Foreign Relations of the United States, 1961–1963, Volume III, Vietnam, January–August 1963

67. Telegram From the Embassy in Vietnam to the Department of State¹

Saigon, March 26, 1963, 7 p.m.

844. CINCPAC also for POLAD. Reference: Department telegrams 856,² 857.³ Country Team message.

1. Recommend State/DOD/AID accept CPSVN as basis for MAP planning CPSVN developed by MACV/MAAG in response specific directive by SecDef last July to develop military plan which looked ahead three years and covered requirements to meet GVN military needs on orderly basis so that, by end three-year period, GVN could take over increasingly greater share of internal security responsibility and US special assistance could begin be phased out. Basic assumptions to this exercise were that VC insurgency would be under control by end three-year period and that extensive US support would be required during period to do this. In process its development, plan realistically related to MAP planning and requirements National Campaign.⁴ Within this context, plan represents best military judgment on how to bring insurgency under control and meet SecDef’s objective. Accordingly, I gave my concurrence to CPSVN as basis for MAP planning, subject review annually as normally occurs with MAP. It of course impossible guarantee that CPSVN will bring US out of woods by end three-year period, or that its major assumption that VC will be brought under control by then will be borne out. Present progress is encouraging and holds prospect of continuing in same vein, but nonmilitary aspects this war can not easily be quantified or put into time period. Thus, there are risks in tying ourselves to time limit for bringing insurgency under control and defining phase-out special US military assistance to GVN. However, as stated para 4 of Plan, CPSVN represents best estimate military requirement to permit GVN to defeat current insurgency by end CY 65, defeat any new insurgency threat that may arise after withdrawal special US military assistance and put up initial defense against overt invasion.

2. Care was taken in development CPSVN to relate it to revised FY 63 MAP. Refined FY 64 MA program and FY 65-69 plan now being developed under assumption that CPSVN will be received favorably in Washington. In fact, revised FY 63 MAP now approved by DOD was developed concurrently with CPSVN to support intensified counterinsurgency effort during 1964 in line with National Campaign Plan (NCP). As reflected in para 8,CPSVN, $160 million DOD guideline for FY 64 entirely inadequate by estimated $369 million to permit implementation CPSVN. In this connection, believe it important keep in mind that over FY 64-69 time span CPSVN envisages total cost of only $4 million more than DOD dollar guidelines ($901 million vs. $897 million). Adding PCH&T increases total costs by $62 million over same period, since DOD guidelines now require country allocation to bear cost PCH&T. Major compression involved in CPSVN occurs in FY 64 in order provide means to accomplish job in three year period.

3. The detailed review of the refined FY 64 program and FY 65-69 MA Plan for RVN now scheduled in CINCPAC 13-17 May 63, following submission of 1 May 63.To meet this tight schedule, CPSVN is being used as planning basis.

4. Envision little problem in accomplishing activations or increased strengths under the FY 64 force levels proposed in CPSVN. Soft spots in training of some categories of technical personnel are discussed in CPSVN but they are not considered sufficient to affect the feasibility of the plan.

5. Parallel development of other mutually supporting national plans and programs such as National Police, etc., should and are being accomplished to attain the objectives cited in the CPSVN.

6. In light above, following are Country Team’s answers to questions posed Deptel 856:

A. We do not anticipate economic consequences to be overriding factor in GVN’s willingness to accept additional piaster contribution. We cannot foresee GVN’s reaction with any precision. We now trying persuade GVN agree contribute in major way to joint counterinsurgency fund and undoubtedly later in year we will be trying to get GVN agree finance an increased proportion its military budget for CY 1964 (in past 3 years GVN proportion has increased from 11 percent to 29 percent). However, GVN budgeted in CY 1963 force levels paralleling those in CPSVN which FY 63 paramilitary increase just recently approved by OSD. Re-examination of CY 64 additional cost stated in CPSVN for planned FY 1964 force levels reflects that the increase will be about 492 million rather than 846 million piasters. Difference between 492 and 846 is a result of GVN budgeting in CY 1963 for force levels larger for paramilitary forces than we had projected based on previous MAP planning figures, resulting in lower average cost per man. General Harkins furnished Secretary Thuan 5 March, without commitment, detailed proposed see [sic] structure for CY 1964 for GVN budget planning guidance (which are based on CPSVN FY64 and FY 65 planned strengths) with no adverse reaction to date or expected.

In fact pattern has been the reverse, with MAAG and MACV receiving repeated requests for MAP support of increased forces. Since GVN knows forces proposed (which represent the increased piaster contribution required), we recommend that requirement continue to be described to GVN in terms requirements of National Campaign and not of three-year plan objective of which was US phase down to normal MAAG. If GVN does not agree to absorb additional piaster costs of CPSVN, latter would have to be stretched out accordingly. Amount of stretch out and corresponding effect on CPSVN cannot be determined in vacuum.

Additional financial contribution required of GVN to implement CPSVN would comprise only about 4 percent and 10 percent respectively of deficits which we estimate would be in order of five billion piasters in CY 1963 and 5.5 billion in CY 1964. We do not envision supplementing or increasing of GVNCY 63 budget for support of CPSVN. Believe CY 63 shortfall amounting to about 200 million piasters can be absorbed by program slippages. While anticipated aggregate deficit of 10 to 11 billion piasters in CY 1963 and 1964 is staggering burden, and we doubt GVN’s ability, administratively and politically, to implement harsh and unpopular measures necessary to hold inflation in check, contribution to CPSVN is only a minor fraction of estimated deficit. Since we anticipate deficits of this order of magnitude with or without CPSVN, economic risks, whatever their potential danger must simply be borne and measures taken to minimize their ill effects.

Accordingly, we think standby authority to inject goods and services into Vietnam will be necessary if deficits of this order develop. Such authority will not only help assuage GVN fears, but will also enable US to intercede swiftly and effectively should inflation threaten to nullify economic and social gains already achieved.

B. Anticipate two stage turnover present CIDG areas: 1) as these areas come under initial GVN control, CIDG will be absorbed into RVNAF, CG, SDC or discharged; 2) as these areas are further secured permitting turnover to civil authorities, paramilitary will be demobilized and used as recruitment base for local police per Embtel 800.⁵ To extent stages (1) and (2) overlap, there could be direct absorption of CIDG into police.

C. Dollar costs of construction in CPSVN peak at $26 million in FY 1964 decreasing to annual average of less than $4 million in succeeding years. In view comments in answer pare A. regarding dangers inherent in anticipated budget deficits, definitely recommend against additional shifts out of MAP which would further exacerbate these deficits. Large and complex construction projects in MAP exceed capability SVN construction industry and availability GVN or counterpart piasters. In addition to MAP funded construction program, there is annual counterpart-funded construction program as part of GVN budget which represents maximum counterpart fund availability for that purpose.

D. MAP includes maintenance of weapons, arms and other ordnance items required to support villages and hamlets, including those taken over from CIDG. Anticipate CIDG secured hamlets will normally not require other hamlet kit items. These hamlets will be ready for socio-economic projects through USOM’s action plans and are included in projects given pare E. below.

E. USOM now has study underway to develop three-year projections for action plans related counterinsurgency. However, these projections based not only on CPSVN (which contemplates construction 7,500 strategic hamlets by end FY 1963 and completion total 11,000 by July 1964), but also on experience already gained as new CI activities progress and evolve. Projections cited below would require revision if CPSVN not approved but some increases would still be required.

Preliminary estimates for province administered-strategic hamlet plans (activity no. 430-AA-99-5) Montagnard relief (activity no. 430-AA-99-AB-5) and CI operational support (activity no. 430-AA-99-A1-5) indicate total FY 63 and FY 64 dollar costs these activities $3.4 million and $6.3 million respectively as compared CAP totals $3.020 and $3.4 million. Wish emphasize these new estimates do not necessarily require increase by these amounts in FY 1963 and 1964 total dollar requirements; final estimates may vary considerably up or down after completion review balance of program. Do not recommend change in FY 1963 and FY 1964 dollar totals for Congressional presentation for AID. However, some increase in total FY 1964 requirements stated CAP is definite future possibility for which AID/W may wish to reserve funds.

CY 1963 and CY 1964 piaster requirements for above three activities may require increases over CAP estimates on order of VN$ 265 million and VN$ 284 million respectively. As in case of dollars, these not net increases and only in part attributable to CPSVN.

7. Regarding Deptel 857, differences in economic consequences of stretching CPSVN from three to four years should not prove consequential. We face serious economic problems in any case. In our view, CPSVN should be put into effect, but no hard decisions need be taken on timing US phase-out. Latter will undoubtedly occur gradually and in any event should not begin until internal security situation permits and until GVN can realistically take over. This process may begin before end CY 1965 or it may begin later.

Accordingly, recommend that no decision re extending phase-out of US special military assistance be taken at this time for the following reasons:

a. The target date for phase-out of the US special military assistance was generally established in the SecDef requirement for the development of the CPSVN. The date was further defined by the CINCPAC guidance and assumption that this insurgency will be under control at the end of 3 years (end of CY 65). The plan was developed to accomplish the desired objective within the assumptions and timeframe established.

b. The CPSVN was developed concurrently with the revised FY 63 MAP. The refined FY 64 MAP as well as the PY 65-69 MA plan are now being developed for submission to CINCPAC 1 May 63 under the assumption that the CPSVN will be favorably received in Washington.

c. A stretch-out would require a smaller increase in the FY 64 training costs to US and GVN. However, when considered in the context of the overall FY 64 costs and the training costs which would be MAP supported if the CPSVN were not implemented, the increase of $3.7 million under the CPSVN is very minor. The savings realized in later years will offset a portion of this increased cost. Many of the individuals trained early under MAP will undoubtedly be qualified for subsequent duty as instructors. This gives RVNAF the capability of developing more qualified technicians, specialists and leaders, sooner than would occur otherwise. The overall increased training costs for the period FY 63-68 over that contained in the original MAP is only$3.2 million of a total $74.3 million.

d. The training proposed in the CPSVN is adequate to provide their personnel required to execute the plan within the 3-year period. Shortages of personnel in critical categories are discussed in the CPSVN but they are not considered sufficient to affect the feasibility of the plan. Should GVN be unable take over US tasks when the appropriate time arrives, it would be for relatively short extension of a few specific US units or personnel. This residue would not justify continued existence of the US special military assistance but could probably be handled by MAAG.

e. There may be some political risk that GVN would become unduly concerned that US planning pull out prematurely, if they were informed now of 3-year plan. For this reason believe it preferable present additional requirements to GVN in terms National Campaign rather than CPSVN.

Nolting

1. Source: Department of State, Central Files, DEF 19 S VIET. Secret. Repeated to CINCPAC.
2. Document 57.
3. See footnote 5, Document 57.
4. Regarding the National Campaign Plan, see Document 26.
5. Document 53.