Economic Development under Conditions of Guerrilla Warfare: The Case of Viet Nam

Abstract

It is hardly startling to report at this date that guerrilla war. fare against the government of South Viet Nam has reached crisis proportions and that South Viet Nam's future as an independent political entity is in grave doubt. It is also obvious from the outset that one can sum up quite simply the gist of any treatment of economic development under these conditions. One sentence might suffice: Economic development is difficult, if not impossible. However, there is a need for further analysis, and as one approach to the subject, two main questions may be examined: (1) What has been the record of economic development in South Viet Nam, and (2) To what extent is this record a function of the guerrilla warfare which still continues? By economic development I refer to a process through which resources -human, natural and material-are used in increasingly efficient ways so that the production of goods and services rises beyond previously attainable levels at rates which bring higher real per capita income. To accomplish this, an important share of the productive effort must be channeled into the kinds of production which add significantly to the productivity of the future-improved types of capital equipment, better communications facilities, more power, aids to agriculture such as irrigation and fertilizers, and the like. There must also be modifications in those existing institutions which inhibit increased productivity or discourage innovation and change. External economic aid can help by providing capital equipment and techniques, and these facilitate the process and ease some of the initial strain on existing productive capacity. But external aid alone cannot bring economic development. The aid-receiving system must have within it incentives, drives, and stimuli which build on the available aid, utilize it effectively, and impel the system toward the next stage of increased production whereby more capital goods can be accumulated. If the basic allocations of resources are not made within this general pattern, economic development will not take place, no matter what temporary flurries of economic activity there may be and no matter what popular pressures may be building up for economic improvement. A bald answer to the first question, then-what has been the record of economic development in South Viet Nam-is that there is little evidence