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Robert S. Browne and Foreign Policy

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Browne, Robert S. "Address of Robert S. Browne At the Forum 'Vietnam Aflame: What Are the Issues.'" The Community Church, New York City, June 30, 1963.

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The Community Church, New York City

June 30, 1969

Since 1955 America's 'so called' economic aid program to Vietnam has absorbed approximately $2 billion. This comes to about $700,000 every day, including Saturdays and Sundays, since 1955. And this does not include an unpublished figure for the direct military aid program — which probably runs considerably more than the figure for so called economic aid. This is a whopping lot of money by anybody's standard. It puts the Vietnam aid program near the top of all the countries which receive American aid despite the fact that Vietnam's population of more than 14 million is a modest one by comparison with some of the giant sized countries to which we give our aid.

I would, therefore, like to take a few minutes to tell you a bit about what your tax money is used for in Vietnam. I will attempt to be as non-technical as possible.

I referred to this $2 billion in aid as 'so called' economic aid. In reality, only about 10-15% of it can be termed unqualifiedly as economic aid — and even the validity of a portion of this 10-15% might well be challenged by some economic developers. This 10-15% is the portion of aid devoted to the dollar costs of projects in education, health, agriculture, and public works — including roads (roads which are often designed for military rather than economic objectives). The remaining 85-90% of the aid — that is to say, more than $600,000 per day — goes into what is called the commercial import program. This is a program through which the U.S. makes hard currency, mainly dollars, available to the Vietnam government for sale to private businessmen in Vietnam who wish to import foreign goods. The local currency (piastre) proceeds from the sale of these dollars then goes into a counterpart fund where it can be used for the local currency cost of projects mutually agreed upon by the U.S. and the Vietnamese governments. In principle, there is nothing wrong with such a mechanism and in some cases it can be of great benefit to a country's economic development, for the recipient country is enabled to purchase cement, iron and steel products, tractors, machinery, fertilizer, petroleum products, and other basic items which it may need to speed its development.

But there is a limit of how much development aid of this kind a country can readily absorb — and $600,000 a day, far surpasses Vietnam's reasonable absorptive capacity. In fact, for Vietnam to use the amount of money we give it, it has become necessary for Vietnam to import all manner of luxurious items. No visitor to Saigon would ever suspect that he was in a country which was virtually bankrupt and living off the largesse of another. Rakish new French, German, and British sport cars are everywhere in evidence. Fine restaurants and well provisioned shops abound, boasting imported wines, cheeses, and perfumes. Luxury homes and air-conditioned apartments and movie theatres have sprung up all over town, and Saigon now has the distinction of having the only escalator in Southeast Asia — and all thanks to American aid.

Now do not think that I am an opponent of foreign aid. On the contrary, it is because I am so ardent a supporter of foreign aid that I become disturbed when I see that aid program is being utilized in ways so likely to bring it into disfavor with the Congress and the American people.

Why do we persist in financing such a peculiar and dubious aid program in Vietnam? — You will recall that I said earlier that the proceeds from the sale of the $600,000 a day to Saigon businessmen were put into a counterpart fund to be used for projects mutually agreed to by the U.S. and Vietnam governments. Well, the major project which has been mutually agreed to, and to which the bulk of the counterpart funds go, is the payment of salaries of the Vietnamese army. And on that decision hangs the explanation both of the sport cars and of the astronomical sums for the Vietnam aid program. Instead of the dollar cost of all the tractors and cement and fertilizer and pharmaceuticals which Vietnam needs determining the size of the aid programs, it is the sum of piastres required to be generated to pay the army that determines the size of the aid programs — and since the military budget is virtually unlimited in the presently hopeless Vietnam situation, it has been necessary to fritter our dollars away on almost anything that the monied Vietnam consumer might be tempted to buy. (Stimulated by congressional prodding, and especially following a sensational expose of this situation by the Scripps Howard press in 1959, some tightening of the aid criteria for Vietnam took place, thus eliminating some of the more flagrant outrages to common sense and to taxpayers sensibilities. For example, some luxury items previously paid for by aid funds were made ineligible for aid financing — but reform was more apparent than real for the Vietnamese government merely revised its own shopping list, buying the sleek cars with its own foreign exchange earnings and leaving more of the country's basic needs for us to supply.) Of course, this isn't the only way that the Vietnamese army could be paid for — but any other way would require the Vietnamese government to do such unheard of things as levying and collecting substantial taxes, on both its rich and its poor. Taxes are anathema to even the most popular of governments so obviously they are out of the question for President Diem. Our insistence on supporting Diem thus means that our Vietnam program costs us a great deal more than it need to — and with results which can hardly be described as encouraging. Indeed, a rather strong case can be made that the excessive generosity of our aid program in Vietnam is self-defeating —, in fact, that is a major deterrent any real rallying of the populace toward any degree of unity.

For needless to say, most of the Vietnamese are not so fortunate as to be riding in foreign sport cars and motor boats, or dining on imported foods, or living in air conditioned houses. Wealth breed wealth and in Vietnam, governmental positions also breed wealth. The American aid program has meant windfall profits — legitimate and otherwise — to a great many Saigonese businessmen and high civil servants, including especially the President's family and it's immediate circle. Although no scientific studies have been made, it certainly seems to me that during my several years of residence in Indochina, the gap between the wealthy and the poor has actually widened rather than closed — although it may well be that the overall economic level of the poor has been raised somewhat by the aid program.

I do not profess to know 'the Vietnamese mind' (despite the fact that my wife is Vietnamese) but it is not unlikely that among the explanations for the Diem government's inability to rally his people because of their resentment at the display of wealth which the Vietnamese rich indulge in — a wealth which is quite out of place when thousands of people are dying for the country, and hundreds of thousands have insufficient charcoal, water, and sometimes not even enough rice. Since it is widely known that this wealth is attributed to American aid, just as the strangle hold which these nouveaux riche have on the Vietnamese masses is attributable to "the Americans", I suspect that our image among the Vietnamese has actually suffered in direct proportion to our excessive generosity. In fact, we are unquestionably the only country in the world buying its way to unpopularity at a price of $600,000 a day. A survey taken a few years ago showed that the average, unlettered Vietnamese could point to no concrete way in which he thought American aid had benefited him. To an extent, of course, this is merely a reflection of his own ignorance or of the inadequacy of our publicity organs. But in part it is also a reflection of the form which much of our aid takes. Although there does not necessarily seem to be widespread belief that the American aid program is intended primarily for the benefit of the rich, a surprising number of Vietnamese do express the belief that in actual practice it is only the rich who enjoy the benefits of this aid — a fact which they attribute to the venality of the Vietnamese officials rather than to American design.

Speaking to an audience such as this one I hardly need point out that there are also disturbing ethical implications involved simply in our government undertaking to underwrite between 1/3 and 1/2 of another nation's total annual budget. The sheer magnitude of our aid provides an overwhelming element of support for whatever group is in power and further entrenches its powers. The way the program is administered has tended to create and fortify a powerful new wealthy class — a fact which has been nurtured by the corrupt practices of the many government officials who have shared richly in the spoils. An observable result of this surfeiting of the country with laxly administered aid has been an alarming rotting within the government's administration and an accelerating loss of respect for the government by the people. In so many ways, the parallel with Chiang's China is striking. From a moral point of view the aid program is an actual disservice to Vietnam.

From a purely economic point of view an aid program of such magnitude is probably a disservice as well. The demand by the military that an ever increasing sum of piastres be generated, thus requiring a constantly burgeoning number of foreign imports, has actually been a deterrent to real investment taking place within Vietnam. There is little incentive for a potential investor to assume the risks and undertake the efforts of opening an industrial plant in Vietnam when his products will have to compete with a plethora of American goods which are imported at artificially low exchange rates.

In closing, and at the risk of being ostracized by my audience, I would like to refer, for comparative purposes, to the descriptions which I have had of conditions in Communist North Vietnam, Hanoi in particular. There, I understand, we will find a totally different world — an economy of extreme austerity, as compared with Saigon's glittering nightly neon displays — we will find in Hanoi a lustreless city which sleeps early because electricity is scarce and is to be used for less frivolous purposes, instead of Saigon's lovely boulevard clogged with European cars, we find new cars, — and those mostly of old vintage. Ho Chi Minh, clad in his traditional pajamas and residing in a modest house, contrasts vividly with the natty and fastidious President Diem in his spotless white sharskin suits, his Mercedes limousine and his bubbletop Cadillac (a gift from President Eisenhower), residing with this elegant sister-in-law in the ornate palace which formerly housed the French high-commissioner. The standard of living, from all reports, is distressingly low — but it is not low for everyone. I am no advocate of poverty but I do feel that austerity is called for under certain conditions. It seems apparent to me that a more equalitarian society in South Vietnam is highly desirable for the success of the ideological struggle taking place in that beleaguered country. Regrettably, our aid program encourages greater economic disparity rather than greater equalitarianism among the Vietnamese people.

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