CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005339972
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 4
• Document Creation Date: June 23, 2015
• Document Release Date: July 15, 2009
• Case Number: F-2008-01829
• Publication Date: September 6, 1956

APPROVED FOR RELEASED
DATE: 06-29-2009
~i'tTR,t~L INTELLtGENCE ,4C~:+~C.
OFFICE OF CURRENT, INTELLIGENCE
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Among. these lieutenants,
selection. of new central commit
ee members from the committee'.s.
present apparatus. In the se-
lection of new members from per-
government. officials, Chou En
tai's influence will probably
ue most apparent-. The''military
in recent'years of Peng Te-
.huai, who has been surrounding
Vietnam, having achieved a
measure of internal stability
and.security, is increasingly
concerned over what President
Diem calls the ".rampant growth
of neutralism"?in Asia, par-
ticularly in Laos and Cambodia.
ThreatFrom Laos and Cambodia
South Vietnam fears that
the Laotian government's
rapprochement with the Pathet
.Lao foreshadows an anti-Western
administration in Laos, which
would undermine its own efforts
to resist Communism. With
Cambodia already strongly,,
neutralist and antagonistic
toward Saigon, such a develop
ment in Laos would complete
South Vietnam's physical
isolation from sympathetic al-
lies and further expose it to
Communist encroachment.
More immediately, the Diem
government fears that the set-
tlement in Laos will provide. the
Communists with fresh propaganda
to-revitalize their long
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CURRENT INTELLIGENCE WEEKLY. : SUMMARY
September 1956
earlier deputies.
outside Peiping. can be plausibly
aligned with .any one of the top.
handful, although some of.them
may have been appointedby
, Liu. Those elected to the
leaders now Just below the top
level of power, such as Teng
Hsiao-ping, Lin Piao, Chen I
Po. I-po.
to unification elections.
port of,and India's acquiesence
will be adversely affected,
since both these countries have.
tended to consider that a set-
tlement in Vietnam would be
dependent on Communist willing-
-over., have both recently signed ..
nations formally endorsing the
full implementation of the.
Geneva accords in Vietnam.,
whereas previously they had re-
fusedto become involved in
Vietnamese affairs. Hanoi radio
concern over developments in
Laos, and pointedly predicted
that "the successof the Vien-
tiane talks has heightened the
confidence and spirit of struggle
of the Vietnamese people for the
country."
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 CURRENT. INTELLIGENCE, WEEKLY I SUMMARY
September 1956
South Vietnam's Tactics
To protect its position
externally, Saigon has rushed
an envoy to Laos to counter.-
act the. arrival ofany Commu-
nist representation in Vien-
tiane that seems likely:. to re-
sult from Laotian premier
Souvanna Phoumats visit to
Peiping and Hanoi, The envoy's
thinly veiled threat to. Laotian
leaders prior to their depar-
ture for Peiping, however, to
the effect that Laos'.outlets
through South Vietnam might
be closed unless Vientiane
abandoned its neutralism,. Ap-
pears only to have irritated
the Laotians.
Similarly, the South Viet-
"stand and.fight it out" in
the event Viet Minh diplomats
show up in Phnon Penh. In ad-
dition, Saigon has, decided to
continue its disadvantageous
trade and payments agreement
with Cambodia in order not to
push the Cambodians toward
closer. relations with the
Communists.
Saigon is also attempting
to convince New Delhi that
Indian interests can best be
served in Indochina by `keeping
South:Vietnam independent. To
this end, the influential
secretary of state for the
presidency,Nguyen Huu Chau,
went to New Delhi with a trade
delegation for 'talks rwith Prime
Minister Nehru and other Indian
officials. Chau appears to
have had some success, as he
has. quoted Nehru as saying,
"The Red Chinese--they-must.
not absorb Vietnam," an. indica-
tion that India is becoming
apprehensive-of growing Chinese
Communist influence in the
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Indochinese peninsula, despite
its official position that'the.
early unification ofVietnam
would help relax international
tensions..
Internal Situation
Meanwhile, Diem is con-
fen ses against Communism.
units are also conducting a
paramilitary forces in the
antiespionage arind treason de-
the death penalty for any
Vietnamese' taking upr arms
against the state..
Diem recognizes that al-
though the danger of overt
Viet Minh . aggression
have receded for the present,.
he will have to deal with the
more subtle long-range problem
of political and economic.sub-
version. Spiraling living
costs, periodic shortages of
commodities and labor agitation
are sources of potentially
serious unrest. In addition,
travelers on the highways have
been subjected to lengthy
harangues by Communist agents
concerning the South's impov-
erishment and lack of hope for
the future, an indication that
the Viet Minh is actively ex-
ploiting economic conditions
in South Vietnam.
Diem blames much of, the.
recent labor trouble and food
shortages on corrupt admiiis
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 CURRENT INTELLIGENCE` JVEEKLY SUMMARY
6 September. "1956
both agriculturally and indus,
trially, if it is to.compete
served notice that now that a
measure of stability% has come
to South Vietnam, he intends to
concentrate on rooting out venal
elements in the government.
Stiff punishment has already
officials convicted. in the
black-market sales of government-
distributed rice, while the
last Octobez's antispeculation
merit of high officials, the full
will probably enhance the gov
ernment`s prestige.
Diem is convinced South
Vietnam must expand its economy,
in the long run.. Efforts for
a large-scale expansion of the
planning stage,-although there
are some" signs of progress, such.
Vietnamese plan to give top at-
tention to agricultural projects
the" establishment of certain
light : industries such as tex
1 will also have a high priority.
GRANTS UNDER THE SOVIET FOREIGN
The USSR has granted.coun
tries outside the Sino-Soviet
bloc loans-and credits totaling
at least $500,000,000 for eco-
nomic purposes since launching
its "trade. and aid" campaign
early in 1955. In the same peri-
od, credits for the purchase of
military equipment extended. in-
directly by the USSR'to the Mid-
dle Eastern nations totaled
$300,000,000. in contrast,
countries belonging to the bloc
have received only$100,000,000''
for economic purposes since
early 1955, while $500,000,000
was granted in military- credits--
a:ll to Communist China. From
1946 through 1954, the USSR had
advanced $4.7 billion to Commu-
nist controlled countries for.-all
purposes, and made nc.signifi-
cant loans to other countries.
Credits to Sino-Soviet Bloc
Soviet aid to bloc coun-
tries since 1946 totals $5.3
less than $250,000,000.
billion. Of this, over $2 bil-
lion has been granted for-eco-
nomic development and for food-
stuffs stuffs and raw materials. The
major beneficiaries of this
part.of the program, have been
Poland, East Germany, China,
North-Korea and North Vietnam..
A like amount of "Soviet credits
has been. extended for the pur-
chase of Soviet-ownedproperties
in" East Ger m ny, Rumania, Hungary,
Bulgaria and Communist-China These so-called "joint stock
companies" were largely composed
of Soviet-seized assets of Nazi
Germany and Japan.
Military aid, totaling
$1.2 billion, accounts for the
-remainder of Soviet financial
assistance to the Sino-Soviet;
bloc' since 1946. .
Of. the $5.3 billion total,
only $600,000,000 has been granted
since January 1955; Communist
China received a military credit
of $500,000,000 for the pur-
chase of Soviet-held equipment
*The USSR has recently of-
fered economic aid to East Ger-
many, including a loan of un-
t.-- mn omnnnt hurt nnnuront.lo
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and installation in Manchuria,
and Bulgaria received about
$100,000,_000 worth of economic