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PRORABLE DLVELOPMENTS IN VIETNAM TO JULY 1956

Submitted by the DIRECTOR OF CENFRAL

The following intelligence 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 Force, and The Johat Staff.

Concurred in by the INTELIGENCE ADVISORY COMNTEE

on 11 October 1955. concurring the Speekal Assnstant. Intelligence Department of State: the Asststant Chief of Staff. G-2, Department of the Army; the Director of Naval Intelligence; the Director of Intelligence, USAP: and the Deputy Director for Intelligence, The John Staff. The Atomic Energy Commission Representative to the IAC, and the Assistant Director, Federal Bureau of Investigation, abstained, the subject being outside of their jurisdiction.

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THE PROBLEM

To estimate the prospects for the development of a vietnamese government with the capability to defend itself against internal subversion and uprisings and with aufficient authority and administrative ability to deal adequately with the many problems facing it, including those posed by the Geneva Agreements.

CONCLUSIONS

1. Since he became Premier in July 1954, Ngo Dinh Diem has made considerable progress toward establishing the first fully independent Vietnamese government. Nevertheless, the capability of the South Vietnamese to develop an effective government which can survive during the next few years is still in doubt. (Paras. 9, 12)

2. Assuming Diem survives and provided he continues to receive wholchearted US support, we believe he will probably be able to cope with non-Communist dissident elements and to remain in office during the period of this estimate. Moreover, providing the Communists do not exercise their capabilities to attack across the 17th Parallel or to initiate large-scale guerrilla warfare in South Vietnam, Diem will probably make further progress in developing a more effective government. (Para. 54)

3. Diem will almost certainly not agree to hold national elections for the unification of Vietnam by July 1956. Although Diem, under pressure from the Western Powers, might reluctantly agree to indirect consultations with the DRV concerning elections, he would insist on conditions which he felt certain the Communists would be unable to accept. Aware that such a position will probably cause the Viet Minh to increase their efforts to destroy his government Diem will probably seek to bind the US more specifically to the defense of Vietnam. (para. 49) 4. The Viet Minh. Despite their relative quescence, present the greactest potential threat to Diem. Should the Viet Minh elect openly to invade the south with regular forces, they are capable of defeating the WNA and any French forces (if committed) now present in South Vietnam. Moreover, with an estimated 10,000 military personnel in South Vietnam, the Viet Minh have the capability to undertake local sabotage and terrorist actions, and small-scale but widespread guerrilla warfare. The Viet Minh can reinforce these forces by infiltrating into South Vietnam. The Viet Minh apparently exerts political influence in many areas scattered throughout South Vietnam. (Paras. 24, 27-29)

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6. However, the Communists probably estimate that unless they effectively challenge the position of the Diem government the latter will gradually strengthen and stabilize its position. They might decide, despite the presence of the International Control Commission, to initiate small-scale but widespread guerrilla warfare in the south, provided such action was consistent with over-all Bloc policies and provided they estimate that such action would nhot provoke Manila Pact counteractions. (Para. 30)

7. Should the Viet Minh initiate largescale guerrilla operations supported by substantial infiltration from the north, the South Vietnamese government would be hard pressed to do more than maintain control in the Saigon-Cholon area and in a few other major urban center. If the operation were prolonged, the government probably could not survive without military assistance from outside (para. 36)

8. While the French will continue to seek to salvage as much as possible of French commercial and cultural interests. we believe French interests and influence in South Vietnam will progressively decline during the period of this estimate. Except for training personnel, possible air and naval bases, and perhaps some token forces, the French will have withdrawn the bulk of the FEC by July 1956. French forces remaining in South Vietnam will almost certainly not be committed against the Viet Minh, except in self-defense or possibly as part of a multilateral Western action. (Paras. 40, 51)

DISCUSSION

I INTRODUCTION

9. When Ngo Dinh Diem was appointed Premier by Chief of State Bao Dai in July 1954, he faced a basically unstable and deteriorating situation. In the area under the administration of the Vietnamese government, the population of some 12 million was war-weary, lacked a sense of identification with the National government, and was divided by regomal loyalties and religious opinion. Their principal concern was to better their economic position and preserve their newly-found peace. the most significant artiulate political sentiment of the bulk of the population was an antipathy for the French combined with a personal regard for Ho Chi Minh as the symbol of Vietnamese Nationalism. The small educated minority who were concerned with national politics, were prinarily power seeking opportunists. The existence of armed politice-religious sects contributed to the difficulties of establishing central government authority throughout South Vietnam. Many French were still trying to preserve their

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10. In this situation Diem was forced to move slowly. Although possessing considerable national prestige as a patriot, he was inexperienced in administration and was confronted at the outset by the intrigues of Bao Dai and other self-interested individuals and groups, who in many cases benefited from French support. Moreover. The loyalty of the army to the central government was in deubt and General Hinh, its Chief of Staff who also held a commission in the French Air Force, was openly maneuvering for political power. The national police and seeurity services were communanded by Bay Vien. the leader of the Binh Xuyen gang who had bought them from Bao Dai in April 1954 and who was hostile to Diem. Finally, Diem was handicapped by a lack of trained administrators at the national and provincial levels.

11. In the difficult and confused situation confronting the national government. Diem concerntrated on eliminating or neutralizing the most important groups and individuals challenging the authority of his government. He successively excluded General Hinh and Bao Dai from the political seene, won the support of the army, and established the independence of his government from French influence. By bribery, persuasion, and finally force, Diem virtually climinated the Binh Xuyen and the most important elements of the Hon Hao sects as threats to his authority. At the same time, he mancuvered the Cao Dai -- the strongest of the seets -- into an uneasy aliance. As a result of these successful actions. Diem gained presige and increased popularity as a symbol of Vietnamese independence.

12. Nevertheless, the success of Diem's efforts to establish a viable anti-Communist government in South Vietnam is still in doubt Although Diem has established control over the apparatus of government, he has dealt only in part with such fundamental problems as: (a) the development of an effective administration, particularly on tpovincial and local levels; (b) the institution of a popularlysanctioned constitutional basis for the regime; (c) the elimination of armed oppesition and the extension of government authority throughout all areas of South Vietnam; (d) the suppression of Viet Minh military and political capabilities remaining in South Vietnam; and (e) the restoration of the economy.

II. THE INTERNAL POLITICAL AND SECURITY SITUATION

The Diem Government

13. At present, Diem's greatest assets are his reputation for honesty and unsullied nationalism, his control of the Vietnamese national Army, and the moral and financial support of the US. In addition, Diem has gained considerable popular following, especially in urban centers and in recently pacified areas and has the loyalty of the refugees from North Vietnam. However, should he lose army or US support, his regime would probably collapse.

14. Diem also has the sympathy and in many instances the active support of the estimated 1,000,000 Catholics in South Vietnam (including about 500,000 Catholic refugees from the north), who represent an anti-Communist core with considerable political potential. However, in order to avoid aggravating the religious issue, Diem, a Catholic, has been careful not to appear to champion the Catholic cause.

15. Diem is still in the early stages of organizing a political machine. His cabinet is composed primarily of loyal technicians who lack political stature. Most well known political figures of the pre-Diem period have been alienated by Diem's unwillingness to trust them and by his insistence that unquestioned acceptance of his leadership is the only basis for cooperation. Diem has depended heavily

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16. Although Diem has established firm controt over the army and security forces, he has not established internal security. This fact, coupled with his failure to organize his government effectively, has been largely responsible for the delay in the implementation of promised reforms in government procedure and agrarian policies. Projects for agricultural development and land reform, under the guidance of US advisors, are still largely in the planning stage Even with US assistance and its own best efforts, the Diem government has completed only about 47,000 housing units accommodating approximately 40 percent of the 650,000 refugees from the north Diem has made some progress in increasing the number of villages under the administrative guidance of the central government. Civic action teams, composed of representatives of the various ministrics. have been trained and sent out to villages in about 10 provinces.

17. diem has made a considerable effort to galvanize mass popular support behind his program Initially, he concentrated on exploiting popular antipathy for Bao Dai and the French; more recently he has sought to develop strong anti-Communist sentiment. Although there have been instances of uncontrolled manifestation of popular anger and xenophobia, Diem has on the whole succeeded in keeping popular passions within bounds.

18. Diem and his advisors are currently planning a three-phase program to obtain a popular mandate for his regime and eventually to form a representative assembly in South Victnam: (a) an carly referendum for a simple public choice between Diem and Bao Daias Chief of state; (b) a referendum on a new constitution coupled with elections at the communal and municipal levels; and (c) elections by the end of 1955 for a national assembly with limited powers. To what extent this porcess will be carried through will depend largely on Diem's judgment as to his own appeal in the south and the extent of Communist influence. The formation of a representative body may be delayed into 1956.

Non-Communist Opposition

19. The Cao Dai, the most powerful of the sects. aspires to political control of South Vietnam and is potentially Diem's most important non-Communist opposition. It controls a sizeable rural area and has a relatively cohesive religious following of some 1,500,000 Victnamese, including a trained army of about 15,000. While the Cao Dai spiritual levder. Pope Pham Cong Tac. has cooperated with other sect leaders opposing Diem, most Cao Dal military leaders have supported Diem. General Phuong, the Commander-in-Chief of Cao Dai forces and probably the sect's most influential political leader, has entered into an agreement with the government to integrate the bulk of his troops into the VNA and to disband the remainder. However, Phuong has continued to intrigue to obtain better terms and the agreement still has not been fully implemented.

20 During the spring and summer of 1955, the Cao Dai sought to become the major political force in South Victnam by attempting to capture control of the Revolutionary Committce (RC). This committce was formed during the spring of 1955 at the time of the Binh Xuyen crisis. It resulted from a merger of followers of Diem's brother Nhu, Cao Dai generals The and Phuong, and Hoa Hao General Ngo, all of whom sought to use the force of nationalism to serve their own political ends. It is likely that much of the extreme nationalist activity of the Committee during April and May of 1955 reflected Cao Dai efforts to undercut Diem and to give the RC the political initiative. However, Diem's supporters have thwarted Cao Dal efforts.

21. During the period of this estimate, integration of Cao Dai forces into the VNA will

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22. Although the Binh Xuyen and some elements of the Hoa Hao sect still retain the power to wage guerrilla warfare in limited areas, the government by force and bribery has drastically redeced the potential of these groups to chalienge its authority. The followding is the disposition of the four principal forces of the Hom Hao: Ba Cut's unit is beheved to be reduced to about 1,000, who are beattered and in hiding after evading VNA encirclement; Soal's group has been badly disorganized as a result of VNA operations and probably does not now total more than 1,500; Nuyyen's force of some 2,500, though ostensibly rallied to the government, is in fact neutral; and Nego's unit of some 3,000 is cooperating with the government. The Binh Xuyen have probably ceased to be an effective force following the recent VNA operation against their swamp hideout. However, the remaining forces of Bay Vien, Ba Cut, and Perhaps Soai will probably continue to oppose the government during the period of this estimate and may be tempted to cooperate with the Viet Minh.

23. Most of the other political groupings are opposed to diem and are composed primarily of intellectuals and political opportunists. They have little popular following. While these groups will continue to maneuver for position in an effort to secure power, we believe the majority will gradually come to terms with Diem as they become convinced that he cannot be removed by political maneuvers.

Communist Opposition

24. The communists pose the ultimate threat to the independence of South Vietnam. The Communist regime in North Victnam possesses a far stronger army, a more experienced administration, greater cohesion of leadership, and greater drive than the government of South Vietnam. However, we do not believe there will be a direct test of military and political strengths during the period of this estimate. Considerations of over-all bloc strategy and apprehension cencerning possible US intervention will almost certainly prevent an open Viet Minh attack. On the other hand, Premier Diem will almost certainly not agree to a test of relative popular strengths in national elections.

25. The struggle, therefore, will be indirect. On the Viet Minh side it will be carried out by their agents now in South Vietnam, by the combined resources of Bloc diplomatic and propaganda facilities, and possibly by troops infiltrated across the 17th Parallel.

26. Since the cease-fire and the subsequent evacuation of most Viet Minh military units to the north, the Communists in South Vietnam have concentrated on methods of ``political struggle" designed on the one hand to exert pressure for nationwide elections according to the Geneva Agreements, and on the other to infiltrate and subvert the institutions of Free Vietnam with a view to bringing to power in the south political personailties who would be amenable to a coalition government with the north.

27. We have little intelligence on Viet Minh strength, activities, and intentions in South Vietnam. We estimate, However, that in South Vietnam there are about 10,000 armed Viet Minh military personnel in addition to an unknown number of political cadres and several Communist front groups. Military personnel are probably organized as skeletal units. Unit locations are not fully known, nor is the identity of their leaders. However, the strongest groups and most extensive activity appear to be centered in the coastal mountains of Southern Annam, the interior moun-

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28. The Viet Minh probably exercises effective political control only in areas which are underpopulated and in which the government has made no attempt to establish its own administration. These include pockets in the plateau and foothill areas of South-Central Vietnam, the Camau peninsula in the extreme southern part of Vietnam, and the Plaine des Jones in Cochin-China. The Viet Minh also probably exerts influence in rural areas where government administration is present but still ineffective. In urban areas where national government control is greatest, the Viet Minh are working prinarily through front organizations, such as labor unions, social service, and "peace" groups.

29. There appears to be little Communist infiltration in the higher echelons of the Vietnamese namese National government or the army, but there are indications of fairly extensive penetration of lower units of the administration, possibly including regional and provincial governments, and almost certainly the village councils. With respect to the South Vietnam politico-religious seets, recent information from Vietnamese sources suggests growing and prebably successful Communist efforts to penetrate the factions of these sects which remain hostile and in armed opposition to the government.

30. The Communists are confronted with a serious dilemma in their campaign to establish Viet Minh control over South Vietnam They probably estimate that unless they effectively challenge the position of the diem government the latter will gradually strengthen and stabilize its position. Moreover they have probably concluded that Diem will not agree to elections or unification schemes which would favor the Communists. Under these circumstances the chances for a Communist take-over of the south by means short of open force might decline. On the other hand, the Communists also probably realize that the use of force against South Vietnam -- either through open invasion or by infiltrating sufficient troops across the 17th Parallet to insure a successful ``liberation" -- would jeopardize current Bloc peace policies and risk provoking US intervention. In addition, the Communists may not presently have sufficient strength in South Vietnam quickly to overthrow the Diem government and may therefore estimate that to undertake widespread guerrilla warfare without substantial infiltration from the north might lead not only to the weakening of their exposed organization in the south but also to a drastic loss of public support.

31. We believe that until July 1956 the Cornmunists will follow a course of action which is primarily political. They did not seize upon the crisis of last spring to initiate guerrilla warfare and their propaganda pronouncements from Hanoi appear to direct their followers in the south to continue their political actions. Their objective appears to be the preservation of their pose as the defenders of Vietnamese unity and independence and as the supporters of the provisions of the Geneva Accords. In the south, they will probably work in both the villages and urban centers to exploit grievances to hamper and sabotage government administration and reform, to subvert the command clements in the VNA. to diseredit Diem as a nationalist, to encourage dissident groups in armed opposition against the government, and to increase support for plausible Communist proposals for unification. By these moasures, winch may involve terrorism and violence short of concerted guerrilla action, the Viet Minh could seriously hamper government efforts to administer the rural areas. They would prob

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32. However, the Communists might, despite the presence of the ICC. decide to initiate small-scate but widespread guerrilla warfare in the south, provided such action was consistent with over-all Bloc policies and provided they estimate that such action would not provoke US counteraction. The Communists presumably would be less fearful of US intervention if they believed that they could conduct successful guerrilla operations with sufficient support from the south to make unnecessary obvious and extensive support from the north.

III VIETNAMESE MILITARY AND SECURITY SERVICES

33. The Victnamese National Army (VNA) has an estimated strength of 147,000. execlusive of some 8,000-10.000 sett forces in the process of integration The VNA is commposed of 159 combat battalions, including 148 infantry-type, 2 armored, and 9 artillery battalions. As a result of recent reorganization most of the battalions have been regrouped to form 4 field infantry divisions; 6 light infantry divisions: 13 territorial regiments; and 3 independent infantry regiments. The remainder of the battalions are independent. The larger elements generally are still in the formative stage, and are not yet operational. The Vietnamese government hopes to increase the VNA to a strength of 200,000, whereas current US-approved force levels, including air and naval forces, call for a total strength of about 150,000 by July 1956.

34. In recent operations against seet forces, the VNA displayed major weaknesses in staff work, particularly in logistics, and the tactical control of units was poor. Since October 1954, several key VNA officers have been purged, and much of the present army leadership is new. Time will be required for the new team to "grow" into their positions, but with experience and the scheduled training of VNA officers in US service schools, the army leadership should improve gradually.

35. The morale of the VNA has risen sharply as a result of its operations against the Hoa Hao and Binh Xuyen dissidents. This factor, together with the halt in demobilization and the firm nationalist stand of the government against the French, has given the VNA a new sense of independence and confidence.