Economy of the Republic of Vietnam
The United States played an important role in this economy through economic and technical aid, and trade.
Agriculture made up around 30% of economic output in South Vietnam, a share that did not vary significantly over the years.
[1] South Vietnam's agriculture had a total area of around 6 million ha, mostly in the southern regions (the Mekong River Delta and roughly what is now the Southeast region), while the Central Highlands had few cultivated areas (see map),[2] Other significant agricultural areas were the lowlands along the coast in the north of South Vietnam (central Vietnam including the provinces of Thừa Thiên–Huế, Quảng Nam, Bình Định).
Food processing and textiles became the largest industries by 1967, both having increased their capital ten-fold and employing over 17000 workers each.
[8] South Vietnam's industry suffered from the departure of foreign troops in the early 1970s, which resulted in significantly less demand.
The state budget of the Republic of Vietnam enjoyed a surplus in the early stage but soon turned into deficit from 1961.
Investment remained strong, industry and agriculture generally retained a high growth rate.
[14] In March 1957, Ngô Đình Diệm proclaimed Declaration of the President of the 1st Republic (Tuyên ngôn của Tổng thống Đệ nhất Cộng hòa), calling upon foreign and domestic private investment and committing the governmental protection of the investors’ benefits as well as investment encourange policies (preferable tax rates, land rent, income tax…).
The warfare caused negative impact on economic growth, especially the large scale Tet Offensive in 1968.
On 26 August 1970 US ambassador Ellsworth Bunker informed President Richard Nixon that South Vietnam seemed to rely on the United States not only for military support but also for the basic economic commodities that sustained its life.
In last years of the Republic of Vietnam's existence, the government went on to introduce import limitations, export incentives, and encouraged domestic consumption.
After 1975, the economy of Vietnam was plagued by enormous difficulties in production, imbalances in supply and demand, inefficiencies in distribution and circulation, soaring inflation rates, and rising debt problems.
Vietnam was one of the few countries in modern history to experience a sharp economic deterioration in a postwar reconstruction period.
Its peacetime economy was one of the poorest in the world and showed negative to very slow growth in total national output as well as in agricultural and industrial production.
Vietnam's gross domestic product (GDP) in 1984 was valued at US$18.1 billion with a per capita income estimated to be between US$200 and US$300 per year.
Reasons for this mediocre economic performance included severe climatic conditions that afflicted agricultural crops, bureaucratic mismanagement, elimination of private ownership, extinction of entrepreneurial classes in the South, and military occupation of Cambodia (which resulted in a cutoff of much-needed international aid for reconstruction).
