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Declassified per Executive Order 13526, Section 3.3 NND Project Number: NND 63316. By: NWD Date: 2011  led by a military junta or by Vice President Tho, with the army playing a major if not the predominant role behind the scenes. On the one hand the military might conclude that a military led-government would be better able to maintain national unity and internal political cohesion and, more importantly, to conduct a determined and effective campaign against the Communists. On the other hand, they might, conclude that Tho, who apparently has been on good terms with some of the present military leaders, would not disagree with their views on the manner of conducting the fight against the Communists and that his constitutional succession would legalize the change in government and avert a serious power struggle. (Although Diem's brothers, Nhu and Can, would probably also be removed by a coup, they might attempt to retain real political power in the event Diem left the scene by means other than a coup. However, the army would probably act quickly to neutralize their efforts.) Another important actor which would almost certainly enter into the calculations of the military would be the fortunes of the coup group in South Korea and the course of US-ROK relations. In any event, a government led by the military, by Tho, or by any other civilian approved by the military would probably maintain Vietnam's pro-US orientation.

If there is a serious disruption of government leadership as a result of a military coup or as a result of Diem's death, any momentum the government's counterinsurgency efforts had achieved would probably be halted and possibly reversed, at least for a time. Moreover, the confusion and suspicion attending the disruption would provide the Communists an opportunity to strengthen their position in the countryside, and they might even be emboldened to attempt to seize control of the government. Since a serious split within the military leadership does not appear likely Communist attempts to take over the government in Saigon would probably fail.

C.

Because of the greatly increased internal and external Communist threat, improvement in South Vietnam's economic position during the next few years will depend largely on developments in the security and defense fields. Moreover, if larger and more effective military and security forces are to be maintained, South Vietnam is likely to remain increasingly dependent on US aid during this period. The security situation also will continue to affect adversely the willingness of the government to undertake fiscal reforms, urged by the US, aimed at increasing tax revenues.

Agrarian reform and land distribution programs, as well as highway and canal reconstruction, will continue to suffer as long as the government's control of much of the countryside, particularly in the Mekong delta area, remains as tenuous as it is at present. Prolonged, unrelieved insecurity in the countryside would result in a decline of agricultural output, a further decline in domestic commerce, and a lowering of business Rh