DEVELOPMENTS IN INDOCHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A000400020002-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 12, 2016
• Document Release Date: November 19, 2001
• Sequence Number: 2
• Publication Date: February 18, 1975
• Content Type: NOTES

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Secret
No Foreign Dissem
RD
rE~e
Developments in Indochina
Secret
February 18, 1975
No. 0068/75
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Controlled Dissem
Warning Notice
Sensitive Intelligence Sources and Methods Involved
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Classified by 005827
Exempt from general declassification schedule
of E. 0. 11652, exemption category:
4 513 (1), (2), and (3)
Automatically declassified
on: Date lrnpossible to Determine
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DEVELOPMENTS IN INDOCHINA
This publication is prepared for regional specialists in the Washington com-
munity by the East Asia - Pacific Division, Office of Current Intelligence,
with occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
February 18, 1975
LAOS
Resettlement of Refugees Continues. . . . . . . 1
Most Foreign Aid
Donors Remain Parsimonious. . . . . . . . . . 3
SOUTH VIETNAM
A New Look
at the "Third Force" . . . . . . . . . . . . . 9
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Resettlement of Refugees Continues
The resettlement of refugees in Laos, which be-
gan January 29 with an airlift of about 140 refugees
from Vientiane to Phong Savan on the Plaine Des
Jarres, is proceeding smoothly. According to passen-
ger lists prepared by the coalition government's Joint
Central Commission and the UN High Commission for
Refugees (UNHCR), which is providing 2 million dollars
for the resettlement effort, as of February 9 approxi-
mately 3,200 refugees had boarded flights for the Com-
munist zone. If repatriation continues at the current
rate, more than 8,000 refugees will have begun the re-
settlement process by March 1.
The airlift is being conducted by a combination
of non-Communist military and civilian (Royal Air Lao
---RAL) aircraft. The military flights have been land-
ing at Phong Savan, the site of the prisoner-of-war
exchanges last fall; RAL has been using a grassy strip
at Xieng Khouang, approximately 6 miles to the west.
Although US nationals have been piloting the RAL planes,
the Pathet Lao have not objected to landings in the
Communist-administered zone.
Unconfirmed reports indicate that the Pathet Lao
may be planning to involve the Soviet Union in reset-
tlement: operations. On February 13, five Soviet per-
sonnel, including an Aeroflot representative, and two
Pathet Lao officials, reportedly flew from Vientiane
to Xienq Khouang to inspect the airfield.
e Yatne
ao o not Intend to return all the refugees to their
_
native homes. After arriving in the Communist zone,
February 18, 1975
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the refugees are given temporary quarters in nearby
villages. Later they will be split into groups and
placed in "planned" villages. For some of the refu-
gees, there are no homes or villages to return to
since many were destroyed during the war and the
Pathet Lao have not yet rebuilt them. In some vil-
lages, land formerly worked by the refugees has been
given to others. If the refugees cannot clear and
prepare new land in time to plant a crop this year,
they may be forced to rely upon the Pathet Lao for
support--an obligation the Communists would like to
avoid.
25X1X
er, however,
sentatives o; the UNHUR wi accompany Joint Central
Commission teams on inspection tours of refugee vil-
lages, an arrangement agreed to by the Pathet Lao to
secure UN financing of the resettlement program. (CON-
FIDENTIAL)
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Most Foreign Aid Donors Remain Parsimonious
The financially strapped coalition government
has dispatched four aid-seeking delegations in the
past three months. Although 14 European countries,
including the Soviet Union, and four Asian countries,
including Japan, were visited, only about $16 mil-
lion in aid--mostly in the form of commodities--was
pledged. Three countries--West Germany, the Nether-
lands, and Japan--accounted for nearly $13 million
of the total amount pledged. Combined with the
meager commitments secured by the first aid-seeking
mission in October, the latest pledges should further
convince Lao leaders that the US, which has provided
more than 80 percent of all aid given over the years,
will remain the country's largest donor, and that
most other foreign countries are still unwilling to
supply large handouts to solve the country's serious
economic problems.
Europe: Mixed Results
Two of the recent delegations, one led by non-
Communist Defense Minister Sisouk na Champassak and
the other by Communist Economics Minister Soth
Phetrasy, visited nearly all the major European coun-
tries. The Soth delegation, which hit nine European
capitals plus Moscow, fared badly in Western Europe.
They received some words of encouragement and a few
weak promises, but little financial or commodity as-
sistance. In Switzerland they were met only by a
limousine and a driver and had to pay all their own
hotel and food bills. They never met any major gov-
ernment officials and received no promises of aid.
The delegation received similar treatment in Austria
and Denmark, although both governments did promise--
to help Laos seek aid from the In-
ternationa Re ross, UNICEF, and some private groups.
February 18, 1975
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Aid to Laos
Approximate value of
total aid commitment
$16,000,000
Countries visited by Soth-led delegations
Sweden-previous commitment of $2'/: million
Austria-no aid received
Denmark-no aid received
Switzerland-no aid received
USSR-value of aid not determined
India $125,000
Yugoslavia $250,000
Hungary $320,000
Countries visited by Sisouk-led delegations
France-no aid, but contributes to FEW
United Kingdom-no aid,kut contributes to FEOF,
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Sweden merely confirmed promises of aid it had al-
ready pledged.
The Sisouk-led delegation made stops in Great
Britain, France, the Netherlands, and West Germany.
Although Sisouk left London and Paris with empty
shopping baskets, he did secure new aid commitments
from Bonn and The Hague. West Germany affirmed a
low interest loan of about $6 million and two grants
totaling approximately one million dollars for com-
modity and technical assistance. The Netherlands
promised a grant of $3 million and reportedly ex-
pressed an interest in contributing to the Foreign
Exchange Operations Fund (FEOF),* a multinational
institution that finances most Lao imports.
Compared to cool receptions in Western Europe,
Soth and troupe were given warm welcomes--but little
aid--in the five East European countries they visited.
Reportedly, East Germany promised $750,000 in com-
modity aid--mostly medicines, textiles, and food--
while Hungary, Romania, Bulgaria, and Yugoslavia made
similar commodity commitments totaling some $1.7 mil-
:Lion. Belgrade also expressed an interest in invest-
ing in mineral exploration in Laos, particularly for
:iron ore.
USSR: Great Expectations
Contrary to expectations, the Soviets committed
themselves to very little and were unexpectedly tough
bargainers. In his report to the cabinet, Soth com-
plained that the Soviets expressed little interest in
*Current members of FEOF are the United States, Japan,
France,, the United Kingdom and Laos. Contributions in
the past several years have averaged $25-30 million.
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helping Laos and handled his delegation poorly.
Following its arrival in Moscow on December 26,
the Lao delegation made an initial request to
the Soviets for commodity aid in the amount of
30,000 tons of oil and 15,000 tons of pharmaceu-
ticals. A Soviet deputy commerce minister flatly
refused the request. He pointed out that Laos has
no storage facilities for that amount of oil. As
for pharmaceuticals, he firmly told the Laotians
that expensive antibiotics such as penicillin could
not be provided. The Soviets did agree to study a
list of other commodities requested by the Laotians.
Moscow also agreed to contribute materials for sev-
eral construction projects in the Pathet Lao zone:
--three bridges;
--a 150--bed hospital in Phong Savan;
--expansion of housing facilities at
Phong Savan to accommodate 2,000 people;
--an 8,000 cubic meter fuel storage tank
in Sam Neua;
--and a repair facility in Sam Neua capable
of handling 100 vehicles per year.
25X1 C
Indonesia: A Million Dollar Vote for the Coalition
On January 30, Jakarta announced it would extend
a one million dollar, 30-year, interest-free loan to
Laos. According to an official government press re-
lease, half of the loan will be in the form of foreign
exchange to support the Lao kip. The other half will
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be used for imports of goods from Indonesia, es-
pecially textiles. Jakarta will also offer tech-
nical assistance in the fields of agriculture and
resource exploitation. In addition, the Indone-
sians promised to try to persuade the World Bank,
the Asian Development Bank, and other international
agencies to increase aid to Laos.
The loan--the first by Indonesia to a foreign
country--has little economic significance, but is
viewed by the US embassy in Jakarta as politically
important. According to the embassy, it is a sign
of Indonesian interest in the survival of a Lao neu-
tralist regime in an area threatened by Communists--
and it is in obvious contrast with Jakarta's unwill-
ingness to make financial contributions to Cambodia.
In addition, the embassy sees the loan as an expres-
sion of Indonesian interest in drawing Laos into
closer relations with--and perhaps ultimately member-
ship in--ASEAN.
Japan: More Aid from a FEOF Contributor
In addition to its $2.5-3 million contribution
to FEOF, Tokyo promised approximately $2.7 million in
construction and commodity assistance. The Laotians
also requested Japan's cooperation in building a rail
and road bridge across the Mekong--presumably opposite
the Thai railhead town of Nong Khai, approximately ten
miles southeast of Vientiane--and in the construction
of an all weather highway from Vientiane to the North
Vietnamese port of Vinh. Japan is more likely to be
interested in the bridge project since it would facili-
tate the export of bulky raw materials such as iron ore
and timber from Laos.
Aid-Seeking Missions:
A Long-Lived Feature of a Neutral Laos
Laos will need to put aid-seeking delegations on
the road for some time to come. Although results will
February 18, 1975
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probably remain unspectacular, any foreign-donated
financial or commodity assistance will be important
to the Lao economy since:
--Inflow of private capital for develop-
ment is unlikely to materialize to any
significant extent as long as political
and economic conditions are uncertain.
--Export potential, except for timber, is
limited largely because of inadequate
transport facilities and the location
of some of the best mineral deposits in
the Pathet Lao zone.
--Greater production and eventual self-
sufficiency in rice, livestock, and
other agricultural products are de-
pendent upon difficult technical and
institutional problems such as expanding
irrigation facilities and training cadre
of agricultural experts. (SECRET NO FOR-
EIGN DISSEM/CONTROLLED DISSEM)
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The South Vietnamese Communists appear to be
taking a new look at the mercurial band of oppo-
sitionists and exiles who comprise the so-called
"third force." The southern Communist headquarters
--COSVN--has issued a new directive urging more
effort to cultivate "third force" elements in South
Vietnam,
COSVN does not exhibit any real confidence that
its urban political apparatus can take advantage of
the current outbreak of anti-Thieu opposition--or
that it can be effective in persuading the opposition
that the Viet Cong brand of socialism is better than
Thieu's style of democracy. But the instructions
clearly imply it is time to start.
Not since shortly after the signing of the Paris
agreements two years ago have the Viet Cong shown
any real interest in manipulating opposition groups
in South Vietnam, but now they apparently believe they
can capitalize on President Thieu's current domestic
and international problems.
Recognizing that most political opposition is
centered in the cities, cadre are being told to spruce
up their urban operations, begin penetrating opposi-
tion groups, and start proselytizing "intellectuals
and other elements of the bourgeois class." The ini-
tial emphasis is to be placed on extreme leftist
groups, such as Madame Ngo Ba Than's Committee Demand-
ing the Implementation of the Paris Agreement. Tar-
geting of other opposition elements currently causing
problems for the Thieu government, such as the Bud-
dhist-backed National Reconciliation Force, will ap-
parently await an evaluation of the strength and capa-
bilities of the Viet Cong's urban apparatus.
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The COSVN instructions indicate that the south-
ern Communist. leadership has a new appreciation of
the need for greater political sophistication in trying
to manipulate legitimate opposition groups. In the
past, Viet Cong political operatives have been partic-
ularly inept and inflexible in the art of political
persuasion. This time around they are being urged to
understand that the "third force" embodies individuals
whose political beliefs cover a wide spectrum, and
that many-are in fact "in close relationship with im-
perialism." Third force elements, according to COSVN,
do not necessarily completely subscribe to imperialism,
but neither do they fully accept socialism. Cadre
must work hard to exploit the conflicts in the capital-
ist philosophy and use considerable skill and exper-
tise to persuade third force groups to support the
objectives of the Viet Cong revolution. The COSVN in-
structions suggest that the most useful themes to con-
centrate on in any dialogue with third force elements
are independence and "neutrality." (SECRET NO FOREIGN
DISSEM/CONTROLLED DISSEM)
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