THE SITUATION IN SOUTH VIETNAM (WEEKLY)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00826A001800010002-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 20, 2016
• Document Release Date: July 18, 2006
• Sequence Number: 2
• Publication Date: March 27, 1967
• Content Type: IR

Approve' Release 2007/03/15: CIA-RDP7911826A001800010002-4
Secret
DIRECTORATE OF
INTELLIGENCE
Intelligence Report
The Situation in South Vietnam
(Weekly
State Dept. review completed
USAID review completed
Secret
144
27 March 1967
No. 0343/67
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Secret
WARNING
hi, do cunu nt contains information affecting, the national defense of the
roe (i 4tatt?'s, within the meaning of Title 18, sections 793 and 794. of the
S '. sale-. aLs wnennded. Its, transmission or revelation of its contents to or
.- t ,g,t by .ui unauthorized person is prohibited by law.
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Secret
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
THE SITUATION IN SOUTH VIETNAM
(20 March - 26 March 1967)
POLITICAL SITUATION I
Post-constitutional developments;'
Possible rift between Premier Ky
and General Khang; Candidates for
president; Premier Ky's conditions
for negotiations; Militant Buddhists
show increased activity.
Status of Revolutionary Development
workers; Village and hamlet election
developments; Psyops and Chieu Hoi;
Chieu Hoi statistics.
Prices; Currency and gold; Pork situa-
tion; Credit prob:Lems; GVN tax and
customs collections; Changes in Min-
istry of Economy.
ANNEX: Weekly Retail Prices in Saigon (table)
Saigon Free Market Gold and Currency Prices (graph)
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 E RET ~om d*
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1. POLITICAL SITUATION
The next scheduled step in the con-
stitutional process is the submission of
the document for approval by the Armed
Forces Congress, expected this week. The
Constituent Assembly, its original task
accomplished, will probably meet early
next month, following promulgation of the
constitution, to elect new officers and
committees for its role during the tran-
sitional period. Although there is evi-
dently some continued Directorate dissat-
isfaction with the constitution, the
political repercussions emanating from
that body's quick acceptance of the docu-?
ment under pressure from Premier Ky are
not yet clear. Friction seems to have
developed between Ky and III Corps com-
mander General Khang, but evidently pre-
cedes Ky's compromise with the assembly.
Two more civilians, assembly chair-
man Phan Khac Suu and ex-premier Tran Van
Huong, have decided to enter the presi-
dential race, but neither has avowed his
intention publicly as yet. The apparent
competition between Premier Ky and Chief
of State Thieu for the military's nomina-
tion continues unresolved, although there
are indications that Ky is still tr iy ng
to make his selection inevitable.
In the meantime, the i tant
Buddhists are once again showing signs of
political activity, including a call for
a military cease-fire in honor of Buddha's
birthday.
Post-Constitutional Developments
1. The next step in the evolution of the con-
stitution, its submission to the Congress of the Armed
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Forces for review, may take place by 27 March, ac-
cording to comments of Premier Ky last week. The
Congress, which comprises some 40 of the ranking
military officers, is theoretically the supreme
ruling body as set forth in the June 1965 charter
establishing the present military regime. Although
the Congress may reiterate earlier military objec-
tions to the draft and could conceivably request
changes or refuse ratification, all indications
currently suggest that it will follow the lead of
the Directorate and approve the document without
alteration. Actual promulgation of the constitu-
tion is expected in early April.
2. the Directo-
rate,at its 19 March meeting on the constitution,
agreed upon 3 September as the date for the election
of a president and vice president, 4 September for
the election of the upper house of the legislature,
and 1 October for the election of the lower house.
It is possible, however, that the Constituent As-
sembly, which will exercise legislative power re-
garding electoral regulations, may consider the
selection of such dates as proper parts of its au-
thority. The scheduling of the lower house elec-
tion, in particular, could become a significant
issue since the Constituent Assembly is to assume
full legislative powers from the time the future
president assumes office until an elected lower
house is established. The constitution itself al-
lows a time limit of one year after the president
takes office for the holding of elections for the
legislature. An assembly spokesman on 23 March
stated that the scheduling of all elections would
be left up to the executive--presumably meaning
the Directorate.
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3. Although there is clearly some high-level
dissatisfaction with the final provisions of the
constitution, the effect within the Directorate,
and within the military establishment itself, of
Ky's successful effort to obtain speedy Directorate
approval is not yet clear.
most of the Directorate members present at
the 19 March meeting objected to the compromise ver-
sion worked out by Ky and the assembly, and, while
Directorate chairman General Thieu personally raised
no objections and joined with Ky in urging quick
dispatch, officers previously deemed loyal to either
Ky or Thieu did not support them. According to one
politician, nine of the ten civilians on the Directo-
rate were strongly critical of the draft, and one
ranking military officer characterized its acceptance
as tantamount to the Directorate's acquiescing in a
tout d'etat by the Constituent Assembly.
Possible Rift Between Premier Ky and General Khang
5. Friction between Premier Ky and one of his
previously staunch supporters on the Directorate, III
Corps commander General Khang, has recently become
apparent, although the origins evidently predate the
19 March Directorate meeting.
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6. By commanding troops in the important III
Corps area surrounding Saigon and by commanding the
Vietnamese Marine Corps which acts as a part of the
general reserve, General Khang occupies a key mili-
tary position, and he apparently fully recognizes
this fact. On past occasions, Khang has implied
that various military unit commanders were loyal to
him as opposed to either Premier Ky or Chief of
State Thieu. Khang has on occasion also acted as a
spokesman for a loose association of field grade of-
ficers known as the "Baby Turks." Khang's past as-
sociation with and support for Ky appear to have
deep roots; both men were born in the same town in
North Vietnam and are less than a year apart in age.
7. It is not clear whether the reported fric-
tion between Khang and Ky stems from Ky's growing
ambitions for power--as Khang alleges--or whether
there are more personal factors involved,
-fl -
is thus
difficult to judge how serious the rift mi2ht be.
or where it will lead.
lit may well be indicative of
growing uneasiness wi hin the military over the ap-
parent conflict between Ky's presidential ambitions
and his willingness to protect military interests.
Candidates for President
8. In addition to the previously reported can-
didacy of Revolutionary Dai Viet Party leader Ha
Thuc Ky, two other civilians have apparently decided
to toss their hats in the presidential ring. Con-
stituent Assembly chairman Phan Khac Suu told re-
porters on 21 March that a number of friends had
urged him to run, although he did not openly commit
himself to do so. He did state, however, that if he
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should run, he would choose Dr. Phan Quang Dan, a
prominent independent in the assembly, as his run-
ning mate. Dan, a northerner who is popular in the
Saigon area, told an Embassy officer on 20 March
that he has definitely decided to run as vice presi-
dent with Suu, an elderly Cao Dai southerner. He
said that he recognizes the strong position that a
military candidate would have, but is confident that
he and Suu will make a strong showin if the elections
are honest. F_ I
Suu is already attracting some Cao Dai support, and
is further hopeful that, if and when the military
decide between Ky and Thieu as their candidate, bit-
terness on the part of the general not selected may
be exploitable.
9. The other civilian hopeful, southern ex-
premier Tran Van Huong, will definitely announce his
candidacy once the constitution has been promulgated,
Huong was no longer looking
to the Nationalist (VNQDD) Party for a running mate
who could bring support from the northern provinces
because of Premier Ky's efforts to woo the VNQDD.
Instead, Huong is putting out feelers to Ha Thuc Ky,
whose Revolutionary Dai Viet Party is based in I Corps,
to join with Huong as the latter's running mate.
10. Although Ky was allegedly overheard by two
reporters at an impromptu press conference last week
to state that he had "no plans" to seek the presi-
dency, there are indications that he is still trying
to ensure his selection as the military's nominee by
demonstrating that he has broad civilian backing. Ky
was quoted by the official Vietnam press agency as
telling the same press conference that rumors of two
military candidates were groundless and that the
Armed Forces Congress "is not a political party" and
will not select candidates. These remarks provide
further evidence that Ky is backing off from the idea
of leaving the decision between himself and Thieu
purely up to the military.
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Premier Ky's Conditions for Negotiations
11.
ere are three con i-
cons upon which Ky will not compromise in connec-
tion with any possible peace negotiations. During
the period preceding and immediately following the
Guam Conference,
he was not willing to consider a
coalition government with the National Liberation
Front (NFLSV), that the Saigon government must be
fully represented at any peace negotiations, and
that participation of NFLSV officials in the govern-
ment would be acceptable only on an individual basis
and not as NFLSV representatives. Ky reportedly in-
dicated that he was willing to give ground on the
question of NFLSV participation in negotiations,
and further indicated that his position on negotia-
tions could become more liberal once the constitu-
tional government has actually been established.
12. Although Ky's reported remarks reflect a
significant change from his stand of a year or so
ago, they do not represent a radical departure from
the more recent position of the government. Of-
ficially-inspired demonstrations against a "false
peace" have stressed the government's objections to
a coalition government and its desire for full rep-
resentation at any peace discussions. On the other
hand, the question of NFLSV representation at dis-
cussions--either as a part of a North Vietnamese
delegation or separately--has not received as much
attention from the Saigon government. Although it
was not put in very precise terms, Ky's reference to
a more "liberal" outlook once a constitutional gov-
ernment has been established could be one of the
more noteworthy aspects of his reported remarks on
negotiations.
Militant Buddhists Show Increased Activity
13. The leading bonzes aligned with the mili-
tant Buddhist faction have sent letters simultaneously
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to all factions in the Vietnam war as well as to
several world leaders requesting a cease-fire on
the occasion of Buddha's birthday on 23 May, ac-
cording to the US Embassy. In the first display
of cooperation in some time between the militant
and moderate factions, progovernment bonze Thich
Tam Chau issued a communique along the same lines,
apparently because of its appeal among domestic
and international Buddhist movements. Premier Ky
has told Ambassador Lodge that he may authorize a
one-day cease-fire to avoid provoking the Buddhists,
but will probably peg any such response to the re-
quest by Tam Chau.
14. There have been other indications that
the Buddhist militants may hope to capitalize
politically on the peace theme in the hope of re-
gaining their influence.
It he present cease-fire
request is a beginning of a three-part plan con-
ceived by militant monk Tri Quang in hopes of
achieving a permanent truce. If the effort were
successful, Quang would eventually offer to serve
as a mediator between the opposing sides in the
war.
15. Additional evidence that the militant
Buddhists may be cautiously testing their strength
and the government's reaction to their resuming a
more open political role may lie in the religious
procession staged by them in Saigon on Easter.
Ostensibly a funeral to transfer the ashes of a
monk dead six years to the militants' headquarters
in the city, the procession may have been in part a
quiet response to the government's recent arrest of
a prominent layman for draft dodging. The proces-
sion was temporarily barred by police until Premier
Ky personally authorized it to continue. Political
agitation by the Buddhists in the past has usually
begun in the guise of purely religious activities
often designed to provoke some government reaction
which the Buddhists can label discriminatory.
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II, REVOLUTIONARY DEVELOPMENT
Serious problems continue to exist in
the quality of Revolutionary Development
(RD) workers. Province recruitment, train-
ing at the Vung Tau Training Center, and in-
province control of the RD teams still need
improvement. The rate of attrition among
RD workers appears to be growing, although
this may be only a short-term trend. Prep-
arations for village and hamlet elections
are progressing. Under the Chieu Hoi pro-
gram, a new safe-conduct pass has been
designed to help Viet Cong troops rally to
any allied force. During the period 12 to
18 March, there were 1,004 Chieu Hoi ral-
Tiers, bringing the 1967 total to 8,559.
Status of Revolutionary Development Workers
1. On 20 February, another Revolutionary Develop-
ment (RD) worker's course started at the Vung Tau Training
Center with 2,357 trainees. The size of the class is
considerably less than the 3,447 scheduled by the Min-
istry of Revolutionary Development and stemmed from the
failure of some provinces to meet their quota of recruits.
This failure may be a result of the implementation of
more stringent recruitment guidelines.
2. Serious problems persist with regard to the
quality and leadership of RD workers. The caliber of
recruits varies from province to province, as does the
commitment to the program on the part of local officials,
both civilian and military. The performance of the
teams in the field, after returning to their provinces
from Vung Tau, also varies widely. Many teams are poorly
led and improperly used, often in security roles or
according to the political purposes of local officials.
3. The Vung Tau course, as presently constituted,
does not provide the student with the necessary high de-
gree of motivation. Moreover, technical training for
the specialist elements in RD teams is still considered
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inadequate to meet the problems faced by the teams
in their day-to-day activities in the field, Therefore,
in-province training courses have been established with
the assistance of government technical service chiefs
in an effort to overcome continued deficiencies.
4. Another problem, of potentially greater
significance, is the attrition rate of RD workers. Pre-
liminary assessments indicate that RD momentum cannot
be sustained in some provinces if attrition continues
at the rate now reported. According to available data,
attrition of RD workers in the field during the last
half of 1966 has varied from approximately ten percent
to over 20 percent of the total field force. On 1 Jan-
uary 1967, there were approximately 18,735 RD workers
in the field--1,000 fewer than on 1 July 1966. This
decrease occurred in spite of in-province recruitment
and a net output during the period of 2,900 cadre
members from Vung Tau to the field.
5. This decline in the number of cadre may
represent a temporary adjustment rather than a long-term
trend. The last six months of 1966 were a settling-in
period for the "team concept," and numerous changes of
regulations were made in an effort to tighten financial
and administrative control over RD workers. In addi-
tion, the government successfully weeded out some inef-
ficient cadre members and some of the "payroll ghosts"--
500 in just one province. These reforms alone reduced
the strength of RD workers by 1,800.
6. Of total RD losses through 1966, 15 percent
were killed or missing in action, 20 percent were dis-
charged, 35 percent resigned, and 30 percent deserted.
7. As a result of sharp competition in the
country for qualified personnel, the RD Ministry has
lost RD workers both to other GVN agencies and to the
military draft. Moreover,
3,000 of the -suppor e
cadre members who entered the program--many of whom
were forced to take a pay cut--subsequently dropped out.
8. The high attrition rate suggests a need to
overhaul recruitment procedures. In some cases, workers
from urban areas have resigned or deserted when they
were assigned to rural areas. Workers from rural areas
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often have not been employed in their home areas, or
have not been assigned tasks that were properly part of
the RD program.
Village and Hamlet Election Developments
9. Reports from several provinces indicate that
government preparations are generally in good shape
for the village and hamlet elections scheduled to be-
gin next month. Popular enthusiasm so far is not high,
but should increase as a result of an intensive publicity
effort and the local campaigns that will commence of-
ficially one week prior to each election date.
10. The government now anticipates that the
weekly elections to be staggered from 2 April to 11 June
Will be only the "first phase" of a longer term program to
restore a measure of self-government at the village and
hamlet level. A "second election phase" is planned for
later this year, contingent upon progress in pacifica-
tion.'
11. In the first phase, elections are planned in
961 villages and 4,578 hamlets. The population in the
areas affected is estimated at 5 million, with approxi-
mately 2.2 million voters. This total of voters is
considerably smaller than the number registered for the
Constituent Assembly elections in September 1966, partly
because the six autonomous cities and most of the pro-
vincial and district capitals are excluded in the coming
local contest.
12. If pacification does proceed according to
schedule, an estimated additional 205 villages and 1,500
hamlets may hold elections before the end of 1967. These
plans, however, may be overly optimistic. The 1967
Revolutionary Development program is already two months
behind schedule, and may be further disrupted as RD
workers are diverted to help administer both the local
and national elections already scheduled during this
year, Moreover, the pacification effort may be slowed
if,--as indicated by recent Viet Cong forays against
RD teams, supporting paramilitary troops, and rural
offices--the Communists make a more determined effort
to resist government encroachment on their areas.
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13. Candidates who have filed so far for the
forthcoming local elections appear to be of average
Vietnamese educational standards and ability, and in-
clude many persons already serving in existing village
or hamlet administration. About ten percent are women.
14. It is unlikely, at this point, that on a
nationwide basis there will be a ratio approaching two
candidates for every local position at stake. In some
areas, the government has had to encourage qualified
persons to stand for office. In one village of Khanh
Hoa Province, for example, the province chief dis-
covered that there were no volunteers to run for po-
sitions on the village council. Static census griev=
ance cadre members were requested to find prospective
candidates and to influence them to enter the elec-
tion. The cadre succeeded in convincing 13 people
of suitable background and qualificiation to enter the
contest for ten council positions.
15. The success of the elections will depend on
the effectiveness of local government officials--in-
eluding the Information Service RD teams and security
forces--in arousing public interest, in encouraging
candidates to come forward despite Viet Cong threats
or terrorism, and in demonstrating an ability to pro-
vide protection for voters and candidates during the
election and for elected officials afterward.
16. Because persons of administrative talent
at the local level are either lacking or limited in
experience, the elections are likely to bring about an
initial decline in the standard of local government.
The Ministry of Justice and the Special Commission for
Administration, which operates under the Ministry of
Revolutionary Development, have developed training
programs that should help to overcome within a few
months the lack of skills expected to prevail among
many of the new and unqualified elected officials.
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Psyops and Chieu Hoi
17. A new safe-conduct pass has been designed
for use by Viet Cong and North Vietnamese troops de-
siring to rally to the GVN under the Chieu Hoi or "Opan
Arms" program. The new pass bears the flags of the US,
Australia, New Zealand, Thailand, Korea, and the
Philippines, along with the flag of the Republic of
Vietnam in the center of the pass. A statement on the
pass--in four languages-.-declares that the pass is to
be honored by all government agencies and allied forces.
The reverse side of the pass bears a photograph of
government soldiers welcoming Viet Cong as Hai Chanh
or "returnees." Approximately 23 million passes are to
be printed and air-dropped during March 1967.
18. With assistance from the Joint US Public
Affairs Operation (JUSPAO), the Chieu Hoi program is
working to provide the psychological stimulant that
persuades a man to rally now rather than merely to con-
template such a step. Although there is little evidence
that psychological warfare by itself has induced de-
fections, it does provide the psychological impetus
that turns a potential rallier into an actual returnee.
A captured enemy document credits allied psychological
operations with "exerting considerable influence on
local cadres and personnel."
19. Numerous other documents reveal that the
Communists are increasingly concerned over the effec-
tiveness of the Chieu Hoi program.- A document captured
early this year during Operation CEDAR FALLS stated
that information given by defectors to government and
allied forces was 70 to 80 percent correct. There are
indications that the Communists are taking positive
steps to try to counter the program. In several in-
stances, returnees have admitted that they were in-
structed to rally in order to serve as "fifth columnists"
in the program. In addition, the Hoi Chanh themselves
as well as the returnee resettlement hamlets apparently
are becoming increasingly the targets of enemy terrorism.
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Chieu Hoi Statistics
20. Following is the breakdown of returnees for
the period 12 to 18 March:
I Corps
73
II Corps
269
III Corps
287
IV Corps
375
1,004 (675 military, 285
44 other)
political,
21. As of 18 March, the Hoi Chanh in 1967 total
8,559 (compared to 4,698 for the same period of 1966),
or 42 percent of the total for 1966. The present
weekly average of 778 ralliers could, if sustained,
result in a total of 40,456 for this year.
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III. ECONOMIC SITUATION
Retail prices in Saigon rose sub-
stantially during the week ending 13 March
with both food and nonfood items sharing
in.the increase. Rice prices were higher
than on 6 March, but fell from the peaks
reached on 10 March. Prices of imported
commodities also rose, reversing the trend
of the previous two weeks. Free market
currency and gold prices declined slightly.
The supply of pork in Saigon continues to
be adequate as deliveries of hogs from the
delta remain at a high level. Credit con-
ditions are currently very tight and prob-
ably will remain so for several months.
The indebtedness of the commercial banks
to the National Bank of Vietnam (NBVN) has
increased rapidly during the last few
months. GVN collections of taxes and cus-
tom duties increased significantly during
1966, Governor Hanh of the NBVN has been
sworn in as the new minister of economy
and finance.
1. Retail prices in Saigon rose substantially
during the week ending 13 March, reaching a level
more than 25 percent higher than at the beginning
of the year. Food prices, as measured by the USAID
retail price index, were six percent above those
of 6 March. Although higher rice prices again con-
tributed to the increase in the food index, prices
of vegetables and some other foods also rose con-
siderably, apparently under the influence of the
recent sharp increases in rice prices. On 13 March
the price of the type of rice consumed by the work-
ing class was 33 piasters per kilogram, or four
piasters below the peak reached on 10 March, but
one piaster above the price on 6 March. Meat and
fish prices were generally stable as pork remained
plentiful (see paragraphs 4-6). The index for non-
food items rose by four percent, led by increases
for charcoal, firewood, and aspirin. (A table of
weekly retail prices in Saigon is included in the
Annex.)
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2. Prices of selected US-financed imports
also rose by about four percent as of 14 March,
reversing the slight downward trend of the previous
two weeks. Almost all imported goods shared in
this price increase, with condensed milk and cement
registering the greatest gains. Prices for wheat
flour and certain chemical products remained stable.
Currency and Gold
3. Free market prices for currency and gold
were down slightly on 13 March compared with the
previous week. The prices for dollars and gold
each declined one piaster to 171 piasters per dol-
lar and 225 piasters per dollar, respectively. The
rate for MPC (scrip) also fell by one piaster to
119 piasters per dollar. (A graphic on monthly and
weekly free market gold and currency prices is in-
cluded in the Annex.)
Pork Situation
4. The supply of pork in Saigon continues to
be adequate as deliveries of hogs from the delta
remain at a high level. During the week of 12 March,
the number of hogs received at the Saigon slaughter-
house was about 65 percent above the November-Jan-
uary rate. To a large extent, however, this in-
crease probably reflects a switch from the black
market to legal channels rather than a real increase
in hog arrivals. The GVN?s removal of official
price ceilings on hogs in late January has resulted
in higher legal prices to the hog merchants and a
virtual elimination of the black market, which may
have absorbed as much as 40 percent of all deliveries
to Saigon in previous months.
5. These developments have not yet had much
effect on the retail prices of pork. Prices have
remained stable since late February, but are still
somewhat above pre-Tet levels. USAID expects, how-
ever, that retail prices will drop as the holding
of live hogs at the slaughterhouse becomes too ex-
pensive and as imported pork, now in the Saigon port,
goes on the market.
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6. Although the pork situation is encourag-
ing now, the current large number of hogs arriving
in Saigon gives some cause for concern. Deliveries
have included a considerable number of breeding sows,
indicating that some farmers are selling off entire
stocks, possibly because of military operations
underway in the delta. Other signs of a possible
future shortage are low hog prices and high feed
costs in the producing areas. The price spread be-
tween the delta and Saigon has widened considerably
in recent weeks.
Credit Problems
7. Credit conditions in Saigon are currently
very tight and probably will remain so for three
to five months, according to the US Embassy. The
commercial banks are overextended and now find them-
selves almost completely governed by the actions of
the National Bank of Vietnam.(NBVN). As a result
of this overextension, the banks are now granting
credit on a more selective basis than during the
past few months. Moreover, they are requiring im-
porters to put down a 100 percent advance deposit
for selected commodities and may increase the amount
of the deposit on other items as well.
8. In order to avoid a shortage of credit for
stocking imported goods, the NBVN has liberalized
its rediscount policy, giving the commercial banks
twice as long to repay their loans from the NBVN.
This has lessened the pressure on importers to make
forced sales, but has put the commerical banks deeper
in debt to the NBVN. These conditions will exist
until the importers can reduce their very large stocks
of goods now sitting in the Saigon port or in ware-
houses and begin repaying the commercial banks.
9. The indebtedness of the commercial banks
to the NBVN has increased rapidly during the last
few months, riot only because of the over-all increase
in the ,vo.lume: and piaster cost of imports, but also
because the NBVN delayed its collection of US-fin-
anced import accounts. Normally when commercial
banks receive payment notices for these goods, they
are required to pay the NBVN within 20 days. The
NBVN, however, allowed this period to extend to
Appr
 Appr r ke . Release 900ZICMC-ItUJgtnR7-9lO&t~SAOOIBOOOI 1 002-4
several months and in effect let the banks use
these funds to extend further credit. By the end
of December, these accounts payable amounted to
more than six billion piasters. During January and
February, the NBVN began collecting large amounts
of these delinquent accounts, thus forcing the com-
mercial banks to increase their rediscounting of
importers' notes,
10. Recently the bankers' association requested
that reserve requirements he relaxed in order to
open up credit, but the NBVN decided to relax the
discounting policy instead. Thus, the amount of
new credit is determined by the NBVN and not by the
commercial banks which have now lost some freedom
of action, US officials feel that the most disturb-
ing aspect of the entire credit situation is the
uncertainty of the over-all credit policy and the
effect that this uncertainty-may have on commercial
bankers and importers who are now at the mercy of
the NBVN.
GVN Tax and Customs Collections
11. With the assistance of a US Internal Reve-
nue Service (IRS) team, GVN collections of taxes
and customs duties increased significantly during
1966. Tax collections amounted to 12.2 billion
piasters compared with an original 1966 estimate
of 11 billion piasters and actual 1965 collections
of 8 billion piasters. As in previous years, the
major portion of these taxes consisted of excise
taxes and various indirect taxes such as levies on
production and entertainment. Revenue from direct
taxes should increase during 1967, however, as
the
GVN implements its new withholding tax system.
The
impact
of IRS assistance also was reflected in
GVN
customs
collections during 1966. Revenues from
this
source
amounted to 8.4 billion piasters in 1966
com-
pared with an original 1966 estimate of 7 billion
piasters and actual collections of 5.6 billion in
1965.
Changes in Ministry of Economy
12. On 18 March Governor Hanh of the National
Bank of Vietnam (NBVN) was sworn in as. minister of
Ap roved For Release 2007/03/15 : CIA-RDP79T00826A0018000 0002-4
 Appr 02-4 I a-Fed Ear R lease 90OZ16W&BXJWRDPZ9100896AO()1M"
economy and finance. He will supervise four min-
istries--commerce, industry, finance, and communica-
tions--each headed by a secretary of state. At the
same time, Pham Kin Ngoc, deputy tanager of the
Credit Commercial, the commercial arm of the NBVN,
was made Hanh's deputy. Ngoc is close to Governor
Hanh, and the US Embassy feels he will be a welcome
addition to the new economic administration. Hanh
also hopes to use Luu Van Tinh, presently the di-
rector of the budget and foreign aid, as his aide
responsible for tax policy and collections. Tinh,
however, has not yet been given a new title. All
three men reportedly will retain their previous
positions while taking up new duties with the Min-
istry of Economy and Finance. The GVN apparently
decided not to replace the ministers of finance and
commerce, as reported earlier, but rather to give
Hanh top-flight assistants who could work with and
improve the effectiveness of the present ministries.
App oved For Release 2007/03/15: CIA-RDP79T00826A0018000100 2-4
SECRET
 Approvedr Release 2007/ RDP79T026A001800010002-4
F-- I
25X1
WEEKLY RETAIL PRICES IN SAIGON a/
13 J
16 Au
20 Feb
27 Feb
6 M
ar
13 Mar
une
1966 b/
g
1966 b/
1967
1967
1
967
1967
173
211
261
255
273
284
Index for All Items
t
190
216
290
285
311
324
ems
Index for Food I
Of Which:
(In Piasters)
Rioe-Soc,.:Nau,.(X40 kg,.
1,250
1,450
2,200
2,300
3,
20
0 3,300
150
Pork Bellies (1 kg.)
90
100
170
150
15
0
170
Fish-Ca Tre (1 kg.)
130
170
170
170
18
0
150
Nuoc Mam (jar)
70
85
120
120
12
0
d Items
f
f
140
190
206
201
20
3 210
oo
or Non
Index
Of Which:
(In Piasters)
Charcoal (60 kg.)
460
600
660
650
67
0 680
14
Cigarettes (pack)
10
14
14
14
1
4
32
o (meter)
li
hit
C
27
37
30
31
3
1
a
c
e
W
Electricity (kwh)
4,2
N.A.
5.2
5.3
5.2 5.2
A. Data are from USAID`sources. For all indexes 1 January 1965 = 100.
b. Price levels just prior to and two months after the 18 June devaluation.
Appro
 Approved Release 2007/03/15 : CIA-RDP79T006A001800010002-4
Saigon, Free Market Gold and Currency Prices
GOLD: Basis gold leaf worth $35 per troy ounce
US $10 GREEN
US $10 MPC Military Payment Certificates (scrip)
Approved For Release 2007/03/15 : CIA-RDP79T00826AO01800010002-4
 Approved For lease 2007/03/15: CIA-RDP79T0082 01800010002-4
Secret
Secret
Approved For Release 2007/03/15 : CIA-RDP79T00826AO01800010002-4