B US .. ~·:P. .. U FOR VlE:TNA.1'.{ . ll.GENC:Y }'OR Il\ "1'E I\~ ·; 1:.. ·~c.~O NAL DBVELOt.='.lvi.ENT
DEPA::"'.Tr·1ENT OF STATE
'!'he cccnwmic independence· of South Vietnam is one of our broad
objcctivcs 1 as in~iCated in the. opcninf;! stc-itement made befo..-e this
Suhcor.nmittee .. · Ii i'eac•! ai1d security ar(' restored, we beUev~ that°
South Vietnarn can achieve this objeci:ive in about ten yr.R:rs)~ft~. i· the ,
.tt}rraiI]ation of hostilities •.
' . ,· p~3 : ~tep~ ' il~ th.i~ ' proce~s, we aim to phase-ove:r aid::prograni5 and •:. I , -_·. , ' · ,"·., ·_ ,· ·, , · , ' ,. _;.' I '< • •, > • I ' ' '
'. tli~ :yie:triame s·e ·a 5 _rapid! y as we ·cart·~ .. ~;A·s~ /f1i~ ·.:~ji~t,~~¥~:·~e: c~n prt'.:vid~ tlte furids and the . trained manpower to \a.s.~uine , :g:r~·~iq t ··:· ...
. ·. ·.' ' ' - ~. ' '" . .· - . __ -- · : ~ ;· ; :.:. _~.--:·;; : · .... ·::.: ·::"_.;; ; ,·._::· .. :.: ·.<<···.·.-.. · .·
respc;nsibility.·for the: progra.111s w .e help initiat~·; \Vci; c'riri'. ~c. ~iri: : ri~;~~~ ,a'.ml , .. . ;,''. '1 ·· :<1r .· •. < ·• ." ·. /:• :·;·.
. . . ··. · . . , .. ' .· · · · .·_.{· <: ·. ·. I ;i/.<.·X·;: ' ~',::·: · ._.· ' :~:·~··._ }: ·; · ··. ·'.'· 'J· '< eventu;).Uy phast::~o.ut .. .c\.1ne~·!.can · advisors and rn~ney o'ri.-:o.;-i~es~ior~al ' ,,
• . • ·. .. , . 'I . • ,·•. · ' • ,,. '· • . . .·., · . ... • · . . .
terms,.
-. ' fh~::·:!1~;~f: ~#1?.~~W :~~i. · p~ase-~Y~~ 'is .:intli~·: mii:iti·~~ · Ii~ld~ . As . you . ~ . . ' 1
know>· •.~h~-~.;~ :~ ·~if'Q),'i~}~~i~~ - ~··~~~.;:;·~;.a s · · .~~,i,~~~-~~:¥Y~t.~ .. ff;:~.- . ·a·~no.unc en~e~t . -. after · the . MicJ\t/ay_. m~~Hng.'i!(Jun~ ',::,:.196<] ;• ''1:hatVietnarncse .for.:e ~ ·.~o,1id
• • • .. ..... : ~ , •• ·'..; • • • •• • • \ .' · • • .. '_·,-". ~ ~:: ' • • ·~. : '~· :- ~\ /: :..:· . .... • ~· > •• •• l . • .
begin to i·.::place American troops~ ;
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Mibtary phase-cv~r affects ihe scope and pace of phase-over in
the economic and.sc.ci~l field. Military phase-o\•er increa1:1es the
military manpower requirements of the Vietnamese, thus further
straining their already severely pressed m9.npower pool and affecting
Vietnam's efforts t~ ,carry on and develop its economy. Similarl}r, ' . . '
military phase-over rai~.es sub~tantially the budgetary expenditures of ' ' . - .~·' :· '. ' : - '. ·', ' . . .. . ' . . . .
. the Vietname&e Goyei:;rurient~ wlli~h hripfriges upori its abilify·t6 ·pj~k . ·: ... ·. . .. , .,· , .. '• - .,. . . ,• ...
up. expendit\.1res fti.nde.d ,by·J\. I~ D. :o.n:the civil side;·,ind!·indeed:co~ld . .· ' , " ..
, lei:i.u l;ampora1·11y·to ·1ncreased·aid.·requircm'ents·~ . . ' ,,_ .... , ..... ,.. . : .· -···'· ..
Given these cir'c:umstances1. if is usefuFtc)]ook ;i.t"'th~ trend iri . ._· . .. . ' '.· ' . ·.1· '.: : .
recent years :with. respect to i'~burden.~Ghari~gir by.:the.:U;~{~-~:nd. So~th . ~ . '"' ·.: '. '·'. '
'.r.,,'.;.Stabilization:.·:.The :l~rg·e· ~~~tiri"l~ expendi.1t'1res 'a1id. bt~d~etary , . . . " . ' . ' ~ . : . ' , ". .:·· ' ' . . ' . .. ' ' . ', . . : .• ' : . ' .. . . , "· ·~· ',:. ' .
dt:fic.i~·~ssociated with military mobilization have created, _and cor;iti.lme .·,, ...
.. ·:.-·.'
to cr:~t~, i119~e:_asi~g.deman~·£~r goods and services. To some e:x"tcnt, .~ '" ' "
.. _'".' ' . '• ;', .. :·;, <i< ,,:· .: ·~(;f·: >.:: .. :: . . . - .
dome.s'tic produ.~:ti<:>nJ1~s.·rE(Sponded to rfomand incentiv-cs .fen· cer.tain. • • . . ·. . • '. ~ ~ •, », .'" ._ ' . ,1 . • ·" . • : . . . '
. .( . . ; ·. ·, ........ ,~,,:·.,,;S.f __ :··-.~: ~-- :1 ·:'·>.' .. ,·'~;,<,, ;~y . .:L···~'." ','. ' --- ' .. Si~~c~» e?'J?o .. rts .hav.~ fa:Uen:off substantial~y,·~y(ith the traditional
exports of rice and' 'rubbc'i ha~µ'..:hit by' the,war, three sources of '·. . .'·: .,:' •.. . ' ... . ' ... ·,. '•
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fo1·E:ign c~xchange or comm.oditie:s h:.vc perrnitted the Vietn?.mesc
Governrne:nt to mt!'et irrtport clcmand and, in turn, keep rises in prices
within rcason:ible limits. One is the large dolla.r earnings by the
Vietn~mese Government from U.S. military expenditures, the second /
iz the Commercial Import Program (CIP) financed by A. I. D., and the
third is the U.S. PL-480, Title I: program. In 1966 A.I.D. financed
almost two-thirds of total commodity Lrnports; today A.I.D. 's share has . . .
dropped to little mo1~e.·"than one-fourth~·
Conversely, ·the':-Vietnamese Government ·has increased its· share of the . . ... '\'.
impo1·t burden as shown by the following. table:
FY J966
FY 1967
FY l 968
FY 1969
Vietnamese-Funded A. I.D. -Funded. PL-480 .,
Import Lie ens ing Import Licensir1g Shipme~ (Millions Dollars U. s .. )
$150 $344 . $. 66
$306 $155 $156
$249 s sq $127
$462 $2o'5' $ 82
The Vietnamese Government has also sought, as buC:iget~ry expenditu_r.es
have risen; to limit the rise· in import demand~ :r_,,_ additioifto·:a majol" • • '• '" • • • i .,, ••• ,
devaluation in 1966, it has taken action, most strikingl)• in t9.69, to increase
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tax rev<!nues. The following table shows the incrcasinc burden being
shou!der~d by the•Victlla1ncse in meeting budget expenditures:
Vietnamese Government Budgets -,.--
(Cash Flow Basis - in Billions of Piasters)!_/
Expenditures '?:._/ ___funding Source .
U. s. Local .Remaining Taxes Currencv Supportl/ Deficit _ Year
1966
i967
1968
Total l'vfilitary Civilian
61 37 24
·106 50. ..
123 51 ,_. ~ \ •• - • J
·9·6 ..... •'. ~ ;
40 20
53 26 .; f.'
. ' / r
,55 ...
77 2_/ 25
.!/.:.:l.J;i¢1~d~s,:e;#r,a:<hU:dgetary expenditures and receipts •. :1· . . . .
!:_/: .Ineltides:AJ:neric'an Aid Chapter and Assistance in.: Ki.nd.' '><' .,;, ·.·.,,,, .: •• ••• , '. ' ,,. • •
3/- ·N~'t proce~~fs' fr~m CIP ;and PL-480, Title I. - . . '' .... . . . . -·~· . ' . . .. 4/>· In."pr<;>cess .of.r.evision ..:- ·may i~crease by: 12 billio~.~pfaste·r·s~
,,,.,- ·' ' - . ' .' . .', ' . .
§_I .Likely.to be surpassed since revenues ran 97·p.ercf~nt;h.i~her'.:: in:~e first five months of 1969 ·thanAuring tlie·\:.o~~e·~'~61l'.ding:
'period of 1968.
1
27
48
43
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Despite the recent improvements in the Vietna.m.~se r~co!'d for
. ~
financing the budget and im1)orts, the future will be difficult. Budget
expenditures will continue to rise as Vietnamese troops replace Amt::rican
forces. Displacement of FL-480 rice by increased Vietnamese 'rice
production, favorable as it is in terms of e::onomic development, will
have the effect of reducing. U.S. local currency sup:o·rt of the Vietnamese
budget, thus further increasing the deficit.
At the same time Vietnam's foreign exchange earrings will declin'e
as employment cf Vietnamese by the U.S. military drops off. Therefore,
in order to meet the continued heavy import demand caused by the budget
deficit, requirements foi: A. I. D. funds for the Commercial In1port.
Program seem likely to increase for a while {in contrast to the lessened
o\•eral.l U.S. burden in Vietnam).
Consmnption and import demand can be restrained through increased
taxation. But a drastic reduction in the standard of livi:ng seems out
of the question for reasons of political comp~tition with the Communists.
Maintenance of full employ1nen-C 1 for exarnple, seems politically necessary,
• and will require positive measu1·cs as ernployment of Vietnamese by
the U.S. establishment declines.
To furnish employment opportunities for many of the Vietnamese
discharged b~r the U.S. establishment, we expect the private sectoi· in
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Vieb3.111 to expand. Thi.:; cxpo.nsion of production should, over tir.ne,
lead to '1 n imp1:overnent in Vietnam.' s balance of payn1ents by providing
both competitive import substitutes and export products. To assi£t
in this expansion, A. I. D. i3 pushing p:r.oduct and market research. It
will also continue its efforts to increase agricultural production, and
will relax the inflation-caused restriCtions on assistance to the
industrial sector.
These efforts to increase production should,, after a few years,
lead to a gradually declining Commercial!mport Program. The rate ' .·: ' '.' ·, .. - ' . '·' . . "
,',l
of progress will, howe.ver~ be str~ngly. influ~nced by the security . . . - .
situation.
2. War SuE.Eort and Relief: . The "V;ietna·~~se Government .is taki:ng '. <' : ~ " .... ; , .. ' ! ..
increasing responsibility with respect to civilian casualties .of:the' " . . ·.·· . ,.'_ ·•· ·; ' ',' ·., ·.
war and refugees.
u.s. personnel inv?lved in medical treatment, which had r"isen from
41 in September ~ 9651i to a peak of 525 in. mid-1.968, are now down to
438. The A. I. D. cOmponent of these totals has declined from 131 in 1968
to' 89 at the present tinie. In hospitals receiving U.S. and· Free World
support, montJ1ly average p~.tient adr.nissions rose fron1 19, 000 in
1966 to 38, 000 in 1968 a.nd 39, 000 during the first four months of 1969.
Outpati_e:r:.t treatment at the samr:: hospitals increased from a monthly
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averf\.ge of 125, 000 in 1966 to lSO, 000 in i968.
Overall A. I. D. "personnel, direct-hire and PASA, involved in
the total health program h<'<.s decreased from 390 authorized positions
.. ·in 1968 to 236 in 1969.
Vietnamese :Ministry of Heal.th em.ployees have, on the other
hand. increc:.sed from 14, 159 in 1966 to 16, 830 in 1968. Graduations . ~ : ' '
of doctors have risen from 85 in 1965 to 187 in.1968 •. · NU:rsing 'and .· • '·. • •• • f' •. '
assistant nursing graduates rose from 2-80 .. i.n 1965't9 _SS~.;n.1'96S. ' ,.·~: .. ,• , . ·:-,,./· ;' .. ·:: ... ·!-·:·>': .· .,,, ', \ <. '·::! ,< ·. ,~·
Irrunediate objectives for pharma.cists·'arid·inidvr{i-&e_s.·haye: been .inet •. (" ~:· ' '; .. ,.~· ,:. '·. :: . .. . . ~··. . '. . . '. '; .
Forces are being corrected. Ab6utl70. :milita~ydcict'cits· .a*~: ~ow . . ' . •. ' .· : ' ... . .
detailed full-time to work in ·the government's ~i.:...flian hospitals. In \i' "' .,
recent weeks the Vietnamese Ministries of Defense and Health, Social'
Welfare and Relief. have agreed to a program which will establish
joint civilian-military treatment operations in 26 provinces and 185.
districts. Vlhen the Prime Minister's decision on this program ~s fully
• implemcr.ted, it is expected to involve an ac!ditional 4, 300 military
medical personnel, including 125 more doctors. This Vietnamese
' military medical contribution is equal to more than one-fourth of
th~ current staff of Vietnam's Pub~ic Health Progra1n.
- q ..
M8dical logistic::; sup-;_ . .,ort haz continued tc• i!:!prove during recent
months, with Vi~tnarr,1ese Ministry perno.nnel taking over an ever-
increasing share of the supply operating functions. With the
anticipated addition to the Ministry logistics system of a substantial ,.,,,,~···
nu.ml.H~r of Vietnri.rr..c :;e military supply technicians in the immediate
future, A. I. D. is planning the withdrawal in late 1969 of more than
100 "third-country national" supply technicians who have been augmenting
. Vietnamese capabilities for more than two years. Medical maintenance
technicians from other Free World countries will, however, continue . ' . .
to be required until Vietnamese militar_y manpower requirements
release personnel for training in. this area •..
The Viietnamese budget for public health has risen from .1. 5 billio.n . . . . .
piasters in 1965 to 2. 8 ~ill,ionjn 196_8 and 3. 1 billion in J.969 •. Total
·A. I. n: assistance in thi~:·ar.ea: has declined from $27. 6 million in. ' '· • • I
FY 1968 to about $20 millfon::in FY 1969, but rises son1ewhat to· $21. 9 ,• "" ,' .• .. ,, ,, .... '
million in FY 1970 be,cause·of '.the·:. need .to "re-finance contracts with four
volunteer a.gencies ea~lier f.inan<:e.~f':ri'.:Fy· 1968 for two vP-~rs.
A~ I. D. is. ~hiftirig.itsJocusJn.tiie· he'a:ltl{ area as rapidly as.: ·. . ... ,_ .. : ·>•:'··· ··. " ... -,' '
wartime circumstances. pe1~1nit from curatlve·.to preventiv.e i:ne'dical t•''·· " •.' .. . ...... ,• ' -- ' . •'
assistance· to the Vietnamese Government •. Once the:'War "i~~. ()ver. arid
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civilian casualties have ceased, we would expect the assistance required
for emergency medical care to diminish rapidly, although it will not
be possible to terminate abruptly our assistance to hospital care
facilities.
In the field of refugees, the num.ber of Vietnamese Government
personnel working or. refugee rr1atters has risen from 400 at the
end of 1966 t.o 2300 at the present time. A. I. D. refugee personnel
position:> ~'iave increa::>cd from 55 in 1966 to 116 in 1969.
The scope of the refugee problem does not permit envisaging a
decrease in American personnel strength in this area during the near
!uture. In 1968 about 1, 000, 000 people were ciriven from their homes
during the Cornmunist offensives against the cities. While these people
have esi::entially befm taken care of, about 1, 200, 000 people from rural
areas were still on the refugee rolls at the end of May 1969 .. The number
• resettled or returned to village of origin has exceeded the number of
new refugees since mid-1968. The target for resettlement or return to
village of origin is 600, 000 for calendar year 1969, almost half of ·
which ha.cl been achieved by the end of Mc>.y. Security per1nitting, the
number of refugees should be reduced to well under 1,.000, 000 by the
end of 1969.
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The A. l. D. budget for refugees rose from $11. 4 million in FY 1907
to $21 miilion in FY 1968, but dropped to about $10 milEun in FY 1969
and $11. 4 million is requested for FY 1970, The decrease in FY 1969
and FY 1970 is attributable to lessened r~quirements for commodities
as stocks Wi:-re built up rapidly in the aftermath of the Tet offensi vc
(February, 1968).
The Vietnamese budget, on the other hand, is expanding, particularly
·for resettlement purposes. In 1968 the Vietnamese buciget was 2. 0 billion
piasters, and in 1969 it is 3. 2 billion pi~.sters. Most of this is financed
with counterpart funds.
Once the war is over, we would expect refugee relief to phase-
down fairly rapidly since presumc:.bly no ne\V refugees will then b~
created. However, funding require:nents fer resPttJ.ement may remain
considerable until all refugees have been re-established.
3. Pacification: Pacification is essentially an operation of the
Vietnamese Government. The bulk of the security forces concerned
with ..pacification -- Regional Forces, Popular Forces, police, et cetera
consist. of Vietnamese personnel paid out of the Vietnamese budget.
'The U.S. role with respect to these forces is to furnish advisors I
and equipment.
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Of these forces A. r. D. is conc~rne<l chieflr Vli.t.l;. the pol.ice.
This force is L~ihg e~pandcd by the Vietnamese Government becauf"}
of greater emphasis on tts nlission to identify and eliminate the Viet
Cong political infrastructtue at the village /hamlet level. ln a postwar
context it is generally envisaged that the police will continue to play
a major security function in addition to its civil law and order role.
Given the current expansion of the police an~ t}le future uncertainties
a'oout security, it is not possible at this j· .. mcture to establish a time-
table with respect to phase-over of A. I. D. assistance in this area,
The U.S. (through the Department of Defense) directly supports
the £w1ding of ire Revolutionary Development cadres who have both
security 2.nd development responsibilities in the pacification program.
At their origin the U, S. totall~r funded the S~t.laries of these cadres by . purchases of piasters with dollars, but the Vi~tnamese Government
began to pick up these r.:osts from the U. s. during calendar year 1969.
The U.S. expects to continue to shift these co~ts progressively
to the Vietnamese.
The A .. J.. D. responsibility with respect to Revolutionary Develop-
ment is inainly to fund a network of civilian advisors at the Saigon
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headqu2rt·:::::-s, four ·reeional sub-headquarters, province and district
levels to •,vo:rk with Vietnamese officials on the development c.spects , . of paci.fication. The size of the staffs is under current review to
see whether reductions can be made.
4. D~vekp!nent: Exfraordinary requirements for goods and services
generated in the development area by the war have been met to a large
degree. A. I& D. is now focusing in this area on a more normal t}•pe
oi development program.
It has become possible for the A.I.D. Mission in Saigon to begin
to apply the usual A. I. D. procedures ~or project development. The
Missi<Jn is, therefore, now in the process of preparing Project
Irnplem~ntation Plans (PIP's) for each p1·oject. PIP's require a
p-rojection of progres 5 throughout the life of a project in terms of
' · inputs and outputs, and are in effect phase-over plans.
It should be noted that, in view of the scope of the problems in • ,. f
Vietnam and.the nature of the dev~lopment pro·cess itsP.lf, achievement· . . -··· -.. -
of fihase-over targets for a cur'rent ac~ivity under a project may no.t . .
mean that the project will be phas~d.crnt, but we shall rather move
on to another activity under the same project. For example, as the
rice prodtic:tion target5 under the Crop "Production Project are achieved,
ass istancc to other crops will get under way.
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Pending the compl~tiar. oi p:.:cpa::::-alion of PIP':; for each project,
we are outlining b.dow ;t<::ntative phase-over pla.ns in the development area.
L-1 crop producti~~ we believe that Vietnam wiJ.1 have become self-
sufficient in rice by 1971. We have already reduced the time and resources
A. I. D. spends on detailed management of production of the new high-
yielding varieties program. It is now largely a Vietnamese program.
With respect to seed distribution, the Vietnamese· Governrnentis, in
fact, finding even its ro!e more lin1.ited than expected. Knowledge of
the new seed varieties has spread so :rapidly· that farmers. b~y nio~t:of
thei:r seed requi:rcn1ents from each other. However,· slnc:e·IR~B'.and m.:.s ' '. _, ,",I.'· ' ·, -
are not suitable as export varieties, the Vietnamese Government,
with our si,pport, is testing new, higher qualit:r varieties fot~ future
introduction. Other new problzms reql!iring OU1' help have emerged,
such <is drying, storage and processing problems related to the new
varieties.
A. I. D. continues through the Comm.ercial Import Program to
provide foreign exchange for fertilizer and pesticide imports fo,1"..,
the rice program, but their distribution has ~oved, or ~s .moving,
from government to private channels. Eventually. A_._I.,D~ :-~s,hbuld be
able to phase· down in this area as well. Investment surveys for.
fertilizer and industrial chemicals are anticipated, or in progress.
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Pz-ivat•~ foreign ente:rp:-isc is expected to iurnish much oi tl;e capital
requirements, at foa"st with ref.pect to fertilizer.
'Ve '\re also moving in this direction in our r.uppo:rt of the
proteir':...J2.!0gram. 'l'he Vie.tname.se goal is to encourage, under the
free enterprise systen1, the establishm.ent in Vietnam.of PJ:'Oducers.
of all categories of swine, poultry, and fish to meet. the p,r6t~in: needs '·,· ....
of the nation at reasonable prices~ : Th·~ progr~m involvea the; . ' .. :· ... . · .. ··.
importation of breeding stock, the;· dev.elop~ent of .vaccine a?ld the "· '' / ',• ' .. ' '. . .
dis sem.ination of information· about.me methods of vacciriiltion;·. The. · "· ,., . '·-" . . . . '
program also invblves the esta~HshrI1erit of:a,'fe~·d ·g~airiindtistry, ·
the raw rnaterials of which.are .. iri..iti~l~y·suppli~cl bv.ifu'-oorts,· bu,t·with
p1a11s IO?° tne eventual·~.substitutfo.n:·()f.domestically·growtifecdstuffs. ·. '.. • • • ' t •• ·~" ' • • • •
It includes the purchase of special'.gea'r"aiiC:rsuppltEis:'f'b~. the fi~hinf! ~ ' ' . ••' ·'') '.' ' ',. ·'• ', . .., .....
inductry and t4e provisio'n of adequa.'te creciit.through::the~Agri~"ti1fu;al · ; ' ' ., ' II ''< • ' : '' "'I ' ~· : ',: ~ •./ . ' ' •.
Development Bank.. A.I. ·D. 's co11tribUtion is ~·cheduJ.~d ~for .coiri_ple.tion · . . :··
by the surruner of 1972 at which time both the GVN and espec.ially the
private sector should be quite capable of carrying on •. The importa.tion
of breeding st.ock.by·Vietnamesc enti·epreneu~rs is ~ell under way.
·A. l. D. has. ~~sisted in the importatior1 of both large and small feed . . (,' ·. ·.,. '
mills and this aspect of the program has been transferred to the
Vietnamese with USAID providing sc;>n1e technical assistance.
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The poultry industry is expanding rapidly in t.he private . , I
sector with technical assi~tance from the Vietnam.::se. Government
and USAID. Incubators with a capacity of 450, 000 eggs have b~e_n. ·
imported by private operators at a cost of approximately U.S.
$400, 000. Breeder birds have also been imported by these new
businessn1en.
Swine and poultry productiL'n have increased with a sharp
reduction in imports of frozen meats. · The major- th:r:ust:hf. USAID
assistance is to reorient and train the Vietnamese- Gciverriment
personnel, at all levels, to support and assist the entrepreneur:.in
the privatP. sector and to assure the farmer and conunercial ,producer
of the proper economic and political climate. Progress is most
. satisfactory and indications are that th~ Vietnamese Government·
will be able to assume responsibility,for this project on schedule
with the exception of some additional assistance in. trai~ing and - . . .
information dissemination after 1972.
Regarding credit, much of the groundwork has been laid with
the Vietnamese Agricultural Dev~lopment Bank. Seeing to it that
vc-.rlous g rc;mps of hog and poultry formers and fishermen are able
to get suffi-::'ient c:redit when they need it, will probably require
A. I. D. 's technical assistance for so1ne time yet.
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In the are?. o'f agr~cultural production assistance we should
count on continued Vietnrtmesc reqdrem.ents during the 10-ycar·
period 2fter peace is re-eEtablished. With its present enormous / .
balance of payments deficit and a prospective decline in foreign
e>.:change earnings as U •. s_. troops .. a~e ·~~d.#c·~4~·and ·m~litary ··· .··· . . ' . - . '. 'i. ' ' -... ,. . • ;~,, 1· l.1'.~ . .. •• , ; ' ' '
' L·
conversions ofdolla'rs into,pia·ste.rs decline, South Viet~am. , -; .~. '· ·,. ·' '. .. ~ ·.' . '.; . " . . . ' .. ,. . .
·must explore all av~ilal:)ie_ oppc>~t\lni~ies to exPand exports· and .:·' ' . ,'". · ... ; ,. .
find import subs~ittltio~~: :,Tl'li·s. Irieans expansion of exist.i:ng .: ';1 ,.
line& of production.anCi·a~~elo~ment of new Droducts.··.·· Ii:i.solll:e cases,
. I• i ' .. . ~ . ' . '·1. ; . . '. . . " : .' _' . \ ' : . ' ,· . ; "' . :_, »: -_,··. . ... : . ·: -
the Vietnamese' m_ay dev,elop a produc~ without outside as·sistance ~-. . . '. . . ' " ' :· ' - . . . . ' .. :· \~ . ' ' ' ' . . . . .'
for ~x~pfe, they:ar'e now experimenting with the i11ti-~c:luction.
of s:C>rghurnwith.their own resources •. · But, in:_otlie't. case~; we' .·;'\
should expect, ~s we phase out of one lirie pf-pt.odtic~ion, ·F.uch a·~ ' . . . . . .
rice,· to put our resources into the expa~.sion:fr de~elopmei:it of
new products. Only in this manner ccin'Sou~h Vietnam gradually
. develop the tax; ba~e to .close. ~t-s b~dg~t.ar,:y. gap and the eco~omic
base to bring its.·foreigll:.accou:l;:ts int()J~.Ja~ce. This i~ the direc.ti~n
in w~ch ~·~'{;rrit,st_?g() ~!~e· ~~e gra.dually·~*-~}·.·aperiod.6.fye~rs. to··
reduce· the .·size.· of our pommer.t:ial ·.ImP~·rf:~i-p·r;~ram·.,,
. In the field Of education, the transfer or .pl1ase'-over is in .· '. . ··.· .. '' '. '.' '•'
progress and continues.
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Initial A. l. D. efforts were directed toward classrooms,
equipme1it and preparation of teachers at the elementary level.
Subsequent emphasis has been pl2.ced on improving the quality of
elementary education, expanding secondary facilities and some.
technical as sistar1ce in the field. u.f vocc.tional, :::.gricultural arid:.
higher education.
Quantitative targets have been largely achieved in elementary
cduc~tion. Elementary enrollment increased from. 401, 000 pupils
in 1955 to 2, 000, 000 in 1968, representing about 80 percent of
all elementary school age children. This i~ just short of the
national goal of 85 percent for 1970.
Secondary education, now beginning to feel the impact of more
e].ero.enta:i:y school graduates, has an enrollment of 550, 000 students,
I
or 20 percent of the secondary school age population. The national
target for 1970-1971 is enrollment of 24 percent. University
enrolln1ents have similarly grown, from some 3, 000 in 1956 to
32, 000 in 1968. Further expansion of secondary and higher
education is expensive, and Vietnam will face som.e difficult
choices in the use of its limited resources in the futu::-e.
As the educational syfltem h<J.s expanded and improved, U.S.
inputs are shifting from construction of facilities to technical advice
- 18 -
i\nc;! enco\l:ragement of modern eclucatjonal ccn.::~pts. U.S. dollar
• I
obli~~tions have been reduced from~ high of $14, 500, 000 in FY 1967
to $7, 80$, 000 in 1969, while Vietnamese Government expenditures
!or ecluc;:at:j.on have increased from an ~quivalent of $50. ·1 million to
$57. 6 million during the same period. ",['he Vietnamese Government
ehare of the total educational program costs increased from 77. 6
p~~cent in t 967 to 83 percent in I 969,
This trend is expected to contip.µe, A, l. D. is r~questirig
$~, '$77; 000 for ;:i.ssistance t~ educatj<;m j.n F'1 lC,70, of ~hich .$4, 482, 000 .: ... \." . ' ' '. ,- . '
rn~nt o! education in VietnaJ;ii·will.have been completely reoi:iented · .
. tg te~hn.ical ?.dvice ::!or UJ:ip~~v~n'g:)he· q,µ~U.ty of secondary .~xid : • ), ,' •' : .... : • •• , .· i
• · •. ,.,. •. • .. • • • . • • , •• l ... • •• v:··. ·,,
higher educ~tj.op.. A~ I. D. 's' coiit,:act tQ improve training.of ele.L
, . . . .. .. .. ·: . .' . •.: m~nt~ry ~c;:hool teachers has .been pha:;;ed down from ··14 personnel·
• ' • ; oHO.
to Sin FY 1970. It should be completed by FY 1971. We expect to
phase down our contract to improve training for secondary school.
teadJer.s beginning in FY 1971.
Jn ~he field of public health, progres r; in U.S. disengagement
will continue to be slow, other than in the assumption by the Vietnamese
Govermi1ent (a.s discussed above) o! a ·.dsing share of the extraordinary
- 19 -
burdens imposed by the wa 1:. The longer terin aims in this field
are (1) to assist· the Vietnarncse Ministry of Health in the areas
of manpower development and organizational improvement, and
(2) to assist the Vietnamese Government to contain epidemic
diseases and concurrently develop the basis for good health in
the population.
Some of these more norm.al health activities are being phRr.ed
over to Vietnamese responsibility despite difficulties arising from
mobilization of trai.ned health and medical personnel. A. I. D. :iurses
are no·.v limited to advisory roles as Vietnam.ese nurses assume
more of the operatj.onal functions. This has ma.de possible a re
duction in U.S. nursing staff from 176 in 1967 to 83 in 1969. Medical
logistics is also now :-everting to Vietnamese staffing, as pointed
out earlier. Foreign specia.Hsts in this field will have been reduced
from 196 in FY 1967 to 67 in FY 1970, while Vietnames: e personnel
will !1ave risen ovci.· the sani.e period from 106 to 200.
At the Faculty of Medicine of the University of Saigon, we
have developed a long-range plar. for the compli:!tion of a first-rate
medical training institution that will be able to serve Vietnam's needs
for the future. We continu~ to p:ro·;5de some faculty advisors ln the
basic sdences whi:te Vietnan1ese complete their post-graduate
- 20 -
training abroa.d. The next phasp,, already in progress, involves
' ·revamping the clinical sciences element of the program. The second
phase will culminate, with A. I. D. 's assistance, in the establishme:-1.t
/of a n1odern teaching hospital as pa.rt of the Medical Science Ce!'lter.
Assuming an early end to hostilities a.r,d optimum progress of on-going
projects, we r.i.nticipate that the Vietnamese will be able to carry on
.. with minimal advisory support by 1974. There will, however, need
to be long-term. support for programs for control of malaria, plague,
and other endem.ic diseases.
In logistics, we can point to a S\..'.ccess story. Funding has
decreased frorn a high of $39 million in FY 1967 to a proposed $8
million in 1970. The Thu Due warehouse complex, previously run
by au' .American contractor, is now in the hands of the Vietnan1er.;e.
Tho. civilian port of Saigon, managed by some 500 American military
personnel during the period cf congestion in 1966, is now run by the
Vietnamese w:th only 8 American advisors. Warehousing and
distribution of supplies :are in Vietnamese hands, but with continuing
U.S. advice. This is a difficult one to dis engage from i:n:nediat~ly
because of. the volume and complexity of the comrn.odities. The
remaining logistics functions rel.ate largely to our own needs for
surveillance aver commodities.
/ ..
- 21
In the eub!ic works area we have rn::Lde a specia.1 effort to
help the Saigon lvieti·opolit.>.n Water Office beco1ne a. self-sustaining
utility. Except for A. I. D. financing of war dan:age repair and
__,..emergency installatio::-is related to the war, and continued technical
advice and management training, it has now reached that stage.
Our target is total phase-over by FY 1971.
A similar effort is being directed toward the Saigon Power
Administratio!l. After the inctallation of gene rating, transmission
and distribution capacity being funded out of resources already
programmed by A. I. D., we anticipate that further development will
be financed on other than concessional terms. The target date for
co1nplete pha.se-over is the end of 1972.
In other public works areas A. I. D. 1 s activities cbring the war
years have generally been aimed at n-taintaining systen1s in operation
in the face of war dan1age and mobilization of fr~tined technical
personnel. Development has perforce been relegated to the future.
Since much remains to be started in this area, it is too eady to .
develop .3. widely a!;plicablc phase--over plan.
Similarly, the whole area of urban develoEment has generally
been consciously de-emphasized during t.lic wa.r years, other than
reconstruction of war damage and tho beginning in 1968 of the
- 22 -
applicatio-:-1 to Saigou cf the pacification techniqu;:;s pre::viously used
in rural areas., AP. y, S. forces arc reduced and we mo·.,re toward
the postwar p~riod, a more active A. I. D. role in as sis ting the
Vietnan~ese Government in the n1ainlenance of full employment, in
industrial Jevclopn1ent, and in the development of other aspects of
an urban strategy will become necessary if our political objectives
are to be achieved. Such a strategy will also have to encompass
phase-over plans.