Tuesday, July 29, 2014

Cambodia: Wave of discontent

PHNOM PENH, CAMBODIA - JULY 19: Opposition supporters greet Cambodia National Rescue Party President Sam Rainsy with a number seven, which referred to the party in the last national elections, on July 19, 2014 in Phnom Penh, Cambodia. Thousands of supporters of the opposition Cambodia National Rescue Party gathered at Phnom Penh International Airport, as CNRP President Sam Rainsy returned from France amidst increasing political tensions, and marched with him through the streets of Phnom Penh. Last Tuesday, after a CNRP demonstration turned violent, eight opposition Members of Parliament-elect were arrested and charged by the authorities with crimes of insurrection and incitement to violence. Today also marks the anniversary of Sam Rainsy's return from exile one year ago ahead of the National Elections held on 28 July 2013, which resulted in an almost year-long boycott of the National Assembly by the opposition. (Photo by Omar Havana/Getty Images) *** BESTPIX ***
7-up: supporters greet CNRP president Sam Rainsy with a number seven, the party's number in the last national election

The Financial Times: Analysis - July 28, 2014 7:06 pm
By David Pilling and Michael Peel

Hun Sen’s 29-year regime is tottering as a young population, angered by corruption, seeks change
t 29 years and counting, Hun Sen’s lengthy spell as leader of Cambodia ranks alongside only a handful of other fiercely tenacious world figures, including Cameroon’s Paul Biya (32 years) and Zimbabwe’s Robert Mugabe (34). Muammer Gaddafi, the firebrand former Libyan ruler to whom the loquacious and sometimes foul-mouthed Mr Hun Sen is occasionally compared, lasted 42.

Now, after a year-long political crisis stemming from claims he stole last July’s election, Mr Hun Sen has had to make big concessions to a newly invigorated opposition. Last week, after five hours of emergency talks with the veteran opposition leader Sam Rainsy, he concluded a deal that, on the face of it, yields important powers. In return for ending its boycott of parliament, the opposition Cambodia National Rescue party will take control of half the 10 parliamentary commissions, including those dealing with human rights and corruption. Perhaps even more important, Mr Hun Sen has agreed to revamp the election committee to ensure that the next election, due in 2018, is fully transparent. Many political analysts argue that, if the process really is free and fair, Mr Hun Sen will have to accept the fact that his people no longer want him.
The result of that election has dispelled Mr Hun Sen’s air of invincibility and plunged the country into a political crisis that many say will either force him to adapt or go. Mu Sochua, a leading opposition member recently released from prison, argues that the prime minister is unable to change. “It’s impossible for Hun Sen to reform. He is knee deep – no neck deep – in this corruption. He has locked himself in this system and he cannot move.” She detects “an awakening” among a population radicalised by land seizures and resentment at the conspicuous consumption of a wealthy elite. “I don’t want to call it a revolution,” she says, arguing that the opposition must avoid violence if it is not to provoke a fearsome crackdown. “But it is a revolution.”Amid strikes by newly militant garment workers and mass political mobilisations against Mr Hun Sen’s rule, Cambodia has been gripped by a sense that the old regime is faltering. “The manner in which the country has been governed in the past 20 years is no longer tenable,” says Surya Subedi, the UN special rapporteur for Cambodia. “In my opinion Cambodia has moved on. Whether Prime Minister Hun Sen wants to be part of that process is up to him.”
Since he first came to power in January 1985, installed by the Vietnamese whose invading forces dislodged the murderous Pol Pot regime, the former Khmer Rouge commander has consolidated his grip on power through a web of patronage and brute military strength. He has also negotiated several electoral hurdles, including that of July 2013 in which – even with the levers of state power at his disposal – he managed to scrape only an embarrassingly narrow victory.
If the opposition sees the last gasp of a deeply compromised regime, the government views it differently. Phay Siphan, a spokesman, blames the opposition CNRP for not accepting the result of the 2013 election and for whipping up anti-Vietnamese xenophobia. “Democracy means compromise,” says Mr Phay Siphan. “It doesn’t mean no Hun Sen.”
The prime minister, he says, is the one person who can guide the country through what he describes as a transition from post-genocidal instability to socialism, capitalism and democratic reform. “Who is strong enough to put everyone together? Only Hun Sen.”

Cambodia timeline

1953: Wins independence from France under King Sihanouk
1970: Sihanouk ousted by pro-US Lon Nol, intensifying conflict with communist North Vietnam and Pol Pot’s emerging Khmer Rouge movement
1975: Khmer Rouge takes Phnom Penh and declares “Year Zero”. During the next four years the death toll from executions, starvation, disease and exhaustion is estimated to reach at least 1.7m and possibly twice that.
1979: Invading Vietnamese forces topple Khmer Rouge
1981: Pro-Vietnamese Kampuchean People’s Revolutionary party, forerunner of Hun Sen’s Cambodian People’s party, takes power in one-party election
1985: Hun Sen becomes premier amid continuing internal conflict
1991: Peace deal in Paris leads to UN-backed authority taking share of power
1997: Hun Sen, now second prime minister, launches coup against first prime minister Prince Ranariddh
2005: Opposition leader Sam Rainsy flees into exile after immunity from prosecution removed. He is later jailed in absentia for 10 years for allegedly spreading false information about a border dispute between Cambodia and Vietnam.
2013: Sam Rainsy pardoned and returns to Phnom Penh to be greeted by massive crowds. Hun Sen’s Cambodian People’s party declared winner of the subsequent election, but Sam Rainsy’s Cambodia National Rescue party says the result is fraudulent.
September 2013: Sometimes deadly rolling protests against election result begin as opposition boycotts parliament
July 2014: Senior Cambodia National Rescue party members are rounded up after latest demonstration. Sam Rainsy agrees deal with Hun Sen for their release, an end to the opposition boycott of parliament and reform of the election authority.
Cambodia’s spoils may not seem worth the bother. With 15m people and nominal gross domestic product per capita of not much above $1,000, its economy, which is roughly the same size as Botswana’s, is the smallest in southeast Asia apart from Laos. Still, that does not tell the whole story. It has been growing at more than 7 per cent annually for the past decade. Nor, with a construction boom and strong interest from foreign investors, does growth show any sign of abating.
The country has become a preferred destination for the garment industry, partly as suppliers seek cheaper alternatives to China where wages are rising fast. Cambodia’s garment factories employ 400,000 workers who churn out clothes for the likes of GapWalmart and Marks and Spencer. Garments make up about 70 per cent of official exports. Tourist numbers have also surged, from just 500,000 15 years ago to more than 3m a year today, with the ancient ruins of Angkor Wat a big draw. Cambodia has also become the scene of an often ugly scramble for resources, including old-growth timber, gems, fisheries and agricultural land for cash crops such as rubber and sugar.
Although it remains overwhelmingly rural, with an estimated 80 per cent of the population living in the countryside, an urban middle class of sorts has sprung up. Last month Japanese retailer Aeon opened the capital’s first large-scale shopping complex at a cost of about $200m. Motoya Okada, Aeon’s president, said he expected to invest in at least four more stores. Rolls-Royce, the UK-based luxury carmaker, has announced plans to establish an office in Phnom Penh.
International interest in Cambodia goes beyond the economic. In the west, it is still strongly associated with the “killing fields” of the Khmer Rouge (1975-79), when Pol Pot’s genocidal regime oversaw the murder and starvation of at least 1.7m people, a third of the population. Western donors have had a huge stake in Cambodia since 1992-93 when, for the first time in its history, the UN took over the administration of an entire country. It poured in billions of dollars and organised elections in 1993.
Although the results of those elections nominally relegated Mr Hun Sen to the position of second prime minister, he was able to wrest back full control in a 1997 coup. Even today Cambodia is teeming with non-
governmental organisations. About half of the central government’s budget depends on donor aid, according to the US state department. That obliges Mr Hun Sen to erect what critics say is a democratic façade, including a relatively free press, in order to keep the aid dollars flowing.

For China, Cambodia has become an important ally in the Association of Southeast Asian Nations, where it consistently takes Beijing’s side. Phnom Penh has regularly refused to put its name to communiqués that are even mildly critical of Chinese actions in the disputed South China Sea. Beijing has sent hundreds of millions of dollars in loans and grant aid. Last year Mr Hun Sen returned from a five-day trip to China with a pledge for aid and in­vestment worth a projected $2bn, in­cluding a memorandum of understanding to build an oil refinery in southern Cambodia. Other funds have gone to big hydroelectric dams and to roads and bridges. China has also built some of the larger-than-life government edifices in Phnom Penh, including the monumental $33m Council of Ministers building.
If Mr Hun Sen’s regime really is beginning to falter, there are two main reasons. The first, paradoxically, is that, as Cambodia gets richer – or at least less poor – the spoils pile higher. The single-biggest popular grievance centres around land. Licadho, a human rights group, says at least half a million people have been affected by land grabs since 2000. Land rights were abolished un­der the Khmer Rouge. Theoretically, a 2001 land law gives farmers the right to land that they have cultivated without dispute for five years. In practice, subsistence farmers are regularly evicted with little or no compensation to make way for new, politically connected, agribusiness owners. A 2009 report by Global Witness, a campaigning NGO, estimated that, in 15 years, 45 per cent of the country’s land, from forests and fisheries to prime beach front, had been sold off, mostly to government cronies.
The other new factor is changes in the Cambodian people. The country is young, partly because of the 1970s’ genocide. More than half the population is aged 24 or under. Internet use is low but growing fast. Licadho estimates that, in 2013 alone, penetration rates doubled to 20 per cent. As in many other countries, this has facilitated the spread of information and allowed people to organise. “Every Cambodian has something to protest about,” says Theary Seng, a lawyer who lost both her parents to the Pol Pot regime. “A young population is coming of age . . . They don’t have the same trauma or fear as their parents.”

If land is the big issue in the countryside, in the cities it is wages. Some 350,000 garment workers went on strike last year, demanding a doubling of pay to $160 a month. The strike ended in January after wages were raised to $100 and authorities shot and killed at least four strikers. One long-term resident says 2013 was “the moment Cambodians had enough of being serfs and decided to be citizens”. At a demonstration in Freedom Park this month, Thy Tournth, a 32-year-old taxi driver, said: “I need my rights back. Here is the only place I can come to express my feelings.”
If pressure appears to have been building inexorably, last week it eased – at least temporarily – with the deal between Mr Hun Sen and the opposition. In an interview, Mr Sam Rainsy, the opposition leader who spent many of his earlier years in France, rejected claims that he had been “soft”. The prime minister, facing a united opposition and months of popular unrest, had been forced to make real concessions, he said. Some opposition supporters – younger and more prepared to take the fight to the streets than their leaders – are pressing for faster change. They wanted the CNRP, for example, to demand early elections.
“We have to be realistic,” says Mr Sam Rainsy, who concedes that the wily prime minister might just be buying time. However, he also says he detected in the prime minister a pragmatic desire to change and even the faintest of hints that he might one day give up power. During their lengthy talks last week, Mr Hun Sen quoted a well-known Cambodian proverb: “When the water rises, the fish eat the ants; when the water recedes, the ants eat the fish.”
Mr Sam Rainsy took it to mean that Cambodia’s political transitions have historically been bloody affairs. As opposition leader, his task was to persuade Mr Hun Sen that he could step down without fear of reprisal.
Few political analysts believe Mr Hun Sen will exit without a fight. Many predict he would prefer to stage another military takeover than to go quietly. They have watched over the years as he has survived one political crisis after another.
“I would love to think Hun Sen can change, but he’s not going to,” says Brad Adams, Asia director at Human Rights Watch. When he finally goes, he adds, it is not likely to be through the ballot box.
Dollar dominance: Give the riel a chance
Cambodians are being urged to embrace their national currency as part of a fresh government push to take greater control of economic policy by curbing the overwhelming use of the US dollar, writes Michael Peel.
The central bank is using public events and even a short film to exhort citizens to show more love for the riel in what the International Monetary Fund has described as “Asia’s most dollarised economy”.
The effort to cut the reliance on the greenback highlights Cambodia’s legacy of economic fragility, despite the booming export-led growth of the past decade. “Everything is there and yet the shift to use the local currency is still very slow,” said Chea Serey, director-general of central banking at the Cambodian central bank. “Part of it is psychological . . . this is still a young country with a young currency.”
Dollars account for 90 per cent of money in Cambodia’s banking system and almost the same proportion of cash used in everyday transactions, according to official estimates. The greenback’s near hegemony is in part a product of a lasting fear of instability after the nightmare years of the Khmer Rouge. It is also a legacy of the international money that poured into the country when the UN took over administration of it in the early 1990s.
Since then Cambodia has developed few sources of foreign currency earnings outside tourism, and exports of clothes and rice. The stock market is not even a niche attraction for international institutions, with only two listed companies.
The dollar dominance has helped attract foreign direct investment and establish a stable inflation and exchange rate but it means the government has only a weak influence on monetary policy. As in other countries where the US currency has been heavily used, a debate rages about its pros and cons.
An IMF working paper said in 2011 that a carefully managed market-based strategy was “essential for Cambodia’s de-dollarisation”. The Cambodian central bank says is does not want to eliminate the greenback but is looking to establish the riel’s primacy through measures such as forcing the national currency to be used for government salaries, utility billing and retail pricing.
The government has a more personal argument it hopes will be persuasive to the public: if dollar bills get damaged, then you just might have to go to the US Federal Reserve to replace them.

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