Cambodia Under Fire

Cambodia, which held the rotating chair of Asean in 2012, hosted international fora in November which President Obama attended, but even though he and Hun Sen held a one-on-one meeting and stood next to each other for group photos, no picture of the PM was posted on the White House web site and there were no smiles between the two, Obama maintaining a cool distance. This was meant to show America’s displeasure at many of the things happening in Cambodia. The Asean meetings also came after both the European Parliament and Australian Senate called Cambodia to account for the direction it’s been taking regarding human rights and fair elections.

The PM’s response was that they were misinformed and the media was exaggerating. That, of course, is what a lot of politicians would say under fire, and while there has clearly been some serious backsliding on Cambodia’s part, I agree that some of the complaints do seem to be out of proportion to reality. Nonetheless, since Cambodia gets a substantial part – 10%/$300 million - of its annual budget from the international community, it would behoove the PM to take the complaints more seriously.

The complainants are asking that the country hold free and fair elections, that an independent election commission be appointed, that political prisoners be released, that Sam Rainsy, now in self-imposed exile to avoid a long prison term, be allowed to take part in the upcoming national election and that the country put an end to land grabbing and displacement.

Independent election commissions are an obvious starting-point for honest elections. It’s too bad that’s not the way things are done in the US. In 2000, Republican Katherine Harris of Florida was both Secretary of State, the office that runs elections, and GW Bush’s campaign manager. She did everything in her power to skew the vote in Bush’s favor. An clean election would have easily made Gore the winner. Similarly, four years later Ohio Republican Secretary of State Kenneth Blackwell simultaneously ran the Ohio election and Bush’s campaign there. He used every dirty trick in the book to throw the election to Bush. So yes it’d be great if Cambodia had an independent electoral commission, but the US is hardly one to complain until it gets its own house in order.

Independence of the electoral commission is far preferred but what’s important is the outcome; that is, a free and fair election. I’ve now lived in Cambodia for 11 years and been around for four, maybe five national elections. I don’t remember one declared not free and fair by international observers, so I’m not sure where that complaint is coming from. There have been minor problems but nothing that would’ve countered the wide lead the PM’s Cambodian People’s Party had in every election, at least in the last 11 years. The CPP has consistently received a minimum 55% of the vote.

Elections in Cambodia are held on two levels. The national parliament and the communes, of which there are about 1700 that cover the entire country, both urban and rural. Phnom Penh, for instance, has about 90 communes. Almost all of the communes are run by the CPP as a result of efficient gerrymandering. In case you’re not aware of the genesis of that term, the word is a combination of Gerry, the name of a governor of Massachusetts in the early 19^th century and a salamander, since the electoral districts Gerry designed to favor his own party looked like salamanders.

The CPP also has overwhelming control of the parliament for that reason and a divided opposition – for a long time there were two opposition parties - which makes it easier for the ruling party to keep control. A similar situation exists in the UK: The party with the most seats in parliament almost never has a majority of the vote… Margaret Thatcher never got past about 40% of the vote. Still, even with some level of intimidation, a partisan electoral commission and control of most of the media by the ruling party, the opposition received about 45% of the vote in the last election and, at least as far as I remember, it was deemed free and fair by international observers.

The government’s case against Sam Rainsy revolves around two factors. As part of a campaign ploy he pulled up temporary border posts which the government and Vietnam were using to try to demarcate the border between the two; thus destroying public property. As part of that action he accused the PM of selling out Cambodia, essentially treason. For that he received an 11 year sentence. That was way out of line in a Western perspective, but accusing the PM of treason was beyond the pale in a Cambodian context. In fact, the PM and his party are regularly criticized by the opposition.

Sam Rainsy has never come close to challenging the PM in the polls and personally I’m happy about that. In general he’s a bit more conservative on social issues and rails against corruption. On the latter, he might be better than the CPP on tackling that issue, but that’s hard to say since Cambodia is hopelessly corrupt, scoring 157 out of 174 countries on Transparency International’s corruption perception index, and so probably everybody is in the game. On the former, I’m personally not fond of conservatism in any form. The real problem I have with him is that his strongest campaign rhetoric involves stoking antagonism against the one million or so ethnic Vietnamese living here, regularly using a derogatory term for them. Pulling up the border posts was part of that push against the Viets.

After all the terrible changes that Cambodia has gone through the last thing it needs is ethnic strife. In general terms, the Khmer are largely distrustful and disdainful of the Vietnamese in spite of them driving Pol Pot out of power and saving possibly hundreds of thousands of lives in the process. At the same time, on a personal level they have no problem getting along with the Vietnamese, making friends and just being the pleasant, easy going people that they are.

While ethnic tension and violence and even insurrection can be found in many of the surrounding countries, there is absolutely none of that in Cambodia. The country has about 500,000 Muslims, but there isn’t the barest hint that they are the least bit dissatisfied with their lives here.

Cambodia is the easily the most welcoming of foreigners in the region and maybe the world. Anybody from anywhere in the world who can make their way to Cambodia can stay as long as they like and if they wish, open a business with no interference from the government (baksheesh excluded) or need of a local partner. Moreover, in a poll last year, 78% said they thought their country was going in the right direction: By any standard that is an amazing number.

The 400,000 people who’ve been displaced over the past 10 years by urban development, dam building and rural land concessions probably aren’t so happy about the country’s direction, but overall Cambodia is growing economically at a good clip, with new construction everywhere including impressive infrastructure improvements and a lot of people’s lives are being enhanced.

A lot of urban development in Phnom Penh has been happening on filled-in lakes and wetlands and on formerly public park spaces, all of which I consider a terrible mistake, almost a crime against the people. Nevertheless, I don’t doubt that the government honestly sees that development as a plus for the city. There’s unfortunately very little transparency in how those projects are planned or who the land is sold off to, and precious little citizen input. For a country that’s relatively new to democracy, that’s discouraging but not surprising.

There are a lot of dams being built to supply electricity that is currently sorely inadequate, with blackouts now happening on a daily basis in the capital. A large majority of power now consumed in Cambodia comes from neighbors Vietnam and Thailand. Hydropower has a great many advantages over burning fossil fuels, which the country is also pursuing in the form of new coal plants in Sihanoukville. Hydropower does have a great drawback here in that little can be produced in dry season when it’s hottest and thus when it’s needed most. It also is displacing large numbers of people and in some cases is or will be causing serious damage to the country’s fisheries – Cambodians get 80% of their protein from fish.

Most of those drawbacks could be ameliorated by building dams mostly in the mountains and possibly making them smaller. Most river fish are found in slow moving flatland rivers, very few in fast moving mountain streams, so, for instance, the Kamchey dam in the mountains near Kampot will have little impact on local fisheries. There also are few people who need to be relocated from mountainous areas. Nonetheless, a lot of countries have in the past and/or are still in the present making the same (what I consider to be) mistakes, so, once again, it’s difficult to fault the government in that regard.

Some 10% of Cambodia’s total land mass has been leased to local and foreign companies for industrial agro-plantations and giant tourist projects. Concessions have been granted in national parks and wildlife preserves as well as degraded forest land. In many if not most cases that has involved displacement of local villagers. While most people being displaced receive some type of compensation, much of it is inadequate. Considering how endemic corruption is here, it seems likely many public officials involved in the granting of concessions are filling their pockets, still, as in the above, I don’t doubt they also believe it’s good for the country. In a few years time Cambodia will be producing a lot of rubber, sugar cane, acacia and palm oil from the many plantations now under development. I would have done it differently, distributing land to thousands of villagers instead of a few large corporations, as better for the country in the long run. And for sure, I would never trash national parks and wildlife refuges with plantations.

In almost all of the above cases, people affected have demonstrated and protested to varying degrees of success. The government is not keen on the above stemming in part from a protest that went violent back in 2002 with disastrous consequences for the country. In that event a rumor, that was later learned to be unfounded, circulated that a popular young Thai soap actress had claimed Angkor Wat belonged to Thailand and made other disparaging remarks about Khmer people. What started as a protest mostly involving college students resulted in the torching of several Thai owned businesses as well as the Thai embassy. In the latter case the Thai ambassador had to flee over a wall to save himself. The government was forced to pay damages of about $30 million and offer profuse apologies. While many Thai companies have important stakes in the economy, and Thailand was funding Cambodian roads near the border at the time of the riots, it’s true that many Thais look down on the Khmer.

After that embarrassing event the government has tried to put a lid on protests and demonstrations with varying degrees of success. In spite of their efforts at suppression, protests are a regular occurrence as are work actions by unionized garment workers. It is not that different in America where people wishing to demonstrate at political party conventions or international meetings are shunted off to ‘free speech zones’ which often wind up to be paved areas surrounded by chain-link fences under freeways and far from the venues, thus far from where anybody can see them or hear of their grievances. In other cases, peaceful protesters have been pepper sprayed just for the fun of it.

 Finally, one of the international community’s demands is the freeing of political prisoners. Last October Mam Sonando, 72-year-old owner of one of the few independent radio stations and frequent government critic was given a 20 year sentence on fabricated charges: supposedly he tried to organize 400 village families, who were protesting the loss of their land to a concession, to secede from Cambodia and form their own nation. Fortunately the local foreign language press – we have two English language dailies here - and international broadcasters like the BBC, which has an FM outlet in Phnom Penh, have been left to do their work unhindered. Also last fall about 20 people protesting the loss of their land in an urban development were given 2 year sentences, but then were released a month or so later. Locking up dissident voices is a very worrying trend; maybe they are trying to emulate China, their great friend and benefactor where lots of people are routinely put away for simple political advocacy. Still, the most political prisoners anybody can come up with in Cambodia is 13. Even one is too much, but compare that with Burma where even after all the thousands of prisoners who’ve been released, there are still, by various estimates between 125 and 1000 political prisoners who remain behind bars.

The Western media usually categorize the PM as a strongman, sometimes a dictator. A dictator he is not as they maintain control through violence, incarceration and murder of opponents. The strongman appellation is fair. Some years ago he decided that betting on sports was bad for the country and literally within two days, hundreds of legal betting parlors were shut down and thousands lost their jobs. Also a while ago, a property owner wanted to develop a large lot in a valuable and central location that was occupied by an NGO serving homeless kids. Though not part of any legal requirement, he offered to build a new facility for the NGO outside the city’s central core, but the facility, which has a lot of powerful friends, objected saying they needed to be where the kids were. The PM intervened on the NGOs side and the property owner had to eat his development plans.

Cambodia is hardly a model democracy, but in spite of some serious backsliding and worrying developments, it’s still in pretty good shape. The country’s development plans, which are causing much displacement and misery, and which I personally find very troubling, are well within conventional development models; in other words, heartily approved by the business/financial community. While the international political community needs to keep up the human rights pressure, Cambodia’s situation needs to be kept in perspective.

China Says Jump; Cambodia Asks, How High?

Two months after the last Asean – Association of Southeast Asian Nations – meeting, Cambodia is still catching flak for torpedoing a joint statement that would have referenced the territorial dispute in the South China Sea between China and the Philippines and Vietnam; Malaysia and Brunei also have competing claims but they’ve maintained a lower profile. Vietnam and the Philippines wanted the closing statement to ask all parties to adhere to a code of conduct and abide by basic rules of the sea. It was the first time in the Association’s 45 year history that no closing communiqué was agreed upon.

Since Cambodia holds the rotating chair this year it did its damnedest to prevent any language not approved by Beijing. At one point it went so far as to cut off the microphone of the Philippine representative to prevent him from speaking. In response to Philippine complaints which were still being voiced long after the meeting, the Cambodian ambassador to that country wrote a scathing article accusing the Philippines of ‘dirty politics’ and saying it was trying to sabotage the meeting by injecting outside matters into it. That prompted the Philippine government to summon the ambassador for a dressing down – to register its own complaint at the Cambodian ambassador’s decidedly undiplomatic tone. The ambassador never showed up. With great surprise and raised eyebrows all around, Cambodia declared a few days later that he didn’t show because he’d already been reassigned. In typical Cambodian fashion the easiest way to deal with the situation was to avoid it with a tall tale nobody would ever believe. At least, in Cambodian reality, the confrontation was avoided by a little diplomatic sleight-of-hand.

It’s not hard to understand Cambodia’s extreme deference to China’s political needs as it’s the country’s foremost donor and financier. Think roads, railroads, bridges, dams, irrigation; the money keeps poring in. The dams are generally BOT, or build, operate for a long period and then transfer to the government. The rest are concessionary loans; that is, loans at lower than market interest, though considering how flush China is, the interest rates are higher than they need to be or should be. Nonetheless, there’s a lot of money flowing in and it’s made a clear difference in Cambodia’s development. The latest tranche, announced September 4, amounted to $523 million, five hundred of which is loans for unspecified infrastructure projects, a cool $23 mil grant for the PM to use at his discretion.

Sin Serey, Cambodia’s ambassador to Singapore, in response to an opinion piece in Thai newspaper The Nation accusing Cambo of being too closely aligned with China is quoted as saying, “Cambodia, a country with great civilization and culture for thousands of years, is not a Banana Republic. Cambodia has not been and will never be kowtowing to any country.” Of course not! However, according to Prime Minister Wen Jaibao, China will ‘closely coordinate’ with Cambo on the upcoming Asean meeting in November. But hey, that’s not kowtowing, only coordinating. He also thanked Cambodia for helping China maintain friendly relations with the Asean countries. Cambodia insists (paraphrasing from the same article) it’s not taking sides but actually taking a principled stand in urging members to settle their differences with China bilaterally, exactly China’s position. Well, now, if you were a 900 pound gorilla would you want to take on a pack of hungry hyenas one at a time or all together?

The dispute centers around China’s claim to the entire South China Sea encompassing about 2 million square kilometers, including areas that are very close, within figurative spitting distance, to the other countries but far from China, more than 2000 kilometers from the nearest mainland Chinese territory. Proximity doesn’t always infer right of ownership, but it’s a strong determining factor nonetheless. China’s claim goes back to the fifties when it drew a line around the South China Sea and said this is ours based on historical precedents. This would be akin to Mexico claiming California based on historical ownership while ignoring current US possession of more than 150 years. Or Spain claiming the same because they were there first, or why not go all the way back to Native Americans making the same claim?

There are three areas of concern regarding potential Chinese ownership of the whole South China Sea: first is possession of natural resources, supposedly there’s a lot of oil under the sea; two is fishing rights, in a very densely populated part of the world, of utmost importance; three, and most worrying for the international community is sea transport; about half of all oil shipments in the world and a commensurate amount of other trade passes through the South China Sea. It wasn’t till the seventies during China’s Cultural Revolution that serious claims were made in the area.

The current dispute with Japan over the Senkaku Islands – Daioyu in Chinese - in the East China sea is also instructive. Japan took over control of the uninhabited islands in 1895 when nobody was there and no other claims of sovereignty existed. It wasn’t until 1971, 76 years after Japan first took over, that China made its first claim or mentioned them at all. What is Japan supposed to do? take a deep bow and say, We’re sorry we’ve occupied your islands for more than a century, if it hurts your feelings we’ll pack up tomorrow.

Recent Chinese aggressiveness stems from three factors; a longtime inferiority complex and resulting quest for revenge regarding perceived past wrongs done to them, a desire on the part of the government to stoke the fires of nationalism to help it maintain control and divert people’s attention from the deficiencies of autocratic government, and a heady power that comes from their newfound economic prowess and wealth.

Chinese are still furious about the way they were humiliated by the British more than 160 years ago in the Opium Wars. They are rightly proud of their long history and rich culture but still don’t grasp how their xenophobia, feeling of superiority and aloofness back then kept them from changing and adapting to the modern world and thus made them vulnerable to relatively very small forces from the outside. Japan too made them feel small and inadequate in its easy takeover of parts of the country and the ruthless way Chinese people were treated. Now that they are borderline rich and powerful, they feel the need for revenge.

Still Japan is an important trading partner, to the tune of $350 billion annually, and investor and employer of many Chinese so it would seem to behoove China to minimize conflict with Japan. Recent news articles have implicated China in organizing the anti-Japan protests, which have turned violent and caused many Japanese to reconsider their commitment to China, all the while the state media counsel calm and non-violence. In Qingdao on September 15, rioters/looters spent more than four hours causing $30 million damage to a Japanese-Chinese joint venture supermarket. If they were Tibetans, Uighers or Falun Gong practitioners peacefully demonstrating they’d have their heads bashed in and taken to jail in a wink and a nod, but somehow the police in one of China’s largest cities stood helpless for 4 hours while a large supermarket was being ransacked.

Do they expect to humiliate Japan by forcing them to abandon the islands and still expect that country to maintain its massive industrial presence there? Maybe they feel so rich and powerful they can forego that economic relationship in spite of the great loss to both economies.

Let me relate an incident from my own experience while living in China in the mid-nineties. For three days Chinese TV news headlined a story about a few shipping containers from a recycler in New York that were sold as recycled scrap paper but actually were garbage. The question, continually repeated by news anchors in an insulted and angry tone was, Why is America sending us its garbage?

Having spent quite a few years in a cooperative recycling business in Portland I can offer a little background. Scrap paper is almost worthless. We received a token $5 per ton for it and the brokers received their shipping costs but not much more. We recycled it in spite of the loss because we believed in the cause. It all went to China where their low cost of labor allowed them to pick through it to pull out the more valuable stuff before recycling the rest for low quality uses. Because it was mixed paper people often mistook it for garbage, or would carelessly toss garbage in with it. Knowing the waste paper business and the probable lackadaisical attitude towards recycling in New York at the time, it wouldn’t be surprising if some or even a lot of garbage got mixed with the paper. It also wouldn’t be surprising if an unscrupulous outfit purposely misrepresenting their garbage as paper to save the cost of disposal and receive money for their ‘paper’. So a few containers worth a few hundred dollars sent by a private company became America Sending China its Garbage as an outrage and humiliation.

My Chinese wife, who I brought to America a year or so later, was amazed to see Made in China everywhere. So at the same time the Chinese media was casting America in the most derogatory terms as a means of stoking nationalism, it was making bundles of money while taking over the American market. I haven’t been back to China in 16 years but everything I hear tells me nothing really has changed.

For 16 years and more the US has been complaining about China’s manipulation of its currency to make their goods artificially cost less and for the same length of time China has promised to change and proceeded with very small adjustments just barely enough to temporarily appease the US and its other trading partners but not enough to change the reality on the ground. During that time it has amassed $3 trillion worth of foreign reserves, mostly in US dollars. This all came about because of capitalism’s love of doing business with a state which maintains firm control of its workers; forbidding unions or protests or any kind of dissention from the party line.

China for its part has taken the ball and run with it. With a combination of smarts and hard work in addition to currency and market manipulation and repression of workers, it has become too powerful not to want to flex its muscles and take what it considers its rightful place in the world, with threats of force if necessary.

China is now a communist country in name only. When I lived there my wife was a teacher in a minority kids’ boarding school. The teachers, administrators, students and maintenance staff all lived at the school in a gated complex. Health care and all social benefits were enjoyed by all. The maintenance staff lived in quite mean circumstances compared to the headmaster, but nothing like the gulf between the two levels today. At one point I met an important fellow who I was told had a lot of money. He rode a bicycle like everyone else because he didn’t want to flaunt his wealth. That’s communism. All that is finished, people are now on their own; the grave to cradle safety net - the Iron Rice Bowl - has been shredded.

Today, China much more closely fits the description of fascism. Quoting from my dictionary. “Fascism is a set of right-wing political beliefs that includes strong control of society and the economy by the state, a powerful role for the armed forces, and the stopping of political opposition.”

China has perfected the philosophy: The state controls everything important, all opposition is repressed, leaders live like royalty while the peasantry are exploited and oppressed for the benefit of the nation. Nationalism fits perfectly into the fascist mindset..

Consider the plight of China’s hundreds of millions of migrant workers. They work excessive hours for low wages, are segregated from and looked down upon by their fellow urbanites, they receive no benefits in the cities they live in, including not having the right to send their children to school, let alone healthcare or any other social services. They’ve worked hard to make China rich without receiving any of the benefits that are their due and certainly would be forthcoming in a true communist state. Illegal immigrants in America have more rights and receive more benefits than Chinese migrant workers in their own country. 

The question is why act the bully and turn your whole neighborhood into a conflict zone using a flimsy, if not specious, historical argument for a bunch of small uninhabited islands? China is a great country: Even if there are natural resources there, why play the ruffian and antagonize everyone around you? The answer is twofold: autocratic leaders need to feed the fires of nationalism to maintain their power, and they are basically clueless. Just as most Chinese people blindly follow the party line, the leadership is prone to take stands which almost everyone else in the world considers ridiculous. Their vendetta against the Dalai Lama is a case in point. He is very widely, if not universally, recognized outside of China as a wise and great spirit, an advocate for peace, yet to China he’s pure evil and every time he goes to visit another country China lodges a protest and threatens vague repercussions. To the rest of the world their attitude towards the Dalai Lama makes them a laughingstock. They are either so far out of touch they are oblivious or maybe they do understand the absurdity of their positions but don’t care because they cravenly feel the need to use him as a nationalistic focus, a foil to help maintain their power.

China has money to burn and knows how to use it to make friends with countries like Cambodia. Recognizing how important China is to Cambodia’s development plans, Cambodia will do all in its power to protect China’s interests, even against the wishes and interests of its neighbors.

Privitize Cambo - Giving Away the Farm

Cambodia now has its first stock exchange and the country’s political and economic leaders are all fired up about entering the world of ‘high’ finance. Well, maybe it’s not that high, but still they are proud of making a beginning.

The first stock listed is Phnom Penh Water Supply Authority, two others to follow are Electricite du Cambodge and Telecom Cambodia. All three are public utilities. All are reasonably well-run though the telecom company, the only one that’s not in a monopoly position and thus subject to market forces, is behind the times and not very competitive.

The capital’s water company is highly regarded amongst developing country public water systems: it’s well run and efficient. That means it’s well placed for privatization and public officials are giddy with having such a good candidate for their new stock market.

For the longest time, as far as everybody including the media was concerned the sell-off of public assets was considered all positive and there was no in-depth reporting as to the details and possible consequences of the move. However, anybody who keeps up with these trends in the world knows that privatizing essential services like water in a low-income country has almost invariably turned into a disaster. As well, private water companies have also often had a well-deserved bad reputation in rich countries. Privatization is also high on the agenda of the International Monetary Fund, the World Bank and conservative financial and political establishments. They hate to see potential profit centers go unexploited regardless of any possible negative impact on the people served.

There are often good rationales for privatization, since, according to prevailing economic philosophy, publicly owned enterprises are likely to be inefficient, uneconomic, poorly run and repositories for political patronage. Private companies, on the other hand are so well run, or so the ideology goes, they do everything cheaper and better and the people ultimately save money and receive better service by selling off their public enterprises to the free market.

You certainly wouldn’t want a government involved in a competitive market, like making shoes, for instance, as in Soviet times, because it would never work out well. However, if you’re dealing with an absolutely essential service which enjoys a monopoly market position the dynamic is totally different.

The first thing that happens when a public utility turns private is that rates go up. That is ostensibly to extend and improve service; in reality, in most cases, private utilities spend the absolute minimum on improvements, especially if they involve very long paybacks. The only way to keep them honest is to have strong regulatory systems in place, which, in the case of Cambodia, would constitute near miraculous intervention.

The purpose of a privately owned water company is to make a profit, everything else the company does is incidental and secondary to that primary goal. On the other hand, the mission of a public water utility is to provide clean water at the lowest possible price. When providing water, the most essential ingredient of survival, to a population in which many people are living right on the edge of existence, minimum cost is imperative.

Cochabamba, Bolivia provides a good example of the perils of privatizing water. As per the demand of international financial organizations - IMF, World Bank - Cochabamba’s water system was sold off to a multinational corporation. They immediately raised the rates to the point where large numbers of the peasantry could no longer afford water; which resulted in demonstrating and rioting and in no time at all, the utility was back in public hands.

At the very same time that the capital’s water company was put in the process of privatization, a small water provider was privatized in Ratanikkiri Province. Rates nearly doubled along with vastly improved service, but large numbers of people affected by the changes resisted and fought them. The government relented and gave the people a choice, either the old system which provided cheaper but relatively low quality water for about 12 hours a day, or the new privately owned system which offered 24 hour, better quality water at the higher rate. A lot of people, already barely scraping by, chose the cheaper lower quality public service.

So, after about a year of hearing about the privatization of Phnom Penh’s water company, without any details appearing in the media, I wrote to the Cambodia Daily to ask for better, more in-depth coverage. Maybe the information was ready to come out anyway because the stocks were about to be sold, but it turns out that only 15% of the company is being sold so that the municipality will retain complete control. They expect to gain about $20 million they can use for improvements and expansion at a much lower cost than borrowing. So, it may not be such a bad deal for the people after all; still, people don’t invest money without the expectation of returns. Sometimes returns on investment come as a result of rising stock values, but chances are that the utility is going to have to pay dividends so the money will hardly be free and the end result will have to wait for the passage of time.

Cambodia is actually a poster child for the conservative fixation on privatization and free markets. There are few import controls, except occasionally when specific industries are threatened, so Cambodian entrepreneurs are forced to compete. There are also few restrictions on investment, leaving the economy wide open. As often as possible provision of public services and development of public spaces has been left to private investors.

Cambodia is very well positioned to take advantage of this openness compared to surrounding nations. The decimation of the country’s industry and commerce in the Khmer Rouge years took the country all the way down to square one, so it needs a lot of imports for goods it can’t produce itself. Moreover being a small country it can’t really compete for investment in industrial scale operations, though if the ASEAN group ever gets its tariff free zone happening it won’t matter which country an industrial operation is located in.

Higher education provides a good example. The Royal University, founded in the fifties after the country became independent, was Cambodia’s first tertiary institution. The first private university, Norton U., was established in 1997. In the ensuing 15 years some 30 or 40 higher institutions have been opened, meanwhile the Royal U. has remained static, with no investment over the years. It works fine for the government, people get educated and it doesn’t have to pay for it. All it has to do is try to regulate the sector and establish standards, which, in the event, vary wildly. The drawback is the relative high cost of tuition in private institutions. Many potential students are left out because of the dearth of subsidized public education.  

Recent privatizations of public space in Phnom Penh also provide a good example of its pitfalls. In the last few years two large, centrally located pieces of land were traded away to rich Cambodians with no controls whatever. One was the former police headquarters at Streets 154 and 51, the other was the old T-3 prison site at Streets 154 and 13. Both sites are large enough, prominent enough and important enough to have warranted international design competitions. Both could’ve included large developed areas with quality buildings as well as substantial public squares and green spaces. What did we get instead? Most of the former police headquarters is now a public market with adjoining car park. The building is okay but nothing special - a cheap metal-roofed structure with a modicum of interesting design - though to its benefit, it does include a bandstand for music events. However, except for the market stalls fronting the streets, 80% of the stalls remain empty even after years on the market; it’s obviously wasted space. The former T-3 prison site is a hodge-podge of car repair shops, parking lots and buildings that range from non-descript to trashy. A tremendous opportunity for adding quality urban spaces to the city has been lost, at least temporarily: there are no structures of any real value at the T-3 site so a better designed future space is still a possibility.

Dam construction also provides a good example of the trade-offs inherent in depending on others for financing and construction. Cambodia heaps boatloads of gratitude on China and Vietnam for their willingness to fill the country with dams without it having to pay for them, but in the end it may rue the day. Often hidden in the fine print of the contracts are provisions that require Cambodia to not only pay a high price for the energy generated, but also a high price even if the energy’s not needed or produced. That’s leaving aside the environmental degradation and loss of fisheries that is always a corollary to large dam construction.

It makes sense for the dam builders: they’re not going to put hundreds of millions of dollars into dam construction without guarantees that they’ll get a return on their investments. However, so many dams are under construction or in the planning stages in addition to two coal-fired power plants in the works for Sihanoukville - one is a large 700 megawatts - that the country could soon be awash with power and require years of increasing demand before the electricity is needed. For instance, peak power demand in Phnom Penh, which is easily a large majority of the country’s total demand, is 350 megawatts, whereas the one S-ville coal plant, by itself, will produce 700 megawatts. Cambodia may well find itself paying through the nose for power it has no use of.

The other alternative is to become a power supplier to neighboring countries. Electricity from the controversial Lower Sesan Dam in Stung Treng is intended almost exclusively for export to Vietnam. It’s one thing to sacrifice one’s own environment for the sake of needed electricity, but to do so strictly for export is pure folly, the free market gone wild; though in truth, sacrificing one’s land for quick bucks is nothing new and happens as easily in America as it does in developing countries.

  Finally, probably the most discouraging aspect of Cambodia’s give-away-the-farm mentality is the granting of economic land concessions on a grand scale. Twenty-two percent of the country’s entire land surface, nearly 4 million hectares, has already been given away in land and mining concessions and the give-away is continuing apace. That includes large swaths of national parks and conservation areas.

The largest concession - 315,000 hectares which is equal to 3150 square kilometers - was granted in 1997 to a ruling party senator. Even with that vast holding, he still has frequent conflicts with the locals; he can’t stand to let villagers living within the concession have a few hundred hectares… typical of the filthy rich.

That was before a 2005 law that limited concessions to 10,000 hectares, equivalent to 100 square kilometers. However, there are ways to get around that limitation: in one case four adjacent concessions, each nearly 10,000 hectares, have been granted to four companies owned by the same corporation, a Vietnamese one at that. Isn’t it ironic that individual foreigners are not allowed to own small plots of land but immense holdings are granted to foreign corporations?

A prominent CPP lawmaker quoted in the Cambodia Daily strongly defended the practice of granting concessions as important for the country’s development and said the poor people being displaced should be willing to sacrifice for the good of the country. It’s easy for a rich lawmaker to speak about the need for the peasantry to give it all up for their homeland. While many of the villagers displaced by land concessions are given plots of land elsewhere, they’re often either poor quality land or in places where they have a hard time earning money. There will be jobs offered in the rubber, oil palm and sugar plantations but they’ll be low paid, not very desirable jobs. Nearly every concession involves displacing local people or the destruction of the forests they depend on for their livelihood. In some cases, the government discovers years later that the area has been logged, the grantee has pocketed the profits and then has failed to develop the land as proposed. They then yank the concession, but by then the damage has been done.

The plan to convert immense areas of the country into corporate plantations reminds me of the great inequality that exists in many Latin American countries as a result of the colonists taking land that was previously held in common and dividing it up amongst themselves. The result has been that a few percent of the population descended from the original colonists owns almost all of the land. The rest are landless peasants. In a sense, Cambodia is being recolonized: large areas are going from public ownership into corporate ownership.

It’s easy to understand the leadership’s eagerness to give away the farm: they get permit fees and the land is developed without any cost to the government. In my mind, rather than give 10,000 hectares to a corporation, it’d be far better to grant 100 hectares each to 100 people, or 10 hectares each to 1000 people and then provide the training and wherewithal needed to plant the rubber trees, etc. That way the profits and benefits are spread around to large numbers of people rather than the profits going to corporations or the wealthy and the peasantry left with low wage, peon work.

That of course would require planning, investment and organization, rather than simply pocketing the commission fees (both overt and under-the-table) and walking away. Unfortunately, that goes against the prevailing wisdom that corporations always know best and privatization is the only legitimate way to develop a country.

All in all, the mania for giving away the farm may well bring development to the country - rubber, oil palm and sugar cane are all likely to be in high demand in the future - but it’s a very big question whether that growth will benefit the people at large. It may turn out to be a classic case of the folly of trickle-down economics where, in the event, a lot of money goes directly to the top, while only a pittance trickles down to the bottom.

I don’t doubt that Cambodia’s public officials are sincere in their beliefs that they’re doing the right thing for the country, whether or not they are personally benefiting. There’s also no question that development is desperately needed, but in their zeal to give away the farm I fear they will also be giving up a lot more and that all Cambodians, outside of the elite few, will, in the final tally, be losing out.