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 17. Political. Some political progress has been made in Vietnam during the past year. Premier Tam's administration has enlisted the cooperation of the strongly nationalist Dai Viet leader Nguyen Huu Tri, and nationalist concern over Tam's francophilia has to some extent dissipated. Tam has also added to the political vitality, of Vietnam by holding local elections in secure areas of Vietnam. Another Vietnamese program, undertaken with US economic assistance, which involves the relocation of scattered villages in the delta into.centralized and defensible sites may be an important step toward the eventual "pacification" of heavily infiltrated areas. The decisions of March 1953 to increase the size of the Vietnamese National Army while expanding the area of Vietnamese strategic and operational responsibility, could also be of major political significance.

18. Despite these advances, Vietnam still lacks the degree of political strength essential for the mobilization of the country's resources. Tam's "action" program remains more shadow than substance. Elected local councils have no real power, promised land reform and other social and economic reforms which might generate popular support have not left the planning stage, and the Vietnamese government is handicapped by incompetent cabinet ministers and the lack of competent administrators. While Bao Dai refuses to assume active direction of the affairs of state, he remains hostile toward new leadership and democratic activities.

19. Of more basic importance in the failure of Vietnamese to rally to the Vietnamese government following the French grant of independence within the French Union in 1949 have been the following:

a. Many Vietnamese doubt the ability of French Union forces to defeat the Viet Minh and prefer to remain apart from the struggle.

b. The French Government has not dared to promise complete national independence at some future date, as demanded by the Vietnamese, because of the fear that the French national assembly would then refuse to support a war in a "lost" portion of the French Union.

c. The Vietnamese, despite many evolutionary steps toward complete independence since 1949, are generally inclined to believe that the French intend to retain effective control over the affairs of Vietnam.

d. The nationalist appeal and military prestige of the Viet Minh remains strong among significant numbers of the Vietnamese.

20. In Cambodia, internal political strife has weakened the government, dissident nationalist elements have continued to sap popular loyalty to the throne, and the King is demanding greater independence from the French in order to strengthen his political position at home. Meanwhile, the 9,000 Viet Minh combatants in Cambodia, while under fairly constant attack by French and Cambodian forces, are capable of exploiting disorders which may develop.

21. Laotian stability has been upset by the recent Viet Minh incursion. The Laotians are generally hostile to the Viet Minh but are unable to contribute a great deal to the defense of their homeland. A small group of pro-Communist Laotians returned to Laos with the Viet Minh during the recent incursion. It is led by a disaffected Laotian nobleman, Prince Souphanouvong, and calls itself the "Free Government of Pathet Lao" (Laos).

22. Meanwhile, the Viet Minh leadership, with Chinese Communist material and advisory assistance since 1949, has demonstrated the necessary zeal, ruthlessness, and tenacity to exploit to the maximum the limited resources at their command. The Viet Minh have expanded the area under their complete control and their prestige has probably increased throughout Indochina as a result of military successes in northwest Tonkin and Laos.

23. In the areas of Viet Minh occupation, Viet Minh control is believed to be effective, and minimum food requirements are being met. The Viet Minh have taken on increasingly the conventional characteristics of a "Peoples Republic" and are now engaged in programs to confiscate and redistribute land and to eliminate "traitors" and "reactionaries." Although this departure from national front tactics has increased realization Rh