VIETNAM AS AN MSA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000600060014-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 8
• Document Creation Date: December 19, 2016
• Document Release Date: May 24, 2005
• Sequence Number: 14
• Publication Date: January 24, 1975
• Content Type: MEMO

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Is South Vietnam an ::SA?
We conclude that South Vietnam would easily qualify as an
MSA if the United Nations criteria for identifying such
countries are applied to it. Given its existing
balance of payments circumstances, however, it would not be
so regarded. V'
The U.N. criteria were set crt in a "Special Programme"
incorporated into the Programme of Action on the Establishment
of a new International Economic Order adopted, by consensus,
by the Sixth Special Session of the General Assembly on
May 1, 1974. They were intended to be used to identify
countries most seriously affected by increases in the prices
of "essential imports such as food, fertilizers, energy
products, capital goods, equipment and services,. including
transportation and transit costs" (UN. Resolution 3202/S-VI
dated 5/l/74). The General Assembly regarded 24SAs to be those
which were "the least developed, the land-locked ...... as well
as other developing countries whose economies have been
seriously dislocated as a result of the present economic crisis,
national calamities, and foreign aggression and occupation.
The criteria set out in the Program a were: (i) low
per capita income, (=i) sharp increase-in import cost of
essentials relative to export earnings, (iii) high ratio of
debt servicing to export earnings, (iv)-insufficiency in export
earnings, comparative inelasticity of export incomes and
unavailability of exportable surplus, (a) low level of foreign
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 Approved For Release 20 d06'(y~9 CI 4ROP86T00608R000600060014-6
exchange reserves or their inadequacy for requirements, (vi)
adverse impact of higher transportation and transit costs,
(vii) relative importance of foreign trade in the development
process.
On the basis of these general criteria the U.N.
identified 32 countries in August 1974 as being "most seriously
affected". This was done principally by: (i) estimating the
current account balance per country for all "low income
countries" for 1974 and 1975 on assumptions regarding import
and export volumes and prices in the period, net service payments
and transfers, (ii) estimating net capital inflows on the basis
.of recent historical data for each country; (iii) eventually
including on the list only those countries with 1971 GNP per
capita less than $400 with overall deficits (the algebraic sum
of the current account be Lance and net capital movement under
(i) and (ii) above) exceeding 5 percent of imports for 1974 and
1975. Where the criteria could not be applied because of
insufficient data on which to base estimates personal knowledge
of imminent -conditions appears to have been applied. Table I is
an extract of the U.N. report MSAs of November 6, 1974 on these.MBAs.
'GNP per capita data have been added.
In estimating net capital flows no provision was made for
borrowing on commercial or hard terms. (Increases in private
capital inflows are implicitly ruled out.) The official net
flows are based on past disbursements and amortizations modified
by new arrangements made up to September 1, 1974. The overall
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overall deficit is that which would occur with a minimum
import level consistent with low but positive per capita
real economic growth.
Balance of payments data on South Vietnam are shown in
table 2 in a format similar to that of table 1. The actual
situation presents a more sanguine deficit picture because
real GNP has actually fallen for 1974 and will show no change
for 1975. Under the UN criteria it would have risen, as would
the current account deficit, because of the import requirements
for such growth. Also under the UN criteria, official reserves
are not assumed to rise above the 1973 level and they have in
table 2 (b) but not in table 2 (r). Extraordinary increases in
Development Assistance Committee capital flows for 1974-75 are
in table 2 (b) but not in table 2 (c) as they are not included
in the UN criteria.
In reality, therefore, South Vietnam's balance of payments
deficits will be fully financed in 1974 and 1975; but so will
those of Pakistan, an MSA.
Other countries that may imminently qualify as MSAs are
Korea, Malawi, Burundi, Liberia, and possible Uganda. Several
others, including Chile, would qualify but for the $400 GNP
per capita cut-off point.
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Most Seriously Affected Countries: Balance of Payments
Projections, a974 and 1975
Millions of dollars
Bangladesh
Central African Republic'
Chad
Dahomey
De-ccratic Yemen
E1 Salvador
Ethiopia
G'-aria
Guinea
Guyana
Hait_
i:onduras
#nci a
Ivory Coast
Kenya
Khr-cr Republic
Laos
Leso_ :o
::alagasy Republic
_:ali
:3auritania
:ricer
Pakistan
Senegal
GNP Projected Current Net Inflow
per capita Over-all Account of
(1971) Deficit Deficit Capital
b
974 1975 - 1974 1975 .974 1975
70
150
80
100
120
320
80
250
90
390
120
300
110
330
160
130
120
100
140
70
170
100
130
250 _
95 f ...
82 56
46 11
28 9
23 1
513 330
109 64
375 407
19 - 25
16 30
9 14
45
48 ?..
?23 ?82
21 -10
16 16
8 -8
33 44
820 880
57 77
84 137
612 657 237
39 49 20
6b 80 53
23 30 14
70 ??? 25
78 ??? 30
-7 85 -30
92 70 71
74 48 58
50 67 42
84 104 51
1,919 2,270 1,099
250
24
50
16
3
80
32
75
60
1,390
126
137
153 203 96
197 274 113
87 a/
32 25 88
42 32 53
17 16 26
30 22 31
155 78 485
69 67 133
Projected Deficit
as Percentage of
Imports (c.i.f.) a/
1974 1975
28.3 30.0
21.6 25.0
10.] 17.1
5.5 7.7
12.2 ...
10.0
3.6 10.9
13.9 -5.8
5.9 5.2
7.4 ...
8.9 10.2
16.8 15.7
5.7 6.7
8.9 12.3
57 10.3
14 30.9
12. 9.6
1 ' 21.1
435 8.6
42 13.0
7.6
24.6
8.3
19.6
3.8
11.5
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Most Seriously Affected Countries: Balance of Payments
Projections, 1974 and 1975
(Continued)
GNP
per capita
(1971)
Projected
Over-all
Deficit 1
Current
Account
Deficit
Net Inflow
of
Capital f
Projected Deficit
as Percentages of
Imports (c.i.f.) a~
197
?1974
1975
1974
1~
Sierra Leone
200
31
?20
70
62
39
42
14.8
8.7
So=alia
70
27
29
56
59
29
30
18.6
18.7
Sri Lanka
100
69
100
152
185
83
85
9.7
13.0
Sunan
120
46
30
90
122
44
92
8.5
4.9
United Republic of
Ca-croon
200
25
42
. 43
United Republic of
Tanzania
110
120
124'.
229
218
109
97
16.4
16.5
honer Volta
70
10
17
82
73
72
56
7.4
12.6
Yenen (Arab Republic)
90
11
???
54
???
43
??.
5.0
??-
2,257
2';293
5044
5,,524
2,787
3,231
a. sinus si;nindicates surplus.
b. :anus sign indicates net outflow.
c. Balance on trade account.
d. Sun of listed amounts, excluding Ethiopia, Khmer Republic, Laos, and Lesotho.
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