THE ECONOMIC SITUATION IN SOUTH VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82S00205R000200010037-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 20, 2016
• Document Release Date: August 25, 2006
• Sequence Number: 37
• Publication Date: April 28, 1969
• Content Type: IR

Approved For Release 2007/03/08 : CIA-RDP82S00205R00020001 QO+7-2
Secret
DIRECTORATE OF
INTELLIGENCE
Intelligence Report
The Economic Situation in South Vietnam
(Weekly)
State Dept. review completed
USAID review completed
Secrp*,)
28 April 1969
No. 0491/69
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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.
GROUP I
EXCLUDED FROM AUTOMATIC
DOWNGRADING AND
DECLASSIFICATION
Secret
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
The Economic Situation in South Vietnam
Summary
Tax collections during the first quarter of
1969 were considerably larger than during the
same period of 1968 because of better security,
greater business activity, and higher tax rates.
Production and exports of rubber, which have
declined steadily in recent years, fell sharply
during 1968. A further decline seems inevitable.
During the week ending 14 April retail
prices of both domestic and imported goods in
Saigon continued stable. All free market cur-
rency and gold prices fell. The decline in the
rate for scrip was particularly sharp because of
rumors that a new series was to be issued.
ANNEX: Retail Prices in Saigon (Table)
Currency and Gold Prices (Graph)
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1. During the first quarter of 1969 govern-
ment revenues from internal taxation were 85 per-
cent above those of the corresponding period of
1968 and equal to one third of revenues from in-
ternal taxes during all of 1968. First quarter
data for taxes on imports, which provide more
than half of revenues from taxation, are not yet
available, but they also will show a sizable in-
crease over receipts during the first three months
of 1968. The government's tax collection perform-
ance during the first quarter of this year re-
flects better security conditions and greater
business activity than in early 1968, when the
economy was disrupted by the Tet offensive, as well
as the 20-percent surtax on indirect taxes and the
higher import taxes that were enacted in 1968.
Despite the increased collections, however, reve-
nues will continue to fall far short of government
expenditures. Government revenues covered only
48 percent of planned expenditures in 1968. The
government probably will submit a supplemental
budget request to the National Assembly during the
next few months, but apparently does not plan to
ask the legislature to approve any new revenue
measures.
Rubber Production and Exports
2. Production and exports of rubber, South
Vietnam's major industrial crop, declined sharply
during 1968. Production on the major plantations,
which account for more than 90 percent of total
output, amounted to only 24,000 tons during
January-November 1968, or 39 percent below output
during the corresponding period of 1967. As a re-
sult of the 1968 Tet offensive, output in February
and March 1968 totaled less than 100 metric tons.
No production data are available for 1969, but a
further decline seems inevitable because of heavy
fighting in the area northwest of Saigon where
most of the large plantations are located. For
example, the Michelin plantation in Binh Duong
Province, which accounted for six percent of total
output in 1967, was a major battleground during
the recent enemy offensives.
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3. Exports of rubber amounted to 29,200
metric-tons in 1968, a decline of 22 percent from
the previous year. Rubber has been South Vietnam's
major export product for many years, usually ac-
counting for about 80 percent of the total value
of exports. In 1968, however, rubber accounted
for only an estimated 46 percent of total exports.
The decline in rubber exports will not affect the
country's level of imports, which are financed
either directly or indirectly by the US. In 1968,
exports were equivalent to only about three per-
cent of imports.
4. Retail prices in Saigon continued to be
stable, as they have been for many months. During
the week ending 14 April the USAID index declined
one percent as lower prices for meat, fish, and
most vegetables more than offset higher prices for
rice, firewood, and calico. The price index for
imported commodities continued unchanged for the
fifth consecutive week. (A table of weekly retail
prices in Saigon is included in the Annex.)
Currency and Gold
5. All free market currency and gold prices
fell during the week ending 15 April. The price
of MPC (scrip) fell sharply from 150 piasters to
130 piasters per dollar. The MPC rate continued
to fall until 18 April, when it returned to a more
normal level. According to the embassy, the sharp
decline was the result of strong market rumors of
an impending change in the MPC series. The price
of dollars fell five piasters to 185 piasters per
dollar, and the price of a dollar's worth of gold
leaf declined three piasters to 272 piasters. (A
graph on monthly and weekly currency and gold
prices is included in the Annex.)
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Index for All Items
Index for Food Items
Of Which:
(In Piasters)
Rice-Soc Nau (100 kg.)
Pork Bellies (1 kg.)
Fish-Ca Tre (1 kg.)
Nuoc Mam (jar)
Index for Nonfood Items
Of Which:
(In Piasters)
Firewood (cu. meter)
Cigarettes (pack)
White Calico (meter)
Kerosene (liter)
Weekly Retail Prices in Saigon.//
2 Jan 6 Jan 24 Mar 31 Mar 7 Apr 14 Apr
1968 1969 1969 1969 1969 1969
308 00 397 401 92 89
,:L 446
3 450 436 430
2,500 3,100 3,050 3,000 3,000 3,050
220 260 240 260 230 NA
230 310 320 300 300 NA
150 220 220 220 220 NA
319
305
308 10 314
600 500 760 790 810 NA
14 22 22 22 22 NA
52 82 68 68 68 NA
9 10 10 11 11 NA
a
Data ar
f
USAID
.
e
rom
sources.
For indexes 1 Jan 1965 = 100.
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Saigon Free Market Gold and Currency Prices
113 .:~,;&
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