
even
that
if
Diem
consulta
indirect
VI. OUTLOOK FOR THE DIEM GOVERNMENT
any case,
Diem
as
continue to
ment of French forces in renewed hostilities
its
position
South Vietnam be attacked from the north.
continues
will
the
tions, the UK will probably not join in provid
ing Diem with external protection should
imple
Agreements. In
internal disorders.
of
initiative away from the DRV and force it to
accept the onus of rejecting adequate election
Geneva
ernment
strength
UK will continue to press Diem to urge gen
uinely free elections in an effort to take the
the
or
of its
with the Geneva
compliance
of
more
to the
and the wisdom of Diems
and because of its
mentation
no
as
of the Geneva Conference on Indochina
continues
and influence in South Vietnam will progres
sively decline during the period of this esti
mate.
misgivings
Diem government
policies. Because
support to the
fact cooperate
Assuming
to
Diem survives and
receive
provided
wholehearted
US
he
sup
believe he will probably remain in
during the period of this estimate.
Moreover, provided the Communists do not
exercise their capabilities to attack across the
we
office
17th Parallel
or
with the latter and with the US in Vietnam
rilla
in
only grudgingly.
probably
warfare
to initiate
South
large-scale guer
Vietnam, Diem will
make further progress in
developing
11
government. His position
as a result of
strengthened
probably
increased popular support, the continued
loyalty of the VNA, and a deterioration in the
strength and cohesiveness of his non-Com
munist opposition.
The national government
a
more
effective
will
will
be
increase the
probably
communities under its
areas now
held
by
probably
preliminary stages
reform
the sects.
a
reason
period
in
However, Diem
beyond
the
in his social and economic
programs.
for whatever
rural
control, particularly
have advanced little
will
scene,
number of
Moreover,
should
Diem
be eliminated from the
of extreme
political instability
would
almost
cumstances
amenable to
certainly follow. Such cir
might produce a successor more
a
rapprochement with the Viet
Minh.
55. Viet Minh elements in South Vietnam will
continue to control
or
influence remote
areas
and to
hamper government action in the pro
vinces.
The Viet Minh capability to infil
trate personnel and arms into South Vietnam,
and to reinforce Communist and potential dis
sident elements will remain the most serious
threat to the establishment of
stable national
government
a
viable and
in the south.