125. Memorandum From K. Wayne Smith of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1

SUBJECT

  • Thailand: The Latest Charade

The purpose of this memorandum is to:

  • —inform you of the latest charade in the bureaucracy’s conspiracy to screw up our relations with Thailand;
  • —seek approval of a hold on and reconsideration of STFD (our currently proposed assistance package to Strengthen Thai Forces for Defense) with the idea that we should extract ourselves from this apparently doomed and ineffective proposal and face the issues of Thai force effectiveness head on;
  • —provide you with talking points for conversation with Under Secretary Irwin to set in motion a reconsideration of our assistance to Thai forces.

Background

DOD in response to the President’s guideline to the agencies (NSDM 89 on Cambodia, October 26, 1971) that, in recognition of possible dry season threats, “contingency plans should be developed with Thailand for the possible deployment of Thai forces to aid in the defense of western Cambodia.”

Proposed to the Thai in April (five months after the NSDM and well into the dry season we were concerned about), the STFD package contains the following principal elements of program assistance:

  • Foreign Military Sales Credit—We would provide up to $12 million in credit to finance Thai purchases of military goods from the United States. Most of these goods, consumables, would be in support of Thai air force operations in Cambodia.
  • PL 480—We would provide $20 million of agricultural commodities over the next two years. This assistance would save Thai foreign exchange expenditures. The foreign exchange savings would offset the Thai purchase from the U.S. of ammunition and other consumables under the foreign military sales credit program. DOD and State layers contend that this complicated arrangement is necessary because military grant assistance could not legally be given to Thailand [Page 263]for use in Cambodia. The local currency receipts from the Thai sale of the commodities would support increases in the Thai defense budget to meet increased local costs (e.g., for airfield construction).
  • MASF add on—Imports in the amount of $10–15 million in addition to those already provided or programmed for FY 71 and FY 72 MAP, i.e., $60 million annually, would be financed. Such imports would provide equipment and military consumables for the RTA and RTAF in Thailand, and as such could be covered by the regular MASF grant.

The proposal has not been accepted. The prospects for agreement as reported by the Mission (see cable at Tab B)2 are “only fair.” The RTG is balking because it is:

  • —uncertain about the benefits of military deployments and preparedness which we have linked specifically to Cambodia when Thai concern is much more focused on the insurgency and on developments in Laos;
  • —confused about the complicated assistance trade-off and offset mechanism associated with the proposed assistance imposed by our legal restrictions.

The STFD proposal was poorly conceived from the beginning. We have received the very distinct impression that the motivation of some individuals involved in its design, who are against any external role for the Thai, was simply to provide a “sop to Henry,” perhaps knowing all along that the proposal would bring little or no results. It is, at best, one more illustration of the ad hoc piecemeal manner with which we provide assistance to Thailand. The White House guidance on the program was consistently of the “we don’t care about the details—get on with it” variety.

The Real Issues

The STFD proposal does not deal with serious manpower shortages in the RTA/MC and the Thai budget constraint on more rapid additions of trained and skilled personnel to the force.

It does not provide the Thai with any indication of our long-run intentions with respect to Thai defense support. In effect nothing has been done to implement the Nixon Doctrine in Thailand.

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The real issues are:

  • —(1) The Threat. The overriding consideration that bears on the content or timing of STFD or alternative proposals is that the RTG is capable of sustaining probably no more than the equivalent of ten battalions in combat—the approximate force currently operating against the insurgents. With this limited capability the RTG faces:
    • Expansion and consolidation of insurgent forces. A fifty percent increase over the last six months in armed insurgent strength in the North (including for the first time recruitment of ethnic Thai in the North) and strengthening of organizational infrastructure in the Northeast signal mounting difficulties for the RTG in containing the insurgency. (Excerpts from mission reports on the insurgency are at Tab C.)3
    • Encroachment by NVA/PL forces into areas of Thai security interest in Laos. Enemy pressure and advances in Laos, particularly in Sayaboury province in the North, raise the RTG’s perception of threats to its national security.
    • Allied requirements for greater participation in regional defense and military support for Vietnamization as the U.S. withdraws. Souvanna Phouma has asked for regular Thai battalions in the South to contest NVA/PL advances in the Bolovens plateau area (the RTG has decided not to meet this request) in addition to the irregular Thai forces already deployed in North Laos. The Thai could, with the South Vietnamese, deploy to interdict supply movements in the panhandle and divert NVA/PL forces from targets in Cambodia and South Vietnam as in Lam Son 719. But in my opinion a principal obstacle to Thai deployments is the paucity of Thai ground force capability.
  • —(2) Deployment Sustainability. Thai deployments out-of-country in Vietnam and in Laos have been sustained by U.S. personnel giving direct logistics support as well as financial assistance. By itself the RTG at present could probably sustain no more than 8–10 battalions in combat out-of-country and then only at the sacrifice of deployments against the insurgents in-country. Thus, while we may be able to buy additional Thai deployments, the price will be an expansion of the American logistics support presence in Thailand or a reduction in Thai deployments against the insurgents. If we or the RTG are unwilling to pay this price, then additional out-of-country deployments can only be obtained with improvements in the Thai’s own deployment capability, e.g., extensive manpower recruitment, training and advancement, and logistics infrastructure improvement.
  • —(3) Local Currency Support for the Thai Military Budget. Shortages of personnel, particularly trained officers and NCOs appear to be a binding constraint on increases in the Thai defense capability. To [Page 265]overcome these shortages, large increases in local currency expenditures in the military budget will be necessary. Without a substantial U.S. contribution, it is unlikely that the Thai will undertake these expenditures because of the declining economic situation. Inasmuch as our programs in the past have been for military imports rather than local currency support, improvements in Thai defense capability will require a major program change for the U.S. and significant increases in U.S. costs, e.g., U.S. costs for Thai ground forces in FY 72 including financing for additional imports could reach $150–200 million compared to about $50 million in FY 71.
  • —(4) Alternatives to Irregular Deployments. In lieu of support for the current irregular Thai deployments, the U.S. could offer to support [21/2 lines of source text not declassified].
    • —The irregular deployments siphon off scarce trained personnel and financial resources from the RTA/MC and thus slow the development of a self-reliant Thai defense capability.
    • —Regular force deployments are difficult on political grounds both in Thailand and domestically.

Alternatives

Kennedy and Holdridge’s request in support of Marshall Green and delayed again because of State pressure for STFD instead (after I reviewed it with you in San Clemente) the interagency analysis will finally be ready for review by the VSSG next week.

We are confronted with basically two alternatives:

  • —(1) Persist with STFD, continuing to offer some or all of the proposed assistance with the knowledge that we are buying little or nothing in the way of increased Thai defense capability or deployments.
  • —(2) Extract ourselves from STFD, minimizing the political costs as necessary. Inform the Thai that we are re-evaluating our assistance proposals in the context of recent developments in Cambodia and Laos, and in their insurgency. And tell them that we will be ready to discuss with them, in the near future, additional U.S. assistance in FY 72 and beyond to help build a more self reliant Thai defense capability.

Recommendation

I recommend that you opt for alternative 2, Extract ourselves from STFD. If you approve, I urge you to raise the appropriate issues at your [Page 266]upcoming luncheon with Under Secretary Irwin.4 Talking points to accomplish this are at Tab A.5

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 563, Country Files, Far East, Thailand, Vol. VI. Top Secret. Sent for information.
  2. Attached at Tab B but not printed was telegram 7581 from Bangkok, June 2. Unger reported that it was suggested to Irwin and Green during their visit to Thailand that “substantial reduction in expenditures required (of the Thai for munitions for RTAF sorties in Cambodia) would be very helpful in gaining Thai acceptance of STFD.” Unger suggested that this reduction could be justified by reduced number of sorties forecast for RTAF in Cambodia (from 300 to 60 per month).
  3. Attached at Tab C but not printed was telegram 4862 from Bangkok, April 9, and Airgram A–175 from Bangkok, April 23, which reported increased numbers and aggressiveness of armed insurgents in northern Thailand.
  4. Not found.
  5. Attached but not printed.