Developments during the last year in Indochina have necessitated revisions in the United States military and economic programs throughout Asia. These revisions, in turn, have required a revision of the Agency's information programs, especially in southeast Asia, to meet a situation which has become markedly more critical in terms of United States interests. To meet this situation, the Agency has shifted additional resources into this area over the last year.

The Agency's basic objectives in the Far East are to encourage in the nations of the area a sympathetic understanding of United States policies and motives, a clear realization of the aggressive designs of Moscow and Peiping, and a determination to defend their freedoms by effective internal action and by associating with free neighbor nations and the United States for mutual defense and economic well-being.

The problems met in carrying out the Agency's objectives in the Far East vary according to the wide range of reactions in the different nations toward the Communist threat and toward the United States itself. Suspicion of United States motives is common to almost all of them, while neutralism or the unawareness of imminent danger can be found in most. Suspicion of the United States is based partly on remembrance of European colonial rule. It is stimulated by efforts of the Communists in each country to spread hate against America as a symbol of colonialism and capitalism.

The Geneva settlement has added to the menacing influence of Communist China and may further facilitate Communist penetration into the soft and disunited countries of southeast Asia. The United States is moving to assist these nations to defend themselves against the threat from Communist China to the north. To this end the United States provided leadership both in negotiation and implementation of the Manila Pact. A subtle but increasingly dangerous threat to Southeast Asia is the formation of foreign-based national or ethnic-front movements, such as the Free Lao (Pathet Lao) and Free Thai organizations, as weapons of propaganda and intimidation against the people of this area.

The defense of Southeast Asia against Communist aggression and subversion begins with the psychological task of creating the will to resist. This is a primary task of the Agency in this area. Many of the people of this area are not sufficiently aware of the danger or are unwilling or unable to take the forceful steps necessary to organize themselves to meet the menace.

The Communists, claiming the Geneva settlement as a great victory for their side, are embarked on a campaign to persuade popular opinion in all the Far East to accept this interpretation.

The Geneva settlement leaves the Associated States of Free Vietnam, Cambodia, and Laos with a multitude of problems in organizing and defending their independence. All three countries face the prospect of elections within the next 2 years. Observers believe that, with the majority of the populace of Vietnam presently under Communist subjection, Communist-supported candidates would win if the elections were held today. The three governments of the Associated

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States must establish their own security in areas where the Communists still possess military possibilities. Then they must prove to their own people that their new governments do in fact exercise their own independence and that these governments have the ability and determination to give their people a better economic life and a stable government. The Agency must help show them the great advantage of preserving, fortifying and building democratic society, and at the same time, demonstrate to them the menace of Communism.

Burma and Indonesia remain uncommitted in the belief that only by strict neutrality can they avoid foreign encroachment and involvement in what they consider a conflict between the two blocs of major powers. Meanwhile, they devote their energies to coping with internal instability and revolt. In Burma, the Government has moved against Communist insurgents and has outlawed both of the declared Communist parties. In Indonesia, the Communists have approximately 25 out of a total of 220 seats in the Parliament and they support the present government. The Agency must show these countries that a neutralist attitude may permit the Communists to infiltrate the government and eventually take over control.

The Communist successes in Indochina may result in a stiffening of the morale of the Communist guerilla forces in Malaya. Despite the guerilla movement, however, the people of Malaya have taken the first steps toward self-government. Another development in the area which may have considerable significance is the calling of the Afro-Asian Conference in Bandung, Java. This event is expected to require special efforts by the Agency in support of United States policy objectives.

While the Communists are increasing pressure on the free nations of southeast Asia, Japan, Korea and Formosa to the north are moving separately and with difficulty to strengthen their own defenses. The United States has mutual defense treaties with Korea and the Republic of China and agreements with Japan providing for the defense of that country. In Japan, there remains a considerable reluctance to take adequate defense measures and difficulty in dealing effectively with basic economic problems. The Communists are alert to exploit this situation to their advantage. In Formosa, the Government of Free China continues with American aid, and the assurance of American support, to build its defenses and to strive for the economic betterment of its people, forming an island of freedom to draw Chinese eyes away from the totalitarian and aggressive Communist regime on the mainland. Meanwhile, Chinese Communist military forces are busy probing the defenses of offshore islands held by forces of Free China.

To meet the increasing threat to southeast Asia, the Agency plans to further strengthen its programs in that area. The increases requested for the Far East in 1956 are primarily for operations in the countries of Southeast Asia and for production at Hong Kong of materials for distribution among the Chinese populations resident in the countries of southeast Asia. The countries for which the principle increases are requested, in addition to Hong Kong, are Free Vietnam, Cambodia, Laos, Thailand, Burma, and Indonesia. In these countries, the most significant increases are for local production of motion pictures with an antiCommunist or profree world message; increased press and publications activities (especially the Associated States, Indonesia, and Thailand); and book translations including expansion of the nonprofit publishing corporation activities into the Far East. The latter are needed to reach students and literate local leaders now flooded with pro-Communist and neutralist materials.

Also, funds are requested for installation of more efficient radio-teletype communications equipment at all the principal posts in the Far East. In addition to the increased funds which will be needed for increases in personnel, increased funds will be required also to finance continuing positions which will be filled for a greater portion of the year in 1956 than in 1955 under the Agency's intensified recruitment program.

The following separate narrative statements explain in more detail the significant changes in the countries for which the major increases are requested, Free Vietnam, Cambodia, Laos, Thailand, Indonesia, Burma, and Hong Kong.

1. Personnel at posts

EXPLANATION OF MAJOR ITEMS

(a) American salaries ($1,490,657).—Positions: This estimate provides for the salaries of 238 American positions in 12 countries and 47 posts. This represents a net increase of 15 American positions compared with fiscal year 1955. These include 2 positions for Burma, a motion picture officer and a public affairs assistant; 2 positions for Cambodia, a motion picture officer and a public affairs assistant;" 1 position in Free Vietnam; a cultural officer; 1 position in Hong Kong, an information officer; 4 positions in Indonesia, a cultural officer, Chinese language officer, publications officer, and an assistant cultural affairs officer; 1 position in Laos, an information officer; and 4 positions for Thailand, a motion picture officer, information officer assistant cultural affairs officer, and a cultural officer; 1 position for Korea, an English teaching specialist; 1 position for Formosa, an English teaching specialist; and a decrease of 2 positions for Malaya.

Man-years: The estimate provides for an average of 226 Americans actually on duty at the field posts during the year. This compares with an average of 170 in fiscal year 1955. An increase of 15 positions accounts for 12 man-years of the increase, based on a lapse of 20 percent for new American positions. The balance of the increase, 44 man-years, represents the planned increase in "on duty" strength at the field posts under the Agency's full complement policy. An explanation of the Agency's full complement policy is contained in the USIS mission general statement under tab 6.

(b) Local salaries ($1,523,590). This estimate provides for the salaries of 1,466 local employees (1,440 man-years averaging $1,058), which represents a net increase of 147 positions and $198,354 compared with fiscal year 1955. The increase in positions includes: 16 for Burma, 16 for Cambodia, 33 for Free Vietnam, 5 for Hong Kong, 27 for Indonesia, 13 for Laos, 49 for Thailand, and a decrease of 12 in the Philippines program.

(c) Hardship post differential ($241,400).-The estimate provides for salary differentials paid to American staff employees at posts in which difficult living conditions or excessive hardship prevail. The estimate of requirements was calculated on an individual job basis, post by post, using the differential percentages furnished by governmentwide regulations in effect at the time this budget was prepared. The increase of $46,450 is due to increased American staff employment at hardship posts.

(d) Living and quarters allowances ($232,289).—The estimate provides for temporary lodgings, quarters, cost of living, transfer and separation allowances for the American USIS staff. This estimate is based on rates prescribed by the standardized Government civilian allowance regulations, with due consideration for quarters available in government-owned or government-leased buildings. The increase of $12,089 is due to the increase in American positions and manyears of employment.

(e) All other personal services costs ($20,164).-The estimate provides for salary payment of 1 day in excess of the regular 52-week year, overtime and holiday pay, and temporary employment.

2. Personnel in transit

(a) American salaries ($154,000). The estimate provides for the salaries of American foreign service employees during the time they are in travel status from field posts to the United States, while they are on home leave, and during consultation period in the agency before reassignment to another post. This item is developed from an analysis of the time employees will actually spend in transiteither on home leave, preassignment status, or traveling to a new post.

(b) Travel and transportation assignment, separation, home leave, and transfer ($466,600)-The estimate provides for the travel of American USIS staff and their dependents, and the shipment of their effects from the United States to field posts, from one post to another, and from field posts to the United States. Requirements for fiscal year 1956 are $40,400 less than fiscal year 1955, as reflected on the following table:

(a) Junior officer training program ($67,900).-The estimate provides for the salaries, allowances and related costs of junior officers recruited directly from leading universities and colleges who, prior to regular assignment, are sent to relatively large posts for about a year to learn the program under the guidance of an experienced public affairs officer. This program was instituted in the middle of fiscal year 1955 by the recruitment of 9 junior officers for the Far East area. The increase of $26,500 over fiscal year 1955 provides for a continuation of this program throughout all of fiscal year 1956 at the same level (9 officers) begun in fiscal year

1955.

(b) New American employees' training ($66,100).—The estimate provides for the salaries and related costs of newly recruited American employees while they are engaged in receiving intensive indoctrination and training in the Agency prior to departure to their first regular overseas assignment. The training period averages 2 months.

(c) Specialized training of experienced employees ($37,700).-The estimate provides for the salaries and related costs incident to providing area and language training, training in the National War College, and concentrated training in particular fields of specialization to selected, experienced foreign service employees to increase their usefulness to the Agency.

(d) Training of local employees in the United States ($34,500).-The estimate provides for travel and per diem for key local employees to come to the United States for a period of about 90 days of training and consultation aimed at generating a greater appreciation on the part of the local employee of his role in the conduct of the program, thus increasing his value to the program in his country The estimate for the budget year will provide such training for 12 local employees, 1 more than in fiscal year 1955.

4. Operations allowances

(a) Representation.-Funds for representation allowances are not requested for fiscal year 1956.

(b) Official contact expenses ($28,800).-Funds for official contact expenses are provided for in the limitation for "allowances" in the appropriation language. These funds are required for occasional, informal entertainment expenses to enable key USIS officers to establish and maintain personal, friendly working relations with local government officials, editors, education executives, and other influential leaders. The funds requested will provide an average of $25 per month for 96 American officers in 47 posts in the far eastern area.

(c) Public affairs functions ($6,200).-Funds for public affairs functions are provided for in the limitation for "allowances" contained in the appropriation language. These funds will be used solely for formal social functions arranged by the United States Information Service, in its name, on occasions such as American holidays and the introduction of visiting high ranking United States Government officials to important local officials and opinion leaders. This will provide for an average of about 5 such functions in each of the 12 far eastern countries during 1956, at an average of approximately $100.

5. Consultation and conference travel ($25,000).-The estimate provides for travel of key field officers to regional conferences, consultation trips to Washington, and temporary details of field personnel to other posts. The estimate for the budget year will provide for the same level of travel as in fiscal year 1955.