354. Memorandum From the Ambassador-Designate to Thailand (Unger) to the Assistant Secretary of State for East Asian and Pacific Affairs (Bundy)1


  • Financial Implications of Thai Force Contributions to Vietnam
Virtually all of the significant financial arrangements have been made with respect to the current Thai contribution of 2300 troops to Vietnam and no serious problems are foreseen in this regard. I do however foresee a serious problem arising if it turns out to be possible to arrange for the considerably larger Thai contribution—say 10,000 troops—which we hope Thailand will agree to send. If the pattern for the current contingent were repeated on the larger scale, the Thai budget, because of Thai Army regulations concerning allowances, would be faced with an annual charge of something in the neighborhood of $20 million additional expenditures, something like 1/8th of the present defense budget, solely to pay the overseas allowances for 10,000 troops at the present rates.
This problem takes on even more serious implications when we note the current shortage of non-commissioned officers and company grade officers in the Thai forces. The raising of a further Vietnam contribution will probably accentuate this shortage since officers in these categories will be drained away to form new units. Furthermore, it is officers in these categories who are most essential to the mounting of counterinsurgency actions by small, flexible and mobile units of the Royal Thai Army. According to MACTHAI, the principal reason for this shortage of officers in these categories has been the dearth of defense funds in the budget and an additional drain of $20 million equivalent will make it even more difficult to maintain forces even at their present strength and quality to say nothing of making up the shortages mentioned.
At the same time, it is generally accepted that pay rates for the Thai Army are much too low to attract the numbers and quality of personnel required. The defense portion of the Thai budget is expected to increase modestly in Fiscal Year 1968, and will include provision for some increase in RTA pay rates, but it is not known how helpful this will be in attracting and holding NCOs and junior officers.
All of these problems obviously closely relate to each other and any U.S. position in this regard should be worked out taking them all into account so that at least a tentative judgment is reached as to whether or [Page 788] how we should try, for example, to persuade the Thai to substitute a general pay raise or a pay raise in certain categories, as at least a partial substitute for the overseas allowances. It also may be that the overseas allowances could be met in part by provision of goods or services in kind and that some of the expenses could be met in Vietnam by the United States. These considerations also are almost sure to bear on the questions which we anticipate the Thai will shortly be raising with us about the reforming and expansion of Thai forces related to their sending out a larger contingent to Vietnam.
I will ask for a staff study on this matter immediately upon my arrival in Bangkok, and would appreciate it if the findings of such a study could then be given prompt attention in Washington to see whether any relief to this situation could or should be provided out of U.S. funds. I am not at the moment asking for any action here, but would like to alert the State and Defense staffs to this problem so that it can receive prompt attention as soon as field recommendations are received.
  1. Source: Department of State, Central Files, POL 27 VIET S. Secret.