RESPONSE TO GOVERNOR HARRIMAN'S REQUEST FOR AN ASSESMENT OF ECONOMIC CONDITIONS IN NORTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78T02095R000800020031-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 16, 2016
• Document Release Date: November 23, 2004
• Sequence Number: 31
• Publication Date: June 19, 1968
• Content Type: MF

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l tORAr4 (pMs Chief, D/I
SUBJECT I Response to Governor Harriman' ? Request for an
Asaesament of Economic Conditions in North Vietnam
The recent assessment
Attached Is 1/NV's response to Governor Harriman's request for
an asseeament of economic conditions to North Vietnam and the degree
to Which these conditions might affect Renoir negotiating position.
which prompted the reguest, that deteriorating economic conditions
caused by the war bays forced the north Vietnamese to the negotiating
table is aralyaod and rebutted point by poift.
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The Current Economic 8ituatiop in North Vietnam
We do not believe that the current economic situation in North
Vietnam has been rendered so parlous by the war that the regime has
been forced to meek a respite from the bombing program. However, it
is undeniable that the bombing respite has improved the general
economic situation in North Vietnam by permitting goods to move more
freely and reducing the need for constant bomb damage repair work.
We have seen no convincing evidbwce that the food supply in North
Vietnam has deteriorated since the initiation of the bombing program.
Domestic paddy productions has declined from an estimated normal level
of 4.5 million metric tons in 1965 to 4.2 million tons in 1966 and to
We estimate that the fifth month rice crop
4.0 million tans in, X967
currently being harvested will be about 200,000 tons below the normal
harvest of about 1.5 million metric tons. Theme shortfalls, amounting
to about 650,ooo tons of polished rice during the lest two and a half
years, have been due to adverse weather and to the disruptive effects
of the war. The decline In domestic output however has been more than
offset by'greatly increased food imports from Communist countries.
During 1966, 196T and then first five months of this year North Vietnam
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that Co m mist emus will not be able to continue
has imported by sea a total of about 815,000 tons of foodetuife with
There is no reason tat believe,
the bulk coming from the UtSR and Communist Chinas
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to send foodstuffs to North Vietnam because of China's internal troubles.
The LiPProximatel`y(21O0000 tons of foodstuffs shipped by sea to North
Vietnam from china in 1967 represented only a small fraction-of one
percent of China's total domestic food supply. Although China's domes-
`tic output of foodstuffs probably will drop in 1968 from the good
harvest in 1967, shipments of foodstuffs to North Vietnam are expected
t* crease in 1968. During tho first five months of 1968 China's
exports of foodstuffs to North Vietnam by sea amounted to as much as
1140,000 tons, with more than 50#000 tons of this amount arriving in
May. This rate of food imports from China far surpasses the rate of
1967. In addition, the Soviet Union and bast Europe have continued to
export food to North Vietnam and these countries can fairly easily
fill the gape left by any inability on China's part to supply a
portion of North Vietnam's relatively small imported food requirements.
Ries rationing in North Vietnam pre-dates the initiation of the
[1S bombing program by several years and the official rice ration has
not been reduced because of the war. In addition, for many years prior
to the bombing program, the North Vietnamese have been forced to accept
a high proportion'of their "rice" ration in the form of non-rice sub-
stitutes. Although sometimes the 94a11 ratio might not be available
in some areas ye believe that generally the regime has been We to
honor the ration. Nimilarly the percentage of non-rice substitutes in
at ire believe,
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on average, the percentage he remained at about 40 percent since the
initiation of the bombing program. The few scattered reports of a
higher percentage of non-rice foodstuffs in the ration probably reflect
the greatly increased food imports, including greatly increased imports
of wheat flour, during the last eighteen months. V. feel that much of
the imported foodstuffs is Consumed in Hanoi and Haiphong from which
most of the reporting on diets originates.
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The exhortations to agricultural laborers to work harder and in-
crease output contained in the early June Minn Dan articles are nothing
now and are not surprising in vier of the current harvest period. North
Vietnam suffers from a low labor productivity and * periodically'forced_
to exhort its agricultural laborers to increase output per laborer and
per unit of cultivated land. We agree that the current harvest has been
adversely affected by bad weather whtch bas resulted in a reduction in
planted acreage Q.nd a delay in harvesting in some parts of the country.
We ran not confirm
that about 200,004 hectares of
paddy land have not been planted. Howsiver, vi agree that all the paddy
land was not planted and the implanted area could have been as largo
as 200,000 hectares. The average yield per hectare of polished rice
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produced in fifth month crops has been about 1.1 tons. the reported'
22 percent of the normal output or polished rice for this harvest. Even
a shortfall of this magnitude has already been more than offset by the
885,000 tons of foodstuffs imported during the first five months of
this year. However, we feel that the loon productive paddy land has
made up most of the unpianted area and that even if 200,000 hectares
unplanted area is of average productivity the expected loss of domes-
tically produced polished rice would be about 220,000 tons or about
stuffs,, :thus partially offsetting the reduced rice output.
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of paddy land ware, not planted for the current harvest. the shortfall will
Lt s5 Twra.-
be ?nly about l.30,00) tons of polished ricee Moreover some of the un-
plaanted paddy land can be used for the Auction of subsidiary food-
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The fact that paddy fields are being cultivated by vomen does not
vacesearily indicate a labor shortage in agriculture. Women are tradi-
ticnnily very active in agriculture in Sorth Vietnam. Sven tefc,ra thA
in.ttie-tion of the bombing progzns about 60 percent of the agricultural
labor force van femle.
The restriction on the sale of cookies and other items made of
rice, if true, could merely reflect the increased imports of wheat flour
arriving in Hanoi and Haiphong and the regime's attempt to encourage
the consumption of this foodstuff to a1 low more of the preferred rice
to be consumed in grain form.
It is true that the economic delegation bas been dispatched to
Nast European countries several months earlier than unual and that
supplementary aid for 1968 and aid for 1969 is being sought. However,
we have no evidence that the supplementary aid being sought is as
much as 100 percent of the amount of aid initially obtained for 1968.
The economic delegation arrived in Nast Europe almost two months after
the bombing restrictions were, announced and it is more likely that the
supplementary aid sought for 1968 indicates the changing requirements
generated by the changed bombing progxaem, and the increased involvement
of North Vietnam in the war in the south. rather than a deteriorating
economic situation in North Vietnam caused by the bombing program. It
is also possibly the current aid negotiations are designed to enhance
North Vietnam' a negotiating position by demonstrating the support North
'Vietnam is able to receive from other. aocieliata countries*-
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