The Pain of Yankee Going Home

THE steady withdrawal of U.S. troops from Southeast Asia has been a source of rising cheer at home. In many non-Communist Asian countries few such cheers can be heard. The satisfaction of seeing Yankee go home is tempered by a pain in the pocketbook.

At the peak of the U.S. buildup in early 1969, there were 590,800 U.S. troops in Southeast Asia, including 543,400 in South Viet Nam. "The war effort spread dollar windfalls around the Far East." reports TIME Correspondent Louis Kraar. "An unusually wide range of Asians profited--Japanese manufacturers catering to the PX trade, Hong Kong bar girls practicing the world's oldest profession, and the men involved with Singapore's secretive gold market and numbered bank accounts."

Rolling Back. U.S. spending on the war is being cut from $29 billion a year at the height of the buildup to a projected $16 billion this year; the number of American troops in Viet Nam is already clown to 339,200. Similar rollbacks are under way in Thailand, South Korea and the Philippines. Says a top financial official in the Thai government: "The U.S. withdrawal is going to affect us terribly. At first we thought it would be done more gradually, but now it seems to be speeding up."

The situation, country by country: SOUTH VIET NAM has to make the toughest economic transition. Its economy, according to a new study by the Asian Development Bank, depends "to an extraordinary extent" on continuation of the war. So many local business and government leaders are profiting from the U.S. presence, says the study, that they have a powerful vested interest in continuing the combat. In part their dependence stems from a highly unusual method chosen by U.S. policymakers to control South Viet Nam's inflation. To siphon off the excess buying power that resulted from the huge inflow of dollars, the U.S. directed much of its aid toward financing massive imports of luxury goods--thus increasing supply to match demand. The bank points out that Vietnamese businessmen make "quick and exorbitant profits" by securing import permits and selling foreign goods at outrageous markups. Bureaucrats collect bribes for dispensing the permits, and the Saigon government gets most of its income from import taxes. The report also contends that large shipments of American rice have reduced Saigon's incentive to fight Viet Cong influence in the rice-rich Mekong Delta.

In the past year, 100 U.S. bases have been closed or turned over to South Vietnamese troops, and more than 11,000 local employees dropped from U.S. payrolls. Still, some businessmen who profited most from the war have managed to find new sources of wealth in withdrawal. Pacific Architects and Engineers, which handles everything from water supplies to garbage collection at U.S. bases, had revenues of $102 million in fiscal 1969.

The company has thinned out its staff, and put 1,000 vehicles in storage at Long Binh. Now P.A. & E. is making substantial earnings by cleaning, spraying and packing up equipment that leaves Viet Nam. Company officials expect to gross $66 million in 1971. Says Vice President Thomas Spicknall: "We will stay here as long as we can make a profit--and we think that's going to be a long time." THAILAND stands to lose a major source of new money. The country profited from the war to the tune of $600 million in foreign exchange over the past five years, and 100,000 jobs at U.S. bases. At present, the U.S. is reducing its 48,000-man force by nearly a third. Among the many losers: Tommy Tours Agency, headed by a former Burmese air force chief and the wife of a Thai air marshal; the firm handled all American R. and R. trade under a monopoly arrangement with the Bangkok government.

On the credit side of the ledger, Thailand will inherit $80 million worth of American-built roads and ports, and the skills of 16,000 U.S.-trained mechanics, electricians and other workers. Now that the Yankees are moving out, the Thais are scouting for new markets for their own products. The Asian Development Bank study found that the war-induced financial windfall had weakened the nation's "incentive to export" its rich resources of teak, rubber, tin, rice and maize. Some Thais also argue that the war lowered their country's morals. G.I.s spent $22 million last year while on leave in Thailand, and Bangkok's prostitute population doubled to 20,000. Their income has done little to stimulate the economy. Typically, a massage parlor girl keeps just 75-c- of her $3-to-$5 fee,* and the rest is taken by pimps and bar owners. Those profits in turn have been invested in constructing more hotels and saloons, which are now closing up. Complains the manager of the Lady Bar and Company Turkish Bath and Massage Parlor in Takhli, Thailand: "Business has never been worse."

THE PHILIPPINES are also losing income. Says Manny Angele, a director of the Junior Chamber of Commerce: "We have benefited from the war in Viet Nam, and now it's going the other way." And at the worst possible time. The country has a $1.5 billion foreign-exchange debt, and a 15% unemployment rate, which will increase when layoffs hit many of the 10,000 Filipino construction workers at U.S. bastions elsewhere in Asia. Many have been earning ten times as much as they might get at home. Simultaneously, the U.S. is pulling a quarter of its 24,000 men out of the Philippines, and firing local employees. Peace is particular hell to the Communist Huk insurgents. Through a front company--and discreet payoffs--they had invested their surplus cash in a large housing project near Clark Air Force Base, where U.S. forces are being pared back. SOUTH KOREA sent 50,000 troops to Viet Nam, and in the past four years has collected $542 million in U.S. military contracts and supplies. In 1969 alone. South Korea's war income amounted to $200 million. As U.S. Ambassador William J. Porter puts it, Seoul insisted on sharing "the opportunities as well as the risks" of the Viet Nam War. But South Korea's war revenues fell by more than 10% in 1970. In addition, the U.S. is bringing home nearly a third of the 64,000 troops stationed in South Korea. The effect can already be seen in microcosm in the town of Inchon. When the U.S.'s Camp Kaiser closed down there in November, 10,000 shopkeepers, taxi drivers and prostitutes were deprived of their prime source of income.

Reconstruction Bids. Despite these dislocations, there will be much money to be earned from peace itself. Japanese businessmen are already touring South Viet Nam and mapping plans for reconstruction bids and an export push. The shift to a peacetime economy must be accomplished by Asians themselves, but the U.S. will have to help with grants, loans and private investment. With $2.5 billion in aid over ten years--far less than the cost of the war--South Viet Nam could grow all the rice that it needs, develop forestry and fertilizer industries, and press along with hydroelectric development on the Mekong River. Though the U.S. withdrawal is spoiling the spoils of war, America's most valuable long-term economic contribution to Asia would be to remove even more troops and let the normal flow of business resume.

* Most of her earnings, says an official U.S. report, go for "cosmetics, imported clothing and other tools of the trade, and are diverted out of the local economy."

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