127. Editorial Note

On May 17, 1963, President Diem and Ambassador Nolting issued a joint communique to announce United State-Vietnamese agreement on counterinsurgency funding. The text of the communique reads:

“The Government of Vietnam and the American Embassy announced on May 17 that agreement has been reached regarding funding for counter-insurgency and other economic development projects, particularly those supporting the Strategic Hamlet Program, during 1963. The agreement provides inter alia for the continuation of counter-insurgency projects supported under the piastre-purchase agreement announced in August, 1962. As explained at that time, the latter was an extraordinary arrangement necessitated by the fact that full provision for the counter-insurgency operations in question was not made either in the Vietnamese budget for 1962 or in the United States AID Program. It was planned that the continuation of these operations would be budgeted and programmed in a manner calculated to be responsive to the requirements of the present situation.

“Under the agreement just announced, the Government of Vietnam has undertaken to supplement U.S.-owned funds and counterpart, so as to make available up to $2.3 billion piastres during calendar [Page 308]year 1963. The United States is also providing some $55 million in the form of agricultural products, barbed wire, weapons for hamlet militia, cement, fertilizer and other commodities for the program.

“Counter-insurgency projects will continue to be initiated and developed by the Vietnamese authorities, and all of them will be fully coordinated between the Vietnamese and American central committees, as in the past. The execution of projects will also continue to be closely coordinated between the Vietnamese authorities and American experts in the provinces.

“During the course of the discussions, it was also reaffirmed that the scale of the U.S. advisory and support effort in Vietnam is directly related to security requirements and to the need to bring about throughout the country the economic and social improvements envisaged in the strategic hamlet program. Although at this time the present level of the advisory and support effort is still necessary, as the security situation improves and as the strategic hamlet programme progresses, it is expected that the need for foreign assistance, both in terms of material and personnel, will be progressively lightened.” (American Foreign Policy: Current Documents, 1963, pages 854-855)