NIE 63.2-57

The Prospects for North Vietn~m

14 May 1957 This document is made available through the declassification efforts and research of John Greenewald, Jr., creator of: The Black Vault

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Discover the Truth at: http://www.theblackvault.com NIE 63.2-57 The Prospects for North Vietnam, 14 May 1957

APPROVED FOR RELEASE NIE 63.2-57 DATE: JAN 2005 14 May 1957

(b) (3) 280

N AT ION A LIN TEL L I G ENe E EST 1M AT"E N UM B E R 63. 2 - 5 7 (Supersedes relevant" portions of NIE 63-56)

THE PROSPECTS FOR NORTH VIETNAM·

Submttted by .the

DIRECTOR OF. CENTRAL . .INTELLIGENCE . . . The following intelligence organizations participated in 'the preparation .of this estimt;&te: .The Central Intelligence AgenCY .and the" intelligence· organizations. of the Departments of State, the Arm1l, the Navy, the Air Force, and The JOint Staff. Concurred tnby the. INTELLIGENCE· ADVISORY· COMMITTEE on 14 Mav1957. concurring were the SpeCial.Assistant, In­ telligence, Department of State; the Assistant Chief of staff, Intelligence, Department of the Armv;the Director of Naval Intelligence; the Director 01 intelligence, USAF; ana theDep­ uty Director for Intelligence, The Joint· Staff. The Atomic Energy Commission Representative to the lAC, and the Assist':' ant Director, Federal Bureau Of InVestigation, abstained, the.· subject being outside of their 1uri8dfction.

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THE PROSPECTS FOR NORTH VIETNAM

THE PROBLEM To analyze the current political, economic, and military situations and to esti­ mate the prospects for North Vietnam over the next year or so.

CONCLUSIONS

1. Although the Communist regime in support. However, the DRV has probably North Vietnam (DRV) has probably lost been disappointed by the lack of effective a considerable measure of its original Bloc support for its objective of unifying popular support and has been faced with all Vietnam under DRV rule. The DRV, sporadic outbursts of violence, it remains with Bloc logistical support, could easily in firm control largely because of the loy­ overrun South Vietnam, Cambodia, and alty and effectiveness of the army. More­ Laos if opposed only by indigenous forces. over, with SUbstantial help from the Bloc, However, the Bloc would support such an it has apparently made significant prog­ attack only if Moscow and Peiping were ress toward economic restoration, par­ to estimate that such action carried little ticularly in agriculture. (Paras. 13-16, risk of US military intervention. (Paras. 20-21) 29-34) 2. The DRV has undertaken to "cor­ 4. The DRV will probably continue its rect its mistakes" which it admits caused tactics of "peaceful competition" with popular resentment, and it will probably South Vietnam for the support of the Vi­ be able to regain some of the popular sup­ etnamese, although it will continue its ef­ port which it lost. If the party organ­ forts to infiltrate and to subvert official ization is sufficiently strengthened and and nonofficial organizations and to ex­ if crop prospects are good, steps toward ploit dissident and dissatisfied groups in further socialization of agriculture may South Vietnam. In Laos, we believe that come as soon as the fall or winter of 1957. the DRV will continue to support Pathet Local disturbances may recur but for the Lao efforts to negotiate a political agree­ foreseeable future the DRV will be ca­ ment with the Royal Lao Government, pable of maintaining effective control. with the ultimate objective of Communist (Paras. 17, 23-26) control, and may encourage local Pathet Lao military action in order to bring pres­ 3. The DRV is generally isolated from the sure to this end. The DRV will probably outside world except for close ties with not, in the immediate'future, playa pri-, the Bloc, on which it depends for aid and mary role in Cambodia. (Paras. 34-36)

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DISCUSSION

5. Since the Geneva Agreements in 1954, the Dong has accordingly given increasing em­ Lao Dong (Workers) Party - the Communist phasis to the less direct tactics of peaceful Party of Vietnam - has sought to lay the competition and subversion. foundations for the transformation of North Vietnam into a Communist society. Its most I. THE INTERNAL SITUATION important immediate tasks have been to es­ tablish an effective system of administration Current Status and control over the population and to reha­ 9. The Lao Dong has organized the "Dem­ bilitate the economy which had suffered ex­ tensive damage during the long years of war. ocratic Republic of Vietnam" (DRV) along the lines of other "peoples democracies" and 6. The Lao Dong was in a relatively favorable it controls directly the government apparatus situation at the time it assumed control in and the Vietnam Peoples Army (VPA). North Vietnam. Its victory over the French Power and leadership are exercised by mem­ had engendered considerable popular support, bers of the Politburo who hold positions si­ and its leader, Ho Chi Minh, was considered multaneously in the party and government. even by many non-Communist nationalists as We believe that Ho Chi Minh is the ultimate the only person who could drive the French authority in the regime. He is Chairman of from the rest of Vietnam. It controlled and the party, President of the DRV, and, since had' the loyalty of a large, battle tested, and October 1956, the Secretary General of the effective army. Nevertheless, from the Com­ Central Committee of the Lao Dong. Other munist point of view the party itself had two important leaders who hold both party and major weaknesses. There was a shortage of government positions are Vo Nguyen Giap, well-trained cadres, and many members of the member of the Politburo and Minister of De­ party were motivated more by anti-French and fense and Commander of the Army, and Pham nationalist sentiments than by Communist Van Dong, also a member of the Politburo dogma. and Prime Minister and Foreign Minister. Truong Chinh, although recently removed 7. During the past year these fundamental from the office of party Secretary General, weaknesses were exposed as the regime at­ remains a member of the Politburo and still tempted to impose its control on the peasantry holds the post of Vice Chairman of the Central too rapidly and too crudely. Much of the Agrarian Reform Committee. popular support which the regime once en­ joyed as a nationalist force appears to have 10. Below the top level, the party still suffers been dissipated. The regime now confronts from a serious shortage of experienced tech­ the task of rebuilding sufficient popu"Iar ac­ nicians, administrators, and managers. The ceptance of its programs to permit the imple­ government's administrative apparatus and mentation of further steps toward socializa­ the party's lines of control hav:e proved in­ tion and increased production without the adequate to carry out some major aspects of direct and constant application of force and the regime's program. On at least one oc· coercion. casion the party has had to use the army to restore order. 8. While supremacy over all Vietnam remains a basic Communist objective, the success of 11. The army with a strength of about 268,- President Ngo Dinh Diem in South Vietnam 000 remains the main source of DRV strength. and the apparent unwillingness of the Bloc It is a relatively well paid elite enjoying spe­ to permit u military invasion have substan­ cial privileges, and most of its officers are tially reduced the likelihood of a take-over of members of the Lao Dong party. The less South Vietnam in the near future. The Lao able and less reliable members are being

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weeded out, various categories of militia and 14. The cadres further disturbed the normal regional troops are being integrated into the life of the communities by forcing local peas­ VP A, and the regime has been seeking to im­ ant organizations to disband. Even some of prove the relations between the army and the the peasants who ostensibly profited from the redistribution of land were dissatisfied because ____ ~~~ants. 1 -the land-reform cadres-made--~xcessive estt;.----­ 12. As the economy of North Vietnam is bas­ mates of the crop yield and, consequently, of ically agricultural, the principal problems the taxes to be paid. Catholic peasants were facing the regime involved organizing and further alienated when the land reform cadres controlling the peasantry and increasing requisitioned their churches for use as store­ agricultural production. Land reform cadres, houses, distributed church land to individuals, drawn from politically reliable but otherwise and intimidated worshippers. The concurrent poorly trained personnel, have been the re­ purge of party members involved abuses, guilt gime's principal instrument both for organ­ by association controversies, and arbitrary rul­ izing the peasants and for purging and re­ ings, so that by mid-1956 the morale of the building the party in the rural areas. These party was shaken and the official line changed cadres have been largely successful in des­ to a criticism of the manner in which the troying the landlords as a class and in dis­ purge had been administered. tributing the land among middle and lower 15. The application of controls :has probably class peasants. As the land was redistrib­ also caused some loss of popular support in uted, the cadres began to introduce rudimen­ urban areas. Many factory workers, shop­ tary socialist forms by organizing the peasants keepers, and small businessmen have reacted into mutual aid teams in which the peasants adversely to the Communist system of con­ cooperate to plant and to harvest each other's trols and to the shortages of food and other land. The regime claimed that by mid-1956 consumer goods. The non-Communist intel­ some 190,000 mutual aid teams, which in­ lectuals, who initially supported the DRV, also cluded almost 60 percent of the peasant became dissatisfied and when the regime gave households, had been established. Concur­ them some freedom in the fall of 1956, they rent with the land reform, these cadres severely criticized DRV policies in nonparty purged from the party a substantial number publications. of members believed to be politically unreli­ able and recruited replacements primarily 16. The DRV has also had the problem of es­ from the poorer peasants. tablishing control over the minority groups who inhabit the mountainous regions of North 13. The DRV has conceded that the operations Vietnam and who provided some of the best of the land reform cadres were so crude and native troops in the French Union forces arbitrary that widespread disaffection devel­ during the war. To this end the regime has oped which in some cases broke into open re­ established some autonomous zones. How­ sistance. The regime has admitted that the ever, there is a traditional hostility between cadres classified as landlords many peasants the mountain tribes and the Vietnamese, who were merely slightly better off than the and dissidence will almost certainly remain a average peasant. They also victimized land­ problem for the regime. lords who had supported the regime during the war, had sons in the army, or had relatives 17. Communist China's experience in com­ among the poor peasants. Estimates of the munization undoubtedly prepared the DRV number of landlords put to death by decisions for the development of opposition to the re­ of land reform "people's courts" range from gime's program, but the vehemence of the op­ 30,000 to 100,000. Others were imprisoned, position apparently exceeded its expectations. suffered expropriation, or were cast out of the During the fall of 1956, the regime's concern community. over unrest led it to take measures to remove the causes of discontent. In announcing the

1 See Appendix A: The Military. over-all policy of "correction of our mistakes"

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the DRV acknowledged the profound influence more because of the ineffectiveness of the of the 20th Congress of the CPSU and the local militia than because of the extent and Eighth Congress of the CCP, and some aspects organization of the uprising. The likelihood of the regime's program paralleled those in of further violent outbreaks declined, largely other Communist states. The regime was as a result of the strength exhibited by the probably also influenced by awareness that army in its operations to restore order. The informed Vietnamese on both sides of the army alert appears to have been terminated 17th parallel were comparing developments in January 1957. in the North unfavorably with those in the 21. Our knowledge of economic conditions in South. the DRV is largely derived from Communist 18. The most significant corrections have in­ statements. However, it has been possible in volved the land reform program. The party a number of instances to test these announce­ accepted the resignation of Truong Chinh as ments against other evidence. Based on such its Secretary General, and demoted several analysis, we believe that the regime has other party leaders responsible for agrarian achieved significant progress toward the res­ reform and party reorganization programs in­ toration of the economy. 2 This has been cluding" the Vice Ministers of Agriculture and made possible by the availability of grant aid Interior. In addition, the central and local and technical assistance from the Bloc. The agrarian reform committees were shorn of regime appears to have raised rice output their executive power and reduced to advisory substantially, largely by expanding acreage organs, and the regime announced the aboli­ and rehabilitating irrigation and flood con­ tion of land reform "people's courts." The trol systems. Although 1954 and 1955 were bad DRV also undertook to indemnify relatives rice crop years, in 1956 the cumrllative effects of those wrongly condemned to death, release of DRV efforts combined with good weather prisoners, restore .some property mistakenly resulted in production of rice nearly sufficient expropriated, reinstate expelled party mem­ to meet minimum food reqUirements. This bers and cadres, return churches and church permitted a substantial reduction in rice im­ property to the parishes, and reduce crop ports, and some rice was exported. We believe estimates and tax levies. The DRV promised that the regime has been less successful in corrections in other fields including increased expanding the production of subsidiary food "democracy" and improved living conditions. crops, and rather unsuccessful in its efforts 19. The admission of errors at the top level to obtain a major expansion of cotton. The of the party and government and the promise regime has probably completed the restoration of most of the prewar highway and rail sys­ of reforms and greater "democracy" encour­ tems, except for the line south from Ninh aged the expression of antiregime sentiment. Binh to the 17th parallel. Many mining and DRV leaders reacted quickly and made it clear that there were narrow limits wi'thin which industrial installations are back in produc­ tion. Coal exports in 1956 were more than the liberalization program would function, and that the regime would not relinquish double those in 1955. However, output of any important controls. In early November coal, cotton textiles, and other major com­ 1956, the army was placed on alert status modities is still substantially below peak out­ throughout· North Vietnam. Furthermore, put under the French. troops were more conspicious in some cities, 22. There is little likelihood that the North probably as a show of force to discourage any Vietnamese economy will become self-sustain­ possible outbreaks of violence. ing in the foreseeable future. It has tradi­ 20. In mid-November the army suppressed an tionally been a food deficit area, present con­ uprising in Nghe An province. This is the sumption levels are austere, and reserves for only known major incident in which regular poor crop years are probably nonexistent. army units were committed. Even in this in­ stance regular troops were probably required • See Appendix B: The Economy.

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Although foreign trade has increased, the re­ of agriculture in the Chinese Communist pat­ gime will not be able to cover its chronic tern, since the leaders as Marxists believe that trade deficit from its own resources unless collectivization leads to both better. control there is a substantial increase in domestic and increased output. Moreover, they may production of consumer goods and in the pro­ have completed many of the more obvious duction and export of coal, minerals, and "corrections" by the fall or winter of 1957. If cement. Meanwhile, it will continue to re­ so, they are likely to push forward with the quire large scale economic support from the socialization of agriculture, handicraft in­ Bloc. dustries, and small commercial firms. They will probably move slowly at first and attempt Probable Developments to obtain compliance by "persuasion." 23. Although local disturbances may recur, 26. The regime's internal actions during the the DRV will continue for the foreseeable next year or so will be conditioned by a series future to have the capability to maintain of factors outside its control. Its decisions effective control in North Vietnam. The army, regarding the pace of agricultural socializa­ the principal source of DRV power, will al­ tion will depend not only on the effectiveness most certainly remain loyal and retain its of its party apparatus in rural areas but also offensive capabilities. (See Appendix A.) Its on the weather, since the regime is less likely coastal and river patrol forces and its air to push rapid socialization, at least in the arm are not likely, during the next year, to early stages, during a period of bad crops. increase Significantly in size and effectiveness. The regime will also probably seek to avoid courses of action, such as the blatant use of 24. During the next few months the regime force, which would put the DRV in a bad will probably continue its efforts to regain light in South Vietnam, and will probably con­ popular support, particularly among the peas­ tinue to emphasize in its propaganda the op­ ants, and at the same time to strengthen erations of the National Assembly and other the party organization. It will probably con­ "democratic" procedures. Finally, the ra­ .tinue its "correction of errors" in the land pidity with which internal economic develop­ reform program by such measures as read­ ment can be pushed will be determined in justing the distribution of land, revising crop part by the willingness of Bloc" countries to collection quotas and tax levies, rehabilitat­ extend additional credits. ing those wrongly accused or convicted, rein­ stating party members and cadres mistakenly 27. Though the death or disability of Ho Chi expelled, and restoring some property to reli­ Minh would weaken the government tempo­ gious organizations. It may also seek to make rarily, it probably would not have a Significant a display of "democracy" in order to improve effect on DRV policies or governmental sta­ the popular attitude, particularly that of the bility. A collective leadership appears a pos­ intellectuals. Further effort will probably be sibility. The regime's success ,in demoting made to give the National Assembly the ap­ Truong Chinh while retaining him in im­ pearance of an instrument of popular will. portant party and governmental offices in­ But despite these steps, the regime will not dicates considerable basic harmony and equi­ reiinquish its essential controls over the pop­ librium in top leadership. Factionalism might ulation. develop, possibly ranging O¢neral Giap against Truong Chinh, but it probably would 25. The DRV will probably be able to regain not reach the point of endangering the sta­ some of the popular support which it lost un­ biljty of the regime. In any event, Commu­ less its "correction" campaign is as badly nist China and the Soviet Union would use managed as the agrarian reform. In any their influence to prevent an overt struggle event, the period of consolidation and concern for power. for popular opinion is not likely to continue indefinitely. The regime will probably become 28. In the next year or so, the restoration of impatient to g'et forward with the socialization the economy to the prewar (1939) level prob-

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ably will be completed and preparations made May 1956 meeting of the Geneva co-chairmen, for a modest start on new development. How­ the Soviet Union tacitly accepted the status ever, progress will depend to a large extent on quo in Vietnam for an indefinite period. In foreign aid, favorable weather, and the ability January 1957 the USSR further recognized the of the regime to contain peasant discontent. long term nature of the division of Vietnam Expansion of foreign trade is also a necessity. when it proposed, as a counter~ove to West­ The 1957 state Plan calls for the restoration ern proposals for the admission of South Viet­ of the economy to the 1939 level, with empha­ nam and South Korea, that both North and sis on production of consumers goods, plus South Vietnam and North and South Korea minerals and other products for export. If ex­ should be admitted to the United Nations. ternal aid is continued at current levels and Nevertheless, the DRV will almost certainly agricultural production is not adversely affect­ continue to be guided in its external course of ed by climatic conditions, the DRV should be action by the general policy set down by Mos­ able to provide a modest improvement in the cow and Peiping, although it will continue to over-all standard of living within the next year advocate a stronger policy on reunification. or so. III. DRV ACTIVITIES IN SOUTH VIETNAM, II. RELATIONS WITH THE BLOC LAOS, AND CAMBODIA 29. Not only are the DRV leaders bound to the . Bloc by strong ideological ties, but the very 32. The DRV continues to maintain its ap­ existence of the Communist regime in North paratus for subversion within South Vietnam Vietnam. is dependent on continued Bloc dip­ and has the capability to infiltrate fairly lomatic, military, and economic support. The large numbers of military and political per­ Chinese Communists seem to exercise some­ sonnel into South Vietnam. Although the what greater influence than the USSR and Communists in the South have been largely have given the DRV greater economic and dip­ quiescent, some trained military personnel lomatic support. In large measure this is remain, loosely organized in small units that probably the logical result of geographic con­ presumably could be reactivated for missions tiguity and the type of initial assistance the of assassination, sabotage, or limited guer­ DRV has reqUired, i.e., in the military, agricul­ rilla activity. South Vietnamese security tural, and transportation fields. Finally, the forces intermittently discover cached Com­ Chinese Communist experience in the applica­ munist arms. tion of Communist doctrines appears to be 33. Because the country-wide elections en­ more appropriate then that of the USSR to the visaged by the Geneva Agreements have not situation in North Vietnam. However, there been held and because military action has is no evidence that Soviet and Chinese Com­ been prevented, the DRV has been frustrated munists are at odds over North Vietnam. . in its hopes of gaining control of South Viet­ 30. In its public statements concerning intra­ nam. This has caused some discontent among Bloc politics, the DRV has tended to follow the cadres evacuated from the South in the ex­ line set by the Chinese Communists. It sup­ pectation that they would soon return. Uni­ ported the Soviet action in Hungary and wel­ fication of the country remains a principal comed the reforms in Poland. Despite the objective of the DRV regime, and it continues coldness of current Soviet-Yugoslav relations, to seek support for its pretentions to emerge the DRV has moved toward establishing more as the government of the whole of Vietnam. cordial ties with Yugoslavia, and in March Its "liberalization" measures are designed to 1957 it was announced that ambassadors will appeal to the population of the South as well be exchanged. as the North. The DRV has maintained its pose of adherence to the terms of the cease­ 31. The Bloc has recently given less than full fire agreement concluded at Geneva while support to Vietnamese reunification, to the accusing the Republic of Vietnam and the US perceptible discomfort of the DRV. At the of violations. It is seeking to enhance its

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international. prestige and position, and to forts have failed to date, we do not believe secure the broadest possible support for the that the Communist Bloc will throw over political settlement envisaged at the Geneva the political approach completely and launch conference which it still insists must event­ an attack on the RLG. However, during the ually be implemented. next few months the DRV may support local Pathet Lao military action in order to bring 34. The DRV will probably continue for the pressure on the RLG to conclude a political next year or two to restrict its campaign for agreement. reunification to "peaceful" means. However, the DRV will continue its efforts to infiltrate 36. During the past year the DRV has praised and to subvert official and nonofficial organi­ the Cambodians for their policy of neutrality zations and to exploit dissident and dissatis­ which involved closer relations with Commu­ fied groups in South Vietnam. It would prob­ nist governments while accusing the West of ably not use its paramilitary forces in South undue pressure to induce Cambodia to take Vietnam to initiate widespread guerrilla ac­ a more pro-Western line. The DRV has been tivity unless it estimated that the situation unsuccessful in cautious attempts to secure in South Vietnam had so deteriorated that formal diplomatic relations with Cambodia. such action could overthrow the government. However, in 1956, Cambodia entered into an The DRV will continue to have the capability economic aid agreement with Communist to overrun South Vietnam in a relatively China and permitted the USSR to open an short time if opposed only by South Vietnam­ embassy in Phnom Penh. For the imme­ ese forces, but it would only launch such an diate future we believe that Communist ob­ attack if the DRV together with Moscow and jectives in Cambodia will be pursued primarily Peiping were to estimate that such action by Peiping and Moscow. carried little risk of military intervention by the US. IV. RELATIONS WITH OTHER COUNTRIES 35. The Communist movement in Laos, the 37. Except for conclusion of a new trade Pathet Lao, continues to be dependent on DRV agreement with Indonesia in January, the support and assistance to maintain its posi­ DRV has made no substantial recent progress tion in the northern provinces. However, the in its continuing drive to develop closer re­ Communist Bloc apparently believes that its lations with the countries of South and South­ objective of gaining control of Laos can best east Asia. The DRV continues to maintain be served by political rather than military a semiofficial mission in Rangoon (ostensibly courses of action. Because of US support to a branch of the Vietnam News Agency), and the Royal Lao Government (RLG) and be­ is represented by Consuls General in Djakarta cause of the existence of the SEATO protocol, and New Delhi. Although there is a British the Communists probably estimate that an consular establishment in Hanoi, DRV rela­ attack ag·ainst Laos would involve risk of in­ tions with the UK are slight. The DRV is tervention of US forces. On the other hand, dissatisfied with French refusal to accept a the Lao government is weak and potentially political mission in Paris. The drying up of vulnerable to a political assault by a well­ organized, legal Communist party. Con­ French-DRV relations is reflected in the sequently, for the past year the Pathet Lao limited implementation of French-DRV trade has been seeking to obtain participation in accords, the progressive withdrawal of French the RLG and recognition as a legal political cultural institutions from the Communist party. Simultaneously, the USSR, Commu­ zone, and the failure of the Sainteny mission nist China, and the DRV have sought to which was established in Hanoi at the time establish diplomatic, economic, and cultural of the French withdrawal to develop French­ relations with the RLG. Although these ef- DRV ties.

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APPENDIX A THE MILITARY

AI. Since July 1954, the DRV has placed a not expand beyond their present strength or major emphasis on reorganizing and strength­ assume a role of broader scope as long as the ening its army (the VPA). Substantial quan­ International Control Commission (ICC) re­ tities of arms and equipment have probably mains in Vietnam. been received from the Chinese Communists A4. Up to the present the DRV has demon­ and these have made possible the augmenta­ strated no combat air capabilities, and the tion of unit firepower, the development of new DRV is not expected to present any serious air specialized and technical components, and threat for the next several yearS. Presently the improvement of tactical organizations. the DRV has an estimated 10 liaison-type We believe that the VPA, given external lo­ aircraft used in a semimilitary role. The gistical support, has the capability of defeat­ personnel of this quasi-air force number ing the total military forces of South Vietnam, about 250. Operational training direction Cambodia, and Laos simultaneously. and maintenance probably are iprovided by A2. The VPA is estimated to total about 268,- Communist China, and it is possible that a 000 troops, organized into 14 infantry divi­ real air force is being created covertly in Com­ sions, one artillery division, one AAA group­ munist China. There are 26 former French ment, 11 separate infantry regiments, 5 airfields in North Vietnam, one of which border and coastal security regiments, and 5 could probably support' sustained jet light separate battalions. In addition, there are bomber operations. Four other 'airfields are Regional Troops and Armed Popular Troops suitable for limited jet fighter operations and with strengths estimated at 35,500 and 75,000 could support sustained jet fighter operations men respectively; these are assigned an in­ if developed. (See Map.) ternal security mission under the over-all con­ A5. In an important and lengthy speech to trol of the VPA. VPA units continue to be the National Assembly in January 1957, army deployed in a generally defensive posture. Commander-in-Chief General Giap outlined The largest concentration almost certainly is plans for continuing the transformation of in the Red River Delta region. We also believe the VPA into a balanced, modern force, and that major units are located in Thanh Hoa also emphasized the political aspects of its and Vinh and that smaller forces are deployed mission. In addition to its "defensive" mis­ near the 17th parallel, in the west, and in the Sion, General Giap said that the VPA as com­ northeast. bat arm of the Lao Dong party has the duty A3. The DRV naval force is not an indepen­ of maintaining internal security, 'and of sup­ dent organization but a maritime adjunct of porting the "peaceful struggle for the reuni­ the VPA. Currently the 25 to 30 small, fication of Vietnam." General Giap called lightly armed, motor-launch-type patrol craft for an intensified training in "political-mind­ and 12 to 15 motor junks which comprise this edness" in the VP A, and for the adoption of force are based principally in the Haiphong a compulsory military service system for de­ area. The patrol craft, mostly of Chinese veloping a "reserve force which includes all origin, are employed in coastal and inland the people." waterway patrol while the junks are used exclusively for training. The DRV naval A6. General Giap implied that the strength force could not cope with the South Vietnam of the VPA might be reduced, and cited the navy if the latter sought to deny them the following as factors which have placed limi­ use of the Gulf of Tonkin in the event of tations on the buildup of the VPA's effective hostilities. DRV naval forces will probably strength: the DRV's "peace policy," the VPA's

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"defensive mission," the manpower shortage, A7. Chinese Communist military advisors and and budget possibilities. In' June 1956 the technicians have been assisting in the develop­ DRV announced with great fanfare, intended ment of the VP A since 1950, but we have little to prove the peaceful policy of the regime, information on either the number of advisors that 80,000 troops were being demobilized. or t11e current extent of Chinese (or Soviet) (Probably with some justification, local ci­ military assistance to the DRV. It is reported vilian Communist leaders have regarded that in late 1956 a joint Sino-DRY military these ex-soldiers as having been discharged headquarters was established in the Kunming because they were politically unreliable, and area of Yunnan Province in Communist apparently treated them accordingly. As a China. This could be used both for coordinat­ result many of these veterans have become ing logistic and training activities and for associated with the disaffected groups.) We developing joint operational plans to meet believe that to the extent these discharges future military contingencies in the Indo­ actually took place, they have been offset by china area. It might permit the Chinese new recruitment and by integration of other Communists to exercise considerable influence elements into the VPA. ' in the VP A and thus in the DRV itself.

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APPENDIX B

THE ECONOMY

Bl. North Vietnam traditionally has been a second quarter of the year. The DRV in food deficit area and prior to the division of 1956 operated under a one-year plan aimed Vietnam was dependent on imports largely generally at rehabilitating the economy and from South Vietnam. Hence a major problem laying the foundations for the transition to of the regime is to raise the production of socialism. The plan was formulated along foodstuffs to meet the minimum needs of the the lines of the Chinese Communist experi­ population while developing ~ self-sup.porting ence of the period from 1949 to 1952. No economy. Despite progress m restormg the absolute figures were announced for the 1956 economy North Vietnam continues to have budget, but the regime indicated the amounts a low standard of living and to be dependent to be spent for economic and social projects on foreign aid to cover the trade deficit in its would be allocated as follows. balance of payments. The DRV since 1955 20 percent - agriculture and irrigation has received credits and grants, to be used 38 percent - industrial construction over a period of years, in the amount of $100 23 percent - transport and communications million from the USSR, $330 million from 19 percent - culture, health, education, and Communist China, and small amounts from miscellaneous .. European Satellites (all conversions at official rates) . The regime has claimed fulfillment of most of the specific goals of the 1956 economic B2. The DRV had intended 1955 to be the first plan. of two years of planned economic rehabilita­ B4. Agricultural rehabilitation is fundamen­ tion after which a larger scale plan of longer tal to the recovery and development of aU sec­ duration would be launched. But the com­ tors of the North Vietnamese economy and it bination of unfavorable weather, the govern­ has been the most important program of the ment's lack of experience in economic admin­ regime. Emphasis has been given to expan­ istration and planning, and the delay in ob- sion of rice acreage, and there have been strik­ o taining Bloc technical aid and equipment ing achievements in irrigation and fiood con­ resulted in a year of trial and error, and prob­ trol. These coupled with favorable weather ably of acute distress in large parts of the conditions have resulted in 1956 rice produc­ country. Up to the end of 1955 very little tion Significantly above 1955. Imports of rice, progress had been achieved in developing pro­ which had been sizable during 1955 and early duction in the established industries of coal, 1956, were negligible during the latter half cement, electric power, ferrous and nonferrous of 1956 when the regime was able to export metals, and textiles. Only in the fields of small quantities of rice. In order to increase transportation and telecommunications, where the availability of rice the government has Chinese Communist aid was most readily a­ maintained strict rationing of rice and is vailable, and in irrigation and flood control, pushing a program for raising of secondary was there significant progress. agricultural crops. The regime is also em­ B3. The formation of a National Planning phasizing the development of cotton cultiva­ tion, with the aim of insuring self-sufficiency Board in October 1955, the creation of a sta­ in raw cotton. Although thiS program is tistical service in November 1955, and the promising for the long run, 1956 production arrival of Bloc advisors enabled the regime was disappointing and even if 1957 plans are by early 1956 to inaugurate planned economic fulfilled, only one-third of North Vietnam's development and to utilize effectively the Sino­ raw cotton requirements will be furnished Soviet Bloc aid which began to arrive in the by domestic production.

115 N I E 63.2-57 The Prospects for North Vietnam, 14 May 1957

(Continued ... )

11

B5. Rehabilitation of modern industries has Europe. It is estimated that by 1960 coal proceeded rapidly with the extensive aid from exports will have doubled, and that moderate the Soviet Bloc, and most major mining and increases will be made in the export of cement industrial installations are now back in pro­ and other basic commodities. duction, although output is generally well BB. North Vietnam's seaborne trade has com­ below prewar levels. Emphasis is being given prised mainly the export of coal to Japan, to development of exportable minerals and Western Europe, and China, the importation industrial products and to production of con­ of limited quantities of material and equip­ sumer goods. The DRV claims that produc­ ment from the European Satellites and the tion in 1956 reached 75-BO percent of the peak Soviet Union, and the importation from in the period of French control. Although evi­ Burma of Soviet-purchased rice. The only dence is scanty, we believe that these claims discernible trends are the rapid increase in in most cases are high and that in 1956 coal coal exports since the third quarter of 1955 output reached about 1.2 million tons com­ and the reduction of rice imports in 1956. pared with 2.6 million in 1939, and cotton yarn output 3,000 tons compared with 12,100 B9. Socialization is in its early stages. Major in 1940. Cement production was about 300,- industrial plants and construction projects 000 tons against 312,000 in 1939. The Tinh are operated by the state, but most small scale Tuc tin mine, where a tin-processing plant industry and handicraft production is still has been installed, is being exploited appar­ in private hands. In the interest of efficient ently under the direction of Soviet techni­ operation, the regime has announced that cians. The DRV has claimed that the tin state factories will be given autonomous status resources are far larger than previously be­ with the management assuming responsibility lieved and that golq., tungsten, chrome, ura­ for the capital and property a:p.d operating nium, and iron ores are also present. Mineral on a profit and loss basis. The regime ap­ surveys throughout North Vietnam are re­ parently intends, at least for the time being, ported by the DRV to have revealed more than to control small industry indirectly through 50 exploitable mineral deposits previously un- taxation and marketing and supply mech­ known. . anisms while attempting to organize artisan craftsmen gradually for cooperative produc­ B6. Cotton textile plants and phosphate crushing plants, as well as other factories tion. State control of domestic and foreign trade was expanded greatly during 1956. In serving the domestic economy, have returned agriculture, the regime is proceeding along to production, and production from small in­ dustry and handicrafts has increased mark­ the Chinese Communist road to collectiviza­ tion. By mid-1956 the regime claimed there edly. In spite of this progress in industrial reconstruction, the regime is still far from were some 190,000 "mutual aid teams" in being able to provide either a satisfactory sup­ North Vietnam involving almost 60 percent ply of goods for home consumption, or suf­ of the peasant households. Most of these ficient exports to balance the large quantities were seasonal arrangements for sharing labor of imported material and equipment necessary and equipment, but they almost certainly will for further economic development. become more permanent as pressure from the party cadres increases. A stepped up pro­ B7. In 1956 North Vietnam's foreign trade was gram for agricultural producers cooperatives more than double that of 1955. The regime as well as marketing and credit cooperatives continues to be primarily dependent on trade will probably follow as soon as the regime with the Bloc, but trade with non-Bloc areas considers this move feasible. has also increased, principally with Japan. BI0. With Chinese Communist technical and Exports of coal, the principal export item, manpower assistance, rapid progress has been increased from about 300,000 tons in 1955 to made in restoring transportation and com­ about 700,000 tons in 1956, including 300,000 munications facilities. Rail lines have largely tons to Japan and 130,000 tons to Western been reconstructed (see map) with the ex-

116 NIE 63.2-57 The Prospects for North Vietnam, 14 May 1957

(Continued ... )

~ 12 ception of the line south from Ni~h ~inh to economy and gain planning experience before the 17th parallel. North Vietnam s h~ghway launching a long range plan. We believe that system has been restored gen~rallY to Its pre­ the DRV is likely to formulate such a plan by war status and in some areas Improved. ~a­ 1958, but the plan almost certainly will require jor emphasis is being directed towar~ b.ndg­ revisions in later years. ing numerous streams in order to Hehml~Lat~ B13. In trying to attain a position of relative ferries on the primary roads. The anOl- ru economic independence, North Vietnam will Chau route and roads south from Hanoi to­ continue to face difficult problems. Produc­ ward the 17th parallel have been significantly tion of food must be greatly increased, exports improved, thereby facilitating the ~ovement must be raised substantially, and a body of of troops and supplies to many pomts along skilled technical and administrative person­ the Lao and South Vietnamese borders. So­ nel must be built up. Even if Sino-Soviet Bloc viet Bloc assistance is facilitating the im­ aid is continued at its present high level, provement of port facilities which will further achievement of a self-supporting economy expedite the increase of trade. will take some time, and will place a heavy B1l. Planning goals for 1957 have been re­ burden on the mass of the population. ported in general terms. These goals carr! B14. We believe that during the next year or on the same line as those for 1956. Agn­ so the DRV will continue to concentrate on ef­ cultural production will continue to be basic. forts to increase agricultural, mineral, and Priority will be given to light industry for light industrial production. The unusual em­ the manufacture of consumer goods and to phasis placed by the DRV on light industry those industries which process goods for ex­ may be due in part to a desire to attain con­ port. The state-owned sector is to be con­ sumption standards comparable to those in stantly expanded, although for the present South Vietnam. The DRV has a resource base the regime is apparently counting on private capable of supporting increased exports and enterprise to supply an important portion of modest industrial development and it will locally-produced consumer goods and various tax and price adjustments have been sug­ probably have moderate success in its econom­ gested to encourage such private production. ic efforts. If external aid is continued at current levels and agricultural production is B12. There have been no announcements of not adversely affected by weather, the DRV long range economic plans. The regime has should be able to provide a modest improve­ presumably looked on the years 1955-1957 as ment in the over-all standard of living within a period in which it would reconstruct the the next year or so.

117 NIE 63.2-57 The Prospects for North Vietnam, 14 May 1957

Boonda"es ore not n~ceS$Clril." rhose \ ,eco']niz.pa by the U. S. Govl'mml!'lJf.

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NORTH VIETNAM JET AIRFIELD CAPABIlITIES •.•••••••• Armistice line o lieht bomber ", '; ',: Demilitarized Zone 1;:( limited fighter; could be modified Red River Delta area foe sustained operations. Areal largely under Pathel lao control. +----. Operational railroad (4'8y,1f gauge) -+---+ Operational railroad (meter gauge) - u_ International boundary -. - Internal boundary -+- -+ Non·operational railroad (meter gauge) ® National ca~ital --- Selected road 16 - (Tonhn and'Annom, Frfmch protectorates wIthin tJ.e Jate Indo-Chinese Union, ore no longer po/iticol entltU!s. Th~y ore shown on this mop for orientation purposes only.) 40, 120, 80 160 Kilometers

IO~? IO~ 25969 4-57

118