South Vietnam

South Vietnam, officially the Republic of Vietnam, was a state which governed southern Vietnam until 1975. It received international recognition in 1949 as the "State of Vietnam" (1949–55), and later as the "Republic of Vietnam" (1955–75). Its capital was Saigon. The term "South Vietnam" became common usage in 1954, when the Geneva Conference partitioned Vietnam into communist and non-communist parts.

South Vietnam's origins can be traced to the French colony of Cochinchina, which consisted of the southern third of Vietnam and was a subdivision of French Indochina. After World War II, the Vietminh, led by Ho Chi Minh, proclaimed the establishment of a Communist nation in Hanoi. In 1949, non-communist Vietnamese politicians formed a rival government in Saigon led by former emperor Bảo Đại. Bảo Đại was deposed by Prime Minister Ngo Dinh Diem in 1955, who proclaimed himself president after a referendum. After Diem was deposed in a military coup in 1963, there was a series of short-lived military governments. General Nguyen Van Thieu led the country from 1967 until 1975. The Vietnam War began in 1959 with an uprising by Viet Cong forces supplied by North Vietnam. Fighting climaxed during the Tet Offensive of 1968, when there were over 1.5 million South Vietnamese soldiers and 500,000 U.S. soldiers in South Vietnam. Despite a peace treaty concluded in January 1973, fighting continued until the North Vietnamese army overran Saigon on 30 April 1975.

Leaders

 * 1946–47 Autonomous Republic of Cochinchina (Chính phủ Cộng hoà Nam Kỳ tự trị). The creation of this republic allowed France to evade a promise to recognise Vietnam as independent.
 * Nguyễn Văn Thinh (1946)


 * 1947–48 Republic of South Vietnam (Chánh phủ lâm thời Nam phần Việt Nam). The Vietnamese name acknowledges Cochinchina as a unit within Vietnam.
 * Nguyễn Văn Xuân (1947–48)


 * 1948–49 Provisional Central Government of Vietnam (Thủ tướng lâm thời Quốc gia Việt Nam). This "pre-Vietnam" government prepared for a unified Vietnamese state.
 * Nguyễn Văn Xuân (1948–49)


 * 1949–55 State of Vietnam (Quốc gia Việt Nam). Internationally recognized in 1950. Vietnam was partitioned at the 17th parallel in 1954.
 * Bảo Đại (1949–55). Abdicated as emperor in 1945.


 * 1955–75 Republic of Vietnam (Việt Nam Cộng Hòa). Fought Vietnam War (1959–75) against Hanoi.
 * Ngô Đình Diệm (1955–63). Once highly lauded by America, he was ousted and assassinated in a U.S.-backed coup.
 * In 1963–65, there were numerous coups and short-lived governments, several of which were headed by Dương Văn Minh or Nguyễn Khánh.
 * Nguyễn Văn Thiệu (1965–75). Prime Minister Nguyễn Cao Kỳ was the top leader in 1965–67.
 * Trần Văn Hương (1975).
 * Dương Văn Minh (2nd time) (1975). Surrendered to Communists when others abandoned their posts.


 * 1975–76 Provisional Revolutionary Government of the Republic of South Vietnam (Chính phủ Cách mạng lâm thời Cộng hoà miền Nam Việt Nam). Authority nominal as South was occupied by the People's Army of Vietnam.


 * Huỳnh Tấn Phát (1975–76)

Founding of Vietnam


Before World War II, the southern third of Vietnam was the colony of Cochinchina, which was administered as part of French Indochina by a governor in Hanoi. The northern two-thirds of Vietnam was the protectorate of Annam, which had a Vietnamese emperor as well as parallel French and Vietnamese systems of administration. Cochinchina had been annexed by France in 1862 and even elected a deputy to the French National Assembly. It was more "evolved", and French interests were stronger than in other parts of Indochina, notably in the form of French-owned rubber plantations. During World War II, Indochina was administered by Vichy France and occupied by Japan. When the Japanese surrendered in 1945, Emperor Bảo Đại abdicated, and Viet Cong leader Hồ Chí Minh proclaimed the Democratic Republic of Vietnam (DRV) in Hanoi. French administration was restored in the South in September 1945. In June 1946, France declared Cochinchina a republic within French Indochina. Hồ purged non-communist politicians from the DRV. The French Indochina War began in 19 December 1946, with the French regaining control of Hanoi and other northern cities.

The State of Vietnam was created through co-operation between anti-communist Vietnamese and the French government on 14 June 1949. Former emperor Bảo Đại accepted the position of chief of state (quoc truong). This was known as the "Bảo Đại Solution." The colonial struggle in Vietnam became part of the global Cold War in October 1949 when a victorious Chinese communist army arrived on Vietnam's northern border. In 1950, China, the Soviet Union and other communist nations recognized the DRV while the United States and other non-communist states recognized the Bảo Đại government.

In July 1954, France and the Viet Minh (later the Viet Cong) agreed at the Geneva Conference that the State of Vietnam would rule the territory south of the 17th parallel, pending unification on the basis of supervised elections in 1956. At the time of the conference, it was expected that the South would continue to be a French dependency. However, South Vietnamese Premier Ngô Đình Diệm, who preferred American sponsorship to French, rejected the agreement. When Vietnam was divided, 800,000 to 1 million North Vietnamese, mainly (but not exclusively) Roman Catholics, sailed south as part of Operation Passage to Freedom due to a fear of religious persecution in the North.

1955–1963
In July 1955, Diệm announced in a broadcast that South Vietnam would not participate in the elections specified in the Geneva accords. As Saigon's delegation did not sign the Geneva accords, it was not bound by it. He also said the communist government in the North created conditions that made a fair election impossible in that region. This view was confirmed by independent observers from Canada, India, and Poland.

Diệm held a referendum on 23 October 1955 to determine the future of the country. He asked voters to approve a republic, thus removing Bảo Ðại as head of state. The poll was supervised by his younger brother, Ngô Ðình Nhu. Diệm was credited with 98 percent of the votes. In many districts, there were more votes to remove Bảo Ðại than there were registered voters. In Saigon, 133 percent of the registered population reportedly voted to remove Bảo Ðại. On 26 October 1955, Diệm declared himself the president of the newly proclaimed Republic of Vietnam. The French, who needed troops to fight in Algeria, completely withdrew from Vietnam by April 1956.

Diệm attempted to stabilize South Vietnam by defending against Viet Cong activities. He launched an anti-communist denunciation campaign (To Cong) against remnants of the communist Viet Cong. He acted against criminal factions by launching military campaigns against three powerful main sects; the Cao Dai, Hoa Hao and the Binh Xuyen organised crime syndicate whose military strength combined amounted to approximately 350,000 soldiers. Throughout this period, the level of U.S. aid and political support increased.

1973–1975
In accordance with the Paris Peace Accords signed with North Vietnam on 27 January 1973, U.S. military forces withdrew from South Vietnam. North Vietnam was allowed to continue supplying communist troops in the South, but only to the extent of replacing materials that were consumed.

The communist leaders had expected that the ceasefire terms would favour their side. But as Saigon began to roll back the Viet Cong, they found it necessary to adopt a new strategy, hammered out at a series of meetings in Hanoi in March 1973, according to the memoirs of Trần Văn Trà. As the Vietcong's top commander, Trà participated in several of these meetings. A plan to improve logistics was prepared so that the North Vietnamese Army would be able to launch a massive invasion of the South, projected for 1976, before Saigon's army could be fully trained. A gas pipeline would be built from North Vietnam to Vietcong headquarters in Loc Ninh, about 60 mi north of Saigon.

On 15 March 1973, U.S. President Richard Nixon implied that the U.S. would intervene militarily if the communist side violated the ceasefire. Public reaction was unfavourable and on 4 June 1973 the U.S. Senate passed the Case-Church Amendment to prohibit such intervention. The oil price shock of October 1973 caused significant damage to the South Vietnamese economy. The Vietcong resumed offensive operations and by January 1974 it had recaptured the territory that it had lost earlier. After two clashes that left 55 South Vietnamese soldiers dead, President Thieu announced on 4 January that the war had restarted and that the Paris Peace Accord was no longer in effect. There were over 25,000 South Vietnamese casualties during the ceasefire period.

In August 1974, Nixon was forced to resign as a result of the Watergate scandal and the U.S. Congress voted to reduce assistance to South Vietnam from $1 billion a year to $700 million. By this time, the Ho Chi Minh Trail, once an arduous mountain trek, had been upgraded into a drivable highway with gasoline stations.

In 1975, the communists of North Vietnam launched an offensive in the South, which became known as the Ho Chi Minh Campaign. The Army of the Republic of Vietnam unsuccessfully attempted a defense and a counterattack. It had few remaining operational tanks and artillery pieces, as well as a shortage of spare parts, and ammunition. The NVA had a vastly greater supply of new equipment and ammunition. As a consequence, South Vietnamese President Nguyễn Văn Thiệu was forced to withdraw key army units from the Central Highlands, which exacerbated an already-perilous military situation and undercut the confidence of the ARVN soldiers in their leadership.

The retreat became a rout. The cities of Huế, Da Nang and Da Lat in central Vietnam quickly fell, and the North Vietnamese advanced southwards. As the military situation deteriorated, ARVN troops started deserting.

Thieu requested aid from U.S. President Gerald Ford, but the U.S. Senate would not release extra money to provide aid to South Vietnam, and had already passed laws to prevent further involvement in Vietnam. In desperation, Thieu called back Nguyen Cao Ky from retirement as a military commander, but resisted calls to name his old rival prime minister.

Fall of Saigon: April 1975
Nguyễn Văn Thiệu resigned on 21 April 1975, and fled to Taiwan. He nominated his Vice President Tran Van Huong as his successor. A last-ditch defense was made by the ARVN 18th Division at the Battle of Xuan Loc led by Major General Lê Minh Đảo. After only one week in office, Tran Van Huong handed over the presidency to General Duong Van Minh ("Big Minh"). Minh was seen as a more conciliatory figure toward the North, and it was hoped he might be able to negotiate a more favourable settlement to end the war. The North was not interested in negotiations, however, and its tanks rolled into Saigon largely unopposed which led to the fall of Saigon. Acting President Minh unconditionally surrendered the capital city of Saigon and the rest of South Vietnam to North Vietnam on 30 April 1975.

During the hours leading up to the surrender, the United States undertook a massive evacuation of its embassy in Saigon, Operation Frequent Wind. The evacuees included U.S. government personnel as well as high-ranking members of the ARVN and other South Vietnamese who were seen as potential targets for persecution by the Communists. Many of the evacuees were taken directly by helicopter to multiple aircraft carriers waiting off the coast. An iconic image of the evacuation is the widely seen footage of empty Huey helicopters being jettisoned over the side of the carriers, to provide more room on the ship's deck for more evacuees to land. The evacuation was forced to stop by the U.S. Navy. All the marines and diplomats were evacuated, but thousands of South Vietnamese waited vainly atop the U.S. Embassy on 22 Gia Long Street for helicopters that never came.

Relationship with the United States


The Geneva Accords promised elections in 1956 to determine a national government for a united Vietnam. Neither the United States government nor Ngo Dinh Diem's State of Vietnam signed anything at the 1954 Geneva Conference. With respect to the question of reunification, the non-communist Vietnamese delegation objected strenuously to any division of Vietnam, but lost out when the French accepted the proposal of Viet Minh delegate Pham Van Dong, who proposed that Vietnam eventually be united by elections under the supervision of "local commissions". The United States countered with what became known as the "American Plan," with the support of South Vietnam and the United Kingdom. It provided for unification elections under the supervision of the United Nations, but was rejected by the Soviet delegation and North Vietnamese. Between 1955 and 1956, the retreat of the Vietminh in the South, and the campaign of terror from Hanoi's land reform and resultant peasant uprising round Vinh in the North lead the International Control Commission (including India, Poland, and Canada) to conclude that there was no hope of ensuring a truly free election at that time has since been admitted by the chief sponsor of the Final Declaration. One of the rationales for supporting the South Vietnamese government was America's containment policy, which was designed to hold back the spread of communism during the Cold War.

The failure to unify the country in 1956 led in 1959 to the foundation of the National Front for the Liberation of South Vietnam (abbreviated NLF but also known as the Việt Cộng), which initiated an organized and widespread guerrilla insurgency against the South Vietnamese government. Hanoi directed the insurgency, which grew in intensity. The United States, under President Eisenhower, initially sent military advisers to train the South Vietnamese Army. President John F. Kennedy increased the size of the advisory force fourfold and allowed the advisers to participate in combat operations, and later acquiesced in the removal of President Diem in a military coup. After promising not to do so during the 1964 election campaign, in 1965 President Lyndon B. Johnson decided to send in much larger numbers of combat troops, and conflict steadily escalated to become what is commonly known as the Vietnam War. In 1968, the NLF ceased to be an effective fighting organisation after the Tet Offensive and the war was largely taken over by regular army units of North Vietnam. Following American withdrawal from the war in 1973, the South Vietnamese government continued fighting the North Vietnamese, until, overwhelmed by a conventional invasion by the North, it finally unconditionally surrendered on 30 April 1975, the day of the surrender of Saigon. North Vietnam controlled South Vietnam under military occupation, while the Provisional Revolutionary Government of the Republic of South Vietnam, which had been proclaimed in June 1969 by the NLF, became the nominal government. The North Vietnamese quickly moved to marginalise non-communist members of the PRG and integrate South Vietnam into the communist North. The unified Socialist Republic of Vietnam was inaugurated on 2 July 1976.

Politics
South Vietnam went through many political changes during its short life. Initially, the nation was a republic with former Emperor Bảo Đại as Head of State. He was unpopular however, largely because monarchical leaders were considered collaborators during French rule and because he had spent his reign absent in France.

In 1955, Prime Minister Ngo Dinh Diem rigged a referendum, which ended with a 98% vote in favour of deposing Bao Dai. In Saigon, Diem was credited with 133% of the vote and he went on to proclaim himself the president of the newly formed Republic of Vietnam. Despite successes in politics, economics, and social change in the first 5 years, Diem quickly became a dictatorial leader. With the support of the United States government and the CIA, ARVN officers led by General Duong Van Minh staged a coup and killed him in 1963. The military held a brief interim military government until General Nguyen Khanh deposed Minh in a January 1964 coup. Until late 1965, multiple coups and changes of government occurred, with some civilians being allowed to give a semblance of civil rule overseen by a military junta.

In 1965, the feuding civilian government voluntarily resigned and handed power back to the nation's military, in the hope this would bring stability and unity to the nation. An elected constituent assembly including presentatives of all the branches of the military decided to switch the nation's system of government to a parliamentary system with a strong President. There was a bicameral National Assembly consisting of a Senate and a House of Representatives, which came into being in 1967. Military rule initially failed to provide much stability however, as internal conflicts and political inexperience caused various factions of the army to launch coups and counter-coups against one another, making leadership very tumultuous. The situation stabilised in mid-1965 when the Vietnam Air Force chief Nguyen Cao Ky became Prime Minister, with General Nguyễn Văn Thiệu as the figurehead chief of state.

In 1967, South Vietnam held its first elections under the new system. Following the elections, however, it switched back to a presidential system. The military nominated Nguyễn Văn Thiệu as their candidate, and he was elected with a plurality of the popular vote. Thieu quickly consolidated power much to the dismay of those who hoped for an era of more political openness. He was re-elected unopposed in 1971, receiving a suspiciously high 94% of the vote on an 87% turn-out. Thieu ruled until the final days of the war, resigning in April 1975. Duong Van Minh was the nation's last president and unconditionally surrendered to the Communist forces a few days after assuming office.

South Vietnam was formerly a member of ACCT, Asian Development Bank (ADB), World Bank (IBRD), International Development Association (IDA), International Finance Corporation (IFC), IMF, International Telecommunications Satellite Organization (Intelsat), Interpol, IOC, ITU, League of Red Cross and Red Crescent Societies (LORCS), UNESCO and Universal Postal Union (UPU).

In terms of human rights, Diem's regime "compared favorably with other Asian governments of the same period in its respect for the person and property of citizens." A summary of human rights under the Thieu regime was provided by Congressman Leo Ryan, who was a strong critic of U.S. policy in Vietnam: "Although South Vietnam is no bastion of democratic principles, the worst charges of widespread repression of fundamental human rights are overblown. There is a vocal, operative political opposition and press. It is not doubted that there are some political prisoners, but neither the populace as a whole nor the opposition political leaders appear to be living in fear of government repression." Political prisoners in South Vietnam numbered only in the thousands. According to Robert F. Turner, "In terms of physical characteristics, the so-called "tiger cages" compared favorably with some isolation facilities in this country. Designed for one prisoner, but, because of overcrowded conditions, often used to imprison three, they measured roughly five by ten feet at the ground and were just under ten feet high. The "pits" were above ground and were protected from the elements by a normal roof ten feet above the ceiling bars. They weren’t good—few prison cells are—but they were far less horrible than we were led to believe by the critics."

Provisional Revolutionary Government
Following the surrender of Saigon to North Vietnamese forces on 30 April 1975, the Vietcong, or Provisional Revolutionary Government, established itself in Saigon as the government of South Vietnam. However, it had no real autonomy and was under the control of North Vietnam, and was largely seen as a puppet government. The PRG was dissolved in July 1976 when it merged with the Democratic Republic of Vietnam (North Vietnam) to become the current Socialist Republic of Vietnam.

Army
On 26 October 1956, the military was reorganised by the administration of President Ngo Dinh Diem who established the Army of the Republic of Vietnam (ARVN, pronounced "arvin"). Early on, the focus of the army was combating the guerrilla fighters of the Vietcong, or National Liberation Front, an insurgent movement supplied by North Vietnam. The United States, under President Kennedy sent advisors and a great deal of financial support to aid ARVN in combating the Vietcong. ARVN and President Diem began to be criticised by the foreign press when the troops were used to crush southern religious groups like the Cao Dai and Hoa Hao as well as to raid Buddhist temples, which Diem claimed were harboring Communist guerrillas.

In 1963, Ngo Dinh Diem was assassinated in a coup d'état carried out by ARVN officers led by Duong Van Minh ('Big Minh'), supported by the CIA. In the confusion that followed Big Minh took power, but was only the first in a succession of ARVN generals to assume the presidency of South Vietnam in a period of intense political instability. During these years, the United States began taking full control of the war against the NLF and the role of the ARVN became less and less significant. They were also plagued by continuing problems of severe corruption among the officer corps. Although the U.S. was highly critical of them, the ARVN continued to be entirely U.S. armed and funded.

The value of the ARVN was highly questionable in this period. In 1963, at the Battle of Ap Bac, some 1,400 ARVN troops were defeated by only 350 Vietcong guerrillas. The battle of Dong Xoai in 1965 was another humiliating ARVN defeat. Generals tended to be political appointees and corruption was rampant.

Starting in 1969, President Nixon started the process of so-called "Vietnamization", withdrawing American forces and leaving the ARVN to fight the war against the North Vietnamese. Slowly, ARVN began to expand from its counter-insurgency role to become the primary ground defense against the Vietcong and North Vietnamese. From 1969 to 1971 there were about 22,000 ARVN combat deaths per year. Starting in 1968, South Vietnam began calling up every available man for service in the ARVN, reaching a strength of a million soldiers by 1972. In 1970 they performed well in Cambodia and were executing 3 times as many operations as they had during the American war period. However, the officer corps was still the biggest problem, and after the 1973 Paris Peace Accords, the ARVN lacked necessary military supplies and weapons as a result of a cutback of U.S. financial aid and assistance.

Relations with the public also remained poor as their only counter to Vietcong organising was to resurrect the Strategic Hamlet Program, which many peasants resented. However, forced to carry the burden left by the Americans, the South Vietnamese army actually started to perform rather well, and in 1970 was winning the war against the Communists, though with continued American air support. The exhaustion of the North was becoming evident, and the Paris talks gave some hope of a negotiated peace, if not a victory for the North Vietnamese. Since 1973, the war shifted in favor of the Viet Cong, who were well-equipped, funded and aided by their communist allies, the USSR and the China, than the South was by the Americans.

The most crucial moment of truth for the ARVN came with General Vo Nguyen Giap's 1972 Easter Offensive, the first all-out invasion of South Vietnam by the communists. It was code-named Nguyễn Huệ after the Vietnamese emperor who defeated the Chinese in 1789. The assault combined infantry wave assaults, artillery and the first massive use of tanks by the North Vietnamese. ARVN took heavy losses, but to the surprise of many, managed to hold their ground.

U.S. President Richard Nixon dispatched more bombers to provide air support for ARVN when it seemed that South Vietnam was about to be overrun. In desperation, President Nguyễn Văn Thiệu fired the incompetent General Hoàng Xuân Lãm and replaced him with ARVN's best commander, General Ngo Quang Truong. He gave the order that all deserters would be executed and pulled enough forces together so that the North Vietnamese army failed to take Huế. Finally, largely as a result of U.S. air and naval support, as well as determination by ARVN soldiers, the Easter Offensive was halted.

After the signing of the Paris Peace Accords in 1973, all U.S. military forces withdrew from South Vietnam and theoretically the war officially ended, however clashes between ARVN and Vietcong forces continued.

In 1975, the North Vietnamese again invaded the South. Lacking U.S. air support, the ARVN could not hold them back. City after city fell to the Communists with ARVN soldiers joining the civilians trying to flee south. The North called this the "Ho Chi Minh Campaign". All resistance crumbled. Faced with few viable options, the South tried to form a coalition government that would be palatable to the Communists, one that favored negotiated peace and neutrality. The new coalition government was headed by General Duong Van Minh (Big Minh), one of the organisers of the coup in November 1963, with the full support of the CIA and President Kennedy, that killed President Ngo Dinh Diem. General Cao Van Vien, then Colonel and Commander of the Airborne Brigade, had been captured and held by the Big Minh faction and threatened with execution unless he ordered his troops to join the coup. He refused and was held captive until the end of the coup and was released only because of his close friendship with one of the coup leaders.

Because the new coalition government would be headed by Big Minh, General Vien immediately submitted his resignation to then President of South Vietnam Tran Van Huong, who succeeded President Thieu as President. President Huong, knowing the 1963 coup history, granted General Vien's resignation request, (Vien had submitted his resignation to President Thieu many times and had always been turned down). General Vien then escaped to the U.S. as a civilian once his resignation was effective and formalised.

The situation in South Vietnam further deteriorated. The ARVN tried to defend Xuan Loc, their last line of defense before Saigon. The ARVN forces were greatly outnumbered by the advancing North Vietnamese army. Xuan Loc was taken and on 30 April 1975, initiated the Fall of Saigon. The North Vietnamese army captured the city, placing the Vietcong flag over the Independence Palace. General Duong Van Minh, recently appointed president by Tran Van Huong, unconditionally surrendered the city and government bringing the Republic of Vietnam and also the Army of the Republic of Vietnam to an end.

Radio
There were four AM and one FM radio stations, all of them owned by government (VTVN), named Radio Vietnam. One of them was designated as a nationwide civilian broadcast, another was for military service and the other two stations included a French language broadcast station and foreign language station broadcasting in Chinese, English, Khmer and Thai. Radio Vietnam started its operation in 1955.

Television
Television was introduced to South Vietnam on 7 February 1966 with black-and-white FCC system. Covering major cities in South Vietnam, started with a one-hour broadcast per day then increased to six hours in the evening during the 1970s. There were two main channels:
 * THVN-TV (Truyền hình Việt Nam-TV) on channel 9, featuring Vietnamese-language shows, news, and special announcements from Saigon. This entirely Vietnamese-language channel catered to the Vietnamese populace.


 * NWB-TV on channel 11, broadcasting entirely in English, which relayed popular American-made shows like the The Ed Sullivan Show and The Tonight Show Starring Johnny Carson, and various sports games like the World Series. It also broadcast news and special announcements from the American government and military commanders. This channel catered to American troops in South Vietnam.

Both channels used an airborne transmission relay system from airplanes flying at high altitudes, called Stratovision.

Newspapers
Christian Science Monitor Saigon correspondent Dan Sutherland observed in 1970 that "Under its new press law, South Vietnam now has one of the freest presses in Southeast Asia, and the daily paper with the biggest circulation here happens to be sharply critical of President Thieu....Since the new press law was promulgated nine months ago, the government has not been able to close down Tin Sang or any other newspaper among the more than 30 now being published in Saigon."

Provinces


South Vietnam's capital was Saigon which was renamed Hồ Chí Minh City on 1 May 1975 after unconditionally surrendering to the North.

Before surrendering, the South was divided into forty-four provinces (tỉnh, singular and plural).

Geography
The South was divided into coastal lowlands, the mountainous Central Highlands (Cao-nguyen Trung-phan), and the Mekong River Delta. South Vietnam's time zone was one hour ahead of North Vietnam, belonging to the UTC+8 time zone with the same time as the Philippines, Brunei, Malaysia, Singapore, Hong Kong, Macao, China, Taiwan, and the Australian state of Western Australia.

Economy
South Vietnam maintained a free-market economy and ties to the west. It established an airline under Head of State Bảo Đại named Air Vietnam. The economy was greatly assisted by American aid and the presence of large numbers of Americans in the country between 1961 and 1973. Electrical production increased fourteen-fold between 1954 and 1973 while industrial output increase by an average of 6.9 percent annually. During the same period, rice output increased by 203 percent and the number of students in university increased from 2,000 to 90,000. U.S. aid peaked at $2.3 billion in 1973, but dropped to $1.1 billion in 1974. Inflation rose to 200 percent as the country suffered economic shock due the decrease of American aid as well as the oil price shock of October 1973. The unification of Vietnam in 1976 led to the imposition of North Vietnam's centrally planned economy into the South. The country made no significant economic progress for the next twenty years. After the break-up of the Soviet Union and the end of Soviet aid, the leadership of Vietnam accepted the need for change. Their occupation armies were withdrawn from Laos and Cambodia. Afterward, the country introduced economic reforms that created a market economy in the mid-1990s. The government remains a collective dictatorship under the close control of the Communist Party.

Demographics
About 90% of population was Kinh, and 10% was Hoa, Montagnard, French, Khmer, Cham, Eurasians and others. (1970).

The Vietnamese language was the primary official language and was spoken by the majority of the population. Despite the end of French colonial rule, the French language still maintained a strong presence in South Vietnam where it was used in administration, education (especially at the secondary and higher levels), trade and diplomacy. The ruling elite population of South Vietnam was known to speak French as its primary language. With U.S. involvement in the Vietnam War, the English language was also later introduced to the military and became a secondary diplomatic language. Languages spoken by minority groups included Chinese, Khmer, and other languages spoken by Montagnard groups.

The religion of the majority of the population was Buddhism influenced by Confucian philosophy, which was practiced by about 80% of the population. A significant Roman Catholic minority included many ruling members of the state and during the Ngo administration, the government was often biased towards Catholics in public service and military promotions, as well as in the allocation of land, business favors and tax concessions. Many civilians also converted to Catholicism to avoid discrimination by the government or to receive special government benefits. Tensions between the Buddhist majority and pro-Catholic administration and the Catholic population escalated into the Buddhist Crisis in which civil unrest severely weakened the government and led to U.S. opposition of the Ngo administration. The crisis ended with the arrest and assassination of President Ngô Đình Diệm in November 1963. The Catholic population was then discriminated in turn by the Buddhist majority in following administrations and declined as many converted to Buddhism. Other minority religions included Cao Dai, Hoa Hao and animism practiced by hill tribes.

Culture
Cultural life was strongly influenced by China until French domination in the 18th century. At that time, the traditional culture began to acquire an overlay of western characteristics. Many families had three generations living under one roof. The emerging South Vietnamese middle class and youth in the 1960s became increasingly more Westernised, and followed American cultural and social trends, especially in music, fashion and social attitudes in major cities like Saigon.