Foreign Relations of the United States, 1961–1963, Volume II, Vietnam, 1962

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

Saigon, August 3, 1962—7 p.m.

120. This is a Task Force message. Subject outline FY 63 aid program, interim fund request. Ref: (a) Deptel 61 (b) Embtel 84 (c) Aidto 215 (d) Toaid 87 (e) Aidto 207 (f) Toaid 1077 (g) Toaid 1192 (h) Toaid 175.²

Two purposes this message are (a) provide Washington outline of Task Force thinking re FY 63 program, with brief description its nature, rationale’ and summary cost figures; (b) put forward definitive request interim funds covering identified needs in ongoing priority activities which cannot be delayed. (Dollar and piaster programs listed para 7 below following introductory text.)

a. Total FY 63 Program

1. Situation

As discussed SecDef meeting Honolulu in July,³ all-out drive against insurgency in Vietnam requires as much innovation, speed and imagination in economic and social assistance as in military and other forms U.S. aid. We consider next year to be crucial in counterinsurgency effort here, and are recommending aid program designed specifically to assist major GVN counterinsurgency measures. Programs launched by GVN (especially Strategic Hamlet Program), state of rural economy, and military events (including all types VC pressures) are combining in present period to open way for rapid and profound changes in SVN. One example already in evidence is Montagnard exodus mounting to major proportions. Widespread efforts in rural hamlets bearing heavily on lives of ordinary people, offer great opportunity, and at same time great risks if VC able to prevent fulfillment of hopes of people and government plans.

2. Urgency

This seems evident: (a) that as result social, political, military pressures accumulating at accelerating rate, next 6-12 months will be period of crisis in sense that either great improvement in situation or considerable deterioration could ensue; (b) that our side on hia1 with tremendous opportunity for progress if it can be seized, and grave dangers if it is not. Important note specifically that several GVN, U.S.-supported, programs have made commitments and raised hopes, which could boomerang disastrously if not followed through, e.g. strategic hamlets, still largely in construction/population control stage awaiting improvements of civil programs.

3. Program Based on Events, Not Independent Planning

Another aspect of situation relating particularly to American aid program is that, while U.S. able influence events, it is not able to “program” or control them, nor cause them to adhere to schedule of its choice, nor to await its decisions. In FY 63 significant results will be obtainable from aid efforts only if they tied in with principal current GVN programs, and only if such efforts applied at time events require them. Our program must be defined, in other words, as support of and influence on forces in motion in present struggle, rather than as self-sufficient plan or side scope of fluid situation.

We not proposing at this time, therefore, a static 12 months’ program fixed in detail since neither developments in the country nor activities and programs which may need support can be assessed far in advance. Planning approach include (a) calculation order of magnitude 12 monthsʼ requirement; (b) calculation of detailed initial requirements; (c) establishment of adequate personnel capability and minimum, revolving, supply inventory of major items (requirement for which will be common to a number of potential programs); (d) action immediately on programs and plans ready to move (without compromising, but without waiting for, final 63 plans and program approval); (e) firming up over next 5-6 months succeeding tranches of total program.

4. Rationale

Major shift in emphasis planned for 63 program (as against 62) from: ordinary economic development (of infrastructure, etc) with trickle down benefits, managed through central government as national programs, to: direct injection in rural economy and society, through decentralized machinery of benefits to individual communities and measures enabling communities produce benefits for selves. Rationale for shift, of which experience in 62 makes us more certain than ever, is that outcome of struggle dependent on tangible direct evidence GVN capacity improve economic and social life. There is good prospect for action on such programs by GVN and province authorities, and we aim associate much our own action with them. Initiative at this level appears also be main chance for strengthening representative and democratic processes in hamlet/village society without which crucial economic, social improvement not likely occur, or, if occurring, not likely translate into satisfaction towards regime.

5. Nature of Program

“Public Aid” Program (as distinguished from commercial aid) will include four major segments:

(a) Ongoing development work (such as technical education, crop improvement, town water supply) proportionately reduced from similar activities in 62 and amounting roughly 6.5 percent total dollar cost. Includes also programs seeking influence policies and improve performance central government agencies (taxation, civil service, finance, budget, etc.).

(b) Counterinsurgency support activities. These relate to programs, units of government, etc. which not directly in contact with the target population groups (e.g. strategic roads, replacement RR sabotage, agricultural machinery, police weapons), or whose content not per se essence of C.I. (e.g. malaria eradication, national and province level health installations), but which are essential for support and backstop of sound impact programs of counterinsurgency proper. Some of these activities are carried forward intact as priorities from 62 program (e.g. agricultural credit); some will be carried forward in substance but only m the event that their administration can be revitalized or performed through new direct action channels (e.g. training of teachers for “clear and hold” operations); and some which are new in substance (e.g. POL support for C.I. transportation needs). This category approximately 13 percent total public aid;

(c) Direct civil counterinsurgency, first part, meaning those activities (health, education, agricultural production, public works, information communications, security, self-help, etc.) that will be operated inside hamlets, villages, districts with object of altering life of rural population. (Note: last category below fits this description, but listed separately because distinct from viewpoint U.S. administration.) Twelve of 16 activities this category new in 63. Category represents 25 percent program cost, or combined with last category below, 72 percent. There are broadly speaking two types activity this category: (a) intra hamlet, those in which requirements are generated, work is done, benefits received by, in, and for hamlets, and village people, and, (b) inter-village/district works where outside technicians, resources, etc. play greater role.

(d) Direct counterinsurgency, second part. Largest single segment program is supply of construction materials, signal, communications, and defense equipment for initia1 physical establishment strategic hamlets. Does not include “benefits”. These requirements calculated by MAAG on hamlet-unit basis, and, whether funded originally from AID or DOD sources, USOM plays only service role in programming, procuring, some warehousing; military take over thereafter for distribution; installation under jurisdiction local civilian authorities. Twelve-month requirement ($42 million) is tentative projection of probable rate of progress in setting up these hamlets (which, as Washington aware, in G-VN and Task Force view will become principal instrument in pacification effort). Thus, full-year requirement is order magnitude and lends itself to continuous refinement as time goes on. However, first $13 million tranche (part b below) is solid figure ready for urgent implementation in order get country commodity inventory in motion.

Military civic action (second item this category) has somewhat similar status, with military planning originals and USOM logistic collaboration.

6. Instruments and Procedures

Abbreviated listing follows of certain new aspects in program implementation.

(a) As large dollar proportion of program is devoted to supply support of fluid campaigns (rather than fixed-schedule projects) anticipate that PA-PR procedure will account for nearly an procurement. Main exceptions occur in category (A) (para 5 above) standard projects.

(b) On piaster side, decentralization of budgeting (in which U.S. field reps to participate), expenditure control, and fiscal responsibility are counted on heavily in both counterpart and U.S.-owned piaster programs in order achieve necessary flexibility, timing in rural operations. Considerable progress already made in breaking ice, working out precedent-setting forms.

(c) In matter of allocation total piaster resources, Mission intends lay heavy stress on joint U.S.-GVN budget review; this should reduce problems re athition, and Pave way for broad counterpart piaster release agreements; would also relieve USOM of burdensome preoccupation with minor details (often generating friction). Such an approach to L/C budgeting would also be appropriate in connection with plans for negotiation broad, high-level agreements on main purposes mutual programs, priorities, organization, etc.

(d) Basic reorganization of USOM is in progress. Will have three main features: (1) redesign of channels, authorities, relationships in order increase capability operate in context of interdepartmental, semi-military, campaign-type programs as opposed profession-oriented project work); (27 to establish, support, and delegate operational authority to field stations, offices, representatives, in accommodation to fact that program will be directed to rural areas. In this connection, USOM urging unified regional representation of Country Team in most places, since all U.S. agencies often concerned with same operation in given locality; under this arrangement senior U.S. representative in programs of joint concern would occasionally be USOM man, more often MAAG sector advisor; and (3) to bring together under unified supervision in USOM functions of programming, economic and financial analysis, which will also be increasingly integrated with Embassy Econ. Section.

[Here follow sections 7 and 8, which give detailed listings for individual categories and sectors.]

Nolting

1. Source: Department of State, Central Files, 751K.5/8-362. Confidential, Priority. Repeated to CINCPAC.
2. Telegrams 61 and 84 are Documents 242 and 245; none of the AID telegrams has been found.
3. See Document 248.