ABSTRACT
Beginning in 1966–7 and becoming much more discernible by 1969, the balance of forces within Cambodia had been shifting in ways much more difficult for Sihanouk to manage. The socioeconomic foundations of his state had been strained and weakened. The government’s major role in managing much of the economy, which had considerably increased in 1964 following the ending of American economic aid, had become clumsy and increasingly ineffective. A steady expansion of secondary and tertiary levels of education had for several years far outrun the capacity of the private economy and bureaucracy to absorb the young graduates, leaving an ever-increasing number of discontented urban unemployed. 1 Sihanouk’s abrupt ending of American economic assistance in 1963 had been only very partially offset by other sources of foreign economic assistance. Discontent had risen within the bloated bureaucracy and especially among army officers, a significant proportion of whose salaries had been dependent upon American financial aid and who saw their income shrink soon after it was ended in 1963. US military assistance had covered slightly over 25 per cent of expenditures for defense in 1963, and its absence appears to have been primarily responsible for a subsequent increase in the overall budget deficit by almost the same percentage. (The continuing growth of deficit financing was such as to bring the governor of the National Bank to warn in 1966 that it would inevitably lead to “social discontent as a result of the decrease in the purchasing power of the currency.”) 2
