THE SITUATION IN CAMBODIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004300040002-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 21, 2016
• Document Release Date: February 8, 2008
• Sequence Number: 2
• Publication Date: December 20, 1963
• Content Type: REPORT

V4WV " 20 December 1963
OCI No. 0311/63B
Copy rNo.
.
SPECIAL REPORT
THE SITUATION IN CAMBODIA
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
SECRET
GROUP I Excluded from automatic
downgrading and declassification
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Cambodia's delicately balanced neutrality ap-
pears to be at a critical juncture. Recent actions
by Prince Sihanouk, chief of state with virtually
uncontested powers, are sharply reducing the coun-
try's ties with the free world, especially the
United States. In early November he began a series
of vitriolic attacks against US aid, and on 20
November he formally renounced it. This set off a
chain of events which included limiting free world
press access to Cambodia, announcing an intention
to reduce the country's representation in nonbloc
capitals, and, most recently, withdrawing the Cam-
bodian mission from Washington.
These actions do not appear to have arisen
out of any considered judgment on the volatile
Sihanouk's part that Cambodia's orientation should
be altered, and a reversal is therefore possible.
The actions nevertheless have taken him further
than ever before toward a break with the West. In-
creasing links with Communist China may result.
The assassination of Ngo
Dinh Diem almost certainly pre-
cipitated Sihanouk's outburst.
Sihanouk considered the United
States responsible for the
overthrow of the South Viet-
namese president.
The prince was also wrought
up by scurrilous broadcasts
from radio Khmer Serei (Free
Cambodia), operated by a motley
band of anti-Sihanouk dissidents
based in Thailand and South
Vietnam. While Sihanouk real-
izes that the Khmer Serei has
no backing inside Cambodia,
its broadcasts represent to
him another provocation launched
by his country's traditional
enemies--Thailand and South
Vietnam.
Sihanouk was especially
susceptible to alarms
and frustrations at the time.
A drastic reducing diet, added
to the cumulative fatigue of
running the government virtually
singlehanded, made him partic-
ularly irascible and cantanker-
ous.
There are indications that
Sihanouk was the victim of his
own emotions in the present sit-
uation and that he probably did
not deliberately plan to have
relations with the US deterio-
rate as far and as fast as they
have. Following formal renuncia-
tion of US aid, Cambodian ne-
gotiators made it clear that
they wanted the aid to continue
virtually intact for a six-month
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period, after which, they in-
dicated, Cambodia would be happy
to negotiate a new agreement.
Sihanouk apparently was unaware
that the existing aid agreement
made it difficult to continue
assistance after its formal
termination. These feelers
ended when Sihanouk recalled
Cambodian Embassy personnel
from Washington in response to
US protests over a Cambodian
broadcast slurring President
Kennedy.
Sihanouk may have hoped
all along to use the aid renun-
ciation to open the way for re-
negotiation on more favorable
terms. US aid, some $365 mil-
lion since 1956, has been Cam-
bodia's chief source of exter-
nal assistance. Bloc assist-
ance, while growing, has been
small by comparison--some $65
million during the same period.
The prince had long chafed
at what he considered were in-
sulting "strings" attached to
US aid, in particular the pro-
hibition on commingling US with
bloc military equipment. A
precedent for breaking the free
world's military aid monopoly
was created earlier this year
when Sihanouk accepted as a
"personal" gift four MIG jets
and 24 antiaircraft weapons
from the Soviet Union.
Sihanouk may also have come
to believe that, if he were to
maintain his dominant position,
certain aspects of US aid would
have to go, including the Com-
modity Import Program, which
channeled currency into the
business sector of the Cambodian
economy, and MAAG personnel,
whom Sihanouk views as an all
too real manifestation of Amer-
ican power and a potential
threat to his security. What-
ever his original intentions,
Sihanouk was soon outdistanced
by events.
Economic Consequences
Sihanouk's decision to
terminate US aid and to nation-
alize segments of the Cambodian
economy has had immediate and
deleterious effects. The mar-
ket value of the riel is down,
there is hoarding of imported
commodities, and the uneasiness
of the business community is
reflected in the flight of cap-
ital. The problem of financing
the forthcoming rice harvest is
but one example of the economic
difficulties Sihanouk now faces.
This function has been tradition-
ally performed by banking and
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export interests which face im-
minent nationalization.
While economic dislocation
is likely to be severe, it will
not be ruinous. By Southeast
Asian standards, Cambodia is
basically a prosperous country
producing more food than it con-
sumes. It has ample foreign ex-
change to see it through a short-
term crisis. Austerity steps
already are being taken to re-
duce the budget deficit.
Additional aid from other
sources probably will be forth-
coming, although not in amounts
to take up all the slack. The
French have indicated a willing-
ness to increase somewhat their
modest assistance program, and
French Defense Minister Messmer
will go to Phnom Penh in early
January to work out details.
country's neutrality and might
eventually pose a threat to his
own control. While he still
considers himself a neutral, he
believes also that Communist
China will ultimately prevail in
Southeast Asia and may have de-
cided to accommodate Cambodia's
neutrality accordingly.
The gravity of Sihanouk's
recent moves is mirrored in the
dismay evident among the essen-
tially conservative elements
making up Cambodia's power struc-
ture--the military, the bureauc-
racy, business interests, and
the royal family. These groups,
including Sihanouk's mother,
Queen Kossamak, are deeply dis-
tressed over the prospects of
increased Chinese Communist in-
fluence in Cambodia and the re-
sultant threat to their vested
interests, and are attempting
to persuade him to moderate his
course.
Communist China and the
Soviet Union have reacted cau-
tiously, and thus far have of-
fered no additional assistance.
While Cambodia has been increas-
ing its ties with Communist China
--as the 25 November signing
of a long-pending civil air
agreement suggests--these are
unlikely to become close in the
near future.
Sihanouk recognizes that
an increased Chinese presence
in Cambodia will weaken the
Despite conservative crit-
icism, there are no immediate
prospects of organized open or
covert opposition developing.
Sihanouk's power position is
strong. He commands overwhelm-
ing popular support and has
skillfully used this support to
head off opposition. The tra-
ditionally nonpolitical military
establishment, which stands to
be one of the principal victims
of US aid termination, is unhappy
but remains staunchly loyal.
Even under the worst of circumstances
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that Sihanouk might generate,
significant opposition from the
military and other quarters
probably would emerge only after
a considerable lapse of time.
So long as Sihanouk remains
in an agitated state of mind,
a reversal of policy is unlikely.
His next move probably will be
determined by several factors,
including his assessment of
his own standing at home and
abroad, developments in Cambo-
dia's relations with the United
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States, France, and other West-
ern nations, the success or fail-
ure of South Vietnam's recent
conciliatory overtures, and the
extent to which he can cope with
the economic dislocation he pre-
cipitated.
do so.
While Cambodia's relations
with the free world have dete-
riorated rapidly, changing cir-
cumstances could fashion an
equally rapid improvement. Cir-
cumstances may continue to work
to the detriment of the West,
however, and Sihanouk may al-
ready have created a situation
from which he cannot extricate
himself. even if he wants to
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