The Role of Dollars in SE Asia

We have had to convert dollars into local currency in every port so far until we hit Vietnam. Then in both Vietnam and Cambodia, dollars worked fine.

In Vietnam, the guide said that dollars are preferred by most merchants to the local currency, although they will give you Vietnamese change, so you want to have an ample supply of small bills so you will not need any change. The guide said that because such a high percentage of the transactions in Vietnam and handled in cash, whereas the US has so many transactions using credit cards, Vietnam actually uses a higher volume of US cash each day than does the US.

In Cambodia the situation is even more dramatic. They claim to use more dollars than Vietnam (or the US) or any other country in the world. One passenger tried to use Cambodian currency with a street vendor, and the vendor would have no part of it. She wanted dollars. She walked away in disgust when the passenger persisted in trying to get rid of his Cambodian money.

When Pol Pot and the Khmer Rouge were in power from 1975-1978 they abolished the use of all currency. Their plan was that everything you had was given to the government, and the government gave you what they said you needed. Even if you had a garden in your yard, you were expected to give all of the food to the government. If you did not, you were executed. You can imagine how that incentivized people to farm well.

So when the Vietnamese invaded Cambodia in 1978 to oust the Khmer Rouge, the Cambodians started to use Vietnamese currency. So they never developed any fondness for their own currency, and the dollar is now king.