Soon after establishing their protectorate in 1863, the French realized that Cambodia's hidden wealth was an illusion and that Phnom Penh would never become the Singapore of Indochina. Aside from collecting taxes more efficiently, the French did little to transform Cambodia's village-based economy. Cambodians paid the highest taxes per capita in Indochina, and in 1916 a nonviolent tax revolt brought tens of thousands of peasants into Phnom Penh to petition the king for a reduction. The incident shocked the French, who had lulled themselves into believing that the Cambodians were too indolent and individualistic to organize a mass protest. Taxes continued to be sorely resented by the Cambodians. In 1925 villagers killed a French resident after he threatened to arrest tax delinquents. For poor peasants, the corvée service--a tax substitute--of as many as ninety days a year on public works projects, was an onerous duty.

According to Hou Yuon (a veteran of the communist movement who was murdered by the Khmer Rouge after they seized power in 1975), usury vied with taxes as the chief burden upon the peasantry. Hou's 1955 doctoral thesis at the University of Paris was one of the earliest and most thorough studies of conditions in the rural areas during the French colonial era. He argued that although most landholdings were small (one to five hectares), poor and middleclass peasants were victims of flagrantly usurious practices that included effective interest rates of 100 to 200 percent. Foreclosure reduced them to the status of sharecroppers or landless laborers. Although debt slavery and feudal landholding patterns had been abolished by the French, the old elites still controlled the countryside. According to Hou, "the great feudal farms, because of their precapitalist character, are disguised as small and mediumsized farms, in the form of tenancies and share-farms, and materially are indistinguishable from other small and medium-seized farms." Whether or not the countryside was as polarized in terms of class (or property) as Hou argues is open to debate, but it is clear that great tension and conflict existed despite the smiles and the easygoing manner of Khmer villagers.

To develop the economic infrastructure, the French built a limited number of roads and a railroad that extended from Phnom Penh through Batdambang to the Thai border. The cultivation of rubber and of corn were economically important, and the fertile provinces of Batdambang and Siemreab became the rice baskets of Indochina. The prosperous 1920s, when rubber, rice, and corn were in demand overseas, were years of considerable economic growth, but the world depression after 1929 caused great suffering, especially among rice cultivators whose falling incomes made them more than ever the victims of moneylenders.

Industry was rudimentary and was designed primarily to process raw materials such as rubber for local use or export. There was considerable immigration, which created a plural society similar to those of other Southeast Asian countries. As in British Burma and Malaya, foreigners dominated the developed sectors of the economy. Vietnamese came to serve as laborers on rubber plantations and as clerical workers in the government. As their numbers increased, Vietnamese immigrants also began to play important roles in the economy as fishermen and as operators of small businesses. The Chinese had been in Cambodia for several centuries before the imposition of French rule, and they had dominated precolonial commerce. This arrangement continued under the French, because the colonial government placed no restrictions on the occupations in which they could engage. Chinese merchants and bankers in Cambodia developed commercial networks that extended throughout Indochina as well as overseas to other parts of Southeast Asia and to mainland China.

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Source: U.S. Library of Congress