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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011  refugees) and in carrying out other agricultural reforms, and in establishing some basis for industrial growth. For example, the reconstruction of the principal railroad, running for almost, 730 miles along the coast from Saigon to just north of Hue, was completed; the production of rice, which supports most of the population, reached the estimated prewar annual average of 3.5 million metric tons of paddy; about 140,000 landless persons were resettled in sparsely populated areas in the highlands and Mekong delta as another means to counter Communist infiltration as well as to relieve population pressures in the crowded coastal region; and construction or planing had began on several medium-size manufacturing plants, principally in the textile industry.

Despite the serious security and political situations during the past year and a half, agricultural and industrial output has increased and the main reconstruction projects have been completed. Paddy rice production in 1960 (the 1959–60 crop) rose to over 5 million metric tons, exceeding the prewar level for the first time, and the 1960–61 crop, which began to come on the market toward the end of 1960, was slightly higher, By the end of 1960, as a result of the government's agrarian reform and land distribution programs the number of landless peasants resettled in villages in the highlands and delta areas increased to more than 170,000, an additional 123,000 tenant farmers were able to purchase land holdings they formerly worked or to establish homesteads on abandoned lands, and some 44,000 other peasants were resettled in 22 "agrovilles", the highly controversial government built villages in the delta area. Significant progress has been made in the reconstruction and expansion of the road system by completion of three principal projects, National Routes 19 and 21 in the central part of the country and the Saigon-Bien Hoa highway and the approaching completion of work on other important routes. Industrial expansion since the end of 1959 has been greater than at any time since 1955. There has been a sharp increase in the number of medium and small plants constructed, under construction, or planned for South Vietnam's light industry (which includes textiles, fertilizer, sugar, glass, paper etc.); coal production his issn appreciably and is soon expected to supply all of South Vietnam's requirements; and construction has begun on a large hydroelectric plant at the Da Nhim river (financed through the Japanese reparations program) which, when finally completed in 1956, is expected to more than double the present electric power capacity.

Since the latter pert of 1906, however, the effects on the economy of Communist insurgency and of unstable political conditions have become noticeable and have contributed to some slackening in the momentum of economic progress built up doing previous years. Communist interference with the flow of rice from the countryside to the urban centers has caused a decrease in the amount of rice available for export and forced the government to suspend the issuance of licenses for rice exports, thereby almost assuming a decline in rice exports during 1961. In addition, the threat of rice shortages for domestic consumption in certain areas has Rh