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 Vietnam were to fall under Communist control.

6. We believe that if adequate outside assistance is made available, the Cambodian Government will probably increase its effectiveness and the effectiveness of its internal security forces and will be able to suppress Communist guerrilla activity and to counter Communist political activity. The situation in Cambodia would probably deteriorate, however, if a Communist government should emerge in LoasLaos [sic] or South Vietnam.

I. THE CURRENT SITUATION

General

7. The signing of the agreements at Geneva has ended large-scale warfare in Indochina and has affirmed the independence of Laos and Cambodia. It has, on the other hand, accorded international recognition to Communist military and political power in Indochina and has given that power a defined geographic base. Finally, the agreements have dealt a blow to the prestige of the Western Powers and particularly of France.

North Vietnam

8. The Viet Minh has emerged from Geneva with international recognition and with greatly enhanced power arid prestige in Indochina. The Viet Minh leaders, while admitting that their ultimate objectives may have been temporarily compromised "for the sake of peace," are acclaiming the agreements as denoting a major victory and ensuring the eventual reunification of all Vietnam under Communist aegis. Ho Chi-Minh is generally regarded as the man who liberated Tonkin from 70 years of French rule. The Viet Minh has initiated a program to absorb presently French-controlled areas in the Tonkin Delta.

South Vietnam

9. In South Vietnam, the agreements and the fact of the imposed partition have engendered an atmosphere of frustration and disillusionment, which has been compounded by widespread uncertainty as to French and US intentions. The present political leadership appears to retain the passive support of the more important nationalist organizations and individuals. However, the government's already weak administrative base has been further dislocated, and it has only uncertain assurances of continued outside military and financial support. Mutual jealousies and a lack of a single policy continue to divide Vietnamese politicians. Moreover, certain pro-French elements are seeking the overthrow of the Diem government with the apparent support of French colonial interests anxious to retain their control.

10. The North Vietnam population is somewhat greater than the South Vietnam population and, in any event, the loss of the Tonkin Delta has deprived South Vietnam of the most energetic and nationalist segment of the population. Although South Vietnam has the capability for agricultural self-sufficiency, the principal industrial establishments and fuel and mineral resources are located in North Vietnam.

11. Provided that the terms of the cease-fire agreement are observed, the combined French-Vietnamese forces in South Vietnam now have the capability of maintaining internal security.

Laos

12. The relatively stable internal situation in Laos, which in the past has depended upon French support, remains essentially unchanged. The Laotian Army is poorly armed and trained and, without the support of French forces and advisers, does not have the capability to maintain internal security. Moreover, "Pathet Lao" Communists continue to have de facto control of two northern Rh