In the wake of the Cuban missile crisis, the United States was determined to counter “wars of liberation” before they could be exploited by emerging nationalist leaders.
Vietnam was an important supplier of rice, rubber, tungsten, and tin, and the US wanted both the Chinese and the Russians to know that America would not tolerate “wars of liberation” in areas considered vital to its national interest. Vietnam was a good example.
Overall America’s involvement in IndoChina allowed the Soviet Union to catch its breath and regroup.
Interestingly, as the US escalated the war to “contain communism,” conflict with the Kremlin diminished, and a period of detente emerged.
Kruschev thought that detente was made possible by the Soviet attainment of nuclear retaliatory capability and subsequent strategic parity.
The US, on the other hand, pursued detente in the hope that the Soviets (as the largest supplier of military goods to North Vietnam) might be able to press for peace. Economic assistance was even offered to Moscow if the Kremlin would cooperate in Vietnam, and also agree to arms limitation.
On the other hand, Vietnam was only one of many revolutions in the less developed world and, as such, should not be examined in isolation.
Meanwhile, Kennedy’s theories of development created problems for America’s staunch ally, the shah of Iran, when it was determined that “the foreign policy of the United States will no longer be concerned solely with the external relations of states: the evolution of their domestic life has become a direct and legitimate concern.”
Kennedy insisted that American strategic and economic interests in the region required that the shah broaden the Iranian government’s internal base and reduce corruption.
As an indication of the administration’s seriousness, and despite Iran’s Cold War support for the United States, the US cut off $30 million in loans and grants pending internal social and economic reform. Subsequent change was coupled with a steady upgrading of Iran’s military establishment as the armed forces were given a central role in social change, a policy linked to theories of modernization and development then in vogue.
Aid levels were also threatened in Taiwan where the US insisted on accelerated economic development.
A 19-Point Program of Economic and Financial Reform was implemented in 1960 emphasizing the maintenance and expansion of economic sectors most critical for warfare.
In contrast to Iran, the program was so successful that it set the stage for export-led growth; moreover, economic assistance to the island was terminated in 1965 when the country was perceived to have attained its own capability for self-sustained expansion.
Reform was rewarded by a 1969 loan to build a factory to co-produce military helicopters with Bell Helicopter Company along with an agreement with the Northrop Aircraft Company to co-produce F-5E fighter planes.