and the People's Republic of Kampuchea of much-needed funds by denying them membership to major international organisations such as the World Bank, the Asian Development Bank and the International Monetary Fund. In 1979, Japan stepped up the pressure by suspending all economic aid to Vietnam, and warned Vietnamese leaders that economic aid would only resume when Vietnam amended its policies towards Kampuchea, the Sino-Soviet rivalry and the problem of the boat people. Sweden, which was considered the staunchest supporter of Vietnam in the West, also considered reducing its commitments to the communist country as virtually every other country cancelled its aid. In addition to external pressure, domestic policies implemented by the Vietnamese Government since 1975 had proven to be largely ineffective in stimulating the country's economic growth. By building on the Soviet model of central economic planning, Vietnam placed most emphasis on the development of heavy industries, while production in agriculture and light manufacturing sectors stagnated. Furthermore, attempts to nationalise the economy of southern Vietnam after reunification only resulted in chaos, as economic output was driven down by dislocation of the general population. In addition to those failed economic policies, Vietnam maintained the fifth-largest armed forces in the world, with 1.26 million regular soldiers under arms, 180,000 of whom were stationed in Cambodia in 1984. Consequently, the Vietnamese Government had to spend one-third of its budget on the military and the campaign in Kampuchea, despite receiving US$1.2 billion in military aid annually from the Soviet Union, thus further hampering Vietnam's economic rebuilding efforts. In response to international pressure, and to avoid engaging in a debilitating conflict with various local armed resistance groups, Vietnam began withdrawing its military forces from Kampuchea as early as 1982. But the withdrawal process lacked international verification, so foreign observers simply dismissed Vietnam's movement of troops as mere rotations. In 1984, in order to disengage from Kampuchea, Vietnam unveiled a five-phase strategy known as the K5 Plan. The plan was authored by General Le Duc Anh, who had led the Vietnamese campaign in Kampuchea. The first phase required the Vietnamese military to capture the bases of armed groups in western Kampuchea and along the border with Thailand. The following phases included sealing off the border with Thailand, destroying local resistance groups, providing security for the population, and building up the Kampuchean People's Revolutionary Armed Forces. Foreign observers believed that the Vietnamese Army completed the first phase