THE ECONOMY OF CAMBODIA in the late 1980s was dominated by
subsistence agriculture; the industrial sector was still in its infancy.
After it came to power in 1979, the new, Vietnameseinstalled government
in Phnom Penh set restoration of the nation's self-sufficiency in food,
a situation that the country had enjoyed throughout prewar times, as a
major goal. A persistent guerrilla war and a ravaged infrastructure
impeded the achievement of this goal and of economic recovery in
general, however. At the Fifth Party Congress of the Kampuchean (or
Khmer) People's Revolutionary Party (KPRP), held in Phnom Penh from October 13 to October 16, 1985, General
Secretary Heng Samrin laid claim to some "important successes in
agricultural production" in his political report. At the same time,
he acknowledged that the country's "backward and unbalanced"
economy still faced tremendous difficulties, including shortages of
fuel, spare parts, raw materials, skilled labor, and a cadre of
professionals possessing technical expertise and economic management
skills. In short, the country's material and technical bases had not
been restored to prewar levels. Prior to its adjournment, the KPRP
Congress adopted the First Five-Year Program of Socioeconomic
Restoration and Development (1986-90), hereafter referred to as the
First Plan.
In 1987 there were signs that reforms legalizing private enterprise
were revitalizing the country's economy. Small industrial enterprises
reopened, and transportation and telecommunication systems were
partially restored. As private market activities resumed, the population
of Phnom Penh grew from 50,000 in 1978--the last year of the Pol Pot
regime--to 700,000. Economic revitalization also occurred at Kampong
Saom (formerly known as Sihanoukville), Cambodia's only seaport and its
second largest city, which resumed its pre-1975 industrial and shipping
activities.
Economic rehabilitation has been precarious and has been plagued by
uncontrollable factors, such as adverse weather and serious security
problems. In 1987 a severe drought in Southeast Asia reduced Cambodia's
rice production. According to a senior official of the Ministry of
Agriculture, estimated production of milled rice fell that year to
approximately 1 million tons, about 300,000 tons below the level of
fiscal year 1986. (Cambodia needs at least 1.9 million tons of rice
annually for a population of 6.5 million).
The prospects for Cambodia's economic revitalization were poor in the
late 1980s. The country's infrastructure was both weak and unstable.
Factories and workshops, lacking electricity and supplies, operated only
intermittently and at low capacity. The economy relied heavily--and
almost completely after 1980--on foreign aid from communist countries,
particularly the Soviet Union and the Socialist Republic of Vietnam
(Vietnam); Western nations, Japan, and China had terminated economic
assistance to Cambodia in 1980 to protest the presence of Vietnamese
troops in that country. According to General Secretary Samrin, Cambodia
would require "dozens of years" to restore its economy and to
accomplish "a gradual passage toward socialism."
Internationally, Cambodia in the future may have the option of joining
the Council for Mutual Economic Assistance (CMEA, CEMA, or Comecon--see
Glossary). If the Vietnamese troops leave, the country also may be
offered some form of economic cooperation by other Asian and Western
nations. In either case, however, Cambodia is very poor, produces
little, and is not likely to prove an enticing economic partner. For
this reason, in the forging of new economic links with the East and with
the West, the country is likely to be relegated to a passive role, and
the initiative will probably belong to the larger states, who will
decide on what terms to share their largesse with Cambodia.
Because of insufficient and inconsistent--and therefore
unreliable--data, analysis of Cambodia's war-torn economy can only be
tentative. In the late 1980s, key economic indicators were missing or
were difficult to reconcile, particularly for the Pol Pot period
(1975-78). Since 1979 government economic publications have been scarce,
and official statistics represent targets and estimates spelled out in
the country's economic development plans rather than actual figures.
Cambodia - ECONOMIC SETTING
Metals and Minerals
In general, Cambodia's mineral resources appear to be limited. In the
late 1950s and throughout the 1960s, however, exploration by Chinese
experts in Kampong Thum Province disclosed commercially exploitable
deposits of iron ore amounting to about 5.2 million tons. Western
sources indicated possible reserves of high-grade iron ore, ranging from
2.5 million to 4.8 million tons, in the northern part of the country.
Chinese explorations also revealed manganese ore reserves, estimated at
about 120,000 tons, in Kampong Thum Province.
Deposits of phosphate, limestone, and clay of exploitable quality and
quantity have also been reported. A few thousand tons of phosphate are
extracted annually in Kampot Province and are processed locally or at a
small plant in Batdambang Province. In addition, salt and coal also may
be present in Cambodia's geological strata. Rubies, sapphires, and
zircons have been mined since at least the late 1800s, mostly at Ba Kev,
Stoeng Treng Province, and at Pailin, Batdambang Province. Limited gold
and silver deposits have been reported in several parts of the country.
Hydroelectric Power
The country's hydroelectric generating potential is considerable,
especially from the swift current of the middle Mekong River where it
flows through Stoeng Treng and Kracheh provinces. Other sites of minor
importance are on rivers in the highlands of the northeastern and
north-central parts of the country. Although the Tonle Sap is Cambodia's
dominant hydraulic feature, the rivers flowing into this great lake have
little or no exploitable potential. In general, development of the
country's water potential appears to be more important for the expansion
of irrigation than for the production of electricity.
Petroleum
In late 1969, the Cambodian government granted a permit to a French
company to explore for petroleum in the Gulf of Thailand. By 1972 none
had been located, and exploration ceased when the Khmer Republic fell in
1975. Subsequent oil and gas discoveries in the Gulf of Thailand and in
the South China Sea, however, could spark renewed interest in Cambodia's
offshore area, especially because the country is on the same continental
shelf as its Southeast Asian oil-producing neighbors.
Forestry
Another natural resource is the forests, which cover approximately 70
percent of the country and which potentially constitute a second pillar
of the economy in addition to the primary one, agriculture. A survey in
the 1960s disclosed that Cambodia had more than 13 million hectares of
forests that contained many species of tropical growth and trees but not
teak or other valuable sources of hardwood. Some destruction of the
forest environment undoubtedly occurred in the war that followed in the
1970s, but its extent has not been determined. Most of the heavy
fighting took place in areas uncovered by dense tropical jungle. As of
late 1987, forest resources had not yet been fully exploited because of
poor security in the countryside and a lack of electrical and mechanical
equipment, such as power tools and lumber trucks. Nevertheless, the
Cambodian government reportedly has discussed with Vietnam the
possibility of coordinated reforestation programs.
Timber and firewood are the main forest products. Timber is
considered one of the four economic initiatives of the government's
First Plan. Timber production was projected to reach a peak of 200,000
cubic meters in 1990.
Cambodia - Labor Force
Cambodia ranks among the least populated Asian nations with an
estimated 1987 population of only about 6.3 million to 6.4 million. Its
density of approximately 36 persons per square kilometer is about
one-fifth of Vietnam's population density of 187 persons per square
kilometer. The First Plan set the population growth rate at 2.8 percent
per year, up from the average annual growth rate of 2.3 percent for the
1978 to 1985 period.
In 1987 observers estimated that about 34.5 percent of the population
was under 15 years of age and that 3 percent was 62.5 or older. An
estimated 63 percent of the population (or about 4 million people) were
between the ages of 15 and 64. The economically active segment of the
population, the work force, was probably around 3 million people, or 46
percent of the total population. This estimated percentage of the labor
force remained relatively constant from 1962--when the census showed a
work force of 2.5 million people out of a total population of 5.73
million--until the 1980s.
In 1983 all public-sector employees, including state employees, armed
forces personnel, industrial workers, artisans, teachers, and party
cadres, accounted for approximately 8 percent of an economically active
population of between 2.5 million and 3 million. Approximately 80
percent of the work force was engaged in agriculture, in forestry, and
in fishing.
A critical shortage of qualified and professional personnel emerged
as technicians, engineers, skilled workers, and trained managers either
fled the country or fell victim to executions under the Pol Pot regime.
In 1980 the Ministry of Agriculture had only 200 technicians, down from
a total of 1,600 in 1975.
Moreover, the continuing conflict diverted part of the work force to
combat zones or to security-related projects. In March 1984, the
government initiated a forced-labor program, employing civilians in
"national defense work" to seal the 830 kilometers of frontier
with Thailand. This project, code-named K-5, diverted from the labor
force a number of conscripts (aged 18 to 45) ranging from 25,000 to
30,000 for each province, or as high as 3,000 for each district of
Cambodia. The labor shortage constituted a major impediment to economic
progress, a point stressed by Heng Samrin at the Fifth Party Congress
when he said that "Labor...is scattered at present in order to face
the needs of the struggle," adding that the "lack of qualified
labor and specialized cadres...has prevented us from ensuring that
current works satisfy the requirements for development."
Cambodia - ECONOMIC DEVELOPMENTS AFTER INDEPENDENCE
Sihanouk's political neutrality, which formed the cornerstone of his
foreign policy, had a significant effect on Cambodia's economic
development. Sihanouk insisted that the economic dimension of neutrality
meant either total rejection of international aid (as practiced by Burma
under Ne Win) or acceptance of foreign economic assistance from all
countries without strings attached. Indeed, during the first decade that
he was in power in newly independent Cambodia (1953-63), the prince
carefully practiced his "purer form of neutrality between East and
West" in seeking foreign economic assistance for development.
In 1963 however, Cambodia's economy started to stagnate when Sihanouk
decided to link his economic neutrality policy to the country's
territorial integrity and border security. He rejected further
assistance from the United States, because Washington supported the
Republic of Vietnam (South Vietnam), and from Thailand, with which
Cambodia had continuous frontier disputes. In a related move, Sihanouk
nationalized trading companies, banks, insurance, and major industries,
thereby causing economic deterioration between 1963 and 1969. The 1967
Samlot (Batdambang) revolt and the February 1970 government decision to
demonetize (or exchange) the old 500 riel banknotes were crucial events contributing to the end of the
Sihanouk era.
During his tenure after independence, Sihanouk used the country's
ill-defined constitution to monitor all government activities of any
consequence and to bend the government's decision-making process to his
advantage. During the course of nation building, political aims often
prevailed over strictly economic objectives. For example, prior to 1967,
the government assigned higher priority to social improvements, such as
health and education, than it did to national economic growth. The
government later gave higher priority to the productive sectors of
agriculture and industry in economic plans for the 1968-72 periods;
however, because of war, the government did not implement these plans.
Nonetheless, between 1952 and 1969, Cambodia's gross national product
(GNP) grew an average of 5 percent a year in real terms, with growth
higher during the 1950s than during the 1960s. In addition, the service
sector played an important role in Sihanouk's mixed economic system in
contrast to its position under the regimes of Pol Pot and of Heng
Samrin, who considered the service sector insignificant and
"unproductive." In 1968 the service sector accounted for more
than 15 percent of gross domestic product (GDP), agriculture accounted for 36 percent, and manufacturing for
12 percent.
Agriculture developed under a degree of paternalism from Sihanouk,
who donated farm equipment to various villages and, in return, received
respect and affection from the peasants. In general, however, Cambodian
agriculture subsisted without much help from the government. In 1969
approximately 80 percent of rice farmers owned the land they cultivated,
and the landholding for each family averaged slightly more than two
hectares. The farmers used simple and rudimentary implements that were
well suited to their needs and to the light weight of their draft
animals. Overall, the peasants were remarkably self-sufficient.
Farmers began to cultivate more land, causing rice production to
increase from an average of 1.4 million tons in 1955 to 2.4 million tons
in 1960. Production remained at that level throughout the 1960s. Rice
yield per hectare, however, remained low--less than 1.2 tons per
hectare--during the 1952-69 period little was done to increase yield
through the use of irrigation, chemical fertilizers, or improved seeds
and implements. Average yields in Batdambang and Kampong Cham provinces,
however, were 50 percent higher than the national average because of
better soil fertility and, in the case of Batdambang, larger average
landholdings and greater use of machines in cultivation.
Industrial and infrastructural development benefited from foreign
economic assistance. In general, the government avoided ambitious plans
and focused on small enterprises to meet local needs and to reduce
foreign imports. In June 1956, the Chinese provided Phnom Penh with
US$22.4 million in equipment as part of an ongoing program of industrial
economic assistance. In addition, they helped build a textile mill and a
glass plant in the 1960s. During this period, other nations contributed
through aid programs of their own. Czechoslovakia granted loans for the
construction of tractor assembly plants, tire-production facilities, and
a sugar refinery. Other aid donors were the Soviet Union, Yugoslavia,
France, the Federal Republic of Germany (West Germany), Japan, and
Australia. United States economic assistance to Cambodia amounted to
more than US$350 million for the 1955 to 1962 period, and it was
invested mostly in the areas of public health, education, and
agricultural development. To avoid the appearance of undue dependence
upon foreign aid, Cambodia insisted upon "project sharing,"
that is, participation of its own in specific enterprises, such as the
French-sponsored oil refinery and truck assembly plant at Sihanoukville.
This stipulation imposed by Phnom Penh also had the effect of holding
down the scale of many aid projects and the amounts of loans extended to
the Cambodian government.
The government also used foreign assistance to expand the country's
transportation and communication networks. France helped to develop
Sihanoukville, Cambodia's second largest port, which opened in 1960, and
the United States constructed a highway linking the port to Phnom Penh.
In addition, the Cambodians, with French and West German assistance,
built a railway from Sihanoukville to the capital.
Despite Sihanouk's claims of economic progress, Cambodia's industrial
output in 1968 amounted to only 12 percent of GNP, or only one-third of
agricultural production. Rice and rubber were the country's two
principal commodity exports and foreign-exchange earners during the
Sihanouk era.
Cambodia - The Wartime Economy, 1970-75
The war that engulfed the rest of Indochina spread to Cambodia in
April 1970, shortly after the coup that deposed Prince Sihanouk. Wartime
conditions had a major impact on the country's economy, especially on
the export sector. Production and export of virtually all commodities
dropped sharply, as insecurity spread throughout the countryside.
Intense combat in the nation's most densely populated farming areas
caused a large segment of the peasant population to flee to cities and
to towns. By 1975 the population of Phnom Penh had swollen to 2 million,
from just 50,000 in 1955. Moreover, the war seriously dislocated the
economic system. Food shortages arose as insurgents interrupted the
transportation of crops from the countryside to the main marketing
centers. Increasing budgetary expenditures, skyrocketing inflation,
shrinking export earnings, and a rising balance-of-payments deficit
plagued the war-torn economy.
The war's most damaging effect was on rice production. In 1972
Cambodia needed to import rice (from Japan and from Thailand) for the
first time since independence. Fighting reduced the amount of land under
rice cultivation to fewer than 800,000 hectares in 1972, far less than
the approximately 3 million hectares that had been under cultivation in
1969. The 1972 rice harvest amounted to only 26.8 percent of the 1969
harvest. Exports of natural rubber, the country's second leading
foreign-exchange earner, ceased shortly after hostilities began in 1970.
The war destroyed extensive rubber plantations and damaged
rubber-processing facilities.
In late 1970, Lon Nol, who succeeded Sihanouk, continued to
liberalize the economy in an effort to save the country from economic
disaster. This endeavor was a continuation of the policies he had
enacted as head of the government of "national salvation" in
August 1969. Under Lon Nol's direction, Phnom Penh limited the control
and the authority of the state export-import agency (Soci�t� nationale
d'exportation et d'importation--SONEXIM), which had been established in
1964 to administer foreign trade, to denationalize banks and industries,
to encourage private foreign investments, and to allow greater private
participation in the economy. The new economic policies of the Khmer
Republic gradually reversed the pattern of state socialism that had
formed the keystone of Sihanouk's domestic policies.
On October 29, 1971, the government implemented a comprehensive
program of reforms to stabilize the economy. These reforms included
increased import taxes on all nonessential commodities; increased
interest rates on bank deposits and on commercial loans; elimination of
credit to state enterprises and to public utilities; introduction of a
flexible currency exchange system; and simplification of the import
system to facilitate the movement of goods. The emphasis of the program
was to restore monetary stability in the face of rising inflation,
financial speculation, black markets, and other economic problems caused
by the war. In a change of policy, the government also moved toward
greater involvement with international and with regional organizations
and sought support from the World
Bank, the International
Monetary Fund), and the Asian Development Bank.
As the war progressed, Lon Nol's government aimed major economic
measures mainly at improving the overall food supply situation and at
maintaining public confidence in the continued availability of essential
consumer items. To ensure adequate domestic supplies, in November 1971
Phnom Penh suspended grants of export licenses for major export
commodities, such as rice, corn, and cattle. Although the move helped
maintain stocks of essential commodities in the capital and in
provincial centers, supplies were small relative to demand.
The Lon Nol government had earlier declared in principle that it
maintained a policy of "strict neutrality" and would accept
foreign assistance from "all countries which love peace and
justice." As early as April 20, 1970, Cambodia formally requested
military and economic aid from Washington to help cope with growing war
expenditures and with an increasing budgetary deficit. As military
activity in the country intensified, the United States became Cambodia's
largest donor and supplier. Moscow, however, sent medical equipment and,
in October 1971, the Soviets renewed a financial agreement with the
republican regime. The Economic Support Fund, to which the United
Nations (UN), the United States, Britain, Japan, New Zealand, Thailand,
and Malaysia pledged their contributions, provided US$21 million in
auxiliary relief. Other nations, including Italy, Israel, West Germany,
and Switzerland, provided funds mostly to assist war victims. France
earmarked its aid for the maintenance of French educational programs and
cultural institutions. Nevertheless, these palliative measures fell far
short of what was needed. By 1975 the economy had collapsed, and the
country was surviving mainly on imported food financed by the United
States government.
Cambodia - The Economy under the Khmer Rouge, 1975-79
Under the leadership of the Khmer Rouge, Cambodia underwent a brutal
and radical revolution. When the communist forces took power in Phnom
Penh in April 1975, their immediate goals were to overhaul the social
system and to revitalize the national economy. The economic development
strategy of the Khmer Rouge was to build a strong agricultural base
supported by local small industries and handicrafts. As explained by
Deputy Premier Ieng Sary, the regime was "pursuing radical
transformation of the country, with agriculture as the base. With
revenues from agriculture we are building industry which is to serve the
development of agriculture." This strategy was also the focus of a
doctoral thesis written by future Khmer Rouge leader Khieu Samphan at
the University of Paris in 1959. Samphan argued that Cambodia could only
achieve economic and industrial development by increasing and expanding
agricultural production. The new communist government implemented the
tenets of this thesis; it called for a total collectivization of
agriculture and for a complete nationalization of all sectors of the
economy.
Strict adherence to the principle of self-reliance constituted the
central goal of the Khmer Rouge regime. A Phnom Penh radio broadcast in
early May (about a month after the Khmer Rouge arrived in the capital)
underscored the importance of Cambodian self- reliance and boasted that
during the war the Khmer Rouge had used scrap iron and wrecked military
vehicles to manufacture their own bullets and mines. The statement made
it clear that the policy of self-reliance would continue in peacetime.
In another move aimed at reducing foreign influence on the country, the
regime announced on May 10 that it would not allow foreigners to remain
in Cambodia but that the measure was only temporary; and it added,
"We shall reconsider the question [of allowing foreigners to enter
the country] after the re-establishment of diplomatic, economic and
commercial relations with other countries." Although Cambodia
resumed diplomatic relations with a number of nations, the new
government informed the UN General Assembly on October 6, 1975, that it
was neutral and economically self-sufficient and would not ask for aid
from any country. On September 9, however, the Chinese ambassador
arrived in Cambodia, and there were soon reports that China was
providing aid to the Khmer Rouge. Estimates of the number of Chinese
experts in Cambodia after that time ranged from 500 to 2,000. The policy
of self-reliance also meant that the government organized the entire
population into forced-labor groups to work in paddies and on other land
to help the country reach its goal of food self-sufficiency.
The Khmer Rouge, as soon as it took power on April 17, 1975, emptied
Phnom Penh (of its approximately 2 million residents) as well as other
cities and towns, and forced the people into the countryside. This
overnight evacuation was motivated by the urgent need to rebuild the
country's war-torn economy and by the Khmer Rouge peasantry's hostility
toward the cities. According to a Khmer Rouge spokesman at the French
embassy on May 10, the evacuation was necessary to
"revolutionize" and to "purify" the urban residents
and to annihilate Phnom Penh, which "Cambodian peasants regarded as
a satellite of foreigners, first French, and then American, and which
has been built with their sweat without bringing them anything in
exchange." The only people who were not ordered to leave the city
were those who operated essential public services, such as water and
electricity.
Other Khmer Rouge leaders rationalized the evacuation as a matter of
self-reliance. They told the Swedish ambassador in early 1976 that
"they didn't have any transportation facilities to bring food to
the people, and so the logical thing was to bring the people to the
food, i.e., to evacuate them all and make them get out into the
ricefields." Indeed, when the evacuees reached their destinations,
they were immediately mobilized to clear land, to harvest rice crops, to
dig and restore irrigation canals, and to build and repair dikes in
preparation for the further expansion of agriculture. The rice crop in
November 1976 was reported to be good in relation to earlier years. At
the same time, plantations producing cotton, rubber, and bananas were
established or rehabilitated.
While the Khmer Rouge gave high priority to agriculture, it neglected
industry. Pol Pot sought "to consolidate and perfect [existing]
factories," rather than to build new ones. About 100 factories and
workshops were put back into production; most of them (except a
Chinese-built cement plant, a gunnysack factory, and textile mills in
Phnom Penh and in Batdambang) were repair and handicraft shops revived
to facilitate agricultural development.
Cambodia's economic revolution was much more radical and ambitious
than that in any other communist country. In fact, Khmer Rouge leader
Premier Ieng Sary explained that Cambodia wanted "to create
something that never was before in history. No model exists for what we
are building. We are not imitating either the Chinese or the Vietnamese
model." The state or cooperatives owned all land; there were no
private plots as in China or in the Soviet Union. The constitution,
adopted in December 1975 and proclaimed in January 1976, specifically
stated that the means of production were the collective property of the
state.
The Cambodian economic system was unique in at least two respects.
First, the government abolished private ownership of land. The Khmer
Rouge believed that, under the new government, Cambodia should be a
classless society of "perfect harmony" and that private
ownership was "the source of egoist feelings and consequently
social injustices." Second, Cambodia was a cashless nation; the
government confiscated all republican era currency. Shops closed, and
workers received their pay in the form of food rations, because there
was no money in circulation.
On August 12, 1975, fewer than four months after the Khmer Rouge had
taken power, Khieu Samphan claimed that, within a year or two, Cambodia
would have sufficient food supplies and would be able to export some of
its products. To achieve this goal in record time, large communes
comprising several villages replaced village cooperatives, which had
formed in the areas controlled by the Khmer Rouge in 1973 and which had
spread throughout the country by 1975. Unlike China and Vietnam, which
had introduced collectivization gradually over several years, Cambodia
imposed the system hastily and without preparation.
The Khmer Rouge, in line with the slogan, "If we have dikes, we
will have water; if we have water, we will have rice; if we have rice,
we can have absolutely everything," organized the workers into
three "forces." The first force comprised unmarried men (ages
fifteen to forty) who were assigned to construct canals, dikes, and
dams. The second force consisted of married men and women who were
responsible for growing rice near villages. The third force was made up
of people forty years of age and older who were assigned to less arduous
tasks, such as weaving, basket-making, or watching over the children.
Children under the age of fifteen grew vegetables or raised poultry.
Everyone had to work between ten and twelve hours a day, and some worked
even more, often under adverse, unhealthy conditions.
On September 27, 1977, in a major speech celebrating the anniversary
of the Kampuchean (or Khmer) Communist Party (KCP), Khmer Rouge leader Pol Pot asserted that, "Our entire
people, our entire revolutionary army and all our cadres live under a
collective regime through a communal support system." He then
listed the government's achievements in rebuilding the economy and
concluded that, "Though not yet to the point of affluence, our
people's standard of living has reached a level at which people are
basically assured of all needs in all fields."
Measuring the economic performance of the Khmer Rouge regime was
impossible because statistics were not available, and no monetary
transactions or bookkeeping were carried out. The economic life
described by foreign diplomats, by Western visitors, and by Cambodian
refugees in Thai camps ranged from spartan to dismal. Phnom Penh became
a ghost town of only about 10,000 people. There were no shops, post
offices, telephones, or telegraph services. Frequent shortages of water
and of electricity occurred in all urban areas, and the government
prohibited movement across provincial borders, except for that of trucks
distributing rice and fuel.
Conditions in the cooperatives varied considerably from place to
place. In some areas, cooperative members had permission to cultivate
private plots of land and to keep livestock. In others, all property was
held communally. Conditions were most primitive in the new economic
zones, where city dwellers had been sent to farm virgin soil and where
thousands of families lived in improvised barracks.
Cambodia made progress in improving the country's irrigation network
and in expanding its rice cultivation area. Phnom Penh radio claimed
that a network of ditches, canals, and reservoirs had been constructed
throughout the country "like giant checkerboards, a phenomenon
unprecedented in the history of our Cambodia." Still, rice
production and distribution were reported to be unsatisfactory. Rice
harvests were poor in 1975 and 1978, when the worst floods in seventy
years struck the Mekong Valley. Even after the better harvests of 1976
and 1977, however, rice distribution was unequal, and the government
failed to reach the daily ration of 570 grams per person. (The daily
ration of rice per person actually varied by region from 250 to 500
grams.) Party leaders, cadres, soldiers, and factory workers ate well,
but children, the sick, and the elderly suffered from malnutrition and
starvation. There also were reports that the government was stockpiling
rice in preparation for war with Vietnam and exporting it to China in
exchange for military supplies. This diverted rice could have been one
explanation for the people's meager rice ration.
At the end of 1978, when Vietnamese troops invaded Cambodia, the
ensuing turbulence completely disrupted the nation's economic activity,
particularly in the countryside, which once again became a war theater
traversed by a massive population movement. Agricultural production was
again a major casualty, with the result that there was a severe food
crisis in 1979.
Cambodia - ECONOMIC ROLE OF THE KPRP
After the fall of Pol Pot and the establishment of the People's
Republic of Kampuchea in January 1979, the Kampuchean (or Khmer)
People's Revolutionary Party (KPRP), led by General Secretary Heng
Samrin, set Cambodia's economic development policies. Party congresses
adopted these policies at meetings in January 1979, May 1981, and
October 1985. A new Constitution, which the National Assembly approved
in June 1981, defined Cambodia's new socialist direction and the role of
the state in economic affairs. Then, after six more years of struggling
with an economy of survival and subsistence, KPRP leaders presented
their First Plan, which represented a systematic and rational party
effort at centrally planning and improving the economy.
New Economic Policy and System
In contrast to Pol Pot's radical, doctrinaire approach to economic
development, Heng Samrin and the leaders of the Kampuchean (or Khmer)
National United Front for National Salvation (KNUFNS), the umbrella
group of anti-Pol Pot forces sponsored by Hanoi, sought to rally public
support by formulating a policy that would be pragmatic, realistic, and
flexible. In an eleven-point program promulgated shortly before the
Vietnamese invasion of Cambodia, the front articulated the economic
guidelines that would mark its tenure in power. These guidelines
advocated a gradual transformation to socialism; a "planned economy
with markets"; the restoration of banks, of currency, and of trade;
the abolition of forced labor; the introduction of an eight-hour
workday; and pay based on work performed.
The KPRP socialist economy accepted the private sector. At a May 1980
agriculture conference, Samrin reviewed the effectiveness of the
solidarity groups (krom samaki), production units of seven to
fifteen families, united in a common endeavor to raise food or to
produce goods. These production units had been organized in line with
the policy of moving toward socialism. He affirmed that each member of
these groups would receive at least one hectare of land to cultivate for
communal purposes, plus a private plot not exceeding a quarter of a
hectare on which to grow vegetables or to graze livestock. Also, a July
1980 planning conference called for a policy of "simultaneous
development of family (private) economy and national (socialized)
economy." The conference also decided that the state should buy
agricultural products from the peasants and should sell them
manufactured goods at free-market prices.
The KPRP further clarified its economic policy at its Fourth Party
Congress (its first since taking power in Phnom Penh) from May 26 to May
29, 1981. It declared that the nation's economic system had three main
parts--the state economy, the collective economy, and the family
economy, and that each of these parts "had its own significant
role."
The state economy covered large-scale agricultural production, all
industrial production, the communications and transportation networks,
finance, and domestic and foreign trade. To facilitate economic
transactions nationwide, the state restored the banking system in
November 1979, and it reintroduced currency in March 1980. The KPRP
acknowledged that the state economy was small and said that it should be
expanded. The party leaders, however, aware of the pitfalls of central
planning, warned against "over-expansion and disregard for real
needs, production conditions, management ability, and economic
capability."
The collective economy--the largest of the three elements--was
assigned an important role in agricultural rehabilitation and
development. It consisted of solidarity groups in agriculture, fishing,
forestry, and handicrafts. These groups also assumed the task of
collective purchase and sale.
The family-run economy included the home economies of the peasants,
most retail businesses, individual artisans, handicrafts, repair shops,
and small trade. Although the 1981 Constitution stated that the land and
other natural resources were state property, it gave the citizens
usufruct rights to land allotted for a house and garden by the state. In
some cases, agricultural workers were also allowed to borrow an extra
plot of land from the state, to produce food on it, and to keep the
harvest for their own consumption.
Private enterprise also made a modest beginning under Cambodia's
hybrid economic system. Citizens were allowed to buy and to sell
agricultural produce and handicrafts. The law guaranteed workers the
right to keep their wages, their other income and their property.
Encouraged and protected by the state, hundreds of small shops and
factories, each employing a few workers, opened for business in Phnom
Penh and in other urban areas.
This inchoate private sector played such an important role in the
national economic recovery that party leaders urged its official
recognition, at the Fifth Congress in October 1985, as a means of
mitigating the weaknesses of the state-run economy. Thus, the government
added a fourth component--private economy--to the economic system and
legitimized it with a constitutional amendment in February 1986.
First Plan, 1986-90
The First Five-Year Program of Socioeconomic Restoration and
Development (1986-90), or First Plan, originated in February 1984, when
the heads of the state planning commissions of Vietnam, Laos, and
Cambodia met in Ho Chi Minh City (formerly Saigon) and agreed to
coordinate their 1986 to 1990 economic plans. Heng Samrin formally
announced Cambodia's plan in his political report to the congress.
The plan was intended to open a new phase of the Cambodian
revolution; it gave highest priority to agricultural production, calling
it "the first front line," and focused on the four sectors of
food, rubber, fishing, and timber. It set production targets for each
sector. During the plan period, food production was to increase 7
percent a year to keep up with a targeted 2.8 percent annual population
growth rate, which did not seem to have been reached by 1987. The plan
projected that by 1990, rubber farming would expand to 50,000 hectares
in order to produce 50,000 tons of latex; timber production would reach
200,000 cubic meters; jute production would increase to 15,000 tons; and
fish production would amount to 130,000 tons. As in the past, the plan
labeled agriculture and forestry as the real force of the national
economy.
The plan was less specific for the industrial sector. It did not set
industrial production targets, except that for electrical output, which
was projected to reach 300 million kilowatt hours per year in 1990. The
plan called attention to the need for selective restoration of existing
industrial production capabilities and for proposed progressive
construction of a small to medium industrial base, which would be more
appropriate to the country's situation.
The plan placed increased emphasis on the distribution of goods.
Trade organizations were to be perfected at all levels, and socialist
trading networks were to be expanded in all localities. In particular,
the trade relationship between the state and the peasantry was to be
improved and consolidated in accordance with the motto, "For the
peasantry, selling rice and agricultural products to the state is
patriotism; for the state, selling goods and delivering them directly to
the people is being responsible to the people."
The plan also required that investment be directed toward the
improvement of the infrastructure, particularly toward the
reconstruction of communication lines and waterworks. Road, inland
waterways, and railroad networks had to be restored to serve the
national economy and defense.
Last, but not least, the plan cited "export and thrift"
(without elaboration), as the two primary policies to be followed in
order to solve the national budget deficit. The plan implied that, into
the 1990s, exports would have to consist principally of agricultural and
forestry products, to which some value might be added by low-technology
processing. "Thrift," although undefined, could, in the
future, include some kind of government savings plan, with incentives
for small depositors, to absorb surplus riels generated by Cambodia's
considerable free-market and black-market sectors.
Heng Samrin, like his predecessors, Sihanouk and Pol Pot, urged
Cambodians to undertake the task of economic restoration "in the
spirit of mainly relying on one's own forces." Unlike Sihanouk and
Pol Pot, however, the KPRP leader stressed economic and technical
cooperation with Vietnam. He believed such cooperation would be "an
indispensable factor" in the development of agriculture and of
forestry in Cambodia. Heng Samrin also advocated better economic
cooperation with the Soviet Union and with other socialist countries.
Cambodia - AGRICULTURE
Agriculture, accounting for 90 percent of GDP in 1985 and employing
approximately 80 percent of the work force, is the traditional mainstay
of the economy. Rice, the staple food, continued to be the principal
commodity in this sector. Rice production, a vital economic indicator in
Cambodia's agrarian society, frequently fell far short of targets,
causing severe food shortages in 1979, 1981, 1984, and 1987. The plan's
1987 target for the total area to be devoted to rice cultivation was
1.77 million hectares, but the actual area under cultivation in 1987
amounted to only 1.15 million hectares. After 1979 and through the late
1980s, the agricultural sector performed poorly. Adverse weather
conditions, insufficient numbers of farm implements and of draft
animals, inexperienced and incompetent personnel, security problems, and
government collectivization policies all contributed to low
productivity.
Collectivization and Solidarity Groups
Collectivization of the agricultural sector under the Heng Samrin
regime included the formation of solidarity groups. As small aggregates
of people living in the same locality, known to one another, and able to
a certain extent to profit collectively from their work, they were an
improvement over the dehumanized, forcedlabor camps and communal life of
the Pol Pot era. The organization of individuals and families into
solidarity groups also made sense in the environment of resources-poor,
postwar Cambodia. People working together in this way were able to
offset somewhat the shortages of manpower, draft animals, and farm
implements.
In 1986 more than 97 percent of the rural population belonged to the
country's more than 100,000 solidarity groups. Unlike the large communes
of the Khmer Rouge, the solidarity groups were relatively small. They
consisted initially of between twenty and fifty families and were later
reduced to between seven and fifteen families. The groups were a form of
"peasants' labor association," the members of which continued
to be owners of the land and of the fruits of their labor. According to
a Soviet analyst, the solidarity groups "organically united"
three forms of property--the land, which remained state property; the
collectively owned farm implements and the harvest; and the individual
peasant's holding, each the private property of a peasant family.
In theory, each solidarity group received between ten and fifteen
hectares of common land, depending upon the region and land
availability. This land had to be cultivated collectively, and the
harvest had to be divided among member families according to the amount
of work each family had contributed as determined by a work point
system. In dividing the harvest, allowance was made first for those who
were unable to contribute their labor, such as the elderly and the sick,
as well as nurses, teachers, and administrators. Some of the harvest was
set aside as seed for the following season, and the rest was distributed
to the workers. Those who performed heavy tasks and who consequently
earned more work points received a greater share of the harvest than
those who worked on light tasks. Women without husbands, however,
received enough to live on even if they did little work and earned few
work points. Work points also were awarded, beyond personal labor, to
individuals or to families who tended group-owned livestock or who lent
their own animals or tools for solidarity group use.
Each member family of a solidarity group was entitled to a private
plot of between 1,500 and 2,000 square meters (depending upon the
availability of land) in addition to land it held in common with other
members. Individual shares of the group harvest and of the produce from
private plots were the exclusive property of the producers, who were
free to consume store, barter, or sell them.
The solidarity groups evolved into three categories, each distinct in
its level of collectivization and in its provisions for land tenure. The
first category represented the highest level of collective labor. Member
families of each solidarity group in this category undertook all tasks
from plowing to harvesting. Privately owned farm implements and draft
animals continued to be individual personal property, and the owners
received remuneration for making them available to the solidarity group
during the planting and the harvesting seasons. Each group also had
collectively owned farm implements, acquired through state subsidy.
The second category was described as "a transitional form from
individual to collective form" at the KPRP National Conference in
November 1984. This category of group was different from the first
because it distributed land to member families at the beginning of the
season according to family size. In this second category, group members
worked collectively only on heavy tasks, such as plowing paddy fields
and transplanting rice seedlings. Otherwise, each family was responsible
for the cultivation of its own land allotment and continued to be owner
of its farm implements and animals, which could be traded by private
agreement among members. Some groups owned a common pool of rice seeds,
contributed by member families, and of farm implements, contributed by
the state. The size of the pool indicated the level of the group's
collectivization. The larger the pool, the greater the collective work.
In groups that did not have a common pool of rice and tools, productive
labor was directed primarily to meeting the family's needs, and the
relationship between the agricultural producers and the market or state
organizations was very weak.
The third category was classified as the family economy. As in the
second category, the group allocated land to families at the beginning
of the season, and farm implements continued to be their private
property. In this third category, however, the family cultivated its own
assigned lot, owned the entire harvest, and sold its surplus directly to
state purchasing organizations. In the solidarity groups of this
category, there was no collective effort, except in administrative and
sociocultural matters.
The government credited the solidarity group system with
rehabilitating the agricultural sector and increasing food production.
The system's contribution to socialism, however, was less visible and
significant. According to Chhea Song, deputy minister of agriculture, a
mere 10 percent of the solidarity groups really worked collectively in
the mid-1980s (seven years after solidarity groups had come into
operation). Seventy percent of the solidarity groups performed only some
tasks in common, such as preparing the fields and planting seeds.
Finally, 20 percent of the agricultural workers farmed their land as
individuals and participated in the category of the family economy.
Rice Production and Cultivation
In 1987 statistics on rice production were sparse, and they varied
depending upon sources. Cambodian government figures were generally
lower than those provided by the UN Food and Agriculture Organization
(FAO) for the period from 1979 to 1985.
Political and technical factors account for the discrepancies. Data
collection in the war-torn nation is difficult because of the lack of
trained personnel. Moreover, representatives of international and of
foreign relief organizations are not permitted to travel beyond Phnom
Penh, except with special permission, because of security and logistics
problems. In addition, international and Cambodian sources use different
benchmarks in calculating rice production. FAO computes the harvest by
calendar year; Cambodian officials and private observers base their
calculations on the harvest season, which runs from November to February
and thus extends over two calendar years. Last of all, a substantial
statistical difference exists between milled rice and paddy (unmilled
rice) production, compounding problems in compiling accurate estimates.
In terms of weight, milled rice averages only 62 percent of the original
unmilled paddy. Estimates sometimes refer to these two kinds of rice
interchangeably.
Despite statistical discrepancies, there is consensus that annual
unmilled rice production during the 1979 to 1987 period did not reach
the 1966 level of 2.5 million tons. Nevertheless, since 1979, Cambodian
rice production has increased gradually (except during the disastrous
1984 to 1985 season), and the nation in the late 1980s had just begun to
achieve a precarious self-sufficiency, if estimates were borne out.
Cambodia's cultivated rice land can be divided into three areas. The
first and richest (producing more than one ton of rice per hectare)
covers the area of the Tonle Sap Basin and the provinces of Batdambang,
Kampong Thum, Kampong Cham, Kandal, Prey Veng, and Svay Rieng. The
second area, which yields an average of four-fifths of a ton of rice per
hectare, consists of Kampot and Kaoh Kong provinces along the Gulf of
Thailand, and some less fertile areas of the central provinces. The
third area, with rice yields of less than three-fifths of a ton per
hectare, is comprised of the highlands and the mountainous provinces of
Preah Vihear, Stoeng Treng, Rotanokiri (Ratanakiri), and Mondol kiri
(MondolKiri).
Cambodia has two rice crops each year, a monsoon-season crop
(long-cycle) and a dry-season crop. The major monsoon crop is planted in
late May through July, when the first rains of the monsoon season begin
to inundate and soften the land. Rice shoots are transplanted from late
June through September. The main harvest is usually gathered six months
later, in December. The dry-season crop is smaller, and it takes less
time to grow (three months from planting to harvest). It is planted in
November in areas that have trapped or retained part of the monsoon
rains, and it is harvested in January or February. The dry-season crop
seldom exceeds 15 percent of the total annual production.
In addition to these two regular crops, peasants plant floating rice
in April and in May in the areas around the Tonle Sap (Great Lake),
which floods and expands its banks in September or early October. Before
the flooding occurs, the seed is spread on the ground without any
preparation of the soil, and the floating rice is harvested nine months
later, when the stems have grown to three or four meters in response to
the peak of the flood (the floating rice has the property of adjusting
its rate of growth to the rise of the flood waters so that its grain
heads remain above water). It has a low yield, probably less than half
that of most other rice types, but it can be grown inexpensively on land
for which there is no other use.
The per-hectare rice yield in Cambodia is among the lowest in Asia.
The average yield for the wet crop is about 0.95 ton of unmilled rice
per hectare. The dry-season crop yield is traditionally higher--1.8 tons
of unmilled rice per hectare. New rice varieties (IR36 and IR42) have
much higher yields--between five and six tons of unmilled rice per
hectare under good conditions. Unlike local strains, however, these
varieties require a fair amount of urea and phosphate fertilizer (25,000
tons for 5,000 tons of seed), which the government could not afford to
import in the late 1980s.
Other Food and Commercial Crops
The main secondary crops in the late 1980s were maize, cassava, sweet
potatoes, groundnuts, soybeans, sesame seeds, dry beans, and rubber.
According to Phnom Penh, the country produced 92,000 tons of corn
(maize), as well as 100,000 tons of cassava, about 34,000 tons of sweet
potatoes, and 37,000 tons of dry beans in 1986. In 1987 local officials
urged residents of the different agricultural regions of the country to
step up the cultivation of subsidiary food crops, particularly of
starchy crops, to make up for the rice deficit caused by a severe
drought.
The principal commercial crop is rubber. In the 1980s, it was an
important primary commodity, second only to rice, and one of the
country's few sources of foreign exchange. Rubber plantations were
damaged extensively during the war (as much as 20,000 hectares was
destroyed), and recovery was very slow. In 1986 rubber production
totaled about 24,500 tons (from an area of 36,000 hectares, mostly in
Kampong Cham Province), far below the 1969 prewar output of 50,000 tons
(produced from an area of 50,000 hectares).
The government began exporting rubber and rubber products in 1985. A
major customer was the Soviet Union, which imported slightly more than
10,000 tons of Cambodian natural rubber annually in 1985 and in 1986. In
the late 1980s, Vietnam helped Cambodia restore rubber-processing
plants. The First Plan made rubber the second economic priority, with
production targeted at 50,000 tons-- from an expanded cultivated area of
50,000 hectares--by 1990.
Other commercial crops included sugarcane, cotton, and tobacco. Among
these secondary crops, the First Plan emphasized the production of jute,
which was to reach the target of 15,000 tons in 1990.
Cambodia - Livestock
Industry accounted for only 5 percent of Cambodia's GDP in 1985, down
from 19 percent in 1969. Industrial activity continued to be
concentrated in the processing of agricultural commodities, mostly rice,
fish, wood, and rubber. Manufacturing plants were small, and they
employed an average of fewer than 200 hundred workers. These plants
aimed to produce enough consumer goods (soft drinks, cigarettes, and
food items) and household products (soap, paper, and utensils) to
satisfy local demand.
The extent of Cambodia's industrial rehabilitation could be gauged by
a comparison of enterprises in prewar and in postwar times. In 1969 the
last year before the country was engulfed in the war sweeping Indochina,
a census disclosed 18 large industries countrywide (13 public and 5
mixed public-private sector) and 33,000 small and medium privately owned
enterprises. About half the factories operating in 1969 were rice mills,
or were otherwise engaged in rice processing. In 1985 the government
news agency (Sarpodamean Kampuchea) announced that fifty-six factories
had been renovated and had been put back into operation. In the capital
itself, about half of Phnom Penh's prewar plants had reopened by 1985.
Most industries were producing at far below capacity because of frequent
power cuts, shortages of spare parts and of raw materials, and the lack
of both skilled workers and experienced managers. Industrial revival
continued to be difficult and extremely slow because it was based mainly
on the use of limited local resources.
Major Manufacturing Industries
In early 1986, the major industrial plants in Phnom Penh included the
Tuol Kok textile factory, the largest of six textile factories in the
city (the factory was idle three days a week, however, because of power
shortages). There were also four power plants, a soft drink plant, a
tobacco factory, a ferro-concrete factory, and some other enterprises
that produced consumer goods.
In the municipality of Kampong Saom and in neighboring Kampot
Province, rice mills, lumber mills, small brick and tile factories,
power plants, an oil refinery, a tractor-assembly plant, cement and
phosphate factories, and a refrigeration plant for storing fish were
reported to be in operation. In the important industrial center of Ta
Khmau, Kampot Province, were a tire factory (possessing its own
generator, but lacking rubber and spare parts), several mechanical
workshops, and warehouses. Batdambang Province had shops for repairing
farm implements, a cotton gin and textile mill, a jute-bag factory, an
automobile and tractor repair plant, and a phosphate-fertilizer plant.
In Kampong Cham Province, the former center for tobacco growing and for
cotton garment making, there were a cotton-spinning textile factory,
some silk-weaving operations, and an automobile tire and tube plant.
Handicrafts
Small family-run businesses and private enterprises specializing in
weaving, tailoring (silk sampot and sarongs, the Cambodian
national dress), and small manufactured products grew more rapidly than
public industries, and they contributed significantly to economic
recovery. According to official estimates, the output value of local and
of handicraft industries together amounted to 50 percent of the value of
production in state industries in 1984. In Phnom Penh alone, there were
1,840 handicraft shops whose output value rose from 14 million riels in
1981 to 50 million riels in 1984.
Cambodia - DOMESTIC COMMERCE
The government controlled all official foreign trade. In July 1979,
the Ministry of Local and Foreign Trade set up the Kampuchean Export and
Import Corporation (KAMPEXIM, the state trading agency) to handle
exports, imports, and foreign aid. In addition, the National Trade
Commission was created to be in charge of both internal and external
economic coordination. In March 1980, the Foreign Trade Bank was formed
to deal with international payments, to expand trade, to provide
international loans, and to control foreign exchange. There were reports
of special clearing arrangements for trade among the Indochinese
countries and with some members of the Council for Mutual Economic Ass�stance
(CMEA, CEMA, or Comecon--see Glossary).
Beginning in 1982, the government made serious efforts to promote
foreign trade as a means of accelerating national reconstruction and
development. The First Plan emphasized exports as a way to correct
imbalances in the national economy, but it did not provide any commodity
export target figures. In the late 1980s, Cambodian officials released
information revealing the direction and the patterns of trade rather
than specific numbers. Most official trade was being conducted with
Comecon countries in the form of exchanges of commercial goods. In the
absence of authoritative data, unofficial Western sources placed
Cambodia's trade deficit at US$100 million to US$200 million annually
from 1981 to 1987. According to the Asian Development Bank, the
country's total external debt in 1984 was US$491 million, up from US$426
million in 1983, and US$368 million in 1982.
In an attempt to increase foreign exchange earnings, the Heng Samrin
regime in 1987 encouraged expatriate Cambodians to remit money to
relatives and to friends remaining in the country. Cambodia's Foreign
Trade Bank provided the names of sixteen banks in Western Europe,
Canada, and Australia that were authorized to handle such transactions.
The list included the Moscow Narodny Bank in London and several
capitalistic financial institutions, such as the Soci�t� G�n�rale in
France and the Union des Banques Suisses in Switzerland.
Composition of Trade
Since 1979 Cambodia's major imports have consisted of machinery,
tractors, vehicles, fuels and raw materials for light industry, consumer
goods, clothing, cement, and chemical fertilizers. According to
government information, imports during the first 10 months of 1987
amounted to 97 percent of the plan target, an increase of about 130
percent over the 1986 figure.
The principal exports included natural rubber (latex), resin, maize,
tobacco, soybeans, and timber. Private Western sources estimated
Cambodia's 1985 export earnings at US$10 million. Other sources reported
that they were $US3.2 million just one year later. In 1987 the
government news agency reported that the volume of exports handled by
the Kampuchean Export and Import Corporation in the first ten months of
1987 had increased tenfold over the corresponding period in 1979.
Cambodia - Major Trading Partners
Cambodia's major trading partners in the 1980s were Vietnam, the
Soviet Union, and the countries of Eastern Europe, particularly the
German Democratic Republic (East Germany), Czechoslovakia, Poland,
Hungary, and Bulgaria. Cambodia also claimed to have trade relations
with Japan, one of several countries that had recognized Sihanouk's
Coalition Government of Democratic Kampuchea (CGDK) and had imposed a
trade embargo on the Phnom Penh government of the People's Republic of
Kampuchea (PRK).
Vietnam
In February 1979, Cambodia signed a Treaty of Peace, Friendship and
Cooperation with Vietnam that formally strengthened "solidarity and
cooperation" between the two countries. As part of the Vietnamese
aid program to Cambodia, a joint scheme of pairing Cambodian provinces
with Vietnamese "sister provinces" was inaugurated in the same
year for the purposes of economic cooperation and of technical,
educational and cultural exchange. Cambodia's Rotanokiri Province,
however, was linked with two neighboring Vietnamese provinces--Nghia
Binh and Gia Lai-Cong Tum. In addition, the municipality of Phnom Penh
was paired with two Vietnamese cities--Ho Chi Minh City and Hanoi.
Except for the municipalities of Hanoi and Haiphong, all of the
Vietnamese participants in the scheme were located in former South
Vietnam near their Cambodian counterparts.
The paired provinces were engaged mostly in barter trade the volume
and value of which were unpublicized. Some observers argued that the
system facilitated the integration of Cambodia's economy into Vietnam's.
They pointed to the case of Batdambang Province, which sent tons of rice
to its overpopulated and underfed Vietnamese sister province, Quang
Nam-Da Nang, in exchange for bicycles and cement. In another case,
Cambodia's Siemreab-Otdar Meanchey Province, supplied Vietnamese
counterparts in Binh Tri Thien Province with unmilled rice and other
agricultural products; in return, Vietnam supplied workers from Hue and
its suburbs to help run the building industry in Siemreab-Otdar Meanchey
This exchange came at the expense of Cambodian workers, who were
assigned to find clay, while the new Vietnamese settlers produced bricks
and tiles and made a good living. In Siemreab city, the Vietnamese also
assumed control of the biggest fish-sauce factory.
According to a Cambodian official's evaluation of foreign
cooperation, the pairing system worked successfully. The exchange of
goods between the sister provinces and cities helped "meet the
needs of the people promptly." Reportedly, the system also helped
Cambodia fulfill all of its development targets for 1986. In February
1986, Cambodia and Vietnam signed an agreement to double their trade for
that year.
Soviet
Union
The first important trade agreement between Cambodia and the Soviet
Union was signed in February 1983 and covered three years, 1983 through
1985. According to a Soviet source, Moscow's trade turnover with
Cambodia during this period increased from 71.8 to 100.3 million rubles. Cambodian exports were mainly rubber, while imports from
the Soviet Union consisted of refined petroleum products, textiles, and
chemical fertilizers.
In July 1984, Cambodia--following the examples of Vietnam, Laos, and
the East European countries--set up an Intergovernmental Commission for
Trade, Economic, Scientific, and Technical Cooperation to manage its
bilateral trade with the Soviet Union. The first session of the
commission was held in January 1985. At its fourth meeting, in December
1987, protocols were signed regarding the restoration of rubber
plantations and the development of some joint state enterprises.
On March 28, 1986, the two countries signed a five-year trade and aid
agreement for the period 1986 to 1990 that would double the level of
trade over that of the previous five-year period. The Soviet export
package included tractors, fertilizer, petroleum products, machines, and
raw materials. In exchange, Cambodia was to export raw rubber, timber,
and plant-based industrial products such as lacquer. According to the
Phnom Penh Domestic News Service, by the end of 1986 Cambodia had
shipped 91 percent of its planned exports to the Soviet Union and had
received 104 percent of its planned imports in return. During Cambodian
Prime Minister Hun Sen's visit to Moscow in July 1987, the Soviet press
reported that the volume of goods sold by the Soviet Union to Cambodia
in the 1986 to 1990 period would increase one-and-one-half times over
the previous five-year period, whereas goods sold by Cambodia would
increase more than four times. In November 1987, the two countries
concluded trade-payments agreement for 1988. Under the terms of this
agreement, the Soviet Union was to ship vehicles, tractor equipment, and
fertilizer and would receive in exchange "traditional export
goods" from Cambodia. Trade turnover between the two countries was
projected to reach nearly 80 million rubles in 1988.
East Germany
In 1986 the total trade between Cambodia and East Germany reached
about 14 million rubles, a 17 percent increase over the 1985 total of 12
million rubles. Cambodia exported more than 12 million rubles worth of
rubber to East Germany and an additional million rubles worth of other
goods. Cambodia's imports from East Germany amounted in value to more
than 965,000 rubles.
Czechoslovakia
Trade between Cambodia and Czechoslovakia totaled to 4.4 million
rubles in 1985. In 1986 Cambodia exported 800 tons of rubber, more than
400 cubic meters of timber, and 700 tons of soybeans to Czechoslovakia.
Cambodian imports from Czechoslovakia consisted chiefly of medicine and
cloth. The two countries signed a protocol in Prague on October 29,
1987, on the exchange of goods planned for 1988. Under the terms of the
protocol, total trade would increase by 19 percent over the 1987 level.
Cambodia was to export rubber, beans, and timber to Czechoslovakia and
was to import tractors, diesel engines, and pharmaceuticals.
Poland
Cambodia's trade with Poland between 1982 and 1985 was estimated at
4.4 million rubles. Cambodia exported rubber, timber, and soybeans and
imported Polish textiles, ship engines, and glassware. The two countries
set a trade target for 1986 to 1990 amounting to 14.3 million rubles.
In 1986 the trade between Cambodia and Poland amounted to 2.1 million
rubles. On February 18, 1987, the two countries negotiated a trade
agreement for the year stipulating that Cambodia would export crepe
rubber, timber, furniture, soybeans, sesame seeds, and farm products; it
would import, in return, antitrust paint, soldering rods, sewing
machines, boat engines, raw materials for medicine, and consumer goods.