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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011  US effort to obtain an increased Vietnamese financial contribution which has recently gained a limited Vietnamese agreement (the Vietnamese have agreed to meet the FY 61 local currency costs of the CIP) a relaxation. in our previous position might well be interpreted as an acceptance by the US that the problem is of greater concern to it than to Vietnam. Such an attitude could be highly disruptive to an effective joint US-Vietnamese effort. They have the means to raise more revenue, including increased taxation and monetary reform, but both of these solutions, particularly the latter, are unpalatable in the extreme to President Diem. However, one thing is certain, payment of Vietnamese, troops will receive first priority in the Vietnamese budget and US failure to provide additional defense support aid will not affect the ability or willingness of Vietnam to carry out necessary military actions.

Vietnam is essentially a "have" rather than a "have not" country. It has land, resources, and an able and energetic people. If it were not for the Communists, Vietnam would probably be, like Thailand, economically viable today. We should help it move ahead with a long range development program against the day when the Communist menace has been brought under control and it can press ahead into an era of self-sustaining economic growth. Rh