f ~----------v Cioailicoti on

SitICON 9576Department of Slate 191011Z JULY ~

Amembassy SAIGON

INDICATE ClcoLLECT

Cl CMAlllll TO

DECLASSIFIED UNDER AUTHORITY OF THE INTERAGENCY SECURITY CLASSIFICATION APPEALS PANEL E013526 SECTION S3(b)(3)

ISCAP APPEAL NO 2013-042 document no 1 DECLASSIFICATION DATE October 26 2018

DISTRllUTION K~

EO 11652 GDSTAGS PFOR11 MILIi UlJfilgt EGEN~ PGOV PllllR 11 VNSUBJECT SAJGON MISSION NCllTll VIET-1001 BI-WEEIlaquoY HO 13

ACTION SECSTAfE tiASliOC FRIORTY

INFO USUALAMCOMSUL llOtiQ RONG USLO PEKING

Am DCM 2 SECRET SAIGON 9576 MINPOL SAAFOJ BEGlll SBCRef SAPA POL 1 3~~1ARY llanoi0 mid-year assessment of the situation in the South OSA 8 AID 7 seems somewhat less rosy than previous middot commtmist estimates o Xhe USIS 2 ECON 3 eOmttUDista have reportedly implemented unpopular population~ COMATT LABAT control measures and are attempting to elfmiDate free FBIS ADI~lmiddot entetprise in areas under their control in the South Politburo sY OAOOPD 5 member LG Than T~ghi is in Uungmy bavtnn completed visits to DAOEIT 2 I

PILES nulgalia and East Geimany mere 1doct1ments11 on economic middot CHUSD~ FPJMl POUCH TmllWl VlENlIANil achievements under tlle 1974 State Plan suggest that the BIEN ROi CAN THO 2 tlortbem oeonomy otl11 sbullJffers ft-om mismanagement aud poor llANANG NllA llill~G 4 plannlngo DBV dlplomatrJ abroad have admitted to lobbying CBDON J

s

63 dl DRAFTINmiddoti OATE TliL EXT ~PPROVED 9Y bull

Contributors USISJllaley OSI~ FSnepp

Claaailfcalion

l among 1reaponsibleu U 6 officials for a termination of Ue s atdl to tbe GVN Communiat p1opasaruJi9t9 11aVG ignored fhe 9ub9tantive

83pects of resident tUxon1 s trip to the USSR and have f ocueed bullmiddot notion

lutead on thQ Daa tbat the visit eould not improve the President1 s

positioo domesticallyo Hanoi bas endorsed ebe iampmer Communists middot unconditional

middot rejection of the GIlaquot offer of Blmi negotiations Predictlbly

(and unconvincingly) llanoi has tried to tie the riots i~

Bangkoks Chinese quarter to the BlfG1 s negative foreign policyo 11

Madame Binh is in Conakry after a stop6ver in ca1ro and an

official visit to Algeriao Elreg SUMMARY a mro SEOruf a

BEGIN eONFIDlliNHlliL

PART l THE SITUATION IN TUE SOUTH

Ao llanoi on tlQ State of tha Ilavolutiono I

lo IJanoi4s public assessments of the ait11Stion in South Viet-Nam

at midoyear are somewhat less ebullient than those noted at the

turta of the year and at the 11PBG11 anniveraampry festivitiee last

montho They contain11 to be surep similatly inflated claims of

milit4Zy auccessae 412d predictions of Gventual vietory0 but

their tone seems somewhat moremiddot measured Tbe army paper

quan Doi Nhan Dan11 0 anae1ted on July 8 11 for Geample11 that the

p~hislg oommuuiets 11 efforts have 1more or leaa resulted in ~

tlle United Stacas and Thieu into an increasin13ly difficult

sitvatiocobull lo its editorial tbe follow~ clay the paper

staced that communist forces in the South bullbullhave foiled to a

ccatan degree ~1 milta17 and pacfficaton opalatloneo - The~

Party organgt 11mtian Dan also exhibited some etrcumnpection L

~ oca~31328993 Page l

l among 1reaponsibleu U 6 officials for a termination of Ue s atdl to tbe GVN Communiat p1opasaruJi9t9 11aVG ignored fhe 9ub9tantive

83pects of resident tUxon1 s trip to the USSR and have f ocueed bullmiddot notion

lutead on thQ Daa tbat the visit eould not improve the President1 s

positioo domesticallyo Hanoi bas endorsed ebe iampmer Communists middot unconditional

middot rejection of the GIlaquot offer of Blmi negotiations Predictlbly

(and unconvincingly) llanoi has tried to tie the riots i~

Bangkoks Chinese quarter to the BlfG1 s negative foreign policyo 11

Madame Binh is in Conakry after a stop6ver in ca1ro and an

official visit to Algeriao Elreg SUMMARY a mro SEOruf a

BEGIN eONFIDlliNHlliL

PART l THE SITUATION IN TUE SOUTH

Ao llanoi on tlQ State of tha Ilavolutiono I

lo IJanoi4s public assessments of the ait11Stion in South Viet-Nam

at midoyear are somewhat less ebullient than those noted at the

turta of the year and at the 11PBG11 anniveraampry festivitiee last

montho They contain11 to be surep similatly inflated claims of

milit4Zy auccessae 412d predictions of Gventual vietory0 but

their tone seems somewhat moremiddot measured Tbe army paper

quan Doi Nhan Dan11 0 anae1ted on July 8 11 for Geample11 that the

p~hislg oommuuiets 11 efforts have 1more or leaa resulted in ~

tlle United Stacas and Thieu into an increasin13ly difficult

sitvatiocobull lo its editorial tbe follow~ clay the paper

staced that communist forces in the South bullbullhave foiled to a

ccatan degree ~1 milta17 and pacfficaton opalatloneo - The~

Party organgt 11mtian Dan also exhibited some etrcumnpection L

~ oca~31328993 Page l

July G edfcorilll that ttlf1r forces have smasbad tb0 maJ or1ty of

euemy nbbUns opciationso 11

2 Like preVious situation repotts from Dano1~ the current wrapbull

bullprotect peaer middotand tlle Paris Agreement According to Nban Dan 0

the Agreement io e 1$641 basis uhich b4G ftcorded 4ud recosniud

the great victory of our people~ and l1bich 11our peaple are

determined to firmly maintain 1n1D CONPIBiftfiIAL BEGDi SEGREf

Bo The llew Austerftv 1n CollllllUUistbullColltlolled Areas in South VictDSmo

l The Communiata aro fightoning control owr too movmoonc of to

people la VC-ooatiolledceaawui-e agalut a pegtpvlation eaoduaa

TbA cracltdmm is part of a seriQS of measures undertalten to

implemeDt Central Office for South Vietnam COSVN raquoireotlve 06

iasued 1n 1middot1ay 19740 (See North Viet-Nam Dimiddotlvaekly Noci ll for our

nitial report on Shte Diftetivo ) Ao of earli- July aecordtng

to iata11isence rep01ta from noitbem GVN lJR-3 QlvilLau vndel enable

ecnmuniet control tllaN being iscUGd idGntitl-7 eirds to lmlDt local

commuuiat 11ecourity operatlvee to keep tab6 on themo There

~opMtedly bas boan A haeklAsh ~one DotllA loeal rastdanta tJho

complain that the c0Jm1Pgtn1ate cnc now pJaot1Gini the oppreoaive

tdantifeAtion meanurea Ubieh they had aeeunad tl10 satgon

0oveTIUaeDt of PVllidngo ~

2 In addition to limiting froodom of mouamnt witllin vc areas 11

L raquolroctlve 06 rulce out usiieetricted trade and enterpdae there - a

I(efJNit~titil9~ SUSBfi I

_NW 37324 Docid31328993 Page 3

and other bus1msses have been closed and the remainder bavo

addit1o110 residents have been told to raise enough rice to

eupport tboll ampmiUea poundof one yeaI ~hooe wlO poundail to do oo ~1111 uot be pemitted to buy fran communise suppliers even if they

baw gUffietent monay

311 rlio fGtclUrcncc Jepo1to from northem GVN MB-3 indicate that compensate for

amphe austerity pTogram 18 designed to rifiMpampRRBflllfn deelining

popul41 morale ancl the lack of population flow to VC-co11trolled

areas 11 Up until recentlyo local communist autbortcies bad

eneomased the development of private enterprise VO areao oo as

to attract settlers A number of bard goods and food stores

eroppad up and aaa11 soup kitcheaa did a lively buaineae

lonatheless accordtug to tbe available intelligence there was

no major fDflux of paopla frim CVN tenitory Moreover the

i-elaeltl atmosphere geaerated by these innovations gradually

led to tbe demoral1211tion of eommuniat crnops uho veee siven a

taate of 11 lwmybull they oould not afforio t also 1ed middotto friction

tfou e A few IVA officera requested early tetirecienta to become xaaldenta 1n

civilian uwat11bn1rtutm the araa Others indulgod in eorrup~fDn

Tbe new auate~lty a meaut to ellmiaatc tb1o moEale-damagiDg

11 Hwaste aod extravagancoo Elm SEClmTo BEGIM UNCLASSlFIED

L ~

~PmfO iffim 31328993 Paget

SBGltm Cloaamc111tloa

Page t

lPMrr II ECONOMIC DEUELOPMENrS

A LG ~luanb Nshi Dalegation in Eaat Europe a

la Vin Politburo member~ government VicemPremier a~d recontlye

appointed Chaiman of the DRV State Plamdng Commission (SPC)

Le Thanh Nghi departed llanoi July 5 for middotvisits to a nUCJber of

middot fratarnal oocialiat countries Nghi uho traditionally haso

negotiated the DRV8s aid and trade agreements ~11th soeialtat

nations 0 stopped briefly in Peking and held talks July 7 uith

Vice 0 Premier Li Hsienonien and FangI Minister of Economic

Relatious with Foreign Co~latrieso In the Soviet Union July 7deg9) 0

Nghi tallted witll USSR Council of Ministers Vica-Cbairman

middotnaybakov 011 the 11strenathe11ing aud devalopment11 of economic0

scientific and technical cooperation between the cwo I

countrieso SimUar discussions uere held t11ith Bulgarian

Party and State leaders July 9 130 Accordin3 to a Radiomiddot Sofia

broadC48t0 the 00V aDd Bulgaria agreed to acoordfoaten their

future ecouamic plans o Iu Berlin0 Nghi met JuLy 15 with

GDB SPC Chairman Schuerer to discuss problams of

economic planninglI - t1ith emphasis on the 1976-00 periodo lhe

following day Nghi and Schuerer signed a documentbull on economic

cooperationo Nghi dep4rted East Berlin for Budapest on July 170

2o Ngbi t1110 has been accompanied by Le Ihac0 a senior SPC

Vi~e-cbairman0 appears to be making efforts to orchestrate

foreign aid in order to make it compatible with North Vlet 0

_r___________)

-_

-tied~ that llaaoi is suffeteutly sure of ita 1976middot1980 Fivebull

Year Plan requirementsto want to assure the availability of

speclflc items of fQreigo aldo END UNCLASSIPIEDo BEGIN Q9NFIBBfilALo

B Banoj degmot Satisfied (Ith State plan lnplemantation

1 Despite claims of increased productivity over the aame period

in 19730 IIanoi bampe voiced dissatisfaction with the icrplementation

of its reconstmctloo an4 nhabilitation plans over the ftrst

six months of 19740 A Jnly n Nban Dan editorial noted among middot

otber tliDgs 11 that agricultural plans were not fulfilled

procluctiGD goals for a number of essential industrial goods wera

not met ploduct quality noms wem widoly tsnored irrational capital

use of 1abor0 materials0 equlpmcant and mid remained a problem

and progress ~ ~rov103 management0 frequently cited as ttorth

V1etoNam11 s primary taaka in the economic sector0 baa been slowo

As a result0 degNban Dan declared awe are not yet satisfied with

our aehtevemanta in the past sSamp monthsu o

2o Mast of North VietbullNams economic sectors have claimed

sisntf1ca11t i11ereases oveii production in the first sis ~onths

of 19730 Fertilizer production0 for instance uas said to be

200 peJcent greater food processingincreased by 30 percent

and production of such export items as clothing textiles woolen

carpets~ and jute sacks increased middotbullsobstantfallyn Electtical

power p1oductloa was c latmed to be rill~ percent higher than in the

first half of 1973ti and coal production increased 100 percent oveJ L--

(C[L~$$~fF~~fO) r -middot

lCSMT1Watrr1c= maa tInf 37324 Doold31328993 Page

I the same perlod Uhile Hanoi media also claimed a ttfairly l sueeaaofUl S1he-fonth-Spri123 riee erop 11 it io Uttlikely tbat

pradvation goals were met

3 AUhougb inefffelGDC am incampatant tnalUlSamortt probably loom

laampge es factors in lhmoia chronic eQonomic malaise

umeallstic planning has probably- also played a significant

role The jOUftley of Vfce-Premiel awl State Plannlng Commission

Cbaliman Le Thanh Ugh1 to East Europe where he apparently iampJ

coordlnating future foreilltl aid inputs with the DRVs ecOllOIDic

deYellopmeat plans0 my lmkate that the shortcomings of the past

six months haw been somethtna of a lesson to North Vietnamese

plarmerso It was perhaps in that context that a Co~i1 of

Hirdsters Communique on State Plan Implementation claimed that

reaults of the flst six months of 197bull are caeatfns 11favorable

couditiODB far satisfactory fulfillment ofmiddot the remainder of Plan

the ~ END oomDmlllAL BEGIN SBEJaB

PAm III DEVELOPMENTS ABBOAD

4 North Vietnamese CogggtgiaB fo llloclc U S Aid to Saisono

lo

North Vietnamese afficials are telling sympathisers abroad

that a reduction in Uo so aid to South Vietnam is of prSme

importance in assurlng communist objectives there According

to fntalliBQnco reportiag from a West European capita111 DlV

representatives recen~ly atated flatly in background briefings

that llanoi had to persuade 11responsiblo Uo s officials to stop

suppo~ for the ihieu Government o Without adequate u11 so suppor~L

emuamp PMUl(tl)a

ttJvc~f19fM lfmBTh 31328993 Page t

------P

y

SECftlpound V 3 ________________________

GlcaoUlctatlon PGOO---~-------

rthcy eaid0 the South VietaulmeGe Govc-rmieDt vould be fo~ced into ~economt difficulties that ~ould destroy the morale of its Army~

Thoy added chat if the GVIgtl triad to asoalnte tha fighcins to justif

further Uo So aoaletanc~ 0 the Communists would decimate its

forces aud popular opposition to the govermnene would increaaeo

Tbe spokesmen abo speculated tbat the GVN uoul4 contiuua to

11rob1 the people of tho freedom of trada and movemant t-7hieh could

alleviate the e~onomic difficu1tiesa

2o These reports reinforce other evidence that the North

Vietnamese have mounted a major campaiga to assure a cutback in

Uo Sa aid to the Southo The fact thac such briefings are now

beiug given in West European cnpitals is indicative of the scope

of the efforto END SBGREpoundo BEGIN UNCLASSIFIEDo

Bo Hanoi Domibeat on Presidentn Sojourn

lo 1-1lult little attention Danoi-controlled medla devoted to President SbwtaAlfwdb Nixons visit to the USSR focused on the notion

that the visit wouldnot improve the PresidentDs position

domestically a Liberation Itadioe in a July 8 broadcast (FBIS

Saigon 090440 July 174) aseertod that tho trip failad to

distract American public opinion from the Watergate affair I

and that 0 after the Presidant s hanecom1ns0 bullpeopla spoke again

of removing hbhr Radio llaaoi~ citing tm1dentified Uo So

sources averred that Viee Prasident Ford uas ~eluctant to

meet the lrea1dcnt on his anival in Maine (FBIS Saigon 070910

i_ruiy 0 74) _J

SICRE

-J 9 Paj1---d-----Tllli-~~-t-

F - ( I 1 2 ~ tlmitored medtn aot0 2bus faro ae~lt tritb Che substantive I

Mpcacta of the v1eita On July S Radto llanoi broadease a pmes

revieW wieb noced Uithoutmiddot oonmiantiil middottbat the party paper) 11lhan

Dan i bad canled a item that ~ay reportiq tbat 0 the Soviet

Vuion awl tba tJnimd States bava signed many l1GC1 ASeementso I

Co Hanoi Supports Sihanouko Rejection of Negotiations

Hanoi all4 the Viet cous have ertltlorsed Sihanouks rejection of the

ems offer to open negotiattottB with tha Qmiar communises on

July 14 Bano1degs Party newspaper nNbau Dea reiterated the

Vietnamese communists 9 detemduation to support thail lhmer

comraces0 11persistent struggle until final victory is W~o 11

Libaratf011 Badio weighad b the same day ~tb a commentary

charuteming the Gmt offer aa a cunning diplomatic maueuver

deslgDed to conceal the government I a trdecUae am setbackS 0 a

While avo1dlng much of tbs Prime0s ritriol11 the broadcast

echoed SUteoouks cbmge that the Uo So ie fully responsible11

for the wua s eontilwatlon amt his demand that the Uo s cease GD

its support of the m as a conditlou to peace in Cambodiao

(COMHBm Cudously WhUe Hanoi and Viet Co113 ocmmentariGa

call for a Cambodian settlemant to line with Sihanouk11 a fiye

poiDtatt 0pound March 230 1970 mlthar 81hanouk11 s declaration nor

Ala despatches available here refer to the five pobtso11 We

woUld appreciate any enUgbtmcnt addressees concerned can provide )

_

mva

J

g~

DW 37324 DocXd31328993 Page ~o

lo tilth cbamcterietio 1icenae11 Hauoi pi-opagallda medla deacdbed

the aarly July rLo~o in Blngkok1s Chinese seetiou as a

coutMwatlou am dcvelopmeat of the antl-Uo s movemeut 11

Linking the peacoful July 4 anttoAmerican student rally with che

violence Obicit erupted at Plabplacbal poliea station a Nban Dlllln

article claimed the Chinatown riots were the ~esult of the

rbamasak goveftlllent 1s negative foraign poliey and the

continued presence of Uo So forces in Tbaflando

2 A rathe-r melodramatic July 7 Padio lianol Vietnamesebull RtiUi

language program (Thailand At the ~of Truth) claimed that

the apeuhead of the current struggle is balng aimad at Uo s

impertalisma As intmGdiate cauaes of the rlota11 riad1o Uauoi cited

popular diseatisfactlon with lfving conditions (wfth charming

tuconsistency0 the ~rticle blamed a 20 percent rate of on

inflation d uo S 1111tbdrawala) and a foreign policy tailing

afteigt the Ameticau and hostile to neighboring countrieso 11

3 Banoi0 s treatments of the recent r1ots11 as well as

cooiinutng allegations of Uo s and Thai attempts to dislupt

tba coalition 1n Loaa 11 provides a less than sangUine picture

for future TbQi00V relations

Bo Madame Biub Travels to Cairoa Algiers and Comicroalaya

lo Nguyen Thi Binb11 foreign ilIinister of the so-called PRG~

arrived in Cairo ou July 6 for a three-day visito lbe C4iro

topbullover was apparently oreantzed under the auspices of the _

Afro-Asian Solidarity Committee and the 02ganzation for African

middot

L J

L J

HW 37324 Docid31328993 Page ~1

J

r- Unlllm~lla in ~ Afiiioan 40llltrieo9 BiDb wu not BgyptJam

reGeived by the ftap111hM13p ln her official agowrmnental1

eapaeitfo

2 On July 91) at the invltat1on of Foreign Hinfster BoutefUka0

s be bepn an offfei41 visit to Algeriao DurlDg her atay0 Blob

ms received by hesldent Boumediene and other top gowroment and

NLF offte1Dl9o Sha loft AJsfers on Julr lG0 4ttiying the sama day

lo Gulueao Embassy Coualay (telua 1078) reports that B1Dh1s It

length of stay in Guinoa bas not been detormined (COMMENT U

aeeme that tbe Madames itinerary since her midJuue visit to

tha CWJ Summit has bean purely impromptu She will probably- stay

iramp Coaalay pesMlfDg aucoess by Vietoamese eommtmiat diplomats

elsewhere in Africa in wheGdltng an invitation from thGir host

governmenta for heilr to come aacallingo mm COlfMENT o))

LEHMANN 1