Recessionary Reel

To a casual stroller in Danang, South Viet Nam's second largest city has rarely looked more prosperous. Every store window is full. The shops are freshly painted, and for the first time in years an effort is being made to clean up the streets. In the central market there are baskets of bananas, lettuce flown in from Dalat, fresh oranges from Cambodia. A new air-conditioned hotel has just opened, and despite the withdrawal of American G.I.s, Danang's restaurants still offer Johnny Walker Scotch and Courvoisier Cognac.

The appearances are deceptive. Hardly anyone can afford to drink scotch or cognac any more. The oranges and lettuce often perish unsold. A shoemaker complains: "There are never any customers. I have ten children, and I have to spend at least 1,000 piasters [$2.50] a day to feed them. I can't afford a bowl of soup for lunch."

South Viet Nam's economy, severely strained for months by the continuing departure of free-spending Americans, has been thrown into a recessionary reel by the current North Vietnamese offensive. Fighting in the countryside has already driven nearly a million people off their farms and out of unprotected villages to the big cities, where they continue to live as wards of the state in teeming refugee camps. The nation's shaken business community has held up on new ventures that might be destroyed in the war; as a result, capital investment has practically dried up. South Viet Nam's job market has rarely been bleaker. Thousands of workers who held steady jobs a year ago are now forced to eke out a living as street vendors.

Used Shoelaces. The winding back alleys of Khanh Hoi in Saigon used to be relatively quiet during the day; the men were working on the docks, and the women were tending to household chores. Now the area is bustling. Women try to sell nuts and fruits, children hawk secondhand shoelaces, and the men are not likely to find more than two days' work a week. Some farmers have been hit just as hard. The threat of Communist attack--and of American bombs in counterattack--has kept thousands of them from tending their rice fields.

The recession worries officials of the Thieu regime. "I am not too worried about the economic situation for the rest of the year," says Economic Minister Pham Kim Ngoc, "but after that, if there's not a solution or Congress doesn't understand the need for economic aid, it will be serious." Such bleak forecasts, of course, are nothing new in Saigon. Yet even high government officials, who owe a large share of their remaining credibility to the hope of eventual prosperity in South Viet Nam, seem to realize that they cannot allow the downward economic spiral to continue for long.

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