NORTH VIETNAM'S CAPABILITY TO CONTINUE TO WAGE WAR ER IM 71-88

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78T02095R000300220001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 67
• Document Creation Date: December 21, 2016
• Document Release Date: June 9, 2008
• Sequence Number: 1
• Publication Date: May 21, 1971
• Content Type: STUDY

Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
ER IM 71-88
North Vietnam's Capability to Continue to Wage War
.Apr 1971 ER IM 71-56, Economic Developments in North Vietnam
In 1970, April 1971
25X1 10 May 71
to DD/OER Blue Note forwardin
Bli
d
g
n
Memo
re Methodologies Involved in Estimating Equipment
and Munitions Deliveries to North Vietnam
25X1 14 May 71
May 1971
25X1 No Date
Blind Memo re Routing of Publicati
ons to the
White House
ER IM 71-88, North Vietnam's Capability To Continue
To Wage War (distribution list attached)
note re dissemination of IM 71-88
21 May 71 Blind Memo, North Vietnam's Capability to Continue
to Wage War, ER IM 71-88 (discussing what was
analyzed in IM 71-88)
NSA review completed
OSD REVIEW COMPLETE
DIA Review Completed.
ARMY review completed.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 t I
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
21 May 1971
North Vietnam's Capability to Continue to
Wage War
ER IM 71-88
In this study we analyzed North Vietnam's physical
and material capabilities -- i.e. -- its human and
logistic resources to continue with the war.
As parameters to measure capabilities we used
for manpower a maximum requirement of 250,000 to 300,000
and for logistics, 80,000 -88,000 tons, both being the
inputs needed to sustain the maximum case for a general
countrywide offensive strategy.
Since North Vietnam has with the exception of
manpower few of the resources needed to support the
war we also surveyed the general economic situation in
North Vietnam and the role of foreign military and
economic aid.
Manpower
During 1965 more than 1 million North Vietnamese
have been inducted. This has brought about a decline
in the civilian manpower reserve of from 1/3 to 1/2
depending on age group:
1964
15 - 39 17 - 35
2 million 1.6 million
1.3 million .8 million
SECRET,
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
We estimate the pool at the end of 1970 to be 800,000 -
1.3 million.
The drawdowns have been large but in relative terms
Hanoi's manpower burden has been lighter than Saigon's;
GVN - 1.1 million = 46% of 2.4 million
males aged 18-39
DRV - 600,000 = 21% of 2.9 million males
aged 18-39
The existing reserves would support any of our strategies
through 1972.
-- a drawdown of 100,000 a year could be
sustained without any drawdown of reserves
-- a drawdown of 300,000 would drawdown
reserves at about 200,000 a year reducing the pool
to very low levels -- 400,000 900,000
But these drawdowns are not without costs. In addition
to around 600,000 KIA the North Vietnamese have paid
Y65 should be is
-- Labor force 9.4 million 10.6 9.9
-- CNP 1.6 billion 2.1 1.4
Morale --- we can't measure this but don't see
putting a constraint on Hanoi's
options
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
The most direct manpower constraint is in
training. A maximum capability is 250,000 a year. If
they were starting from scratch it would take more than
a year to train the forces for a maximum offensive.
But given the high rate of induction in 1970 --
200,000 -- they may have a good start on the training
programs.
Materiel
North Vietnam produces little of the goods necessary
to support. Indeed it is heavily dependent on external
sources for the wherewithal to exist:
-- virtually all military equipment
-- 15% (650 - 700,000 tons) of foodstuffs
all POL (360,000 tons).
The economy is at about 85-90% of pre-bombing
levels compared to low points of 65% for industry in
1967 and 80% for agriculture in 1968.
Foreign Aid
Economic Aid
1955-64 $950 million providing 2/3 of input
1965 - 70 $2 billion = 90% of imports
(60% Soviet)
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
S ECRET
Military Aid
1955 64 140 million
1965 - 70 2.1 billion
(70% Soviet)
Military aid peaked at $650 million in 1967,
and declined each year to $155 million in 1970. China
provided 55% of 1970 aid and for the first time became
predominant supplier.
At todays levels Chinese military aid is 60%
of 1967 peak of $145 million. Soviet is 15% of 1967
peak of $505 million.
Two thirds of today's deliveries are ammunition,
1/5 ground force equipment reflecting changing character
of North Vietnam's needs after the US bombing stopped.
Other important aid items
360,000 tons of POL
-- 7,000 tons of explosives
1,800 tons of pharmaceuticals
-- 5,000 tons trucks
Resources
outlook
We estimate deliveries to date insure DRV
has adequate stockpiles -- generally at the 6 month
level. Truck inventories (15-20,000) and war-supporting
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
material seem to be held at levels sufficient to permit
any contingent withdrawals. POL supplies estimated
at 3 months.
Either USSR or China can continue or expand
deliveries to necessary levels. The 1970 level of
military aid is 25% less than 1967 peaks and could be
quickly expanded.
Even if Hanoi became dependent on only one of
its major donors either could pick up the tab for the
goods needed for the type of war now being fought in
South Vietnam.
Logistic Base
Finally we looked at North Vietnam's logistic
base to move supplies south to the battlefields. Hanoi
has consistently maintained, expanded and built
redundancy into what is now a vastly improved logistic
system. On all counts port facilities, rail (up 15%)
and roads (1500 new miles) waterways and pipelines all add up to a system fully capable of meeting the
maximum logistic burden we have measured in our various
strategic options.
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Next 7 Page(s) In Document Denied
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
(Exec Asst to Mr. Helms) asking for some background on
the report. I gave him the title and mentioned that the
report could not be released unless the DCI said OK.
Director's office and ask for the 3 copies.
Five minutes later a call came in from
You had a call on the green line on Friday morning
from Frank Hand. I talked with him. He said that Secretary
Laird wanted 3 more copies of-ER TM 71-88. He, Mr. Hand,
had given Laid Packard's copy when it was delivered on
Friday morning, since Packard was still out of town.
I told Mr. Hand that I did not have the authority
to release the report, that the dissemination was in
the hands of the Director. He said he would call the
sent in a note to Mr. Helms with the
request, and asked if I would bring up the reports
in case the answer was yes. They would send directly
out via Ex. Registry.
I picked up copy # 5 from SAVA and 2 copies from
Joyce.
Called about 4 and was told that Mr. Helms released
2 copies of the report -- nos. 5 and 26 were sent over
to Laird. is reading copy no. 27, but will
return when finished.
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
MEMORANDUM FOR:The Hon. David Packard
Attached is the CIA analysis of
North Vietnam's capacity to. continue
to wage war, one of the, ,studies
requested by Dr. Kissinger in his
memorandum of 15 April. The report
is scheduled to be discussed at an
early meeting of the SRG.
LsL_ Rlcl,ard i i ari
Richard Helms
Attachment:
ER IM 71-88
Copy No. 3
(DATE)
RM NO.
AUG 54
REPLACES FORM t~p ~Ty %L
WHICH MAY BE USED.
SECRET
MEMORANDUM FOR:
Henry A. .issinger
od are two copies of the
rth Vietnam' a capacity
quested in
tam of 15
April. I am also
of the study to the
to General Bennett
LsL Richard Helms
Richard Helms
Mc ill
DATE)
.UGN54 10 1 WHICHCMAYFBEMU D.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
Identical Memos to:
Admiral Moorer Copy 4
U. Alexis Johnson Copy 6
The Hon. Wm. Sullivan Copy 7
General Vogt Copy 8
General Bennett copy 9
The Hon. Ray Cline Copy 10
NOTE: Copy No. 5 - Secretary Laird
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095ROO0300220001-2
MEMORANDUM FOR:
25X1
Ch/DD/P/FE
Attached is a study on DRV
capability to continue with the
war prepared at Kissinger's
request for review by the SRG F,.
Deputy Director
Attachment:
ER IM 71-88
Copy No. 20
Economic Research
10-01
FORM NO. ioi WHICH MAY FORM
I AUG 54
MEMORANDUM FOR:
D/OCI
Attached is a study on ARV
capability to continue with the
war prepared at Kissinger's
request for review by the SRG.
Attachment:
ER IM 71-88
Copy No. 16
AU N 101 WHICH RELACES FORM 10-01
AUG 5 54
Economic Research
Approved For Release 2008/06/09: CIA-RDP78TO2095ROO0300220001-2
=3(DAMau '21
TE)
(E)
 Approved For Release 2008/06/09: CIA-RDP78TO2095ROO0300220001-2
MEMORANDUM FOR: Acting DDI
Attached is a study on DRV
capability to continue with the
war prepared at Kissinger's
request for review by the SR('.
Deputy Director
Economic Research
=ORM NO. 101 WHIICHCMAYFBEMUS10-101
ED.
1 AUG 54
MEMORANDUM FOR: DDCI
Attachment:
ER IM 71-88
Copy No. 12
Attached is a study on DRV
capability to continue with the
war prepared at Kissinger's
request for review by the SR.
Deputy Director-
Economic Research
Attachment :
ER IM 71-88
Copy No. 11
13 Mau #
TET1
Ma 21
(DATE)
Approved For Release 2008/06/09: CIA-RDP78TO2095ROO0300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
MEMORANDUM FOR:
25X1
Attached are two copies of the
analysis of North Vietnam's capacity
to continue to rage war requested in
Dr. Kissinger's memorandum of 15 April.
Attachment:
ER I)1 71-88
Copy Nos. 21, 22
3
1
DAT~E)197
M
10-101
UNO IVI WHICH MAY BE USED.
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
SECRET
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
North Vietnam's Capability To Continue To Wage War
SECRET
25X1 ER IM 71-88
May 1971
Copy No.
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 25X1 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
14 May 1972
INTELLIGENCE MEMORANDUM
North Vietnam's Capability
To Continue To Wage War
Introduction
1. The purpose of this memorandum is to assess
North Vietnam's physical and material capabilities
to continue with the war. The analysis focuses
primarily on Hanoi's ability to continue to provide
the human and logistic resources needed to support
increased combat activity against Allied forces.
The parameters of the analysis are those provided
in our recent analyses of North Vietnam's strategic
options through 1972.
2. The manpower requirements range from the
100,000 infiltrators needed to support a continua-
tion of the war at the low level characteristic
of 1970 to the maximum requirement of 250,000-
300,000 needed to support a general offensive
throughout South Vietnam and Cambodia. The logistic
inputs to support the same strategies range from
66,000 tons annually for the low combat strategy
to an estimated 80,000-88,000 tons for the general
offensive strategy.
3. These parameters are used as an expression
of the maximum strains that might be put on Hanoi's
capabilities. It should be remembered that as US
forces withdraw, both the logistic and manpower
inputs needed for any of Hanoi's strategy options
will decline.
4. With the exception of its manpower, Hanoi
has few of the resources needed to support the
war. Consequently, the analysis also presents a
brief survey of the general economic situation in
North Vietnam and the role of North Vietnam's Com-
munist allies in providing military and economic aid.
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
I. Impact of the War on North Vietnam's Manpower
5. During the past six years, Hanoi has had
to shoulder an increasingly heavy burden in its
manpower commitment to the war. To put this bur-
den into perspective, we have related Hanoi's
military manpower requirements to its reserves of
physically-fit manpower. The analysis then con-
siders the extent to which Hanoi's manpower re-
serves could continue to support its strategy
options.
Requirements Versus Reserves, 1965-70
6. Approximately 1 million North Vietnamese
men were inducted into military service during
1965-70, a result of both the substantial buildup
in the North Vietnamese armed forces and the heavy
casualties sustained during the war. The size of
the army was doubled in the period 1965-66 in
response to the massive increase in the US presence
in South Vietnam and the bombing of North Vietnam.
Continued heavy recruitment in 1967 and 1968 was
in preparation for, and to offset the casualties
resulting from, the major Communist offensives
during 1968. In 1969 the rate of induction dropped
sharply (see Table 1) as the Communists shifted to
Estimated Number of Men Inducted
into the North Vietnamese Army, by Year
Thousand Men
Year
Total
1965
155
1966
260
1967
185
1968
215
1969
80
1970
200
(prelim-
inary)
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
a protracted war strategy. In 1970 the induction
rate rose again following the ouster of Prince
Sihanouk of Cambodia and the extension of the war
to the whole of Indochina, but it was probably
still below the peak level of the 1966-68 period.
As a result of these induction activities, North
Vietnam's civilian manpower reserve during 1965-70
declined by about one-third to one-half, depending
upon whether the reserve is defined as the 15-39
age group, from which draftees are known to have
been taken, or the more narrow 17-35 age group,
which is apparently the "legal" draft age category.
The tabulation below illustrates the decline in
the manpower reserve during 1965-70:
Thousand Men 1
Year
15-39
17-35
1964
2,000
1,600
1965
1,900
1,400
1966
1,700
1,200
1967
1,600
1,100
1968
1,400
900
1969
1,400
900
1970
1,300
800
a. Physically fit males,
within the indicated age
groups,, who are not in the
armed forces.
7. Although substantial drawdowns have been
made from North Vietnam's manpower reserves, the
remaining civilian pool is still quite large in
relation to the size of North Vietnam's armed
forces. In relative terms, Hanoi has managed to
sustain the war with a much smaller commitment of
manpower than has Saigon. As shown in the tabula-
tion below, Hanoi's armed forces at about 600,000
are equal to only one-fifth the total number of
males aged 18-39 in the population. This is less
than the 46% committed by South Vietnam at present
and selected other countries during World War II
and the Korean War.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Million Men Percent
in the
Males Armed Armed
Country Month/Year 18-39 Forces Forces
United States Jul 45 24.7 12.1 49
United Kingdom Jun 45 8.3 4.7 57
Germany Jun 44 10.3 9.6 93
South Korea Dec 53 3.1 0.7 23
North Korea Dec 53 1.1 0.3 27
South Vietnam Dec 70 2.4 1.1 46
North Vietnam Dec 70 2.9 0.6 21
Future Manpower Requirements
8. The existing manpower reserve in North
Vietnam is adequate to support any of the strategy
options Hanoi might choose through 1972. If during
the remainder of 1971 and 1972 Hanoi should stay
with its protracted war strategy, its manpower
requirements could be met by holding inductions*
to 100,000 per year without any drawdown of its
reserves. If, however, Hanoi were to embark on
a course that would, as in 1968, require the com-
mitment of 250,000 to 300,000 inductees, the re-
serve would decline substantially, as shown below:
Thousand Men
Reserves at Year End
Low Combat High Combat
Strategy a/ Strategy'
Entering Leaving Age Age Age Age
Year Reserve c/ Reserve d/ 15-39 17-35 15-39 17-35
1971 162 67-68 1,300 800 1,100 600
1972 166 65-66 1,300 800 900 400
a. Supported by induction of 100,000 men.
b. Supported by induction of 300,000 men.
c. At age 15.
d. Including those reaching age 40 and those leaving
the reserve through death of decline in physical fitness.
Inductions are equated in this analysis with
infiltration on the assumption that only nominal
changes would be made in the size of the armed
forces kept within North Vietnam.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 25X1
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
9. These calculations undoubtedly overstate
Hanoi's capabilities. There probably is a hard
core of physically fit males of draft age who
would not be subject to induction except in an
all-out emergency, such as an invasion of North
Vietnam. This would include the most essential
people in the economy and some of the ethnic
minority group members unsuited for military
service because of language and cultural barriers.
Further downward adjustments might be made to
allow for the possibility that estimates of induc-
tion in 1965-70 might have been understated some-
what. These factors taken together would suggest
that if the regime opted for a high level of combat
and carried out such a strategy for a prolonged
period of time, the reserve of draftable men would
be very low by the end of 1972. However, it
should be borne in mind that even in this extreme
case, the regime would still have available for
induction in 1973 a new crop of approximately
130,000 17-year olds and an even larger number if
the pool were expanded to include youths below
the 17-year age limit.
10. In sum, North Vietnam's civilian manpower
pool could sustain indefinitely a continuation of
low-level combat. A very high level of combat
would make inroads on the pool but would not de-
plete it through the period of this analysis.
Hanoi's View of Manpower Constraints
11. Hanoi, of course, must look to other con-
siderations than mere numbers in making any deci-
sion involving the commitment of its manpower.
North Vietnam has provided an enormous input of
manpower for the war in South Vietnam. During
the period 1965-70, losses are estimated to have
been on the order of 600,000 men. During the
same period, when the able-bodied pool of manpower
in the 15-39 age group should have grown by sev-
eral hundred thousand, it has been reduced from
1.9 million to 1.3 million. The civilian labor
force, estimated to have been about 9.4 million
in January 1965, grew to only 9.9 million in 1971.
Had there been no war, the labor force would have
grown to an estimated 10.6 million. The burden
of the loss fell almost entirely on the agricul-
tural labor force and was less than the number of
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
men called to the colors only because of an abnor-
mal increase in the female labor force. The whole-
sale call-up of able-bodied men no doubt had a
qualitative as well as a quantitative effect on
the labor force. The diversion of manpower to
military service combined with the fact that the
economy has not yet recovered fully from the dis-
ruptions caused by bombing explain why gross
national product (GNP) in 1970 was only $1.4 bil-
lion, some $0.2 billion below the 1964 total. Had
there been no war, GNP could have been up by $0.5
billion to an estimated $2.1 billion by 1970, a
substantial portion of which would have been due
to the normal growth of the labor force.
12. By any standard these are losses which
must not be viewed lightly in Hanoi. The heavy
manpower losses sustained during the 1968 offen-
sives were a major factor in the decisions to
adopt the protracted warfare strategy of 1969-70.
Despite the past drain on manpower, there is no
convincing evidence that Hanoi has decided that
the manpower costs of the war are too high a
price. There is, in fact, evidence that North
Vietnam is willing to continue inputs at high
levels and if necessary to augment them. There
has been abundant evidence during the past year
of an acceleration in the recruitment and conscrip-
tion of soldiers, and several such. "conscription"
drives have been carried out in recent months.
The regime has specifically reiterated the need
to build up "reserves" in support of the military
activity in the south. We cannot judge specifi-
cally what price Hanoi would be willing to pay
in manpower terms, but we doubt that it would be
as high as that paid in 1968.
'13. The weakening of public morale as the
human costs of the war are increasingly brought
home to the people could also be a factor deter-
ring the regime's mobilization plans, but most
signs we observe point to the contrary.
14. While we have never been confident of our
ability to gauge with precision morale problems
in North Vietnam, there are definite periods in
which the regime manifests heightened concern
about such problems -- either by passing new
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
security regulations or by devoting unusual propa-
ganda attention to issues that seriously affect
morale. The reports of captured prisoners infil-
trated from the North also help over time to identify
problem areas and issues. None of these barometers
has registered any significant change in the past
six months, and we, therefore, do not believe
morale considerations are a significant constraint
on Hanoi today. The morale problems that are
visible in North Vietnam reflect malaise and in-
difference rather than open defiance and circum-
vention. Such problems have been with the North
Vietnamese for years but have never reached the
level where they imposed a constraint on the
regime's ability to prosecute the war.
15. Even without the charisma of Ho Chi Minh
and in the face of new and unusual demands for
support of essentially foreign wars, the Hanoi
regime continues to demonstrate a remarkable
ability to get young men into the armed forces,
to keep its working population plugging away for
small material reward, and in general to extract
a whole host of sacrifices without giving much in
return. The post-Ho leadership is paying lip
service to the need for improvements in living
conditions, allowing the peasant to keep more of
his grain, giving the factory worker piece wages,
and in general looking the other way in the face
of most minor indiscretions and infractions of
law. To the outsider, the North Vietnamese people
seem reasonably content with what they get. There
are continuing reports of corruption, malingering,
draft dodging, and plain inefficiency throughout
the country, but the evidence suggests that the
severity of the problem is fairly constant and the
regime is prepared to tolerate this level.
North Vietnam's Military Training Capability
16. Perhaps the most direct limitation on
North Vietnam's ability to support the large man-
power commitment implied by the "general offensive"
strategy is the capability to train recruits.
North Vietnam conducts basic training for recruits
both in full-time training units and in regular
infantry units that are given a partial responsi-
bility for training. The extent to which the
latter units are used for basic training would
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
depend on requirements during any given period,
but the use of these units gives flexibility to
the army's capacity for training. The three
regular training divisons and one training group
have an estimated capacity to train slightly more
than 25,000 recruits in one training cycle, or an
annual capacity to train over 100,000 recruits in
a three-month training cycle. The nine regular
infantry divisions and five regular independent
infantry regiments probably could train as many
as 140,000 recruits annually and still perform
their primary offensive or defensive mission.
In addition, most recruits destined for special-
ized units, such as artillery and antiaircraft
artillery, receive their basic training in these
specialized units. Thus the estimated upper limit
for providing basic training to new recruits would
be on the order of 250,000 annually. If Hanoi
were to opt for the general offensive strategy,
at least a year and possibly more would elapse
before all the troops necessary to support such
a strategy could be adequately trained for combat.
The apparently high rate of induction in 1970,
however, would indicate that North Vietnam may be
well along in its military training programs.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
II. The Rear Supply Base
17. A major and essential part of the supplies
with which the enemy has waged war in southern
Laos, South Vietnam, and Cambodia must come from
or through North Vietnam. The relatively modest
tonnages directly related to the war-making
capability of the enemy forces in these theaters
are estimated for the 1971-72 period at 66,000
tons annually for the low combat strategy and at
some 80,000-88,000 tons for the general offensive
strategy. Some of these supplies will be provided
by North Vietnamese industry and agriculture, but
much will come from North Vietnam's allies -- the
USSR and Communist China.
18. North Vietnam's capacity for the production
of war-making and war-supporting goods is small.
The ordnance branch of industry produces a limited
number of light infantry weapons, mortars, grentades
and some ammunition, but no other types
hnrdware. From the few captured weapons
nd activities described in
open litera ure, i is evident that the ordnance
industry is primarily engaged in repair of weapons
and only nominally engaged in production. Domes-
tically produced war-supporting goods include food-
stuffs, materials for uniforms, and pharmaceuticals.
Repair shops of the machine building industry are
capable of maintaining all forms of transportation
used to carry men and supplies to the south, but
the country cannot produce the large quantities of
vehicles required by the war effort.
19. Thus North Vietnam is heavily dependent on
foreign aid from Communist countries. During
1965-70, imported foodstuffs accounted for as much
as 15% of annual food supplies; virtually all mili-
tary equipment had to be imported; and the lack of
resources or of domestic capability necessitated
imports of all the petroleum, vehicles, steel, and
most of the machinery that was needed. Reconstruc-
tion of bomb damage would be practically impossible
without foreign technicians and imported industrial
equipment.
20. Except for manpower to fill military in-
contrpipe-
economy logistics
duction terefore, North nVieto man tnam's the
line, buted
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
minor material resources to the war effort. Amini-
mum viability in the economy is mandatory, however,
to preserve order and stability in the country's
social structure, to sustain an adequate standard
of living for the populace, and to insure for the
regime a relative degree of independence in the
conduct of international affairs. In this regard
the government's task is made easier by the simplicity
of the economy, which is predominantly agricultural
with a substantial small-scale industrial base 'and
the nucleus of a modern industrial sector.
Current Status of the Economy
21. In the two years since the bombing halt
North Vietnam's economy has made modest overall,
advances. Although output has not yet reached the
pre-bombing level, the economy is in a relatively
better position now to contribute its share to the
war in the south than it was two to three years ago.
By the end of 1970, output had recovered to about
85%-90% of pre-bombing levels in both industry and
agriculture in contrast to the low points of 65*
for industry in 1967 and 80% for agriculture in-
1968. GNP increased by about 6% in the past year,
reaching an estimated $1.4 billion, or 90% of the
GNP in 1964 of $1.6 billion. At the current growth
rate, total output could reach pre-bombing levels
in two more years.
22. Hanoi has not made restoration of the economy
a first-priority item, reflecting both the concen-
tration on the war and, obliquely, the relative
unimportance of the domestic economy to North Viet-
nam's ability to continue waging war. The slow rate
of recovery may also be attributed to a combination of
factors such as the drain of trained manpower into
military service, failure to eliminate production
bottlenecks, the inefficiencies resulting from
dispersal of industry, and a reluctance to rebuild
without assurances that the bombing will not be
renewed.
Industry
23. Recovery in industry continues to be hampered
by slow progress in repairing damage to modern plants,
particularly electric power stations. The gross
value of industrial output, however, reportedly
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
increased by 5.5% in 1969 and about 6% in 1970,
bringing total industrial output to an estimated
85% of the 1964 level. Output of local industry,
which contributed about one-half the value of total
industrial output prior to the bombing, reportedly
increased during the past year by 4.3%. The decline
and subsequent partial recovery of production in
some of the modern industrial branches is shown in
Table 2.
Transportation
24. Steady improvement and expansion of trans-
portation facilities continued in 1970.* Enlarge-
ment of shipping berths and new warehouses at the
port of Haiphong neared completion. A substantial
railroad realignment project was finished on a
ten-mile section of the Dong Dang-Hanoi line, near
the border with Communist China. In the Panhandle
of North Vietnam, construction continued on new
branches and extensions of the two petroleum pipe-
lines extending into Laos. In addition, a new
and larger pipeline system was begun in the northern
part of the country near Hon Gai. The type of
construction involved suggests that the system will
be a permanent oil transport medium, providing a
possible alternative to the current oil import
procedure at Haiphong.
Labor and Productivity
25. Efforts are being made to augment the labor
force in the face of continued manpower drains.
College and vocational students are required to en-
gage in production on a part-time basis, and a
conference was called in February 1971 to mobilize
more women for the labor force. In addition, until
troops are sent out of North Vietnam they are re-
quired to take part in construction, industrial
production, and agricultural harvests.
26. Much stress also was placed on reducing the
inefficiencies engendered by decentralization and
* Further discussion of the buildup of Logistic
facilities is presented in Section IV.
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
Indicators of Industrial Output in North Vietnam
1965
1966,^ 1967 1968
1969
1970
Million Kilowatt Hours
Electric power
570
520 300 350
450
510
Th6usand Metric Tons
Coal
4,000
3,600 2,500 2,800
2,800
2,900
Cement
660
665 200 120
250
330
Apatite
853
350 200 250
250
350
Chromite ore
12
Negl. Negl. 5
3
2
Iron ore
400
300 80 30
30
100
Pig iron
200
150 40 15
15
50
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
lax management practices of the bombing years.
Criticism of low labor productivity began in
1968
and rose to a crescendo in 1970.. The regime
is
trying to improve the situation by stimulating
labor and management to greater efforts. Wage
schedules are being reviewed to reflect skill and
effort more realistically. In industry and con-
struction, piecework wages have been instituted and
probably will spread rapidly. Plans also call for
a transfer of people from administrative duties
to production activity.
Agriculture
27. Agricultural output rose in 1970, with out-
put of milled rice estimated at 2.9 million tons,
about 7%-8% above output in 1969 and not far short
of the 3.0 million tons produced in 1965. Pro-
duction of subsidiary food crops is believed to
have paralleled the recovery in rice production.
The regime has been only marginally successful in
getting the peasants to resume cultivation of in-
dustrial crop acreage left fallow during the bomb-
ing years, but the regime in 1970 claimed increases
in acreage as well as yields of a number of crops
in this category, including peanuts, sugar cane,
tobacco, and cotton.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
III. Su ort From North Vietnam's Allies
28. Imports from Communist countries, financed
primarily by credits and grants, have provided
critical support for North Vietnam's industrial
development program and for reconstruction of
bomb-damaged facilities, as well as for maintaining
minimum standards of living for the populace..
During 1955-64, Communist economic aid amounting
to $950 million financed about two-thirds of North
Vietnam's imports and provided the capital and goods
necessary for the development of North Vietnam's
modern industrial base (see Table 3). During 1965-
70, economic aid in excess of $2 billion financed
about 90% of North Vietnam's imports. In addition
to developmental aid, North Vietnam has had to rely
heavily on commodity assistance to offset shortfalls
in domestic output and to maintain an adequate level
of consumer welfare. Imports of foodstuffs soared
from less than 80,000 metric tons in 1966 to nearly
800,000 tons in 1968 when imports provided nearly
one-sixth of North Vietnam's total food supply.
Imports of metals and metal products, machinery and
equipment, and transportation equipment more than
tripled in quantity and rose even faster in value
during 1965-70.
War-Making Goods
29. Estimated deliveries of military aid in 1970
fell to $155 million from $225 million in 1969,
continuing the downward trend from the 1967 peak
of $650 million. Communist China for the first time
became the predominant supplier of military aid as
deliveries from the USSR dropped even more precipi-
tously than deliveries from China. China provided
about $85 million of military aid in 1970, accounting
for about 55% of the total, while Soviet aid amounted
to about $70 million. The East European Communist
countries continued to supply only negligible amounts
of military aid. Military aid from China in 1970
was down to about 60% of the 1967 peak level of
million, hSpeak t level military
of $5aid was 05 million.
than 15% of its 1967
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Estimated Communist Aid to North Vietnam
Milli
US
on
195464
1965
1966
1967
1968
1970 a/
950
150
275
380
480
470
535
3,240
USSR
365
85
150
200
240
250
360
1
650
Communist China
455
50
75
80
100
90
95
,
945
Eastern Europe
130
15
50
100
140
130
80
645
Military aid b/
140
270
455
650
390
225
155
2,290
USSR
70
210
360
505
290
120
70
1
625
Communist China
E
70
60
95
145
100
105
85
,
660
astern Europe
Negl,
Negl,
Negl,
Negl0
Negl,
Negl,
Negl,
5 c/
1
Total aid
1,090
42 0
730
1, 03 0
870
695
690
530
5
USSR
435
295
510
705
530
370
430
3 275
Communist China
525
110
170
225
200
195
180
1
605
Eastern Europe
130
15
50
100
140
130
80
,
65^v
b. Military data show value at Soviet foreign trade prices of weapons, other
military equipment, and ammunition. They exclude aid for the construction of
military installations and defense-related facilities.
C. The cumulative value of deliveries from Eastern Europe.
reliminary,
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
30. Two-thirds of the estimated deliveries in
1970 consisted of ammunition, one-fifth was ground
force equipment and the remainder air defense equip-
ment, missiles, and vehicles assigned to the armed
forces. China's primacy as a supplier of military
aid in 1970 reflects its predominance as a supplier
of ground force equipment and the changing character
of North Vietnam's needs. Ammunition and ground
force equipment accounted for more than four-fifths
of total military aid deliveries in 1970. The USSR,
which enjoys a much higher level of technical sophis-
tication than China, was the main supplier of North
Vietnam's missiles and air defense equipment during
the bombing period, but the bombing halt caused a
sharp cutback in deliveries of this type of equip-
ment. In the unlikely event the USSR were unwilling
to meet a demand for increased deliveries of ground
force equipment, China is quite capable of satisfy-
ing North Vietnam's needs either out of current
production or its own stockpiles. Estimated Chinese
deliveries of $24 million of ground force equipment
in 1970 were only half the level of 1969 deliveries
and less than 10% of China's estimated production
of such equipment in 1970 (see Table 4).
War-Supporting Goods
31. Among the war-supporting materials and
equipment supplied in 1970 to North Vietnam by
Communist countries, chiefly the USSR and Communist
China, were 360,000 tons of petroleum products,
7,000 tons of explosives, 1,800 tons of pharmaceu-
ticals, and 5,100 trucks
32. Deliveries of economic and military aid have
served to insure adequate stockpiles of essential
materials as well as to meet current requirements.
Although no precise quantification of North Vietnam's
reserves of essential economic or military goods
is available, there is a great deal of evidence to
support the general conclusion that stockpiles in
general are sufficient to satisfy requirements for
at least six months. Except for food and fertilizer,
Hanoi probably has ample supplies of economic goods.
For example, it appears likely that inventories of
trucks and other war-supporting material are main-
tained at levels sufficient to permit drawdowns to
meet any foreseeable contingencies. Petroleum
supplies are estimated to be equivalent roughly to
three months' consumption.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Communist Military Aid Deliveries to North Vietnam
by Donor and Type of Equipment
Million US $ a/
1965
1966
1967
1968
1969
1970
USSR
China
USSR
China
USSR
China
USSR
China
USSR
China
USSR
China
Total b/
210
60
360
95
505
145
290
100
120
105
70
85
Ammunition c/
70
33
164
41
275
94
164
62
37
37
49
53
1
Missiles
6
0
33
0
120
0
34
0
6
0
3
0
00
Air defense
equipment
118
10
137
13
95
20
81
7
60
17
5
4
Ground force
equipment
7
11
4
35
11
25
4
30
9
48
4
24
Naval craft
0
2
0
2
0
4
Negl.
1
Negl.
0
0
0
Trucks and other
vehicles d/
3
3
2
2
4
4
2
2
6
1
7
6
Other
4
0
18
0
0
0
3
0
1
0
3
0
a. The values are in Soviet foreign trade prices, the list prices charged for military hardware by the USSR under its
aid agreements with non-Communist countries.
b. Individual commodity categories are rounded to the nearest $1 million. Totals are rounded to the nearest $5 million.
Because of rounding, components may not add to the totals shown.
C. Ammunition is priced at $4,000 per metric ton.
d. Estimates are for vehicles assigned to the armed forces. Vehicles used for military support purposes are excluded.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2 25X1
Outlook
33. Both Moscow and Peking have indicated their
willingness to continue deliveries of economic aid to
North Vietnam and to expand deliveries if necessary.
Agreements have been signed to provide economic, tech-
nical, and military assistance to North Vietnam through
1971 from all its major aid suppliers,
34. There is no doubt that Communist countries
are capable of supplying Hanoi with whatever it
needs to pursue the war at present levels or to
expand the fighting to the point where either man-
power or logistics constraints would come into play.
For example, China delivered 150,000 tons of grain
to North Vietnam in 1970, down 270,000 tons from
the 1968 level because of a slight recovery in North
Vietnam's production of rice and increased imports
of wheat flour from the USSR. If Peking were to
increase deliveries to the 1968 level, enough additional
food would be provided, other things being equal', to
offset the production that would be forgone by the with-
drawal of 200,000 men from the agricultural labor force
for military service.
35. While we know much less about the Soviet
and Chinese Communist military assistance activities
and plans than about their economic aid to North'
Vietnam, it seems clear that, without question,
the Communist countries are capable of providing
North Vietnam through mid-1972 with the military
equipment needed to continue the war at present
levels or to expand the action to the point where
North Vietnamese manpower or logistics constraints
would become operative. The 1970 level of military
aid is less than 25% of the 1967 peak, and deliveries
could quickly be expanded to meet any likely in-'
crease in the level of military activity. In th'e
event that either of North Vietnam's major allies
were to demur -- for political reasons -- from
meeting Hanoi's economic and military supply
needs for the type of war it is fighting in South
Vietnam, the other could easily go it alone.
25X1
25X1
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
IV. North Vietnam's Logistical Base
36. During the past year and a half, the loss
of the Sihanoukville route as well as the active
air and ground challenges to the enemy's use of
the Laotian Panhandle have placed important ob-
stacles in the way of North Vietnam's support for
its troops in Cambodia and South Vietnam. However,
the lesson that the logistical history of the
Indochina war has taught is that the enemy has
been willing and able throughout to commit the
necessary resources to maintain a viable, flexible,
and sometimes redundant system through which to
channel supplies to the combat arenas in South
Vietnam, Cambodia, and Laos. Throughout the war,
the Communists have worked continuously to build,
maintain, and expand a complex overland logistical
system capable of providing support to their forces
in Laos, Cambodia, and South Vietnam. Even during
the US bombing campaign in 1965-68, the system
proved surprisingly durable: rapid repair and
reconstruction of bombed structures and the new
construction of other facilities enabled the enemy
to weather the destruction and to meet logistical
objectives. Since the bombing halt in the fall of
1968, the system has been improved so that at
present, war-supporting supplies -- most of which
are imported from other Communist countries -- are
moved quickly and efficiently to dispersed storage
areas throughout North Vietnam, particularly the
southern part of the country, which present few
lucrative targets for air attacks.
37. Improvements to the port of Haiphong now
allow berthing space for some 11 ships, and con-
gestion, once a major difficulty, has been virtually
eliminated. Since 1965 the railroad network has
been increased by nearly 15% to about 750 miles,
and the quality and quantity of rolling stock and
locomotives have been increased. The North Viet-
namese are now engaged in rebuilding the rail
tramway system that will extend from the Vinh area,
the terminus of the main rail network, some 58
miles to a rail-to-water transshipment point about
75 miles north of the DMZ.
38. The highway network was also extended during
and after the bombing. About 1,500 miles of new
roads added to the network since 1965 included at
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
least six new or improved border connections to
Communist China and two new connections to southern
Laos. The import of about 6,000 trucks annually
since 1967 has been generally adequate to maintain
the total truck inventory despite the heavy losses
in North Vietnam and Laos.*
39. North Vietnam's inland water network has
also been expanded and improved, and hundreds of
steel-hulled barges, LCMs, and self-propelled fuel
barges have been imported. North Vietnam's fleet
of coastal vessels has also become a most important
mode of moving supplies directly from Haiphong to
the southern river ports at Vinh, Quang Khe, and
Dong Hoi.
40. As mentioned earlier, the North Vietnamese
have constructed and continually improved a petro-
leum pipeline network. The main north-south system,
first observed in 1968, extends from Vinh through
Mu Gia Pass into southern Laos. This system was
recently linked within North Vietnam to a second
system which extends from the river port at Quang
Khe in a southwesterly direction into Laos west of
the DMZ. The pipeline system frees a substantial
number of trucks that would otherwise be needed to
move petroleum into Laos and considerably reduces
the vulnerability of moving petroleum to bombing
* North Vietnam currently maintains an extensive
truck park within its borders. However, precise
quantification of the total inventory is difficult
owing to the paucity of rail import data and un-
certainties about truck losses resulting from
bombing. Nevertheless,
clearly that the Communists have sufficient vph..ci:o.~
-co maznva-n the war effort, and there is every rea-
son to believe that North Vietnam's allies will
continue to provide a steady flow of vehicles to
maintain the truck park.
has identified some 40 die-?
perse active storage and maintenance facilities
containing some 6,800 cargo trucks.
bout
trucks in these two cities. Thus the 40
facilities and the two cities alone contain some
10,400 trucks. On the basis of this evidence, we
estimate that the total inventory could be on the
order of 15,000-20,000 trucks.
25X1
LJA I
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
and adverse weather. The system has an estimated
length of more than 250 miles and a theoretical
throughput capacity of up to 2,000 tons per day.
This capacity exceeds total nationwide consumption
and is far in excess of present needs in the area.
41. The substantial effort made by the Commu-
nists during the past decade to maintain and im-
prove their North Vietnam logistics base has been
largely successful. Even during the bombing cam-
paign, the rear base functioned effectively to
supply forces in Laos and South Vietnam. The sys-
tem is flexible and elaborate with considerable
built-in redundancy, and its capacity far exceeds
current use. Through 1972 it will continue to be
upgraded and focused on support of out-of-country
combat forces. With sustained imports of military
and transport equipment from other Communist coun-
tries, the system should continue to be successful
in moving supplies southward.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Conclusions
42. Assuming a determination on its part to
persist with the war in Indochina, North Vietnam's
capability to do so depends heavily on sustaining
a flow of men and supplies to the military fronts
in Indochina. In addition to providing overall
leadership, Hanoi's principal contributions to the
war have been its inputs of trained military man-
power and the organization and maintenance of a
viable logistic system. The military supplies and
war-supporting goods needed to carry on the war are
provided almost exclusively by the USSR and
Communist China.
43. In terms of either human or material inputs
the burdens imposed on Hanoi over the past six
years have been manageable and, for the most part,
acceptable costs. Moreover, the resources available
to North Vietnam for continuing with the war are
clearly adequate to support any of the strategic
options that Hanoi's leadership might choose to
follow through 1972.
44. North Vietnam's manpower resources continue
to be adequate and could support a considerable
military expansion. At the present time, there
are from 800,000 to 1.3 million physically fit men
in the civilian reserves, depending on whether the
age span of the pool is defined as ranging from
17 to 35 or from 15 to 39. The military induction
necessary for the enemy to continue to support the
low levels of fighting in the south characteristic
of 1970 would result in no drawdown of this pool.
The considerably larger induction necessary to
support a general offensive in South Vietnam and
Cambodia would cause the civilian reserve to drop
by some 200,000 by the end of 1971 and by a similar
amount by the end of 1972 if the high rate of in-
duction were maintained throughout the next year.
A possible limitation on Hanoi's choice of a high
combat strategy during the next year or so might be
the problems inherent in the annual recruitment
and training of the 250,000-300,000 troops which
would be required. However, the apparently high
rate of induction in 1970 -- on the order of 200,000
men -- would indicate that North Vietnam may be well
along in its military training program.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
45. Although Hanoi has the raw capability to
make an annual commitment of as much as 300,000
personnel over the next two years at least, other
factors may dampen enthusiasm for such an undertaking.
These include the fact that at least 600,000 North
Vietnamese have already been killed in this war.
In addition, an offensive strategy requiring the
commitment of as many as 300,000 men would un-
doubtedly involve heavy casualties. We cannot
judge specifically what price Hanoi would be willing
to pay in manpower terms, but we doubt that it would
be willing to undertake a sustained offensive
throughout South Vietnam and Cambodia that cost as
much as the 1968 offensives.
46. North Vietnam provides only a small part
of the military and war-supporting goods needed to
carry on the war -- and some of the necessary food,
uniforms, and medicines. North Vietnam's economy,
partially recovered from the bombing years, is 'fully
capable of continuing this limited level of support
without difficulty.
47. The major part of the supplies with which
the enemy has waged war in Indochina has come from
the USSR and Communist China. These countries should
find little difficulty in continuing -- or even in-
creasing -- such military and economic assistance
related to the war. During 1965-70, North Vietnam's
allies provided economic aid in excess of $2 billion
and military aid of a similar order of magnitude.
Estimated economic aid for 1970 of $535 million is
about 14% above the 1969 level, and, while it repre-
sents a record high, it in no significant way taxes
the economic capabilities of the donor countries.
Military aid for 1970 -- $155 million -- is only
about one-fourth of the record high for such
assistance provided.
48. Finally, the successful implementation of
Hanoi's strategies will, in the future, as in the
past, depend upon the enemy's ability to move
supplies to the military fronts. While the enemy
faces more complex logistical problems now than
at any time in the past several years, it seems
likely that the system, both in North Vietnam and
in the Laotian Panhandle, can continue to support
the requirements of the battlefields.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 25X1 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
SP.Cret
Secret
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
DISTRIBUTION LIST
ER IM 71-88 North Vietnam's Capability to Continue
to Wage War
Copy 1 & 2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18 & 19
20
21 & 22
23
24
/97/
Dr. Kissinger
Deputy Secretary Packard
Admiral Thomas Moorer
Secretary Laird ( -S W )
U. Alexis Johnson
The Hon. Wm. Sullivan
General Vogt
General Bennett
The Hon. Ray Cline
DDCI
A/DDI
SAVA
ONE -
OCI
D/OCI
D/OER, DD/OER
DD/OER
Ch/DD/P/FE
Ch7D71
Ch/I/NV
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095ROO0300220001-2
MEMORANDUM FOR:
Talked with about
this arrangement. As tar our
Blue Notes are concerned, it will
not hold water. Executive Registry
said they sent out the DCI's
material per "his" instructions
not
14 May '71
(DATE)
USED' 01
FORM NO. 10, WHICNC MAY FORM
I AUG 54
STAT
Approved For Release 2008/06/09: CIA-RDP78TO2095ROO0300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
12 May 1971
MEMORANDUM
SUBJECT: Routing of Publications to the White House
L. Whenever any of the Production Offices have
finished intelligence to be sent to Henr Kissinger, it
should be sent in care of our rnan on
Kissinger's staff. Any i n leant for Dr. Ki
should be clearly labeled as such, but sent to
who will expedite its placement in . issinger?'s an s.
This procedure is to be followed even if the publication
should be covered by a personal note from the Director
to Kissinger.
2. Mail sent
should be addressed:
The White house
ref
DDl Executive Staff
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
MEMORANDUM FOR: D/DOER
Attached is methodologies you requested. You
will note that we have in past depended on DIA
for expenditure rates. This means that the
imports could be overstated (since DIA includes
in expenditures a factor for in-country air losses
and a higher BDA for Laos). However, stockpiling
in North Vietnam is not included in the
calculation so some offset is involved there.
s the keeper of the books on
this one and can speak to the details.
10 May 1971
(DATE)
FORM NO. REPLACES FORM 10.101
I AUG 54 101 WHICH MAY BE USED.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
I I
Methodologies Involved in Estimating
. qui ment and Munitions Deliveries
to North Vietnam
Vietnam are provided by DIA. The following are the
various methodologies used to-determine size of
these imports and their sources.-,
The'data for estimates on military aid to North
A,, Quantity of Imports
1. Missiles - the estimate for the imports
of surface-to-air missiles %SAM's) is
based on the expenditure level during the
year. it is assumed that any :missile that
is fired is replaced in three months. Pilot
si:htings plus orovide a
very accurate estimate on the number of
firings. The methodology does not allow for
changes in inventory. However, the size of
the stock compared to the total number of
missiles fired since 1965 would probably be
small, so that although there might be some
inaccuracies from year to year, the overall
estimate from the beginning of the war
(7,735 missiles valued at $195 million) is',.,
probably very accurate.
2. Air Defense Equipment - aircraft imports are
estimated from changes in inventory as derived
from photography. Exce-lk._:t photographic
coverage is provided and estimates for aircraft
imports are probably the most accurate.
artillery
all of
Coverage is more difficult
an or aircraft because of the greater area
,...
which needs to be covered and also because of
25X1
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
the fact that these pieces can easily be
camouflaged. Theoretically, the methodology
is good for estimating radar and antiaircraft
artillery, but in reality the estimate is
only as good as the coverage which has been
less extensive over the last few years.
3. Ammunition - ammunition imports are based on
estimated expenditure rates' "plus estimated
losses from Allied air and ground attacks.
Stockpiles are assumed to remain the same.
The estimate for ammunition imports is subject
to a large margin of error. Errors in esti-
mating expenditure rates and losses, or
variations in stockpiles, would lead to errors
in estimating imports.
The prQb14m with 8tQc)g ig Qgp?=cially gc 'iQUS
Because of the difficulty in resupplying
stockpiles, there are probably great fluctuations
in their level from year to year. Thus
ammunition imports may be greatly over or under-
rated in any one year, depending on the change
in stocks and barring the possibility of
compensating errors in expenditure rates and
losses.
?, 4.. Ground Forces Equipment - estimates for ground
forces equipment are based on estimated require-
ments. Requirements are derived from such
factors as the level of infiltration during the
year, the level of fighting, the need to
replenish weapons caches lost to Allied ground
operations and the need to replace weapons lost
through normal attrition. No allowances are
made for changes in stocks. This estimate is
subject to a substantial margin of error.
5.? Naval Craft - imports of naval craft are based
on.changes in inventory as determined from
photography. The estimates are probably accurate
within a fairly narrow margin of error.
tif7 L C~Y...~oY1 .O'c~ btcwv j fen-9.a..! - oc-M .. .~-!.c~c+.ie~?w~o
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
6.
Other - this includes primarily
trucks
for military use. The estimate
by applying a fixed percentage
is
to
derived
total
truck imports. Any error in estimating
total trucks or in estimating what share is
allocated to the military would cause
inaccuracies in this estimate.
Be Source of Imports
l.. Donor Countries - production capabilities
where available provide the basis tor
estimating the type and amount of military aid
each country supplies to North Vietnam. For
example, SAM's are not produced in Communist
China, so that all SAM's are credited to the
USSR. The allocation of small arms as to
type and amount depends to a large extent on
the mix of captured weapons. This hypothesis
presumes that the mix of weapons captured in
South Vietnam and Cambodia is the same as
delivered to North Vietnam.
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
I I
Estimated Ammunition Deliveries to North Vietnam
1965 - 1970
Thousand Metric Tons
From All Countries USSR Com
mun
ist China
Total
264
186
78
1965
25
17
8
1966
50
40
10
1967
91
68
23
1968
55
40
15
1969
18
9
9
1970
25
12
13
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Secret
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Economic Developments In North Vietnam In 1970
Secret
ER IM 71-56
April 1971
Copy No.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
SECRET
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
April 1971
INTELLIGENCE MEMORANDUM
Economic Developments In North Vietnam In 1970
Introduction
1. North Vietnam's reconstruction efforts
immediately following the bombing halt of November
1968 were focused on repair of transportation
facilities and military installations, much of
which was completed in 1969. By the beginning of
1970 the regime was in a position to give increased
attention to restoration of other sectors of the
economy. This memorandum reviews economic per-
formance and economic policy developments in North
Vietnam in 1970, particularly in the context of
emerging trends in the post-bombing period.
Summary and Conclusions
2. In the two years since the bombing halt,
economic reconstruction in North Vietnam has
reached the half-way mark. By 1970, output had
recovered to about 85%-90% of pre-bombing levels
in both industry and agriculture in contrast to
the low points of 65% for industry in 1967 and 80%
for agriculture in 1968. At the current growth
rate of around 6%, total output will not reach
the pre-bombing levels for two more years.
3. The slowness of recovery since the bombing
halt is primarily due to war-related disruption.
Large-scale recruitment of men into military ser-
vice, while partly offset in quantitative terms by
an increase in the employment of women, has caused
Note: This memorandum was prepared by the Office
of Economic Research and coordinated within the
Directorate of Intelligence.
SECRET
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
SECRET
a deterioration in the quality of the labor force
and contributed to the sharp decline in labor
productivity. Decentralization of industry to
escape the bombing has resulted in inefficient
use of machinery and breakdowns in distribution of
materials and products. Electric power capacity,
greatly cut by the bombing, has been a bottleneck
to industrial expansion. And in. all probability
the large shipments of foodstuffs and other con-
sumer goods from the Communist countries, which
have made up for North Vietnamese shortfalls,
have weakened the incentive for the North Vietna-
mese to accelerate the recovery program.
4. Although developments in the war during
1970, to which North Vietnam reacted by sharply
increasing military recruitment, probably had some
unfavorable impact on the economy and may have
further postponed consideration of long-range
development plans, there is no indication of sub-
stantial changes in priorities. Economic develop-
ment and the "building of socialism" have taken a
back seat to fighting the war and continue to do
so. As the war goes on, North Vietnam is forgoing
year after year of economic growth. Its national
product is probably some $700 million less than
it would be in the absence of the war. But with
economic support from Communist countries, it is
managing to cover basic needs and make slow progress.
Discussion
Overall Output
5. North Vietnam's economy made modest overall
advances in 1970, but output has not yet reached
the pre-bombing level. Gross national product
(GNP) is estimated to have increased 6%, or about
the average rate achieved in the seven-year period
immediately preceding the war. GNP is estimated
to have reached roughly $1.4 billion, about 90% of
the estimated 1964 level of around $1.6 billion.
6. Hanoi has not made restoration of the
economy a first-priority item. Thus the rate of
recovery has been extremely slow and is attributable
to a combination of factors. The labor force in
SECRET
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
SECRET
1970 was actually slightly larger than at the out-
set of the war despite the drain of manpower into
military service, so that output per worker evi-
dently was far below the prewar level. The low
level of productivity probably reflects largely
the failure to eliminate some bottlenecks,
especially in electric power, the qualitative
decline that must have taken place in the labor
force as a result of the drain of able-bodied men
and skilled labor into military service, and the
inefficiency resulting from the dispersal of
industry carried out to minimize the impact of
bombing.
7. Had there been no war, GNP probably could
have grown some 5% a year during 1965-70 and
reached $2.1 billion, $700 million more than the
actual level. Gains in productivity alone (through
capital formation and improved technology) would
have pushed GNP up to perhaps $1.9 billion. The
remainder of the gap between output in 1970 and
what it would have been without the war can be
explained by the lack of normal growth in the labor
force resulting from the diversion of an estimated
1 million men into military service during 1965-70.
Economic Policy
8. No major shifts in domestic economic policy
were evident during 1970. The 1970 state plan re-
mained basically unchanged from the 1969 plan.
The one notable change was the reduced emphasis on
expanding communication and transportation facil-
ities -- presumably because of the substantial
reconstruction and improvements already completed.
Growth of agricultural production and the produc-
tion of consumer goods by local industry were
listed as the main tasks of the 1970 plan.
9. North Vietnam's economic goals during the
post-bombing period have been characteristically
modest. Annual plans usually call for improvement
in all sectors of the economy but with no set tar-
gets, and since 1967, planning has been conducted
solely on a yearly basis. Statements concerning
plans and achievements in 1970 imply that the
value of output of local industry was planned to
increase by only 1% and for total industry by only
3%.
SECRET
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
SECRET
10. In February 1970 a long article by Le Duan,
Party First Secretary, laid out party guidelines
for the country's future development. In discussing
the North Vietnamese economy, he appeared to be
defining long-range goals for a period of five to
ten years. Le Duan's text placed more emphasis
on heavy industry than other public commentary
on economic goals, probably reflecting a longer
range perspective. He did emphasize, however,
that recovery of light industry and agriculture
would have priority in the short term.
Agriculture
11. Agricultural output rose in 1970, with
output of milled rice, estimated at 2.9 million
tons, about 7.5% above output in 1969. This is
not far short of the 3.0 million tons produced in
1965. Production of subsidiary food crops is
believed to have paralleled the recovery in rice
production. Since 1968 the regime has been only
marginally successful in getting the peasants to
resume cultivation of industrial crop acreage
left fallow during the bombing years, but the
regime claimed increases in 1970 in acreage as
well as yields of a number of crops in this cate-
gory, including groundnuts, sugar cane, tobacco,
and cotton. The number of hogs was said to have
reached an all-time high with an increase in
average weight. The weather was generally normal
in 1970, as in 1969.
12. Increases in agricultural production were
attributed to greater acreage and wider use of
high-yielding strains of spring rice, expansion of
irrigation facilities, increased supply of nitrog-
enous fertilizer, and a number of institutional
improvements, notably a new grain procurement
directive issued in March 1970. The directive
fixed delivery quotas for a period of five years
as an incentive for peasants to produce. In pre-
vious years a successful harvest apparently often
resulted in a higher government quota the follow-
ing year. The agricultural labor force probably
did not increase in 1970, because of the continued
diversion of manpower into the military.
13. Rising production of food has resulted in
a slight lessening of dependence on imports. Sea-
borne imports of food continued to decline in 1970
- 4 -
SECRET
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
5L't 1 J 1
to 660,000 tons (about 12%-13% of consumption),
compared with peak imports of 790,000 tons in 1968.
Although the regime has made self-sufficiency in
food a major target, food imports can be expected
to remain at fairly substantial levels, at least
as long as the war continues. The population is
about 12% larger now than in the beginning of 1965
and is growing some 2% a year. To eliminate the
need for imports of grain and other basic foods
within two years, for example, food output would
have to increase 20% -- probably an impossible
task.
Industry
14. Recovery in industry continues to be hamp-
ered by slow progress in repairing damage to modern
plants, especially electric power stations. The
gross value of industrial output reportedly
increased by 5.5% in 1969 and about 6% in 1970,
bringing total industrial output to an estimated
85% of the 1964 level. Output of local industry,
which contributed around one-half the value of
total industrial output prior to the bombing,
reportedly increased during the past year by 4.3%.
During 1965-70, moreover, emphasis on expanding
the local economy has resulted in a reported cumu-
lative growth of almost 15% in local industry,
while production in centrally controlled industry,
which includes all large-scale plants, declined
sharply. Production trends in some of the major
heavy industrial items are shown in Table 1.
15. Reconstruction of electric power facilities
in 1970 brought capacity to 70% of the pre-bombing
level, compared with 65% in 1969 and a low of 40%
at the end of 1967. Production of electric power
reportedly increased by 13% in 1970 and reached an
estimated level of 510 million kilowatt hours.
However, the industry operates with virtually no
margin of reserve capacity, and much of the equip-
ment currently in service is badly in need of
general overhaul. Shortages of generating capacity
have made it necessary to ration power supplies, to
stagger work shifts, and to restrict service to
new consumers. Frequent press articles in 1970
blamed electric power shortages for unfulfilled
industrial output goals, and only nominal improve-
ment seems likely in 1971. The slow pace of
SECRET
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
SECRET
restoration in the power industry may stem from a
decision to limit reconstruction efforts at damaged
thermal powerplants in favor of resuming construc-
tion on the large Thac Ba hydroelectric powerplant,
being built with Soviet assistance, where work was
halted during the bombings. Capacity of the Thac
Ba plant will be greater than all the generating
capacity out of operation at the end of 1967.
When this project is completed, probably not be-
fore the end of 1971, present restraints on power
supplies will be largely removed.
16. The coal industry, a major foreign exchange
earner before 1965, continues to encounter produc-
tion difficulties caused by bomb damage as well' as
a host of other problems. Production of coal
reportedly increased by 3.2% in 1970, but output
was only three-fourths of the pre-bombing level of
4 million tons. Presumably because of increased
domestic consumption, however, coal exports de-
clined to 370,000 tons in 1970, the lowest level
in six years, compared with 430,000 tons at the
height of the bombing in 1967 and 1,200,000 tons
in 1965. At the end of 1970, damage to the Cam
Pha coal-processing plant reportedly had been only
two-thirds repaired, and two of the four coal-
loading cranes in the port still were out of opera-
tion. Additional problems periodically aired in
the press include poor management, low labor pro-
ductivity, and equipment in disrepair.
further increases in produc-
tion will be small until there is wholesale replace-
ment of obsolete mine equipment and modernization
of coal transport and processing facilities.
Exports may not recover until completion of a
Polish-aided coal-processing plant -- now scheduled
for 1973.
17. The tempo of construction at other damaged
industrial facilities has been relatively unchanged
over the past two years. The Haiphong Cement Plant,
which was put out of operation in April 1967, has
been restored to about 75% of its former capacity.
Five of seven cement kilns in the plant currently
are in service, but work on the remaining two was
halted in August 1970 for unknown reasons. The
Thai Nguyen Iron and Steel Plant was out of opera-
tion from early 1967 to mid-1970, when one of
three blast furnaces apparently was test-fired,
and subsequently was put into sustained operation
late in the year. Restoration of the other furnaces
SECRET
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
SECRET
and extensive remaining damage to the steel com-
plex is likely to require several years. No
attempt thus far has been made to reconstruct the
Nam Dinh Textile Plant, the Co Dinh Chromite
Concentrating Plant, or the Bac Giang Nitrogen
Fertilizer Plant. Although the volume of general
construction in 1970 was claimed to be greater
than in 1969, construction projects were hampered
by limited supplies of skilled labor, materials,
and funds. Construction organizations were criti-
cized especially for failure to complete projects
on schedule, and hence plans for 1971 stress the
completion of unfinished projects rather than
initiation of new projects.
Transportation
18. Steady improvement and expansion of trans-
portation facilities continued in 1970. Enlarge-
ment of shipping berths and new warehouses at the
port of Haiphong neared completion. A substantial
railroad realignment project was finished on a
ten-mile section of the Dong Dang-Hanoi line, near
the border with Communist China. This project
involved construction of numerous tunnels and
bridges in difficult mountainous terrain. The new
section will replace the original line where steep
grades and short-radius curves both slowed traffic
and limited the number of rail cars in a train.
In the Panhandle of North Vietnam, construction
continued on new branches and extensions of the
two petroleum pipelines extending into Laos. In
addition, a new and larger pipeline system was
begun in the northern part of the country. This
latter pipeline extends about 26 nautical miles
westward from Va Chai, near Hon Gai, toward an un-
known destination that may be Hanoi or Haiphong.
The type of construction involved suggests that
the system will be a permanent oil transport
medium, providing a possible alternative to the
current oil import procedure at Haiphong. There
is, however, no evidence yet of channel improvements
or tanker mooring facilities in the area of Va. Chai.
Labor and Productivity
19. Efforts are being made to augment the labor
force in the face of continued manpower drains.
During 1965-70 the civilian labor force increased
- 7 -
SECRET
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
SECRET
by an estimated 2%, whereas without the war the
increase would have been about 12%. College
and vocational students will be required to en-
gage in production on a part-time basis, and a
conference was called in February 1971 to mobilize
more women for the labor force. The percentage
of women in the labor force as a percentage of
all women aged 15 to 65 has increased only slightly.
One offsetting factor to military induction, how-
ever, is that until troops are sent out of North
Vietnam they are not entirely removed from the
labor force and are required to take part in con-
struction, industrial production, and agricultural
harvests.
20. Much stress also was placed on reducing
the inefficiencies engendered by decentralization
and lax management practices of the bombing years.
Criticism of low labor productivity began in 1968
and rose to a crescendo in 1970. In basic con-
struction, it was admitted that the effectiveness
of investments was wasted because construction
took too long, projects were left unfinished, or
quality was poor. Fixed assets in agriculture
were said to have deteriorated. Wastage of raw
materials, fuels, and semi-finished materials in
industry exceeded prescribed norms. Utilization
rates for machinery in the central machine build-
ing industry reportedly were only two-thirds of
the norm.
21. While complaints such as these are hardly
unusual in Communist countries, it is evident
that North Vietnam does have a serious productiv-
ity problem. Industrial employment apparently is
above pre-war levels while productivity is far
lower. This is openly recognized by the regime,
which sets productivity achievements in 1964 as
goals to shoot at. There is ample evidence that
vast amounts of machinery and equipment -- nearly
all imported and paid for with aid from other
Communist countries -- are used at a small frac-
tion of their capacity, if at all. Machine tools,
distributed to many small shops to repair trucks
and other equipment, often lie idle. Small
electric generators, imported to partly substi-
tute for bombed out capacity in large electric
powerplants, are not usable for many industrial
purposes. Maintenance standards are poor.
SECRET
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
M"u- h I
Decentralization of industry has greatly complili-
cated the distribution of materials and parts and
contributed to the shortage of competent managers.
East European countries have complained that the
technicians they train are not being used effec-
tively to apply their new skills.
22. Characteristically, the regime is trying
to improve the situation by stimulating labor and
management to greater effort. Wage schedules are
being reviewed to reflect more realistically skill
and effort. In industry and construction, piece-
work wages have been instituted and probably will
spread rapidly. Plans also call for a transfer
of people from administrative duties to production
activity. Such changes as these are unlikely to
have much effect, however. Labor productivity
probably will remain low until the main large-scale
plants have been rebuilt and the men have returned
to civilian work.
Foreign Trade and Aid
23. The total volume of North Vietnam's sea-
borne imports during 1970 from Communist and Free
World countries was about the same as in the pre-
vious year, although some shifts in composition
took place (see Table 2). Imported foodstuffs
declined by almost 100,000 tons, reflecting some
improvement in domestic agricultural output.
Petroleum imports declined slightly. The tonnages
of general and miscellaneous imports rose by almost
15%, mainly as a result of increased imports of
metal products, cement, and pyrites which are used
in fertilizer production.
24. Imports of investment goods declined slightly
in 1970 from the high 1969 level, as shown in the
following tabulation, indicating that no accelera-
tion took place in economic development efforts.
- 9 -
SECRET
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
SECRET
Million US
1965
1966
1967
1968
1969
1970
Metal and metal
products
9
18
18
23
28
34
Machinery and
equipment
48
97
126
150
185
168
Transportation
equipment
12
17
21
27
59
47
25. North Vietnamese exports in 1970 remained
at about the 1969 level. Exports of apatite, which
were resumed in 1969 after virtually a three-year
halt, increased sharply. Cement and coal exports,
however, showed significant declines that probably
stem from failures to restore production at a time
when domestic construction and fuel requirements
are increasing. Pig iron exports were absent for
the third consecutive year. Exports of general
and miscellaneous goods, mostly consumer items,
increased.
26. Communist deliveries of economic aid to
North Vietnam have hovered at roughly $500 million
annually for the last three years (see Table 3).
Since 1965, exports to other Communist countries
have generally covered less than 10% of imports,
compared with one-third in the previous decade.
The lack of resources or of domestic capability
necessitates continued imports of petroleum,
fertilizers, vehicles, steel, and most machinery.
Reconstruction of bomb damage would be practically
impossible without foreign technicians and imported
industrial equipment.
27. Aid from Communist countries apparently
will continue to provide military equipment for
prosecution of the war, machinery and technicians
for economic development, and commodities to make
up for shortfalls in domestic output. Unlike past
negotiations which involved a single negotiating
team for all Communist aid and a time-span of about
two months, the main trade and aid negotiations
SECRET
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
SJ UKt 1
for 1971 lasted from September 1970 to January 1971
and involved two separate North Vietnamese negotiat-
ing teams. The reason for this departure from past
practice is unknown; it might have been an insist-
ence by the donor countries on a more thorough
justification of aid requests. Announcements con-
cerning the 1971 agreements did not differ funda-
mentally from traditional statements, and as usual
they made no mention of details concerning values
or quantities.
28. The USSR contributed two-thirds of total
economic assistance in 1970, maintaining its posi-
tion as the primary aid donor. The share of
economic aid supplied during the past year by Com-
munist China amounted to 18%, and by Eastern Europe
15% (see Table 3). The only major shift in the
source of imports during 1970 involved foodstuffs,
most of which previously was supplied by Communist
China. The USSR became the dominant supplier of
foreign foodstuffs in 1970, providing about two-
thirds of the total imported. Except for food,
Communist China's deliveries remained typical of
the past few years, including consumer goods, a
variety of machinery, and other bulk commodities..
Eastern Europe's contribution to North Vietnam
continues to be in the form of specialized,
relatively expensive machinery and equipment, the
total of which almost equals the USSR's contribu-
tion. For the third consecutive year, military
assistance has declined. Military aid deliveries
during 1970 are tentatively estimated at $155 mil-
lion, a decrease of approximately 30% from the
$225 million delivered in 1969.
Consumer Welfare
29. Food and other consumer goods were possibly
somewhat more plentiful in 1970 than in the previous
two years, judging from the increase in agricultural
output as well as the increase in output of local
industry where most of the consumer goods are pro-
duced. Prices in the free market fluctuated with-
in previously observed ranges, indicating no severe
shortages. Statements by regime leaders concerning
"belt tightening" were presented in the context of
reducing wastefulness, rather than reducing the
availability of consumer goods.
- 11 -
SECRET
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
SECRET
30. Only nominal progress was made in rehabil-
itating housing damaged or neglected during the
bombing. Although lipservice is paid to the need
for more housing, the government definitely gives
a higher priority to construction of transport and
industrial facilities. Foreign assistance to
education is devoted to training a large number of
students in other Communist countries. However,
the value of this training is lessened when return-
ing students either are placed in inappropriate
fields or have to undergo political reindoctrina-
tion that often removes them from the labor force
for as long as one year.
Short-Range Prospects
31. The trends of the past two years are likely
to continue in 1971. The 1971 economic plan eschews
any overall growth target and appears to establish
the same priorities as the previous two plans. If
the weather is reasonably good, growth rates near
last year's 6% can probably be maintained in indus-
try and agriculture. Industrial growth may accele-
rate after the expected recovery of electric power
capacity in late 1971. Other basic problems, how-
ever, including shortcomings in management and
labor quality, are unlikely to be much improved
until the war is over.
SECRET
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
Indicators of Industrial Output in North Vietnam
1965
1966
1967
1968
1969
1970
Electric power
production
570
520
300
350
450
510
Thousand Metric Tons
Coal
4,000
3,600
2,500
2,800
2,800
2,900
Cement
660
665
200
120
250
330
Apatite
853
350
200
250
250
350
Chromite ore
12
Negl.
Negl.
Negl.
Negl.
Negl.
Iron ore
400
300
80
30
30
100
Pig iron
200
150
40
15
15
50
Approved For Release 2008/06/09: CIA-RDP78T02095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Table 2
North Vietnam:
Seaborne Imports and Exports a/
Thousand Metric Tons
Cargo
1965
1966
1967
1968
1969
1970
Total imports
847
1,030
1,417
1,967
1,890
1,888
Foodstuffs
119
78
462
798
755
660
Fertilizer
162
227
150
155
151
202
Petroleum
170
201
247
388
375
361
Timber
15
14
13
26
37
14
General and
miscellaneous
381
512
546
601
572
651
Total exports
1,713
1,168
573
694
573
581
Apatite
318
10
--
--
13
95
Cement
78
99
35
--
23
15
Coal
1,150
938
432
629
461
372
Pig iron
48
40
22
--
--
--
General and
miscellaneous
120
80
84
66
76
98
a. Because of round ng, components may not a to the totals s own.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Estimated Communist Aid to North Vietnam
Million US $
1954-64
1965
1966
1967
1968
1969
1970 a/
Total
950
150
275
380
480
470
535
3,240
Economic aid
USSR
365
85
150
200
240
250
360
95
1,650
945
Communist Chi
na 455
50
75
80
100
90
80
645
Eastern Europ
e 130
15
50
100
140
130
40
270
455
650
390
225
155
2,290
Military aid b/
1
USSR 70
210
360
505
290
1,20
70
85
1,625
660
~
Communist China 70
60
95
145
100
105
l
5 c/
Eastern Europe Negl.
Negl.
Negl.
Negl.
Negl.
Negl.
.
Neg
90
420
730
030
1
870
695
690
5,530
Total aid 1,0
,
USSR 435
295
510
705
530
370
430
0
3,275
605
1
Communist China 525
110
170
225
200
195
18
80
,
650
Eastern Europe 130
15
50
100
140
130
a. Preliminary.
b. Valued at Soviet foreign trade prices. Data refer exclusively to combat mate-
rial, excluding aid designed for war-support purposes.
c. The cumulative value of deliveries from Eastern Europe.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
Secret
Secret
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
 Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2
TRANSMITTAL SLIP-
DATE
TO:
DD/OER
ROOM NO.
BUILDING
REMARKS:
FROM:
ROOM NO. BUILDING
.441
I EFB N505 241
REPLACES FORM 36-8
WHICH MAY BE USED.
Approved For Release 2008/06/09: CIA-RDP78TO2095R000300220001-2