THE ECONOMIC SITUATION IN SOUTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82S00205R000200010022-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 20, 2016
• Document Release Date: August 25, 2006
• Sequence Number: 22
• Publication Date: January 12, 1970
• Content Type: IR

Aped Fo2elease 2007/03/08: CIA-RDP82S00ft00296zt-8
DIRECTORATE OF
INTELLIGENCE
Intelligence Report
The Economic Situation in South Vietnam
(Biweekly)
State Dept. review completed
USAID review completed
Secret
116
12 January 1970
No. 0413/70
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'Secret
WARNING
This document contains information affecting the national defense of the
United States, within the meaning of Title 18, sections 793 and 794, of the
US Code, as amended. Its transmission or revelation of its contents to or
receipt by an unauthorized person is prohibited by law.
cn oui' i
FXCL.UDEO FROM AUTOMATIC
DOWNGRADING AND
DEOLA85tFIUATION
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
The Economic Situation in South Vietnam
Summary
Saigon labor unions called a 24-hour strike on
7 January to protest government inaction in the case
of Saigon Bus Company workers who have been out of
work since August. Despite this flareup, however,
Saigon has been remarkably free of labor troubles.
Retail prices in Saigon increased 34 percent
during 1969 compared with increases of 33 and 30
percent in 1967 and 1968. The black market price
of dollars soared to 370 piasters per dollar on
29 December as rumors of devaluation intensified.
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1. The Saigon/Gia Dinh council of the Vietnamese
Confederation of Labor (CVT), which represents most
of the labor unions in the metropolitan area,
called a 24-hour general strike in Saigon on
7 January to dramatize the plight of Saigon Bus
Company employees who have been out of work since
August 1969. After city officials postponed a
meeting with union representatives the council
voted to extend the strike through 8 January but
was overruled by CVT President Tran Quoc Buu. Buu
indicated that the CVT will await the results of
the meeting before deciding what, if any, further
steps will be taken. According to embassy officials,
approximately 15,000 workers, of which half were
dock and petroleum workers, participated in the
strike. No essential services were interrupted,
however, and US servicemen reportedly unloaded
essential cargo at the port of Saigon.
2. The government-owned Saigon Bus Company
ceased operations in August due to insolvency, and
its assets were to be sold to private interests.
An attempt made in September to sell the company
failed when only one bid was received. Since that
time no action has been taken, and 330 of the
500-600 bus company employees still are unemployed.
3. Saigon has been relatively free of labor
troubles considering that the cost of living has
risen an average of 32 percent during each of the
past three years. The government has invoked a
law that forbids strikes and threatened to draft
striking workers on a few occasions, but in general
the unions either have had little trouble in winning
wage increases or have appeared apathetic. The
successful negotiations generally are not reported.
In two cases--the bus company and Esso--where labor
troubles have resulted in one-day strikes, the
unions seemed reluctant to press their demands
vigorously. Wage negotiations at Esso dragged
on for nine months before a settlement was reached
in November 1969. The CVT threatened a general
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strike last August in support of the bus workers,
but their future still is undecided. CVT leaders,
and Buu in particular, apparently are continuing
to hold a middle ground--allowing the unions
sufficient maneuverability to keep their members
reasonably happy but not enough to provoke a real
quarrel with the government. The CVT has a
reputation for being staunchly anti-Communist
and apparently has been able to resist Viet Cong
infiltration attempts. Moreover, the confederation
is now organizing a political party which presumably
will support the Thieu government although at the
same time seek to draw support from workers and
farmers holding a much broader range of political
views.
4. According to preliminary information, retail
prices in Saigon held steady during December,
resulting in a 34 percent increase for the year.
This increase, based on the USAID monthly average
index, compares with increases of 30 percent in
1968, 33 percent in 1967, and 55 percent in 1966.
Domestic rice prices, which increased 30 to 40
percent between the end of September and 1 December,
fell 9 to 14 percent during the first three weeks
of December as deliveries from the bumper crop
now being harvested began to reach the market
and speculative buying eased. On 22 December,
however, rice prices still were more than 60 per-
cent above the level prevailing at the beginning
of 1969.
5. The monthly average price index for
imported commodities increased two percent during
December, bringing the increase for the year to
74 percent. Prices of imported goods rose much
more than the general price level because of
increases in taxes on imports during the year--
perequation tax rates were raised in June and
austerity tax rates were increased in October.
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Currency and Gold
6. During the last week in December the free
market price of dollars in Saigon fluctuated between
350 and 370 piasters per dollar compared with the
official rate of 118 piasters per dollar. Specu-
lation increased as the government put new 20 and
50 piaster notes in circulation and rumors of
devaluation intensified. The expectation that
the piaster would be devaluated on 1 January sent
the price of dollars to a record high of 370
piasters on 29 December. The latest available
quotation for MPC (scrip) and gold leaf are for
16 December when the free market rates were 150
and 415 piasters per dollar, respectively.
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