ECONOMIC AND MILITARY RECONSTRUCTION IN NORTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82S00205R000100190003-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 15, 2016
• Document Release Date: April 1, 2004
• Sequence Number: 3
• Publication Date: January 10, 1972
• Content Type: REPORT

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This periodic report reviews economic developmentt
within North Vietnam, including the receipt of economic and
military aid and the construction of military facilities.
These developments are selected on the basis of their rele-
vance to North Vietnam's ability to continue,supporting the
war in Indochina and to restore the economy, and thus to their
possible effect on the country's desire or need to negotiate
Economic and Military' Reconstruction
In North Vietnam
10 January 1972
a settlement of the current conflict.
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Reassessment of Flood Damage
1. A more definitive estimate of the August 1971 flood
damage
Some conclusions are unchanged from the initial assessment:
there was little loss of life; the Regime coped effectively with
health hazards; main transportation arteries were largely
restored to service by the end of September; industrial instal-
lations suffered little physical damage, although there was a
general shutdown of industry for 2 to 4 weeks from indirect
causes such as power outages and transportation bottlenecks.
Military units assigned to emergency flood duty apparently were
released after September and there is no evidence that the floods
had an adverse effect on military capabilities.
2. Flooding destroyed 35% to 45% of the November rice crop,
which accounts for two-thirds of annual rice production, and
caused widespread damage to dikes and irrigation systems. Total
rice production for the year is down by 20% compared to 1970,
and is the lowest since the Communists came to power in 1954.
As the next major harvest will not take place until the spring
of 1972, maintenance of present food rations may necessitate
the import of as much as 900,000. tons of food during the next
six months. -In-view-of the pervasive damage to dikes and
irrigation facilities, which are essential to successful crop
cultivation during the November-June dry season,'and Hanoi's
obvious concern over the slow progress in rehabilitating
them, output from the 1972 spring crop is likely to be diminished.
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3. Hanoi's options would seem to be limited at this time.
Present food rations are already near a subsistence level so
that further belt-tightening will have to be modest. State
food reserves may amount to as much as six month's supply but
the government probably would be reluctant to draw heavily
on this source for strategic considerations. Perhaps a com-
bination of these two alternatives will be chosen to reduce
import requirements. Nevertheless, a substantial increase in
food imports seems mandatory and was beginning to show up before
the end of 1971. The average monthly import of food during
January-October was about 45,000 tons compared to 75,000 tons
during November-December. In late December, China made an
open-ended offer to supply North Vietnam with wheat imported
from Canada.
4. Aggregate economic output in 1971 also declinedsigni-
ficantly from the flood's impact. Industrial and handicraft
production was claimed to have increased by 14% over 1970 and
is estimated to be a few percentage points short of the 1965
peak. Output of, industry probably would have been higher
except for the two to four weeks of down-time caused by the
floods, long enough to account for a loss'tif 5% to 10% in
production forgone. Coupled with the loss in agricultural
output, which makes up about one-half of GNP, total product
of the economy dropped to roughly 90% of the 1970 level, or
to only 80% of the 1965 peak.
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Military and Economic Assistance
5. Hanoi's military effort continues to receive the support
of Communist allies enabling North Vietnam to replace losses,
to improve its air defense capability in order to protect the
logistic system in Laos, and to respond more effectively to
US protective reaction strikes. As shown in the following
tabulation, military aid in 1971 tentatively is estimated to
have increased, reversing the downward trend of the previous
three years.
Million US Dollars
1967 1968 19
69 1970 1971 a/
Total
650 390 2
25 155 180
USSR
505 290
120 70 100
China
145 100
105 85 80
a. Preliminary
The higher level of military assistance in 1971 resulted primarily
from increased deliveries of SAM battalions and related equipment.
Deliveries of other antiaircraft weapons, ground force equipment,
and ammunition were made to replenish supplies lost or expended
during Lam Son.719.
6. Unusually strong support for Hanoi's policies has been
demonstrated by other Communist countries in the past few months.
High level Chinese and Soviet delegations traveled to Hanoi last
September and October to sign the annual aid agreements for 1972.
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Although the signing of aid agreements with the East European
countries has been slow, the delays have apparently been caused
by the time-consuming arrangements for high level delegations
traveling to Hanoi, as well as by more detailed planning of
aid packages. The Vice Minister of Foreign Trade, Nguyen Ba
Duc, has been in Eastern Europe since October, apparently com-
pleting preliminary negotiations and preparations for these
visits. Delegations from Bulgaria and East Germany traveled to
North Vietnam in December to sign annual agreements for economic
and military aid, and trade and payments agreements for 1972.
Delegations from Czechoslovakia, Hungary, and Poland are scheduled
to arrive in early 1972. Contrarily, Romania reportedly invited
the North Vietnamese to Bucharest. for conclusion of the 1972
agreements, but no decision had been reported by early January.
7. In December both China and the USSR reaffirmed their
support of Hanoi. On 5 December, China signed the customary
trade and payments agreement for 1972 and two protocols on the
supply of "general goods" and "complete projects", in accordance
with the September agreement on Chinese economic and military
aid. Similarly the USSR on 29 December announced the signing
of an agreement on supplementary military aid for 1972, probably
specifying the particulars of the agreement signed in October.
Military Conscription
8. North Vietnam called up a substantial number of men
for military service during 1971 -- on the order of 150,000 --
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about the same number as in 1970. The first wave of recruiting
occurred in the winter, keyed to an "appeal" of the Government
on 10 December 1970 for increased preparedness following US air
attacks in support of the Son-Tay raid in late November. News-
paper and radio broadcasts claimed as usual that large numbers
had "volunteered" for military service. The volume of?articles
tapered off in mid-January but then rose a-gain in late March,
and continued at a substantial level through May. In mid-June,
Politburo member Truong Chinh made reference in a speech to
military recruitment plans for the second half of 1971, and
there is evidence in the press of another upswing in recruiting
during the summer.
9. Recent articles in the press indicate that the first
phase of the 1972 conscription program is now underway. In
early December an unusually intensive propaganda campaign in
support of recruitment was conducted in the army newspaper, and
on 19 December the Minister of Defense Giap spoke at a rally in
Hanoi in honor of youths who were about to enter the service.
Most of the men-inducted in the early par,twof the year could be
trained and fed into the infiltration pipeline before the end
of the current dry-season.
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10. Plans evidently have also been made for subsequent
troop recruitment drives in 1972. Hanoi City officials reportedly
discussed the "national mobilization schedule" for 1972 at a
meeting in November, and a follow-up editorial in December urged
that adequate preparations be made for the "1972 recruiting
phases." Most of those drafted in the spring and summer probably
would be earmarked for infiltration during the 1972-73 dry season.
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foodstuffs in the first part of 1972 although Hanoi may decide
to offset part of the shortfall in production by a combination
of belt-tightening and, withdrawals from state reserves. More-
over, there are indications that repair of damage to water
control facilities may be too slow to prevent adverse effects
on the 1972 spring harvest. In such an event,- sustained high
levels of food imports may be necessary throughout the year.
17. The Communist allies continue to underwrite Hanoi's
military and economic needs. Increased shipment,of military
hardware during 1971 not only made up for the Lam Son 719 losses,
but significantly improved the country's air defense capabilities.
The public prominence accorded high level delegations traveling
to Hanoi in recent months seems to demonstrate strong economic
and military support again in 1972.
18. Military recruiting drives during the past year resulted
in about the same call-up of men as in 1970, and an intensive
propaganda drive in December kicked off the 1972 conscription
program. Men recruited in the early part of 1972 could be
trained and infiltrated before the end of the current dry season,
while those recruited in the spring and summer probably will be
earmarked for infiltration during the 1972=73 dry season.
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