- SBORER LAOS Current Situation Bvaluition The principal remaining issues before the. ‘Geneva Conference, including SEATO, having. been-resolved. it is anticipated that the new Accords may be signed next week. There is nevertheless one serious stumbling block, which endangers the satisfactory conclusion of the Conference, i.e., the possible refusal of the GYN to sign. The GVN's position stems from its belief that so many concessions have been made to the Communists that the security of SUN is gravely threatened. We are, however, hopeful that Diem will still be persuaded that we have achieved the best obtainable compromise for Laos and that we stand firm on our commitments to SYN. There has been little progress on our. action program. We are con- centrating at present on the following problems: 1. Economic Assistance. Elaboration of our future aid to Laos awaits the visit of Souvanna Phouma to Waehington, tentatively scheduled for July 25-27. In the meantime, we seek to spread the burden of providing Souvanna with the material assistarice he requires ‘by enlisting contribu- tions from other Free World nations. 2. Di plomatic Relations. The RLG's decision to recognize 5 bloc countries and an exchange of Ambassadors poses a major problem with respect to the GVN. GRC, Federal Republic of Germany and the ROK. Further action by the RLG is deferred until Souvanna's return to Laog. In the in- terim we are attempting to assist the pro-Western countries involved in establishing or maintesining satisfactory representation in Laos. 3. ICC. We have asked our Geneva delegation to request the ICC to prepare a detailed budget and list of equipment needs so that we will be prepared to meet quickly our share of the requirements. With regard to the essential heavy equipment - helicopters and light aircraft - we are taking steps to make it immediately available to the ICC. &. MAAG Withdrawal. With the signing of the Accords, we will seek Canadian cooperation in utilizing to the full the 75-day period for the withdrawal of foreign military personnel. This will give us the maximum possible opportunity to determine whether the DRV is abiding by its commitments and whether the Soviets as Co-Chairman are. carrying out their underteking. _ SECRET
CONFIDENTIAL -§- BURMA Current Situation Evaluation The internal situaticn remains unstable. This fact was highlighted by incidents on July 7 and 8 when student demonstrations led by pro- | Communist organizations were ruthlessly repressed by the police and army. Thase incidents could well lead to increased public disaffection with the Ne Win regime and to a rift between the regime and the cpportunistic leftist. groups who have, heretofore, been its only outspoken civilian political supporters. Internal security conditions are apparently continuing to detericrate, though not dramatically. A special Government amnesty offer expired June 10 without producing significant response from the insurgents. Progress on Action Program 1. Political .It has been confirmed that Brigadier Tin Pe of the Union Revolutionary Ceuncil will come to Washington for medics] treatment as planned probably in late July, although precise dates have not been determined. 2. Economic (AID) No new develcpnents. 3. Military a. The Burmese are ready formally to accept. the FY 1962 military "gales" program. State and DOD have agreed to accelerate deliveries of Mz carbines as requested by the Burmese, to the extent production facilities permit, in order to contribute to planned post-monsoon counter-insurgency operations. This action will also, hopefully, earn some political credit for the United States. , b. Embassy Rangoon has confirmed that United States training for Burmese officers will be continued under the FY 1962 program. 117 prospective students heve been proceszed for the coming year. CONFIDENTIAL
CAMBODIA Current Situation Evaluation Cambodia's differences with neighboring Thalland and South Viet-Nam continue, but they have so far not significantly affected the presently generally satisfactory relations between the United States and Cambodia. Thai moves concerning Preah Vihear temple are being watched closely, and it appears likely that if the announced decision to respect the World . Court's award is not implemented by September the matter may be brought by Cambodia to the attention of the UNGA, The dispute between Cambodia and Viet-Nam over the ownership of islands off the Cambodian shore has come to the fore again, with the GYN rejecting a Cambodian protest against Vietna- mese naval movements near them on the grounds that they. belong to Viet-Nam. Organization of a new Cabinet has been postponed pending religious rites celebrating the World Court. decision.. New evidence of anti-Sihanouk plotting in Bangkok has developed. Progress on &stion Program le RKG-GVN Border Commission (Pol. 8). The GVN reply.te the RKG's pro= test against. the Jume 16 border Violations is not entirely satisfactory, but Phnom Penh believes it may allow progress on the border commission proposal and has raised this possibility with the Foreign Ministry. 2. Force Increase (Mil. 1). Ths initial reaction of the RKG to approval of the request for a force increase of 3,18), for MAP support only, is one of disappointment that military budget support was not ineluded. 3. New Aircraft (Mil. 5). Four T-28 aircraft, first increment of six- teen, have arrived in Cambodia, Formal turnover awaits the arrival of. Ambassador Sprouse. he Highway Repairs (Econ. 9). Invitations to bid have been sent out, and the rep contract 18 scheduled to be awarded by August 15. Contractors would be scheduled to commence work November 1, under the proposed contract. — SECRET