THE ECONOMIC SITUATION IN CAMBODIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001700020022-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: December 22, 2016
• Document Release Date: May 18, 2010
• Sequence Number: 22
• Publication Date: August 1, 1971
• Content Type: IM

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Secret
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Secret
ER IM 71-169
August 1971
Copy No.
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WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
.18, sections 793 and 794, of the US Code, as amended,
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by raw.
GROUP 1
frc1udcd From oulamodc
d wngrading and
let inrtificaiinI
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
August 1971
INTELLIGENCE MEMORANDUM
THE ECONOMIC SITUATION IN CAMBODIA
Highlights
1. Inflation accelerated greatly in Cambodia starting about mid-May,
after some four and a half months of relative price stability, but by mid-July,
prices of nearly all foodstuff, had peaked and, by the end of the month,
they had dropped substantially below their high points because of increased
supplies from the northwest. Seasonal factors and speculation have
determined the timing of price increases, which occurred in two spurts --
one in late fall and the other in May-June. A doubling in the money supply
in the past yeas., however, is the principal cause of the increase in near
doubling of the price level in that period.
2. Growing popular dissatisfaction with the government's system for
distributing rationed goods to Phnom Penh residents has been reported.
Large quantities are diverted to the black market.
3. The black market value of the riel deteriorated steadily between
mid-May and mid-July but made a significant recovery in the last two weeks
of July. The price of a US dollar in Phnom Penh dropped to 230 riels
on 26 July (the official rate is 55.5 riels per US $1), after having been
as high as 370 riels earlier in the month.
4. The United States has tentatively decided to turn down a
Cambodian government request for PL-480 rice, at least for this year,
although rice may still be purchased under the Commodity Import Program
(CIP).
the existence of large stockpiles of rice in Cambodia. Appropriate
Note: This memorandum was prepared by the Office of Economic
Research. Its focus is on developments in the latter part of June and the
month of July.
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 NOMENOMEN33.
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changes in the government's pricing policy would undoubtedly stimulate
marketing of these stocks, possibly enough to cover consumption needs
until after the next harvest. There is, however, widespread pessimism
regarding prospects for next season's rice crop. If current estimates of a
50% decline in planting in Battambang prove anywhere near accurate,
large-scale rice imports will be necessary in 1972.
5. Commercial shipments over Route 5 declined substantially during
June, more because of increasingly heavy extortions by FANK troops at
checkpoints along the route than to enemy activity. A Mixed Economic
Committee, formed to help resolve the transport crisis, thereupon
established a system of armed truck convoys which has been highly
successful thus far. Enemy harassment and interdictions sharply curtailed
shipments on Route 4 in June and July, but Route I sustained heavy traffic
in both months.
6. Petroleum deliveries to Phnom Penh increased sharply in June
and July, following a substantial expansion of the chartered fleet of
petroleum carriers plying the Mekong. Deliveries reached record proportions
in both months.
7. Charts on prices and currency in circulation; imports, exports,
and gold and hard currency reserves; and government borrowing from the
Banque Nationale du Cambodge follow the text.
Discussion
Recent Price Changes
8. Inflation accelerated greatly in Cambodia starting about mid-May,
after some four and a half months of near price stability, but tapered off
after mid-July. The price level, L which rose 49 percentage points from
March through December 1970, increased another 37 percentage points by
the end of June of this year for a total increase of some 86 percentage
points in 15 months. The increase in food prices has been even larger -
82 percentage points from March through December 1970, and another
36 percentage points in May and June.
9. Among the factors contributing to the May and June price
increases were hoarding, enemy harassment of transport, and heavy
exactions on commercial traffic a` FANK outposts on major routes. / In
1. As measured by the Statistical Institute's general price index.
2. For details, see the section on Transport.
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addilion, the government's increase in petroleum prices on 21 May increased
production and distribution costs and provided retailers with a plausible
excuse for some hefty price hikes. The move also triggered public
speculation and sharp protests in the National Assembly and is expected
to be a central issue during the upcoming interpellation of Finance Minister
E o!c Chhong. The new petroleum prices incorporating the war tax on US
AID commodities raised the retail price of gasoline, already subject to heavy
taxes, to about seven times its cost c.i.f. Phnom Penh. The following
tabulation shows the recent changes in fixed prices on fuels.
Riels per Liter
Percentage
Increase
Gasoline
12.61
to
16
27
Kerosine
4.81
to
9
87
Gas oil
4.83
to
8
66
Diesel oil
2.45
to
5
104
Fuel oil
1.48
to
3
103
10. The availability of some commodities in Phnom Penh was
probably reduced somewhat by increased smuggling, although the effects
of illicit trade on overall supplies were probably not large. Because of a
shift in the riel/piaster exchange rate in favor of the piaster, South
Vietnamese traders were able to purchase goods at prices far below their
cost in South Vietnam. A brick trade in such items as da?ied fish, bananas,
peppers, onions, garlic, and second-quality rice (purchased at
government-controlled prices) apparently developed between the capital and
the military base at Neak Luong, where the goods were being sold to South
Vietnamese forces. The long-standing illegal cross-border traffic in
Cambodian livestock presumably remained extant.
11. A compilation of prices of selected commodities in Phnom Penh
markets from mid-May through July (see Table 1) shows sharp increases
in a number of commodities beginning in late May. These can be attributed
in part to seasonal factors, since the main fishing and vegetable season ends
in May when rice planting gets under way. Most prices continued to increase
during the latter part of .,une but at a much lower rate. By mid-July, prices
of nearly all foodstuffs had peaked, and, probably because Route 5 convoys
were regularly reaching the capital, prices of most items had dropped
substantially below their high point by the end of the month, beef and
pork being significant exceptions. Throughout July, beef remained at the
high price reached early in the month, while pork prices continued rising
steadily into the last week of July, reportedly because rice convoys left
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Prices of Selected Commodities in Phnom Penh a/
1971
Commodity
Unit
15 May
30 May
15 Jun
25 Jun
30 Jun
6 Jul
12 Jul
15 Jul
19 Jul
22 Jul
26 Jul
Percent b/
White rice No. 1
Whi
Kilogram
6.5
8.8
9
N.A.
N.A.
N.A.
N.A.
16
13.3
13.3
13
3
205
te rice No. 2
Kilogram
6.3
7.5
8
7
6.7
6.7
6.7
6.7
6.7
6.7
.
6.7
106
Fresh-water
Kilogram
60
75
75
85
100
110
110
120
110
100
100
167
Ocean
Kilogram
50
65
95
130
120
130
170
170
150
130
130
260
Dry
Kilogram
175 '
180
185
180
180
180
200
200
180
180
180
103
Pork
Kilogram
150
180
200
200
200
200
220
240
230
240
250
167
Beef
Kilogram
90
90
100
120
120
140
140
140
140
140
140
156
Chicken
Duck
Unit
Unit
110
100
150
185
170
190
185
210
195
20
210
2'J
230
220
220
210
191
Cl)
Chicken eggs
Unit
6
6
6
7
0
7
200
7
210
8.5
190
9
180
9
200
9
180
i
180
150
Duck eggs
Unit
6
6.5
6
7
7
7
8.5
9
9
9
8.5
142
m
y
71
Oranges
G
b
Dozen
100
110
90
100
120
80
130
130
120
110
120
120
H
reen
ananas
Bunch
25
25
30
30
30
38
45
50
35
45
40
160
Ordinary bananas
Bunch
15
15
15
15
16
18
25
25
20
30
30
200
Tomatoes
Kilogram
8
20
45
35
35
50
60
40
30
30
30
375
Manioc
Kilogram
5
8
8
10
8
10
12
10
7
7
7
140
Green beans
Kilogram
30
40
40
40
35
40
40
35
30
30
30
100
Pepper
Kilogram
150
150
180
190
180
250
420
450
420
420
420
280
Local products
Candles
Matches
Pair
8
-
-
-
-
-
20
25
25
30
30
375
Rubb
li
Box
1.5
-
-
-
-
-
2
3
3
3
3
200
er s
ppers
Cigarettes
Pair
B
25
-
-
-
-
-
60
90
90
90
85
340
Charcoal
ox
12
-
-
-
-
-
18
18
18
18
18
150
C il "
Sack
215
-
-
-
-
-
220
250
260
260
270
126
a.
omp
ed from
Embassy sources.
b. Prices express- for 26 JuZy as a percentage of 15 May prices.
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a shortage of trucks for carrying livestock. While prices of locally
manufactured goods stabilized during the last week of July, they were,
nevertheless, considerably above their mid-point levels. Shortages and high
cost of raw materials were given by Embassy sources as re':sons for the
increases. Prices of selected commodities to be imported under the US AID
program also increased substantially after mid-June (see Table 2).
Long Term Price Trends
12. There was little evidence of any strong inflationary trend in
Cambodia until the last three months of 1970. Prior to this time consumer
confidence seems to have held up. A sharp increase in the August price
level and its subsequent decline in September was attributed for the most
part to a temporary shortage of meat arising from stepped-up military action
to the northwest of Phnom Penh.
13. From October to December, however, prices rose sharply. The
increases curing these pre-harvest months were partly explained by seasonal
factors and by grim predictions for the coming harvest that turned out
to be far off the mark. Rising prices no doubt also reflected the fundamental
changes on the demand side resulti:ig from an influx of refugees and changes
in the supply side related to insecurity in the countryside and a shortage
of transport.
14. Ample food supplies in 'the market following the harvest were
undoubtedly the decisive factor in keeping prices fairly stable for the first
four months of 1971. Starting about mid-May, however, inflation
accelerated greatly, once again partly for seasonal reasons and in response
to speculation as to a poor harvest next season and a further depreciation
of the riei.
15. Although inflation has come in spurts which reflect seasonal and
speculative factors, its underlying cause is clearly the rapid growth of the
money supply. The money supply more than doubled within a year
following the events of March 1970, and its growth over the period has
been fairly steady. Although the overall increase in the price level is less
than 100%, according to the official indexes, these are of doubtful validity.
Except for rice, price increases for most individual food items appear to
have vastly exceeded the official average. But the official price of rice is
the controlled price, and an increasing share of rice sales probably has taken
place at the free market price, which has risen to double the official price.
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a. Compiled from US Embassy sources.
b. Prices for 26 July expressed as a percentage of 14 June prices.
Prices of Impcrted Commodities in Phnom Penh a/
1971
Commodity
Unit
14 Jun
2 Jul
13 Jul
19 Jul
26 Jul
Percent b/
Cement
Sack
540
600
- 650
780
840
156
Cn
White cement
Sack
480
560
540
640
730
152
Newsprint paper
Ream
400
430
550
550
550
138
Book paper
Ream
1,800
2,200
3,000
3,000
3,000
167
Kraft paper
Ream
2,650
3,500
5,000
5,000
5,000
189
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Rationing Problems
16. Growing popular discontent with the performance of the GKR's
"flot" system as a mechanism for distributing rationed goods has been
reporters. The Hot system - a population control device used by the
Communists as well as by the GKR - employs the principle of collective
responsibility to enhance local security. Each ilot consists of a block of
100 houses subdivided into "sous-ilots" of 50 houses and then into
10-house units. Hot chiefs, who in some areas are popularly elected but
more frequently are government appointees, are meant to provide a liaison
between the lower administrative echelons of the government and the
g3neral populace.
17. Ilots in Phnom Penh have been given the additional responsibility
of distributing rationed items. To obtain rationed commodities, an individual
must obtain signatures of the heads of his 10-family unit, the sous-ilot,
and ilot before submitting his request at the ilot warehouse. Large quantities
of rationed items, however, are siphoned off and sold to merchants, and
only a portion of the goods meant for residents actually reaches them.
Consequently, citizens with validated requisitions frequently find the items
unavailable at their ilot warehouse. This necessitates buying from merchants
at substantially higher prices. A comparison between ilot and free market
prices as of the last week of June is given below:
Riels per Kilogram
Ilot Price
Free Market Price
White
sugar
29
65-100
Salt
3.5
10
Wheat
flour
14
22
White
rice No.
2
6.7
18
t8. The Communists have lost no time in exploiting popular
discontent with the rationing system in clandestine propaganda broadcasts,
tagging ilot chiefs "agents of coercion who will not fail to fish in troubled
waters."
Black Market Currency
19. The black market value of the riel deteriorated steadily between
mid-May and mid-July but made a significant recovery in the last two weeks
of July. As shown in Table 3, the value of the riel fell precipitously from
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Black Market Rates for the Riel in Phnom Penh a/
Riels per US $1
Day
Price
Day
Price
May
10
140
July
12
340
180
13
360
19
240
14
260
June
21
250
15
195
16
195
17
250
July
1
350
18
250
19
260
20
260
21
180
22
180
23
210
9
350
24
210
10
370
25
230
11
360
26
230
a. Compiled from US Embassy sources.
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about 140 riels per US $1 on 10 May to about 240 riels per US $1 on
19 May, where it held fairly steady until the last week of June. It then
plunged again, reaching a low of 370 riels per US $1 on 7 and 10 July.
(In border markets, riels for a time were actually exchanging for piasters
at a discount.) By 26 July, however, the price of a US dollar in Phnom
Penh had dropped back to 230 riels.
20. The significance of specific changes in the black market rate is
often difficult to assess, since the foreign exchange market is thin and easily
influenced by rumor. The sharp drop in the exchange rate during May came
on the heels of pessimistic projections by the International Monetary Fund
(IMF) about the future of Cambodia's economy, setting off rumors of an
imminent devaluation of the riel. A police crackdown on moneylenders and
a threat by the Finance Minister to control bank account withdrawals added
to the speculation. Demonstrations against the Chinese encouraged the flight
of capital. Speculation against the riel subsided briefly in the latter part
of June, but resumed in July. A possible contributing factor was the
Cambodian government's refusal to authorize foreign exchange to the
country's seven airline companies until they merged into two or three
companies with reputable management. As a result, the airlines became the
principal buyers of foreign exchange on the black market in order to pay
aircraft rental fees and pilot salaries. Another factor feeding speculation
was the rice shortage.
21. By mid-July the value of the riel began to increase appreciably,
again probably because of several rumors that injected some optimism into
the business community. Merchants were selling some of their foreign
exchange holdings in order to have riels for purchases under the CIP,
reflecting a new confidence that CIP commodities would be arriving in the
near future. (As orders under the US AID program are approved, importers
are required to deposit immediately from 50% to 80% of the purchase price
of goods ordered in riels.) By 14 July, some moneychangers had become
reluctant to purchase large amounts of US currency, in marked contrast
to the steady demand for dollars during the previous week.
22. The availability of rice in Phnom Penh markets improved
somewhat during the last two weeks of July. First-quality rice, which
disappeared from stores on 19 June, reappeared in retail outlets about
15 July. Since that time the price of. first-quality rice has dropped
significantly, from 16 to 13.3 riels per kilogram, which, nevertheless, is
more than double the 15 May price. Second-quality rice continued to be
made available from government stockpiles through the end of July. A
determined effort to move rice via military convoys accounted for the
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improved rice situation, although, according to official stock figures, the
effort was not enough to maintain the level of reserves in the capital. Stocks
in the Phnom Penh warehouses of public and private wholesalers amounted
to only about 42,000 tons on 23 July, compared with some 50,000 tons
on 24 June.
23. The rice shortage that currently plagues Phnom Penh is the result
primarily of speculation in the wake of the t :change depreciation and the
enormous price level increases of May and June. Rice disappeared from
shops virtually in a matter of hours, despite the fact that the capital's rice
reserves at the time were not substantially below their average level for
the previous several months.
24. A basic factor giving rise to hoarding of rice is the official rice
pricing policy. The government, attempting to keep the price of rice stable
in an inflationary environment, has imposed retail price ceilings in Phnom
Penh. Merchants, after having paid the increased cost of transport, including
sizable FANK exactions, have refused to sell at the artificially low prices.
At the same time farmers are not selling to the government. In Battambang,
according to Embassy sources, whatever rice is now sold goes into private
channels because the government has not raised procurement prices. With
its stocks not being replenished, it is obvious that the government cannot
supply the Phnom Penh market indefinitely at the official price.
25. The Cambodian government, under increasing public pressure to
eliminate shortages and concerned about future supplies, approached Taipei,
Tokyo, and Bangkok for rice and formally requested that the United States
provide under the PL-480 program an immediate shipment of 32,000 tons
of rice and an additional 150,000 tons after June 1972. US Embassy sources
estimated that at present consumption levels, Cambodia's rice shortfall
between now and next harvest could amount to between 75,000 and
115,000 tons.
26. The United States has, nevertheless, tentatively decided not to
supply PL-480 rice this year. The decision is based in part on legislative
and policy limitations on sales to exporting countries. Cambodia has
officially exported all types of rice this crop year, a total of 35,000 tons
from January through i'Iay, the latest month for which official data are
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available. The standard PL-480 agreement includes a prohibition on such
exports. J
27. The US decision, however, does not preclude purchases of rice
with US AID funds provided under tie CIP. Cambodia's use of limited
aid funds (or its own foreign exchange) to purchase rice would mean
foregoheg some other imports and would provide government officials with
a strong incentive to implement the difficult and uapo lular measub'?,,,
necessary to make rice available from present stockpiles and stimulat-
domestic production. PL-480 rice, on the other hand, because of the easy
terms under which it is provided, would relax pressure on the GKR for
implementing self-help measures.
recent harvest was under way, warehouses in
and around Battambang were filled to about 50% of capacity with rice
carried over from the previous harvest. Moreover, farmers at the time were
estimated to be holding as much as 20% of the previous crop. As recently
as July, a rice expert and major paddy merchant from Battambang
commented privately that he believed there was sufficient paddy and milled
rice stored throughout the province to supply both Battambang and Phnom
Penh until the next harvest.
28. One such measure, the removal of price ceilings on rice in Phnom
Penh, would undoubtedly stimulate dishoarding, possibly of an amount 25X1
sufficient to carry Cambodia into the next harvest.
the existence of large
stockpiles of rice in Cambodia. In early December 1970, before the most 25X1
29. With respect to next season's harvest, it is still too early to make
any firm predictions. Reporting, however, continues to be very pessimistic.
While experience has shown that merchants tend to be overly pessimistic
at mid-year (perhaps deliberately) about the coming season's crop prospects,
some of these merchants report planting is as much as 50% behind schedule
in Battambang. Following the last harvest, rice stocks accumulated in
3. On 12 June the Ministry of Commerce placed a ba,i on exports of
ordinary rice and cargo rice and, on 9 July, extended the ban to include
exports of rice flour. Exports of rice have dropped markedly since the ban
but have not ceased entirely. As recently as 15 July, a ship departed Phnom
Penh with 200 tons of an unspecified grade of Cambodian rice, probably
a shipment against a contract entered into prior to the ban. There is no
evidence, however, that Cambodia has exported rice for human consumption
since June.
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Battambang warehouses because of truck shortages and interdictions on
Route 5. As a result, private and government buyers reduced procurement,
thus depressing paddy price.- drastically at a time when labor costs were
rising because of army recruitment and o5 tructions to the normal seasonal
influx of workers into Battatnbang. In some instances, farmers caught in
the price squeeze reportedly chose to let their rice rot on the stalk.
with an indeterminate portion of its total rice requirement. 4/
31. There is one opthi stic note with respect to rice planting.
30. Planting is also sal J to have declined in the rest of the country.
The government controls substantial portions of Cambodia's traditionally
rice-surplus southeastern provinces, which continue to provide Phnom Penh
prices induced some Battambang farmers who had earlie- decided not to
plant to attempt to grow a reducea crop. By late a spurt of late
planting was reported, particularly ii. areas where early rain had not
completely inundated the paddies. It i,; not known whether this trend
continued, but transplanting is possible through the month of August. Still,
the government has not raised procurement prices, and it will soon be too
late in the growing cycle for such a move to have any appreciable effect
on production. If pessimistic estimates of the next rice crop prove even
close to being accurate, a very large volume of imports will be necessary
in 1972.
as the planting season progressed, rising
Transport
32. Communist harassment of transport on Route 5, Phnon Penh's
lifeline to the rich agricultural area of the northwest, was light during the
first half of June but became more frequent during the last two weeks
of the month. Enemy activity, consisting mainly of roadblocks, and truck
and cargo theft, was concentrated along the 25-kilometer stretch extending
northwestward from Kompong Chhnang.
33. Although fear of enemy attack was undoubtedly a factor, the
sharp curtailment of truck shipments was laid primarily to increasingly heavy
extortions by FANK troop. maiming checkpoints on Route 5. F
25X1
4. Reports of smuggling into South Vietnam from this region have
generally been exaggerated. Moreover, Communist policy regarding trade
with the government zone has been neither uniform nor uncompromising.
Rice, livestock, and other commodities each day reach markets in Phnom
Penh and other urban centers from Communist-held areas.
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34. The government reacted quickly to the curtailment of supply
movements to the capital. A Mixed Economic Committee, consisting of
two brigadier generals and several high-level civilian transport officials, was
formed and charged with coordinating the supply of foodstuffs and other
essential items. 5/ The Committee quickly established a system cf armed
truck convoys, the first of which departed for Battambang on 30 June
and returned to Phnom Penh on 4 July. By the end of the month, ten
more convoys had made the trip.
35. The convoys have been highly successful. The first ten --
consisting of 1,255 trucks and 355 trailers - reportedly delivered
approximately 10,000 tons of rice, 6/ or an estimated two-thirds of Phnom
Penh's monthly requirement. The convoys lost no trucks to enemy action
and presumably precluded extortion at checkpoints, two factors which
undoubtedly account for the increased w2lingness of rice merchants to make
use of the convoys.
36. Some potential sources of trouble for future road convoys can
be identified, however. Some portions of Route 5 - particularly the stretch
between Kompong Chhnang and Pursat - are in poor condition and may
deteriorate rapidly under the current high rate of use during the wet season.
Furthermore, a section of the highway between Pursat and Moung often
becomes flooded by the rising waters of the Tonle Sap in August and
September. As the waters rise, 'however, it will become feasible to move
rice from the Battambang area to Phnom Penh by barge, thereby decreasing
reliance on the road. Insecurity hampered such attempts last year, but
Cambodian naval elements may now be more capable of ensuring security
on the lake.
37. The railroad, which has remained operable most of the time
despite occasional enemy attacks, J offers a second alternative to the
5. The Committee's area of responsibility includes the entire country,
but its immediate focus was on Route 5.
6. Although rice was the principal cargo, vegetables, jute, livestock, and
spices were also carried. Small volumes of petroleum products were
transported in both directions.
7. Three trains were derailed by enemy explosives in June and July
between Moung and Battambang and troops guarding the Moung railroad
station and bridges were attacked on 22-23 July. The first derailment, which
occurred on 4 June, disrupted service for three weeks, but the others were
repaired in a few days.
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1t 1?T
section of Route 5 northwest of I'ursal: 8/ Currently, there is daily train
service I1?0111 Pursal to !3altambang and thence to the Thai border, Mice
is moved to Pursat by rail from points northwest of' I3attantbang city, but
most of the rice currently shipped from '3attantbang to Phnom Penh is
carried the entire distance -- about 280 kilometers - by truck. The Irtick
haul could be shortened by about a third by using the railroad for shipments
to Pursat, but Cambodian officials claim this is not done very much because
of the high cost of' lransloading, the scarcity of labor, and the limited
transloading facilities at Pursat. Nevertheless, the sidings at I'ursaI (see the
pho(ograph) appear capable of handling a high volume of transloading
should tl.is become necessary.
S. 711r l'hrninr l'rnh - /'rn?sul cgvrrcvrl o.l'ririlrrrcrcl Ira becvr out rr/rerrrrirrrr
cin c' Jun c / 9 70.
- 'i4 -
sF:CR
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enemy harassment and interdictions.
38. Route 4, from Kompong Som to Phnom Penh, sustained only
light traffic in the latter half of June and the month of July because of
taxing traffic it few kilometers north of Veal Renh. Tax rates on vehicles
reportedly ranged up to 600 rids (about $11), whereas taxes on cargoes
ranged up to 1,000 riels (about $18). Further north, explosives and mines
damaged iome bridges and sections of road, but repairs were quickly
effected, Only t.vo convoys were formed to move accumulated supplies
from the Kompong Som port to Phnorn Penh in June and July. The first
consisted of 92 trucks, whereas the second included only 40. All traffic
was interdicted on 20 July, when the enemy attacked elements guarding
a major bridge about 35 kilometers west of the P ch Nil Pass and destroyed
a span 20 meters long. The bridge was still out of service at the end of
July, but repairs were under way. To the cast, Kampot remained isolated
to overland travel - for the third month - becr,use of numerous destroyed
bridges and control of surrounding roads by the enemy. Cambodian naval
craft have been employed to move supplies Into And out of the city.
Outgoing shipments to I1hnorn Penh have included cement from the Chakrci
Ting plant a few kilometers to tite north. The plant was last reported to
have virtually ceased operations because transport interdictions had resulted
in overloaded storage facilities, Lack of bridging materials is preventing
reconstruction of the bridge linking the cast and west sides of Kampot
that was destroyed b;' enemy action on 17 Jung.
Khmer Communist bands in mid-June were
39. Route 1, Phnom Penh's link to Saigon, sustained heavy traffic
in June and July despiit occasional mining incidents and an enemy
interdiction a few kilometers cast of Svay Rieng from 7 to 9 July. No
ambushes of convoys were reported in July.
Petroleum
40. Petroleum deliveries to Phnom Penh increased sharply in June
and July following a substantial expansion of the chartered fleet of
petroleum carriers plying the Mekong. Deliveries in each month exceeded
16,000 tons, compared with a previous high of 11.300 tons, as shown in
tt'^ tabulation below:
SECRET
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Period
Metric Tons
Total a/
80,000
17-31 January
5,500
February
10,000
March
11,300
April
10,000
May
10,600
June
16,000
July
16,600
a. During the period, additional
amounts of petroleum were truoked
in'o Phnom Penh from Saigon,
riompong Som, and 13a t tarnbang. A
complete accounting of the chip-
mento is not available, but their
cumulative total in estimated to
be on the order of 3,000 tons.
41. The Cambodians now have under charier approximately a dozen
tankers a-,;d barges whose combined capacity is more than sufficient to meet
Phnom Penh's essenti~'I requirements even it' each makes only one delivery
a month. Actually, all of the vessels are technically capable of making at
least two deliveries a month to Phnom Penh from the petroleum depot
at Nha He in South Vietnam, but this performance level is not likely to
be aehi':ved without an expansion oC discharge facilities at Phnom Penh.
an extension of the layover fame currently provided by convoy schedules,
or an increase In the frequency of ~,onvoys. / Nevertheless, Phnom Penh's
petroleum reserves, which an-our,ted to only 13'I'v of capacity on 3 June,
had been increased to about one-third of capacity by 30 July.
42, Deliveries have been sustained despite continued attacks on
shipping. Four convoys drew enemy rocket fire in June and July, but only
two ships were hit, incurring slight-to-moderate damage.
9. Arnsed conrovs - under the coordinated /protection of rircrine, air,
and ground elements - hare been arriving at Phnont Penh ahjut ever), right
daYs. After a 1 S?lwtcr layover. escort resscls forts another cosecs and depart
for South Vietnam. /?ew ships can complete of floadiitn during the short
la,-'orer, and ?tost are forced to await the next con to;'. The conro-'s are
controlled hr the South Vietnamese. who have re/Feted Cambodian request
that their frequency be increased.
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43. In addition to the Mekong deliveries, relatively small volumes of
petroleum - mostly aviation gasoline - have been arriving in Phnom Penh
every few days in convoys of 15-20 tank trucks from Saigon. No petroleum
has been delivered to the city via Route 4 from Kompong Som for several
months. 10/ In the Battambang, requirements for most petroleum products
arc being amply covered by truck shipments from, Thailand.
l0. Cambodian officials at the port of Kompong Som stated on 22 July
that there were no plans to repair the Kompong Som refinery - damaged
by fire resulting from an enemy attack In carry Afaich - ,'c fore security
In the area Is Improved.
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00020022-4
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CAMBODIA
Indices of Cutroncy and of Prices
rnl;:rs ron WOnKINO CLASS
rAMIl11S IN PHNOM I`rNII
Apl Muy Jun Jd hI Sip Oct
Iva
Mu of May Jun
1971
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CAMBODIA
Imports, Exports, and
Gold and Hard Currency Holdings
WHIM) U9 Uullq,.
e-Ullie".Ir,nl.rlmn..(,I? dlr1...d ,n
F -7llmi d "need rr,grrnan
511741 r.41 CIA
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CAMBODIA
Government Borrowing from the Banque Nationale du Cambodga
197071
Million R1rh
19,000 1
T BORROWING
Feb Mar Apr May Jun 1910 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr may Jun
1971
CUMULATIVE GOVERNMENT BORROSINO
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