PROBABLE DEVELOPMENTS IN SOUTH VIETNAM, LAOS, AND CAMBODIA THROUGH JULY 1956

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01012A004500040001-9
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 23, 2016
• Document Release Date: April 25, 2013
• Sequence Number: 1
• Publication Date: November 23, 1954
• Content Type: NIE

Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
NIE 63-7-54
23 November 1954
RSOMT
1 EE4
NATIONAL INTELLIGENCE ESTIMATE
NUMBER 63-7-54.
PROBABLE DEVELOPMENTS IN SOUTH
VIETNAM, LAOS, AND CAMBODIA
THROUGH JULY 1956
Submitted by the
DIRECTOR OF CENTRAL INTELLIGENCE
The following organizations participated in the preparation
of this estimate: The Central Intelligence Agency and the
intelligence organizations of the Departments of State, the
Army, the Navy, the Air Force, and The Joint Staff.
Concurred in by the
INTELLIGENCE ADVISORY COMMITTEE
on 23 November 1954. Concurring were the Special Assistant,
Intelligence, Department of State; the Assistant Chief of
Staff, G-2, Department of the Army;. the Director of Naval
Intelligence; the Director of Intelligence, USAF; and the
Deputy Director for Intelligence, The Joint Staff. The Atomic
Energy Commission Representative to the IAC and the Assist-
ant to the Director, Federal Bureau of Investigation, ab-
stained, the subject being outside of their jurisdiction.
DOCJMENT NO. -1?...
NO CHANGE IN CLASS. t ..w
DECLAS TIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE:
AUTH: HR 70-2
DATE4'1448$ REVIEWER: Q0
COPY NO206
ASSISTANT DIRECTOR ONE
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
1. This estimate was disseminated by the Central Intelligence Agency. This copy
is for the information and use of the recipient indicated on the front cover and of per-
sons under his jurisdiction on a need to know basis. Additional essential dissemination
may be authorized by the following officials within their respective departments:
a. Special Assistant to the Secretary for Intelligence, for the Department of
State
b. Assistant Chief of Staff, G-2, for the Department of the Army
c. Director of Naval Intelligence, for the Department of the Navy
d. Director of Intelligence, USAF, for the Department of the Air Force
e. Deputy Director for Intelligence, Joint Staff, for the Joint Staff
f. Director of Intelligence, AEC, for the Atomic Energy Commission
g. Assistant to the Director, FBI, for the Federal Bureau of Investigation
h. Assistant Director for Collection and Dissemination, CIA, for any other De-
partment or Agency
2. This copy may be retained, or destroyed by burning in accordance with appli-
cable security regulations, or returned to the Central Intelligence Agency by arrange-
ment with the Office of Collection and Dissemination, CIA.
3. When an estimate is disseminated overseas, the overseas recipients may retain
it for a period not in excess of one year. At the end of this period, the estimate should
either be destroyed, returned to the forwarding agency, or permission should be re-
quested of the forwarding agency, to retain it in accordance with IAC-D-69/2, 22
June 1953.
WARNING
This material contains information affecting
the National Defense of the United States
within the- meaning of the espionage laws,
Title 18, , USC; Secs. 793 and 794, the trans-
mission or revelation of which in any mariner
to an unauthorized person is prohibited by law.
DISTRIBUTION:
White House
National Security Council
Department of State
Department of Defense
Foreign Operations Administration
Operations Coordinating Board
Atomic Energy Commission
Federal Bureau of Investigation
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
PROBABLE DEVELOPMENTS IN SOUTH VIETNAM, LAOS,
AND CAMBODIA THROUGH JULY 1956
THE PROBLEM
To analyze the present strength and weaknesses of South Vietnam, Laos, and
Cambodia, and to assess the outcome in these countries of internal stresses and ex-
ternal pressures and inducements.
CONCLUSIONS
1. The situation in South Vietnam has
steadily deteriorated since the conclusion
of the armistice. On the basis of present
trends, it is highly unlikely that South
Vietnam will develop the strength neces-
sary to counter the growing Communist
subversion within its borders; it almost
certainly would not be able to defeat the
Communists in country-wide elections.
Even before the elections scheduled for
1956, strong pressures may well arise in
South Vietnam for a coalition government
with the Viet Minh.,
2. As a consequence of the present strug-
gle for political power which erupted al-
most as soon as Premier Diem came to
office, government functions have been
paralyzed and the government's authority
throughout South Vietnam has become
progressively weaker. Deterioration in
the Vietnamese National Army has been
such that it lacks the capability adequate-
ly to perform internal security functions
and the French are reluctant to commit
their own forces in internal security oper-
ations for fear of further antagonizing the
population. The capability of the com-
bined Franco-Vietnamese forces for repel-
ling a full scale Viet Minh invasion is low
and will decrease as French forces are
withdrawn over the next year.
3. In contrast, the Viet :Minh is method-
ically consolidating its control over North
Vietnam, is greatly increasing its armed
strength by various measures including
the evasion of the armistice terms, and is
continuing to develop networks of agents
and political cadres in South Vietnam,
Laos, and Cambodia.
4. We believe that the Viet Minh now
feels that it can achieve control over all
Vietnam without initiating large-scale
warfare. Accordingly, we believe that the
Communists will exert every effort to at-
tain power in the South through means
-short of war. Should South Vietnam
appear to be gaining in strength or
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
should elections be postponed over Com-
munist objections the Communists prob-
ably would step up their subversive and
guerrilla activities in the South and if
necessary would infiltrate additional
armed forces in an effort to gain control
over the area. However, we believe that
they would be unlikely openly to invade
South Vietnam, at least prior to July
1956, the date set for national elections.
5. French policy will. be a major factor
determining developments in South Viet-
nam during the period of this estimate.
To date French actions have not clearly
indicated whether they believe that their
local and international interests will be
better served by a strong anti-Communist
government in South Vietnam with elec-
tions postponed if necessary, or by a
policy of accommodation with the Viet
Minh which they might hope would pre-
serve a French position in Indochina. In
spite of Mendes-France's recently ex-
pressed desires for a strong South Viet-
nam, we believe that the French are more
likely to adopt the latter course unless the
UK agrees to a strong anti-Communist
policy for South Vietnam and the US in-
dicates its intention to shoulder the
major military burden in Indochina, in-
cluding a commitment to employ US
forces if required.
6. We believe that the Diem government
will continue to lack wholehearted French
support and that accordingly it will be
unable to establish its authority through-.
out South Vietnam and its tenure of office
will remain precarious. No effective suc-
cessor to Diem is in sight. Those who
could be expected to enjoy full French
support have little popular following, yet
without such support a South Vietnam
government would lack the power to exer-
cise authority. Progress in training, re-
organizing, and revitalizing the National
Army will be slow so long as the political
situation remains unstable.
7. The Communists will probably con-
tinue to exercise considerable control in
the northern provinces of Laos and will
retain a capability for subversive activity
against the Lao Government. However,
we believe the Laotians can limit Commu-
nist political advances and that an anti-
Communist government will remain in
power providing it continues to receive
outside assistance and the Viet Minh do
not invade or instigate widespread guer-
rilla warfare. We believe that the na-
ture of Communist aggressive action
against Laos will be moderated by the
Communist desire to continue their
"peaceful coexistence" line in Asia, par-
ticularly directed toward Indian reac-
tions, and to a lesser degree by the possi-
bility of US counteraction.
8. Communist capabilities against Cam-
bodia are somewhat less than against
Laos, and the Cambodians will probably
be more resolute in resisting subversion.
Given outside assistance and the assur-
ance of Western support, Cambodia is
likely to maintain internal security and
its anti-Communist orientation during
the period of this estimate.
9. The fall of South Vietnam to the Viet
Minh would greatly increase Communist
capabilities against Laos and Cambodia.
The extent to which the Communists
would exercise this capability would de-
pend almost entirely on their estimate of
the probable reactions of the Manila Pact
powers and of the neutral countries of
South and Southeast Asia.
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
Xw" Oil W. 3
DISCUSSION
SOUTH VIETNAM
10. The political situation in Vietnam south
of the 17th parallel is one of almost total
paralysis, caused primarily by the struggle for
political power between Prime Minister Ngo
Dinh Diem and his supporters on the one
hand and a motley array of opposing elements
on the other.
11. In the existing situation problems of ex-
treme urgency have been neglected, and the
authority of the South Vietnam state has
remained nominal. The government has
been largely ineffective in meeting vital tasks
such as maintaining domestic order, perform-
ing the normal functions of civil administra-
tion, dealing with the extraordinary problems
created by the armistice, and overcoming
long-standing problems such as inefficiency
and corruption.
12. The Vietnamese National Army is demor-
alized and disorganized, and its capability
even for dealing with internal disorder is low.
It lacks trained leadership and an aggressive
spirit.
13. On the other hand, the Viet Minh in
North Vietnam appears to have, adjusted to
the post-Geneva phase with continuing and
unimpaired confidence. The Viet Minh de-
rived from the Geneva Conference interna-
tional recognition and greatly enhanced
power and prestige. It is methodically con-
solidating its control over North Vietnam and
continuing to plan for the extension of this
control over South Vietnam as well. The
Communist psychological offensive against
the free areas of Indochina continues un-
abated, and the Viet Minh is continuing to
develop networks of agents and political
cadres throughout South Vietnam, Laos, and
Cambodia.
II. FACTORS AFFECTING DEVELOPMENTS
IN SOUTH VIETNAM
South Vietnamese Capabilities
Political Factors
14. The conclusion of the armistice greatly
weakened non-Communist Vietnam morally
and materially. Partition at the 17th parallel
is abhorred by all Vietnamese, who regard
unity of the three regions of Vietnam as a
prerequisite of nationhood. The non-Com-
munist state has been shorn of large terri-
tories, important resources, and above all of
a considerable segment of its more homoge-
nous and energetic population, particularly
the Catholics and anti-Viet Minh nationalists
of Tonkin.
15. Moreover, efforts to develop a strong state
in South Vietnam are hindered by geographic
and ethnic differences and wide social, cul-
tural, and political heterogeneity. Cochin-
china, rich and populous, is a mixture of di-
verse and divergent political, social, and re-
ligious forces : the apathetic rice-growing
masses of the Mekong Delta; the large ur-
banized populations in cities like Saigon; the
1,500,000 adherents of the Caodai and the
500,000 adherents of the Hoa Hao, autono-
mous politico-religious sects which control
large areas; the strong and homogeneous
groups of Catholics; large overseas Chinese
and Cambodian minorities; and approximate-
ly 300,000 destitute refugees from North Viet-
nam. Moreover, coastal south Annam has
been in Communist hands without interrup-
tion since 1945, and has consequently been
subjected to prolonged Communist indoctri-
nation. Finally, the mass of the south Viet-
namese have seen such a succession of crises
in the last decade that they have become in
effect inured to political developments and
unresponsive to appeals.
16. Leadership elements in South Vietnam
are drawn broadly from the following groups:
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
(a) monarchists and court followers close to
Bao Dai; (b) rich merchants and landlords
whose interests are linked with those of
French economic groups in Indochina; (c)
former administrative officials; (d) profes-
sional men and intellectuals, nationalistic but
not given to action; (e) a small number of
professional politicians and intriguers; (f)
leaders of the politico-religious sects, war-
lords who exploit every opportunity for wealth
and power; and (g) army leadership - per-
sonified by General Hinh - a new-comer
group whose influence is not completely
known. These elements have for years ac-
commodated themselves to French control
and to a world of half-peace, half-war. In
this climate, expediency has in most instances
substituted for integrity and personal ag-
grandizement for devotion to public service.
17. Power in South Vietnam is spread among
the heterogenous elements just described and
the French, who still possess the principal
military force, the Expeditionary Corps, and
who continue to control foreign exchange and
central banking. The Vietnamese National
Army remains primarily an instrument of the
French High Command. Although Viet-
namese governments hold office by virtue of
the authority conferred upon them by Bao
Dai, they continue to rely upon French power
in Vietnam to back their authority. Prime
Minister Diem's blatantly nationalistic and
openly anti-French attitude has caused many
of the French on the scene, confused by a
lack of direction from Paris, to assume a hos-
tile attitude toward Diem and to work openly
toward depriving him of the power which had
supported former Vietnamese Governments.
18. The present struggle for political power
in South Vietnam erupted almost as soon as
the Diem government was formed. The
South Vietnam sects, which had not been in-
cluded in the government, were first to oppose
it, primarily because it seemed to jeopardize
their independent existence. Somewhat later,
the army leadership under General Hinh
broke openly with Diem. Although an un-
easy alliance came into being between the
sects and General Hinh, it fell apart when
Diem, under pressure to compromise, reshuf-
fled his government to admit representatives
of the important Caodai and Hoa Hao sects.
However, the third of the sects, the Binh
Xuyen, continued to support Hinh and to de-
fy Diem. General Xuan, a French-natural-
ized, Cochinchinese and former Prime Minis-
ter, is associated with the Army-Binh Xuyen
faction. Other individuals in opposition
to Diem and contending for power in-
clude former prime minister Buu Loc, who has
some support in Paris and among elements in
Bao Dai's entourage, and former prime minis-
ter Nguyen Van Tam, father of General Hinh,
who appears to have the support of many
French officials in Saigon. Prince Buu Hoi,
cousin of Bao Dai, has influential support in
France at present. He has in the past sup-
ported the Viet Minh and participated in ef-
forts to bring about a negotiated end of the
Indochina war.
19. Diem, the leading lay Catholic in Viet-
nam, is honest, austere, and widely respected
for his integrity and nationalistic zeal. He
has spent many years abroad and has not
been associated with any of the previous gov-
ernments in Vietnam. He has the popular
backing of most Catholics and some following
among the people at large, the unorganized
support of most nationalist intellectuals,
and the backing of the dissident Caodai
General Thinh Minh The. He also has the
support of other Caodai and Hoa Hao
leaders, who have joined his government, but
this support is not very firm. However, Diem
is rigid, unwilling to compromise, and inex-
perienced in the rough and tumble of politics.
He is acutely suspicious of his colleagues on
the political scene and is inclined to seek ad-
vice among a small group of relatives and
close friends who, for the most part, are in-
capable of proffering sound counsel.
20. None of the groups opposing Diem has
any broad-based popular support. It is the
weakness of Diem rather than any genuine
political strength of their own that enables
them to prolong the political crisis in Saigon.
The Binh Xuyen has discipline, wealth, and
control of the National Police and Surete, but
it is totally corrupt and numerically weak.
The army leadership personified by General
Hinh is dependent upon French backing and
does not have solid support from the masses
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
8 4-9 4- NAP ST
of troops nor from the people; moreover, it is
divided in itself. There is no widespread sup-
port for any individual contenders for power;
each has numerous and strong enemies.
21. The intentions of Bao Dai, who remains
in France, are difficult to assess. His first
intervention in the political struggle was on
the side of Hinh, the Binh Xuyen, and General
Xuan, against Diem. He was thwarted main-
ly because of strong US representations.
More recently he has intervened on the side
of Diem. Bao Dai's popularity is now at its
lowest ebb and his circle of supporters is re-
ported to be narrowing daily. However, he
still has political importance because of his
hereditary position and because he can, as
chief of state, give the cachet of legitimacy to
his appointees. He is a shrewd politician,-but
is weak, venal, infused with a sense of his
own grandeur, and wholly incapable of con-
sistently responsible action.
22. The present key to political power in
South Vietnam is held not by Vietnamese
groups or combinations of groups, but by the
French. Under present circumstances, only
the French can provide to the legitimate gov-
erning authority in Vietnam-the power it now
lacks, and force the coalescence of the various
factions, groups, and individuals. US support
keeps Diem in office, but the fact that the
French have withheld full support deprives
him of the power to govern.
Military Factors
23. The Vietnamese National Army has an
estimated strength of 170,000 regulars and 10,-
000 auxiliaries. Naval and air strength is neg-
ligible. The regulars include 5 infantry regi-
ments and 152 combat battalions, of which
69 are infantry, 61 light infantry, 8 guard, 5
airborne infantry, 8 artillery, and one armored
reconnaissance. The regroupment necessi-
tated by the Geneva Agreements has forced
many units to leave their home provinces for
the first time, resulting in a considerable
number of desertions since 1 June (up to 25
percent of the total army strength). Some
auxiliaries and other semimilitary forces are
being demobilized, with the exception of the
armed forces of-the South Vietnam sects and
certain guard and militia elements. The
Vietnamese General Staff has become so in-
volved in political affairs that it has neglected
the required planning of an adequate internal
security program. This neglect has fostered
a spirit of insubordination and irresponsibility
throughout the army. The army in some in-
stances has been incapable of executing occu-
pation and pacification operations in areas
formerly under Viet Minh control. Almost
all units, particularly those from North Viet-
nam, require a period of intensive training
and reorganization to bring them up to
strength and improve their effectiveness.
24. Advisory and training aid is provided by
approximately 4,800 French officers and NCO's
currently serving in the French Military Mis-
sion to Vietnam. This mission is to be in-
creased to 6,000 by the end of 1954. These
individuals serve in command, staff, and ad-
visory roles on the Vietnamese General Staff,
in the territorial command structure, and in
training establishments. About 20 percent
of Vietnamese infantry units and 50 percent
of support and technical units are cadred at
least partially by the French. The army is
still under French operational control and
continues to be completely dependent on the
French for logistic support.
25. A major reason for the ineffectiveness of
the Vietnamese National Army is its lack of,
adequately trained officers. Only about one
percent have received training roughly equiv-
alent to that of a US army officer of field
grade, and virtually none has a comparable
background of staff and command experience.
Very few of these Vietnamese officers would
be competent even in assignments justified by
their training and experience, and even fewer
are capable of an adequate performance at
the higher positions of responsibility which
they now hold. Their background is one of
subordination to French command, and they
are inclined to rely heavily on French advisers
even when given positions of authority and
responsibility.
26. The other serious deficiencies in the South
Vietnamese national forces, ineffective organi-
zation and training and absence of logistics
and technical services, are related to the lack
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
of leadership and stem from the same , basic
cause, i.e., French failure to train and develop
qualified leaders. This situation can be re-
solved only over a period of time and only if
an intensive program for the progressive de-
velopment of an effective officer corps is soon
initiated.
27. Few details are available on the pattern
of loyalties within the national forces. The
General Staff is apparently divided. Certain
elements have been pushing Hinh to over-
throw the government in a coup and to estab-
lish a military dictatorship. Other officers
have attempted to help mediate Hinh's diffi-
culties with the government. Still others are
reported to support Diem. However, there is
no officer, except possibly General Vy, present-
ly acting chief of staff, who could command
the loyalty and confidence of a majority of
the army in the event Hinh were removed
against his wishes.
28. We have little information on the strength
and status of other semimilitary and police
forces. The sect armed forces, although woe-
fully inadequate according to generally ac-
cepted military standards, are the most im-
portant. There are a total of about 10,000
armed Caodai troops. Of these, approximate-
ly 4,000 are largely under control of General
Thinh Minh The and the remainder are un-
der Vietnam and French Army control. The
Hoa Hao forces total about 8,000 of which
about 5,200 are in Vietnamese or French army
units, and about 2,500 led by Ba Cut, an ex-
army officer, who is engaged in general dissi-
dent action against both the Vietnamese Na-
tional Army and the Caodai. The Binh
Xuyen have an independent force of 2,600
armed troops, in addition to the urban police
forces under their control which number
about 4,500. These forces are little more
than local militia and are in effect private
armies for these groups.
29. South Vietnam's mobilizable manpower
pool is estimated at 1,500,000 physically fit,
military-age males, of which about 20 percent
are now under arms. An additional 10 per-
cent could probably be mobilized without in-
itially curtailing essential economic activities.
The Vietnamese government would be almost
entirely dependent upon foreign aid to sup-
port such a force.
30. The Diem government proposes to expand
the army to 200,000 by the end of 1954, and
to 225,000 by the end of 1955. By the latter
date, the army would include 10 divisions plus
60 territorial battalions. The cost of main-
taining these forces through 1955 has been
estimated at about $450,000,000, of which al-
most all would have to be provided by external
assistance. The French have supported this
proposal as being required to maintain a
power balance vis-a-vis the Viet Minh. A
proposal for development of a National Guard
under the Ministry of the Interior has been
postponed pending the outcome of French-
Vietnamese-United States discussions.
31. On the other hand, the United States is
considering the reduction of the Vietnamese
army to about 80,000, including 3 combat light
divisions. These reduced forces would have
primarily an internal security mission.
Against a large-scale Viet Minh invasion, they
would serve only as a delaying force. Cost
of maintaining the forces at the reduced levels
has been tentatively estimated at about $200,-
000,000 per year. This estimated cost. is in
addition to financial, economic, and military
support funds, which might total $150,000,000
per year.
French Armed Forces
32. The French Expeditionary Corps in Indo-
china is composed of approximately 150,000
regulars and 22,000 auxiliaries.' Present
plans call for the further reduction of the reg-
ular component to 100,000 during 1955. The
French Air Force in Indochina has 12,000
men and approximately 600 aircraft. Dur-
ing 1955 it is.planned to reduce the personnel
strength to 6,000. The French Navy, includ-
ing Naval air, has a personnel strength of
10,500. During 1955 it is planned to reduce
this to approximately 9,000. At the present
time the French Expeditionary Corps could
not without external reinforcement defend
South Vietnam against Viet Minh aggression.
'The regulars in the French Expeditionary Corps
are made up of approximately 53,000 French, 12,-
000 Foreign Legion, 18,000 West Africans, 33,000
North African, and 34,000 indigenous troops.
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
Communist Capabilities and Intentions2
33. While South Vietnam has been experienc-
ing mounting instability since Geneva, the
Communists in the North have continued to
grow in political and' military strength.
There has been no evidence of dissidence
within the top leadership of the Viet Minh
regime as a result of the armistice and the
Geneva accords.
34. The Viet Minh is adopting a conciliatory
line toward France, thus seeking to exploit
French hopes of retaining their economic and
cultural interests in North Vietnam. It prob-
ably hopes that French susceptibility to, an
arrangement with the Viet Minh will increase
and consequently reduce French willingness
to support a strongly nationalistic state in
South Vietnam.
35. The Viet Minh is consolidating and reor-
ganizing its armed forces by grouping former-
ly independent regular and regional units to
form new divisions with augmented firepower.
This augmented firepower results principally
from a high level of Chinese Communist aid
in 1954, including illegal aid since the cease-
fire. Within the period of this estimate the
Viet Minh will probably have at least 11 or
12 infantry divisions, two artillery divisions,
and one anti-aircraft division. These devel-
opments would more than double the pre-
Geneva combat effectiveness and capabilities
of the Viet Minh regular army. The Viet
Minh is expanding and improving its trans-
portation and communication facilities, in-
cluding rail and highway links with South
China.
36. During the current transition period,
Communist tactics in the south are being
shifted from the "armed struggle" to the
"political struggle" stage. The main facets
of Communist policy appear to be ostensible
compliance with the Geneva armistice provi-
sions and continued development of Commu-
nist subversive capabilities in the south. Al-
though substantial Viet.Minh forces are being
evacuated from South Vietnam, we believe
'The general topic of Communist courses of ac-
tion in Asia through 1957 is covered in NIE 10-
7-54.
that large numbers of trained military and
political. personnel remain. Furthermore,
refugee groups evacuated from North Viet-
nam were probably infiltrated by Communists
who will almost certainly seek to exploit griev-
ances induced by the harsh conditions of
resettlement.
37. It is likely that Communist elements .are
playing an important role behind the scenes
in the present political crises in South Viet-
nam, seeking to bring to power elements that
would be amenable first to the resumption of
North-South relations and later to the forma-
tion of a coalition regime. Furthermore, cer-
tain pro-Communist groups are making their
appearance in Saigon, the most prominent of
which is the "South Vietnam Movement for
the Defense of Peace."
French Capabilities and Intentions
38. Since Geneva, French actions in Vietnam
have been confused and contradictory and
have encouraged the present paralysis. Offi-
cially at least, the present general lines of
French policy are expressed in the French-US
understanding reached September 29. This
understanding was reaffirmed and clarified in
the recent Washington talks between the
French Premier and the US Secretary of
State. The French agreed to support the
independence of the three Associated States
and, within the framework imposed by the
Geneva accords, to oppose the extension of
Viet Minh influence and control. France
further pledged to coordinate with the US in
the planning and implementation of economic
and military aid programs to strengthen the
independence of these states. Finally, the
French agreed to support Diem in the estab-
lishment of a strong, anti-Communist regime
in Vietnam. Despite this agreement, the
French have not given wholehearted support
to Diem.
39. The French appear to have three princi-
pal objectives with respect to Indochina:
a. To maintain to the maximum degree
feasible the French position in Indochina;
b. To avoid involvement in hostilities and
the financial burden of maintaining substan-
tial forces in Indochina; and
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
c. To avoid jeopardizing US-French rela-
tions. The fact that these three objectives
contain elements of mutual inconsistency
poses real problems to French policy.
40. In pursuit of these objectives two general
lines of approach are open to the French.
They can decide to support the reunification
of Vietnam through elections held pursuant
to the Geneva accords. The French interest
in promoting the international detente in the
Far East which they believe was inaugurated
at Geneva would tend to lead to this decision,
and this tendency would be strengthened if
France became convinced that a Communist
takeover was inevitable. The French might
also believe that their desire to maintain a
preferred position in Indochina would be bet-
ter served by an accommodation with the Viet
Minh than under a strongly anti-French
South Vietnamese government. If they
adopted this approach, the French would per-
mit events to drift to a Communist victory or
would support the establishment in South
Vietnam of a government that would acqui-
esce to or facilitate the formation of a Com-
munist-led coalition of all Vietnam. Such a
course would permit the French to achieve
their objective of avoiding the resumption of
hostilities and reducing their military com-
mitment in Vietnam. However, the French
would hesitate to adopt this policy if they
believed that it would severely strain their re-
lations with the US. Their final decision
would be greatly influenced by whether or not
they were confident of UK support.
41. On the other hand, France may decide
that its relationship with the US is the de-
termining factor, and that to preserve this
relationship it is essential to support an anti-
Communist South Vietnam, postponing elec-
tions if necessary. The French would feel,
however, that such a course would involve a
substantially increased risk of renewed hos-
tilities with the Viet Minh. Moreover, the
French probably estimate that, in a strongly
nationalistic South Vietnam, France could not
retain more than the vestiges of its position.
42. Present French actions in Indochina indi-
cate that the French have not fully made up
their mind which course to follow. On the
one hand, the French government continues
to support, though without enthusiasm, the
attempt to strengthen the Diem government.
On the other hand, the French appear to be
considering possible substitutes for Diem who,
at least in the past, have had pro-Viet Minh
sympathies and who might facilitate a reuni-
fication of Vietnam. Moreover, through the
appointment and activities of Jean Sainteny,
the French representative in North Vietnam,
the French have clearly indicated their inten-
tion of maintaining political contacts with
the Viet Minh, preserving, insofar as possible,
their economic and cultural interests in the
area, and of continuing trade relations with
North Vietnam.
III. FUTURE PROSPECTS IN SOUTH VIETNAM
43.. French policy will be a major factor de-
termining developments in South Vietnam
during the period of this estimate. We be-
lieve that the French estimate that South
Vietnam cannot be held over the long term,
except at very high cost. We further believe
that the French would be unwilling to post-
pone the elections unless the UK agreed and
unless the US was willing to shoulder the ma-
jor military burden in Indochina, including a
commitment to employ US forces if required.
44. The political situation in South Vietnam
has steadily deteriorated since the conclusion
of the armistice. Prime Minister Diem will
probably remain in office only so long as the
US continues to give him strong backing. If
Diem had the full support of the French, he
might be able gradually to create a sense of
national will and purpose in South Vietnam;
in this respect, he is probably unique among
Vietnamese leaders in that his strong nation-
alist record might enable him to use such sup-
port without being subject to the onus of col-
laboration with the French. However, the
French are not likely to provide Diem with
full and positive support. Therefore, Diem
will probably not be able to reestablish the
authority of the government throughout
South Vietnam and to tackle effectively the
multitude of pressing problems now facing
the country.
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
45. Should the Diem government fall, it would
probably be succeeded by an uneasy coalition
drawn from the self-interested individuals and
groups now contesting Diem's position. Al-
most certainly, however, any successor to the
Diem government would be hampered by the
incessant political intrigues which have
plagued Diem. Moreover, no successor gov-
ernment is likely to be effective. A govern-
ment tied closely to and politically supported
by the French can have little popular follow-
ing. But a government which does not have
the benefit of the maintenance of public order
by the French coupled with French non-inter-
ference in the local political scene, is not likely
to be able to maintain itself for any length
of time.
46. The internal security situation will remain
precarious. The French will continue reluct-
ant to commit their forces in internal security
operations, believing that such action would
antagonize the population and in the end
might create greater problems than it would
solve. Moreover, during the period of this
estimate, Vietnamese forces will lack the ca-
pacity to maintain order unless the present
political deterioration is reversed.
47. At the present time, the combined forces
of the French Expeditionary Forces and the
Vietnamese National Army could only delay a
full scale invasion of Viet Minh forces; they
could not stop it without reinforcements from
outside. The over-all Franco-Vietnamese
capability in this regard will be diminished in
the next year as the French forces are re-
duced.
48. We believe that the Viet Minh will con-
tinue to gain in political strength and pres-
tige and, with Chinese aid, to increase its mili-
tary striking power in North Vietnam. The
Viet Minh probably now feels that it can
achieve control over all Vietnam without in-
itiating large-scale warfare. Accordingly, we
believe that the Communists will exert every
effort to accomplish their objectives through
means short of war. Viet Minh agents will
continue to subvert all susceptible elements
of the population, to intrigue to prevent the
coalescence of the various factions and the
building of any strength in the south, and
Viet Minh "shadow-governments" and politi-
co-military networks will be established wher-
ever the failure of the national government or
the French to impose controls leaves the Com-
munists a vacuum in which to operate. As a
result of their activities and.probable degree
of penetration in South Vietnam, it is possi-
ble that the Communists will succeed in con-
vincing most Vietnamese in the south of the
inevitability of Communist control.
49. If, on the other hand, South Vietnam
should appear to be gaining in strength or if
elections were postponed over Communist ob-
jections, the Communists probably would step
up their subversive and guerrilla activities in
the South and if necessary would infiltrate
additional armed forces in an effort to .gain
control over the area. However, we believe
that they would be unlikely openly to invade
South Vietnam at least prior to July 1956, the
date set for national elections, because: (a)
they would consider that their prospects of
gaining control over the area without resort
to invasion continued to be highly favorable;
(b) they would be concerned over the possi-
bility of US military counteraction; and (c)
they would probably fear that invasion would
induce the neutral nations in Asia to move
toward open alignments with the West.
50. We believe, on the basis of present trends,
it is highly unlikely that South Vietnam will
develop the strength necessary to counter
growing Communist subversion within its
borders; it almost certainly would not be able
to defeat the Communists in country-wide
elections. Even before the elections sched-
uled for 1956, the probable growth of Com-
munist influence in the South may result in
strong pressures within South Vietnam for
coalition with the North.
SECRET
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
LAOS.
1. PRESENT SITUATION
51. Laos is principally- threatened at present
by the Communist-dominated Pathet Lao
movement, which occupies and controls the
two northern provinces of Phong Saly and
Sam Neua. The Pathet Lao is headed by
Prince Souphanouvong, a member of the Lao-
tian royal family. The Pathet Lao Army
numbers about 6,000 men, and at present is
still supported by Viet Minh, "volunteer"
forces, which probably had not been entirely
evacuated from Laos by the agreed date of
November 19, 1954.
52. Laos is also threatened by an allegedly
non-Communist "Free Laotian" movement of
unknown dimensions which is probably led
by Prince Phetsarath, a pretender to the Lao-
tian throne, who is now an exile in Thailand.
This group probably was responsible for both
an abortive Laotian Army cadet mutiny in
June 1954 and the assassination of the Lao-
tian Defense Minister in September. _ Thai-
Laotian relations have been strained because
the Laotians claim that the Thai police are
supporting Prince Phetsarath as a means of
increasing Thai influence in Laos.
53. Laos lacks effective political leadership
and the population is in large measure politi-
cally apathetic. There are strong personal
cleavages among the small group of politi-
cally experienced national leaders. Neverthe-
less, Laos probably will continue to be led by
a reasonably stable coalition of leading non-
Communist political personalities with the
strongly anti-Communist and pro-US Crown
Prince Savang maintaining a balance of pow-
er. The previous policies of anti-Communism
and requests for US and French assistance
will probably be continued.
54. The Laotian armed forces, organized only
to battalion level, have a current strength
of 27,000 and are augmented by a French Mili-
tary Mission of 1,500 officers and NCO's, and
by 3,500 French combat troops. The army
lacks qualified field-grade officers and relies
on the French army for senior command and
staff personnel and for actual direction of
army administration. Laos is incapable of
financing its present forces, and the Laotian
army will continue to be dependent on outside
financing, training, equipping, and advisory
assistance for a considerable time to come.
The Laotian army has not displayed a real.
will to fight in past operations, and is incap-
able of defending Laos against any Viet Minh
invasion. . It is unlikely that the Laotian army
can exercise effective control in the two north-
ern provinces in which the Pathet Lao are to
be concentrated under the Geneva agreement
or that it can prevent Communist activities
on the local level elsewhere in Laos.
II. FUTURE PROSPECTS
55. During the period of this estimate, devel-
opments affecting the strength and stability
of Laos will be determined primarily by exter-
nal factors, such as Viet Minh and Chinese
Communist intentions regarding Laos, the ex-
tent and nature of US and French military
assistance to the Kingdom, and most im-
portantly, developments in Vietnam.
56. Whatever the outcome of French-Lao-
tian efforts to demobilize the Pathet Lao
troops, Pathet Lao followers of the Viet Minh
will probably continue to exercise considerable
control in the provinces of Phong Saly and
Sam Neua. Moreover, the Communists will
have the capability by political and subversive
means to heighten their influence in Laos and
to weaken the anti-Communist government.
However, the nature of Communist aggressive
action against Laos will be moderated by the
Communist desire to continue their "peaceful
coexistence" line in Asia, particularly direc-
ted toward Indian reactions, and to a lesser
degree by the possibility of US counteraction.
Under these conditions, and providing that
the Lao Government obtains and effectively
utilizes outside assistance, we believe that it
can limit Communist political advances.
57. However, if during the period of this esti-
mate, South Vietnam should fall to the Viet
Minh, Communist capabilities for pressure
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79R01012A004500040001-9
against Laos would be substantially increased, to exploit this situation would depend almost.
and Laotian will and capability to resist these entirely on their estimate of the probable re-
pressures would be correspondingly lessened. actions of the Manila Pact powers and of the
The extent to which the Communists choose neutral countries of South and Southeast Asia.
1. CURRENT SITUATION
58. King Norodom has kept power in his
hands since 1952 when the national assembly
ceased to function. The Cambodian public
generally has credited the King with success
in the achievement of full independence for
the kingdom. Son Ngoc Thanh, the last and
most important of the non-Communist dissi-
dent leaders, rallied to the King in September
1954. However, he retains considerable fol-
lowing and the firmness of his loyalty to the
King is questionable.
59. The Cambodian -armed forces, organized
only to battalion level, total 32,000, includ-
ing 4,000 National Guard and 8,000 auxiliaries.
The army would be incapable of defending
against a large scale Viet Minh invasion.
There is a definite lack of qualified field-grade
officers, and the quality of the army has de-
creased since the withdrawal of French cadres
in 1953. Moreover, at the present time the
effectiveness of the army is deteriorating be-
cause of an incompetent defense minister
whom the King so far has failed to replace.
The army continues dependent on French ad-
visers for its administration. The greater
portion of the Cambodian defense budget must
be supplied by external aid.
60. The Cambodian economy is relatively sta-
ble, and. the country produces a food surplus..
Cambodia has a. favorable balance of trade
but its heavy dependence on exports of rubber
and low-quality rice, makes the economy vul-
nerable to fluctuations in world demand for
these commodities. The Cambodian govern-
ment is greatly interested in accelerating eco-
nomic development and will probably request
extensive foreign economic assistance.
61. Cambodia is concerned that its main trade
route, the Mekong River, and the port facili-
ties at Saigon are both under control of South
Vietnam. Pending conclusion of current ne-
gotiations with South Vietnam, the latter is
withholding the Cambodian share of customs
.duties collected at Saigon. As a result the
Cambodian financial position remains highly
precarious.
62. Although France has recognized Cam-
bodia's full independence and sovereignty,
Cambodia's relations with France and its role
in the French Union have not been redefined.
Cambodia seems intent on broadening its in-
ternational ties and appears unwilling to rely
primarily on French aid and advice. Since
July 1954 no French or French Union troops
have been stationed in Cambodia except the
small French Military Mission.
63. Although 2,800 Vietnamese Communist
troops and their dependents have been evac-
uated from Cambodia, we believe that a sizable
Viet Minh cadre has been left behind. More-
over, the Cambodian Communist armed bands,
although ending their guerilla activities, have
failed to demobilize or to turn over their arms.
II. FUTURE PROSPECTS
64. The future political stability of the king-
dom will depend largely on the attitude of
the King, who is at the present time the only
important political leader. There are some
reports that the King has been exploring the
possibility of a "middle course" bywhich Cam-
bodia would receive the benefits of western
economic aid while simultaneously maintain-
ing the "good will" of the Communist Bloc.
However, we believe that for the next year
or so, providing outside assistance and the
assurance of western support are forthcoming,
the King's leadership will not be successfully
challenged and the Cambodians will maintain
an anti-Communist policy and will be able to
control internal subversion. Cambodia does
not have and cannot develop the capability
to resist a large-scale invasion.
Declassified and Approved For Release 2013/04/25: CIA-RDP79R01012A004500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
JWNRFN%NT 12
65. Future events in-Cambodia will be consid- bodian will to resist further Communist pres-
erably affected by developments in Vietnam sures, though we estimate that the Cambo-
and in Laos. A Communist takeover in South dians would be more resolute than would the
Vietnam would increase Communist capabili- Laotians under similiar circumstances.
ties against Cambodia and would impair Cam-
Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
 Declassified and Approved For Release 2013/04/25: CIA-RDP79RO1012AO04500040001-9
SECRET
,l C H
N A
nY d
? ~
% ? Ssv T
nh Thuy
?~
an-ning
. : k.. ao Kay
III
Coo B 8 Cnion )ii Ch
ac IKen
-.: *LaI Ch.. m
~:ti'
`
N;.g.minq
?:'v
ti .
r
TuYen Lang Son
Yan;B
?'
ti
~
>'?tivir:{
ititi
r ti;
{....... ....... So la
Keng un0
~
u Tho ? on Coy
P