COSTS OF THE BOMBING TO NORTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78T02095R000800030029-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 15, 2016
• Document Release Date: December 2, 2002
• Sequence Number: 29
• Content Type: REPORT

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Diversion of Manpower
Costs of the Bombing to North Vietnam
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1. The North Vietnamese labor force before the bombing began in
1965 was largely unskilled, underemployed, and, at least in agriculture,
seasonally unemployed. Agriculture employed 70 percent of the civilian
labor force of about 9.6 million and was particularly labor intensive.
This highly underemployed work force forms a reservoir from which man-
power has been taken for other purposes with only slight adverse
effects on agricultural output. Handicraft industries accounted for
about a third of the total output of North Vietnamese industry, and
employed about 600,000 workers. This work force has formed another
pool from which labor has been diverted with only slight adverse effects
on the economy.
2. Airstrikes have required the services of about 600,000 workers
for the repair of lines of communication, reconstruction of buildings
and bridges, civil defense, antiaircraft defense and coastal defense.
This labor force is composed of males and females, young and old,
civilian and military. About 100,000 of the 6oo,ooo workers are
military personnel. The labor force is divided about equally between
full-time and part-time workers. Of the estimated 300,000 full-time
workers, about a third are working on transportation, slightly less
than a third on air defense, about one-fourth on repair of lines of
communication and reconstruction, and about 10 percent in coastal
defense. The bulk of these probably have come from the agricultural
labor force. The part-time force is used primarily as needed on a
voluntary basis in the areas where airstrikes create an additional
labor requirement. At any one time, about half of the part-time
force is engaged in civil defense, about a third in repair of lines
of communication, and less than 10 percent each in transport and
air defense. The particular tasks performed by this part-time force
vary as the requirements change. Because the greatest need for civil
defense workers is in urban areas, the bulk of these workers are
believed to be non-agricultural workers coming primarily from the
service occupations.
3. Industries that have been paralyzed by direct bomb damage
and/or outage of electric power were primarily modern facilities using
complex machinery and modern production techniques. It is estimated
that by mid-1967 about 30,000 workers in modern industry had been put
out of work by the direct or indirect results of the bombing. Although
the workers freed represent only about 4 percent of the industrial
labor force, they have a higher technical competence, skills and
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industrial discipline relative to the total labor force. They undoubtedly
play a significant role in the maintenance of production by dispersed
industries, and in the repair of damage facilities.
4. The main effect of the'diversion of manpower on li%ring stand-
ards has boon the increased work load that the labor forgo it now carrying.
The average North Vietnamese is now expending more energy than he did
before the bombing. The diversion of manpower has had only a relatively
minor effect on industrial output. The major harm to industrial output
has occurred from direct bomb damage and the lower productivity of the
dispersed factories. The diversion of manpower from agriculture pro-
bably contributed slightly to the estimated decline in output that in 1966
was the equivalent of 200,000 tons of polished rice. In agriculture, how-
ever, it is not possible to determine clearly those effects attributable
to manpower diversion as compared to those due to adverse weather.
5. North Vietnam's manpower resources appear adequate to operate
the economy at a subsistence level, and continue simultaneously to
support the war in South Vietnam and to maintain its defenses at current
or even increased levels. There are approximately 120,000 males working
in trade outside the state sector; about 175,000 in consumer services
such as barbers, garbage collectors, waiters, publishing personnel and
the like; about 60,000 male students above the age of 15 studying in
North Vietnam and about 5,000 studying abroad; and about L.0,000 males
in teaching.- Therefore, about 380,000 males of working age and demon-
strably capable of some economic activity are available for military-
related work if labor becomes scarce. In addition, there are about an
equal number of women in these occupations. Excessive diversions from
these groups for war-supporting tasks would undoubtedly result in a
decline in living standards and, in the case of students, would be
counter-productive in the long run, but might be considered justifiable
under the circumstances.
6. After more than two and a half years of bombing the North
Vietnamese are much more experienced at countermeasures, and as long as
morale remains high and imports of necessary material continue, North
Vietnam is not expected to be faced with a critical shortage of labor.
Unless losses in the South increase substantially, the military force
can be maintained by drawing from the estimated 190,000 males that
reach the draft age of 17 each year. Of these about 120,000 probably
would be physically fit and if military requirements were increased
lower physical standards could yield additional increments of military
age males.
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Destruction of Industry
7. Industry accounted for about a quarter of North Vietnam's GNP
before the bombing. Almost half of industrial output came from the
modern, large-scale industrial facilities that have been to a large
degree rendered inoperative either by direct bomb damage, shortage of
electric power, or by dispersal. The other half of industrial output
comes from thousands ,of small-scale, local factories or handicraft
shops. At present, the amount of industrial output. lost as a result
of the bombing is estimated at less than 10, percent of GNP.
8. The effect of the bombing of industry on standards of living
probably has been minimal. The inoperative plants'were primarily pro-
ducers of heavy industrial goods, such as pig iron, cement, and
chemicals, and made little immediate contribution to the simple needs
of the North Vietnamese consumer. The one manufactured good in short
supply is textiles but the shortage does not appear intolerable and
can be relieved with increased imports. The. curtailment of residential
construction can be expected to cause a housing problem, particularly
in the areas supporting evacuees from the cities. At present, however,
housing does not appear to be a serious problem. Through exhortations
to work harder and through increased foreign aid, the regime has been
able to maintain the levels of most consumer rations. The people are
by necessity consuming greater proportions of less palatable foods such
as manioc, sweet potatoes and imported wheat flour and maize, but the
total caloric value of the diet appears adequate.
9. The bombing has caused a decline in foreign exchange earnings
as the volume of North Vietnam's exports has dropped precipitously.
in August, for instance, identified seaborne exports amounted. to only
20,500 metric tons compared with an average monthly volume of almost
100,000 metric tons during'1966. Since May no exports of pig iron,
cement or apatite have been observed and exports of coal are well
below normal levels. Although reduced exports of these bulk coi?nodities
resulted in a sharp decline in export volume, the actual decline in
value has been more modest. Over half of the value of North Vietnam's
exports comes from products of agriculture, forestry and handicraft
and the export of these relatively high-value items has not been
appreciably affected by the bombing.
10. Known export losses as a result of the bombing have averaged
less than $2 million a month thus far in 1967, or less than 25 percent
of North Vietnam's average monthly exports for 1965. Although the
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exports curtailed by the bombing were those involved in trade with
Free World countries and thus the main earners of foreign exchange,
the loss is small compared to the amount of economic aid being supplied
by Communist countries. North Vietnam's normal exports to Free World
nations amounted to less than $25 million a year. The loss of these
export earnings should present no economic problems since Communist
countries appear willing and able to furnish North Vietnam any goods
formerly purchased from non-Communist countries.
11. North Vietnam is compensating for the destruction to Indus-
trial capacity largely by increased imports. Imports increased from
about $130 million in 1964 to $195 million in 1965 and to about $240
million in 1966. Imports in 1967 are running at an even higher rate
than in 1960''. Increased imports of textiles, chemicals, fertilizers
and foodstuffs apparently will compensate for the decline in domestic
production that has resulted largely from the bombing. A large part
of the increased imports, however, consists of POL, vehicles, machinery,..
steel sheet and plate, metal tubes, bars, and wire which are being
imported to satisfy increased needs related to the war, i.e., the
repair of damaged lines of communication, the maintenance of transport
equipment inventories, and the construction of defense facilities.
12. North Vietnam has switched the emphasis of industrial develop-
ment from large-scale centrally-controlled industries to small-scale,
local industry. In addition, a few of the existing large industrial
facilities have been partly dispersed. Included among these is the
Nam Dinh Textile Plant, which before it was bombed in mid-1965 produced
almost all of North Vietnam's cotton yarn and had the capacity to pro-
duce. about 50 million meters of cloth annually. Output of the dispersed
shops of the plant is unknown but is believed. to be well belqw the
plant's pre-bombing output. The 8 March Textile Plant, having an annual
capacity of 30 million meters of cotton cloth, 80,000 meters of other
cloth, and about five million jute bags was at least partly dispersed
although it has never been bombed. In addition, the Haiphong Phosphate
Plant which produced about 7 percent of the nation's chemical fertili-
zer has been relocated. A number of minor machine building and repair
shops also have been relocated to rural areas..
13. At present the regime is attempting little in the way of
restoring and reconstructing damaged industrial facilities and little
work is currently being done on partially finished aid projects. The
Lang Chi Hydroelectric Plant apparently has not been worked on since
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June 1966. The plan to add a steel-making component to the Thai Nguyen
Iron and Steel Combine has apparently been postponed. The cost of
restoring the damage to the major manufacturing facilities is estimated
to be only about $15 million. The cost of repairing electric power
plants is estimated at $25 million. The time required to restore these
facilities to pre-war capacities, assuming complete availability of
machinery and of sufficient numbers of technicians would be up to two
years. The reason for the current deferment of such restoration un-
doubtedly is the realization that such restoration would only invite
further bombing.
JA. Only eight I lare industrial facilities. Of
five have been damaged by bombing -- the Lang Chi Explosives
Plant, the Thai Nguyen Iron and Steel Combine, the Haiphong Cement Plant,
the Phu Tho Chemical Fertilizer Plant and the Bac Giang Chemical Ferti-
lizer Plant.
o the bombed targets are inoperative
due to direct bomb damage and lack of electric power.
15. North Vietnam's industry produced little in the way of war-
related materials and the loss of industrial capacity has had little
significant effect on the'North's ability to support the war in the
16. Some additional miscellaneous industrial facilities have been
d=aged by airstrikes and many more have been rendered. inoperative by
lack of power. The complete destruction of these facilities would
yield only, minor additional adverse effects.on the economy and on the
war effort. A number of small-scale facilities and handicraft establish-
ments contribute indirectly to the war effort but do not lend themselves
.readily to targeting.
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Agricultural Production
17. During the seven years immediately preceding the bombing,
North Vietnam's annual rice harvest averaged about 4.5 million metric
tons. The 1966 rice crop was approximately 4.2 million tons, a drop
of 300,000 tons of paddy, or about 200,000 tons of polished rice.
The decline resulted in part from a drought in September, the month
that usually has the heaviest. rainfall, followed by late rains and
flooding in some areas, and also from the disruption of transportation
and diversion of manpower caused by the bombing. It is estimated that
the 1967 spring rice harvest, which accounts for about one-third of the
annual rice harvest, was about 200,000 tons of paddy (about 130,000
tons of polished rice) below average. The decline was due to a re-
duction in rice acreage,.abnormally cold weather, and to the disruption
of transportation and the diversion of manpower caused by the war.
18. Agricultural production is dependent on so many variables
that it is difficult to separate out the effects due to changes in
each one. However, it is unlikely that the current shortfall was ,due
primarily to the diversion of manpower. Even in the-7 years before
the bombing, North Vietnam's individual harvests varied from a high
of 5.2 million tons in 1959 to a low of 4.2 million tons in 1960. In
two years, 1960 and 1963, the rice harvest dropped to the level of the
1966 harvest without any manpower diversions caused by bombing. In
addition, in 1965, the year in which manpower diversion began, the
rice harvest was an average one of 1.5.million tons. In view of these
facts it is likely that little of the shortfall in 1966 and the first
half of 1967 was due to manpower diversions.
19. It is possible for North Vietnam to compensate for a con-
siderable reduction in agricultural labor by the increased use of
fertilizer and equipment. The amount of fertilizer and equipment used
per acre is well below the amounts used in western countries. Rice
yields in North Vietnam, although higher than many other southeast
Asia countries, are still well below. the yields that can be obtained
with greater use of fertilizer. Increased yields would save on
man- power by permitting a reduction in the area to be plowed, weeded and
harvested. However the importation, distribution and application of
fertilizer itself necessitates the use of manpower and adds a.burden
to transportation facilities. The increased use of equipment, such
as tractors, trucks, irrigation pumps and harvesting machinery would
undoubtedly decrease the labor requirement per unit of rice produced.
The fact that imports of. labor saving agricultural machinery have not
noticeably increased since the bombing tends to confirm the estimate
that manpower is not a limiting factor in agricultural production.
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20. The current grain deficit has resulted in a sizeable
increase in food imports. In all of 1966 food imports amounted to
about 80,000 tons, while during the first nine months of 1967 food
imports, primarily flour, rice, maize and sugar, have amounted to
about 320,000 tons and for the whole of 1967 will probably amount
.to 100,.000 tons.
21. The estimated shortfall of polished rice in 1966 (200,000 tons)
and the first half of 1967 (130,000 tons) about equals the 320,000 tons
of food imported during the same time period. Imports during the second
half of 1967 probably represent an attempt to stockpile in anticipation
of a shortfall in the rice crop which is harvested in November and
contribu;;es about two-thirds of the annual crop. If food imports continue
in the fourth quarter at the same rate as the third quarter of this year
North Vietnam would be in a position ' to. cope with a shortfall in the
Autumn harvest of about 250,000 tons of paddy.
Communist Trade and Aid Programs
22. Since the 'tic:.bing began, Communist trade and aid programs
with North Vietnam have changed in a number of respects. The amount
of aid received by Norte Vietnam has increased substantially over
pre-bombing years as reflected in increased imports and declining
::)arts. The type of economic aid has changed from assistance in
developing modern industry to constructing widely scattered small
plants and to supplying large volumes of transport equipment.
The USSR and Eastern European countries have assumed a greater relative
share of the total economic aid to North Vietnam, with the USSR sur-
passing Communist China as North Vietnam's major donor. A greater
portion of the aid extended is "non-refundable" grant aid, apparently
in deference to North Vietnam's obvious inability to repay. Finally,
a greater portion of total aid is now military aid resulting from
vastly increased requirements for air defense and a greater involve-
ment in the war in South Vietnam.
23. As a result of declining food production, declining output
in some industribs, and greatly increased. demands of the war, North
Vietnam has become increasingly dependent on assistance from Communist
countries. Trade deficits have increased regularly as imports grew
and exports fell off. In 1964, the trade deficit amounted to about
$25 million with exports valued at about $100 million. In 1965, the
deficit shot up to about $90 million due entirely to increased imports.
In 1966, the deficit was over $150 million with exports off 20 percent.
it is estimated that exports in 1967 may be below $70 million and
imports thus far have been increased, so the trade deficit in 1967
may go to $200 million. The following tabulation shows the value of total
imports and exports in million of US dollars for the years 1963-66:
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Total Trade
19 63 L964 .1965 1966
248 23 298 323
Imports (Excluding Grant 147 131 195 241
Aid)
Exports 101 108 103 82
24. Almost half of North Vietnam's exports by value are products
of. aavicult;ure, forcct;ry, fishing, and handicr?fte. Agricultuxal
products exported include processed fruits and canned poultry products.
In addition, metals, minerals and building materials are exported.
However, by mid-1967 important exports of apatite, coal, cement, and
pig iron had been drastically curtailed as a result of bomb damage to the
modern industrial sector.
25. The country imports all of its petroleum, finished steel,
railroad rolling stock, vehicles, and most of the machinery and metal
manufactures, spare parts, industrial chemicals, and raw cotton.
Imports of most of these products have been increased since 1965.
There have been sharp increases in imports of machinery and equipment
related to the repair and replacement of parts in the transportation
and power sectors of the economy, and to the repair and reconstruction
programs; such imports include vehicles for road, rail, and water
transport, roadbuilding equipment, machine tools, small diesel generators
and spare parts. The following tabulation shows the volume of identified
seaborne imports, 1964 through September 1967,,in thousands of metric
tons : Jan- Sept
1964 1965 1966 1--9-77-
Total 638 697 932 1,022
Ammonium Sulfate and
other fertilizers 140 162 224 134
Petroleum 142 170 2D1 185
Grain and other foods 162 .119 77 319
Timber 32 15 14 13
Miscellaneous 162 .231 416 371
26. Before the bombing, economic aid projects included a number
of large modern industrial facilities. However, project aid since 1965
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has emphasized the construction of small light industrial plants,
small electric power installatiods and machine shops. Some economic
aid projects since 1965 have contributed directly to the war, par-
ticularly those pertaining to truck repair,, machine shops, and pier
construction. Although most of the construction activity on large aid
projects has been suspended, work on small irrigation pumping stations,
state-fari;i projects, and mining assistance has been continued.
27. Almost $1 billion in economic grants and credits were extend-
ed during the years from 1955 through 1962. Of this total, Communist
China contributed almost half, the USSR about 40 percent, and the East
European countries the remainder. About 40 percent of all economic aid
through 19624 was in the form of grants, and the remainder was in the
form of credits with low interest rates and easy repayment terms. From
an average annual aid of about $100 million through 1964, economic aid
increased as follows; in millions of US dollars:
(Million US
$)
Jan-Jun Total
'
1965
1965 1966
1967 to June
1961
Economic Aid 150 275 170 59
5
USSR 85 150 100 33
5
Communist China 50 75 2+0 16
5
Eastern Europe 15 50 30 9
5
During August through October, 1967, new economic aid agreements were
signed with all Communist countries. Although the value of aid for
1968 was not indicated in these agreements, it is apparent that North
Vietnam's economic requirements will be net. The new aid agreements
made references to grant aid, to the extension of credits and to deferred
payments. it is not possible, however, to estimate how much of economic
aid since 1965 has been in the form of grants. However, because of the
declining value of exports, the majority of present aid extensions will
not be dependent on immediate capacity to meet repayment terms.
28. The USSR and China have greatly expanded military assistance
to North Vietnam since 1965. Deliveries of military materials, which
previously had been on a relatively small scale, reached an estimated
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`70 mill-* or, in 1965, ii55 min lion in 1966, and appear to be con-
tinuing at an even higher annual rate in 1967; as shown in the
following tabulation, in millions of US dollars:.
Jan-Jun
1965
1965
1966
1967
June 1961
Military Aid
270
455
330
1,055
USSR
210
360
260
830
Communist China
60
95
70
225
29. The military aid programs have followed well-established
lines, in part reflecting the capabilities of the donors. The. USSR
has provided the bulk of more advanced weapons systems such as surface-
to-air missiles, antiaircraft guns, radar, tanks, artillery and
fighter aircraft. The Chinese have been the major suppliers of small
arms and ground forces equipment, as well as military manpower for
logistics and construction activities and antiaircraft defense.
unary, Poland, and Bulgaria have indicated that they will supply
military aid to North Vietnam, in 1968, the exact nature not being
specified. Military aid includes both equipment that is currently
being used and produced by the Soviet and Chinese military forces,
and older equipment. There are no clear indications that the rate of
equipment deliveries in any way is a burden on either of the principal
donors.
30. Although economic and military aid to North Vietnam, in
value, represent an insignificant portion of gross national product
or of estimated defense budgets of the Communist countries, this aid,
,e--,en compared with Communist aid programs for all other countries
is of s-_'; nificant proportions. Soviet military aid to North Vietnam
during the first half of 1967 represented an estimated 50 percent of total
Soviet military aid deliveries. Communist Chinese military aid to North
Vietnam in the first half of 19007 represented an estimated 90 percent
of total Chinese military-.aid deliveries. The USSR sent to North Vietnam
during the first half of 1967 about 25 percent of its total economic
aid deliveries. Communist China sent to North Vietnam during the first
half of 1967 about 30 to.1+0 percent of its total economic aid deliveries.
? The European Communist countries, with a considerably smaller total
economic aid program, sent to North Vietnam during the first half of 1967
an estimated 40-50 percent of their total economic aid deliveries.
^? Values are based on Soviet foreign trade prices (prices charged'for
similar equipment sold to less developed countries) that are believed
to most closely approximate the true value of this equipment.
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