DOMESTIC COMMERCE

Cambodia Table of Contents

No information was available in 1987 on the volume of the domestic trade of locally manufactured products or of imported goods. Domestic commerce consisted essentially of contracts between agricultural producers and the state on the one hand, and the private free market on the other hand. Rice was the principal commodity sold to state purchasing agencies in exchange for farm implements, consumer goods, or cash. The state increasingly found itself in competition with private merchants for the procurement of rice. In order to force the peasants to sell rice to the state, the government prohibited private rice traders from transporting rice across provincial borders, a measure that had only limited success. In 1986 state rice procurement amounted to only 154,000 tons, or to just over half of the government's goal of 300,000 tons. Farmers believed that the state purchase price of 2.5 riels per kilogram of unmilled rice was less than the cost of production. In addition, because the government had insufficient supplies of goods such as fertilizer, cloth, and soap to be traded as payment, farmers had little incentive to sell their crops to state buyers. Consequently, in August 1987, the government raised the amount paid to farmers for monsoon-season (long-cycle) unmilled rice from 2.5 to 5.5 riels in an effort to narrow the gap between the official and the freemarket prices. At the end of 1987, peasants still complained that the price paid by the state was too low. For example, one kilogram of improved IR rice seeds was priced at between ten and fifteen riels on the free market, but it cost only six riels on the official market.

In contrast to shrinking state domestic trade, private trade continued to grow and to prosper with governmental approval and encouragement. Spouses of high party officials and cadres were actively engaged in petty trade to bring additional incomes to their families. Government workers also moonlighted by working in the private sector to augment low salaries and to make ends meet. Thousands of retail shops, private markets, and restaurants proliferated in Phnom Penh and in other cities. Shops and markets offered a variety of consumer goods, from gold and silver to bicycles and illegally imported consumer items, such as Seiko watches and Heineken beer.

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Source: U.S. Library of Congress