Cambodia Report

News and views on Cambodia

Compiled by Farib Sos

Vol 1, No 2 June 1999

In this issue-

Indonesian election could finish ASEAN: British expert
.c Kyodo News Service

LONDON, June 8 (Kyodo)
-- Indonesia's first free elections since 1955 could spell collapse for the Association of Southeast Asian Nations (ASEAN), irrespective of who wins, a British expert said Tuesday.

If Jakarta uses its experience of a nonviolent campaign for Monday's parliamentary poll as a pretext for pushing other ASEAN countries into democratic reform, it could put ''unsustainable pressures'' on the association, Tim Huxley of Hull University's Center for Pacific Asia Studies told Kyodo News.

The ASEAN principle of noninterference in members' affairs -- sacred since the organization was founded in 1967 -- could come under strain if Indonesia uses its election to lobby less democratic regimes, such as Myanmar, Huxley said.

But Huxley said Indonesia would more likely stick to noninterference as it is not in Jakarta's interest to see the 10-member group fail as a regional organization.

''Indonesia needs ASEAN to continue as a vehicle for it to influence the region and as a buffer to keep great power interest -- mainly from China -- out,'' Huxley said.

Professor Michael Liefer, head of the London School of Economics' Asian Study Group, also spoke of the implications of the election on ASEAN when addressing a policy seminar in London on Monday.

''After the last few years of turbulence, and especially last summer's upheavals (when former Indonesian President Suharto resigned), the elections are vital to the stability of Indonesia, which in turn could give ASEAN a greater sense of direction and focus,'' Liefer told the group of academics and reporters.

Liefer highlighted two points which have forced ASEAN to change since its formation more than 30 years ago.

''Given the diminution of Indonesia's standing and ASEAN's enlargement, it is not the same organization as in 1967. It still has a minimal defensive role, but is now faced with the problem of managing consensus among different nations,'' Liefer said.

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Red carpet and protests greet Vietnamese party chief in Cambodia
PHNOM PENH, June 9 (AFP) - Vietnamese Communist Party chief Le Kha Phieu arrived in the Cambodian capital Wednesday to a red carpet welcome, despite security forces breaking up anti-Vietnamese protests.

Officials from both sides described lengthly high-level talks -- aimed at resolving long-running border disputes and concerns over illegal migration -- as securing "progress" towards a settlement.

"We have agreed to solve the Cambodia-Vietnamese border issue before the year 2000," Cambodian Foreign Minister Hor Namhong told reporters after three hours of discussions.

"Regarding immigration, the Cambodian government must provide security to the Vietnamese immigrants. It is our duty to do that."

Vietnamese Foreign Minister Nguyen Manh Cam said the two sides would Thursday sign three agreements on information, education and industrial cooperation to mark an end to the two-day visit.

The visit has been hailed as a boost to Vietnamese-Cambodian ties, which remain dogged by frontier disputes and memories of Vietnam's 1979 to 1989 occupation of the country.

However, there was a red carpet welcome for Le Kha Phieu at the airport by King Norodom Sihanouk, Prime Minister Hun Sen and the entire cabinet before he was whisked to the Royal Palace along spruced-up boulevards lined with thousands of flag-waving schoolchildren.

A protest by university students burning tyres and Vietnamese flags close to the motorcade's route was broken up by heavily armed police, and witnesses said two prostestors were arrested.

On Tuesday, police swooped on students planning anti-Vietnamese demonstrations, destroying banners and consfiscating leaflets alleging Vietnam was encroaching into Cambodian territory.

"All we want to do is remind our neighbour to respect our national integrity," asserted Saro Sivatha, who heads the Student's Movement for Democracy.

Le Kha Phieu is scheduled to hold a series of talks with King Sihanouk, Hun Sen, Parliamentary Speaker Prince Norodom Ranaridhh and Senate President Chea Sim.

The visit comes just a month after Cambodia's entry into the Association of Southeast Asian Nations (ASEAN), membership that was keenly sponsored by Vietnam.

Preparations for the welcome went to unprecedented levels. The Vietnamese Friendship Monument, which is loathed by many Cambodians, has been cleaned up, and a park outside parliament covered with Vietnamese flags -- but kept under close guard.

Hun Sen and his dominant Cambodian People's Party (CPP) -- installed as rulers after a Vietnamese invasion ousted the Khmer Rouge in 1979 -- continue to enjoy close ties with Hanoi, but the visit has raised painful memories for some residents.

"A reception like this should not be given unless they give our land back," complained one student watching the welcome. "People should throw away the Vietnamese flags."

Vietnam asserts it saved Cambodia from Pol Pot by invading in 1979, and has also repeatedly expressed concern about the treatment of at least 100,000 ethnic Vietnamese living in Cambodia who have been victims of racial attacks.

Cambodians blast selective justice as western victims seek more
PHNOM PENH, June 8 (AFP) - As a former Khmer Rouge commander on Tuesday began his life sentence for the 1994 slaying of three western tourists, both Cambodians and relatives of the victims said questions remained over whether adequate justice had been delivered.

Several Cambodian papers blasted the "selective justice" of the sentencing of former rebel Nuon Paet, found guilty of ordering the killing of Frenchman Jean-Michel Braquet, 27, Briton Mark Slater, 26, and Australian David Wilson, 29.

"Are the 13 dead Cambodians animals or humans?" headlined the opposition Moneaksekar Khmer (Cambodian Conscience) daily newspaper, refering to the 13 little-mentioned other fatalities in the July 1994 train ambush.

"The three white skinned victims were from countries that have economic and political power in Cambodia," the paper noted.

The nationalist Samleng Yuvachon Khmer (Voice of Khmer Youth) said "unless (Prime Minister) Hun Sen brings to trial other Khmer Rouge leaders for killing thousands of Cambodians then justice will never be done."

"This trial shows the lives of Cambodians is cheap," it said.

Another opposition-leaning paper, the Udom Katek Cheat (National Ideal), said the "show trial" was aimed at "legitimising Hun Sen on the international platform."

Pro-government papers gave the trial front page photo coverage, but their editorial comment was conspicuous in its absence.

A genocide researcher and local campaigner for a genocide trial, Youk Chhang, said the anger echoed by several residents here was symptomatic of the lack of faith Cambodians have in their legal system.

"For Cambodians kidnap and murder is a daily reality that is never dealt with," he told AFP. "The problem is people in Cambodia don't know how to file complaints."

However he said the trial, which was the first time a Khmer Rouge leader had been put in the dock since the genocidal movement collapsed in 1979, had "pushed the boundaries forward."

"But it depends if the relatives of the victims demand more face charges: it is in their hands to take this rare opportunity to battle impunity in Cambodia."

Legal sources said two other former senior rebels present at the trial as witnesses and who now hold senior government posts -- Sam Bith and Chhouk Rin -- would also be charged for their role in the killings.

Government sources said the pair have been temporarily demoted from their ranks as two-star Major-General and Colonel respectively earlier Monday, and "could be arrested at any time," their immunity from prosecution stripped.

Initial diplomatic reaction has been cautiously positive over the trial, which although unrelated to Pol Pot's genocidal rule of Cambodia in the late 1970s, the handling of the high-profile case was seen as an unprecedented test of the country's legal system.

Cambodia is also preparing to try captured Khmer Rouge military chief Ta Mok and the movement's chief executioner, Duch. The two face charges over their role in the killing of up to two million Cambodians from 1975 to 1979.

Australia's Foreign Minister Alexander Downer said the life sentence was "appropriate for the murder of an Australian citizen."

The lawyer for the Australian family has demanded Sam Bith and Chhouk Rin also stand trial for the killings. Downer welcomed the decision to lift immunity on the two.

But the French family have labelled Nuon Paet -- who on Monday said he was the victim of "injustice" -- a "scapegoat."

"Though absent from the dock, the guilty ones were in the courtroom," said Braquet's mother, alluding to the presence of Nuom Paet's Khmer Rouge military superior Sam Bith and Bith's deputy Chhouk Rin.

The family's lawyer Gerard Baudoux said the family had filed a suit in France and that the case was in the hands of a Paris anti-terrorism judge Jean-Louis Bruguiere.

The Braquet family have been vocal in criticising the government's reported botching of a ransom payment and subsequent bombardment of Nuon Paet's base while the hostages were still alive.

Britain's ambassador George Edgar and the mother of the British victim, Dorothy Slater, said they were "pleased" with the verdict and would closely watch for further investigations.

Tragic adventure that turned to test for Cambodia
PHNOM PENH, June 7 (AFP) - On July 26, 1994, three western backpackers took an ill-fated train ride from Phnom Penh to southern Cambodia's undiscovered golden beaches. But the risks were high.

The stunning rolling countryside through which the slow diesel locomotive wound its way was infested with Khmer Rouge rebels and opportunistic bandits keen on whatever pickings a train could offer, and the train's guards were little match for a well planned attack.

Ambushed, Frenchman Jean-Michel Braquet, 27, Briton Mark Slater, 26 and 29-year-old Australian David Wilson were plucked by the shadowy Khmer Rouge from obscurity and freedom to captivity and the world's headlines.

A ransom of 150,000 US dollars was demanded, but the payment was botched and some of the ransom reportedly went missing. Then the Khmer Rouge demanded an end to French, British and Australian military assistance to Cambodia as a new condition.

The kidnapping case became international news and a point-scoring exercise between the government and the notorious rebel movement.

The government responded with an artillery barrage of rebel commander Nuon Paet's Phnom Vour base, where the hostages were believed to be held. A videotaped plea by the three captives failed to secure a resumption of talks.

Under bombardment and encircled by government forces, Chhouk Rin defected to government ranks, helping Phnom Penh forces to capture Nuon Paet's base.

Nuon Paet fled, and in October the bodies of the three hostages were dug up from shallow graves in a landmine-strewn forest close to his base.

The 53 year-old commander was Monday judged guilty as the rebel responsible for the kidnap and subsequent killing, but key questions remain unanswered and continue to dog the anguished victims' relatives.

"This has destroyed my life," said Jean-Claude Braquet, Jean-Michel's father. "This is an affair that should never have happened."

Braquet has blasted the government for allegedly botching the ransom payment and claimed Phnom Penh cynically exploited the kidnappings for political points on the international stage.

Now facing charges are Nuon Paet's then-superior Sam Bith -- now a two-star general in the Cambodian army -- and Chhouk Rin, also promoted within government ranks as a reward for his well-timed switch of loyalty.

Prime Minister Hun Sen's policy of "national reconciliation" faces a test. The government is eager to satisfy foreign friends calling, but is equally determined not to unravel the close links it has built with former senior Khmer Rouge rebels whose defections helped to destroy the genocidal movement.

With a precedent set of even loyal defectors facing the prospect of trial, scores of former rebels could be unnerved that the value of their immunity deals may not be all that was initially promised.

Human Rights Group Says Khmer Rouge Trial Not up to Scratch
AP 08-JUN-99

PHNOM PENH, Cambodia (AP) -- The conviction of a Khmer Rouge commander for ordering the murder of three Western tourists marked a positive step for Cambodia's courts, but the trial still was far short of international standards, a human rights expert said Tuesday.

The one-day trial Monday of Nuon Paet, a former guerrilla commander, was closely watched for signs that the courts might be able to organize a tribunal for the bigger Khmer Rouge leaders responsible for the genocide that turned Cambodia into a killing field between 1975 and 1979.

Sara Colm of New York-based Human Rights Watch said because the strongest witnesses were on videotape, there was no cross-examination.

"It seemed the court really made an effort and the trial proceedings did not appear orchestrated," she said. "But if this is the best they can do, it doesn't bode well for a future Khmer Rouge tribunal in Cambodia."

Nuon Paet was found guilty of the abduction and murder of the three backpackers and received the maximum penalty of life in prison. He shouted, "Unjust!" as he was led away in handcuffs.

Two other former Khmer Rouge commanders, both of whom defected to the Cambodian government and are now high-ranking army officers, were called to testify against Nuon Paet. In a surprise move, they were also charged with the crimes.

Judge Boninh Bunnary called a host of witnesses, allowed both sides to present their case and asked probing questions.

But Colm pointed out that there were many idiosyncrasies that would not be tolerated in a developed democracy, including reliance on a videotape of witness testimony apparently more than four years old.

The Cambodian government and the United Nations are negotiating the formation of a tribunal to try senior Khmer Rouge leaders for genocide in the deaths of an estimated 1.7 million people.

South China Morning Post, June 9, 1999

'10 wise men' meet to chart greater global role for group
Singapore (AFP) -- Prominent representatives of the 10 ASEAN members met for the first time yesterday to ponder the future of a diverse grouping rocked by a severe economic crisis and a host of political problems.

The Eminent Persons' Group (EPG), formed after December's summit in Hanoi of the Association of Southeast Asian Nations (ASEAN), will try to chart a greater global role for the bloc in the 21st century.

"These are difficult and yet challenging times for Asean," said Singapore Foreign Minister Shanmugam Jayakumar, who is also chairman of ASEAN, in remarks opening the talks.

He said the EPG members had "the important task to provide insights and ideas to guide our leaders in planning for ASEAN's future".

"It is a fitting challenge, and given your vast experience and talents as well as diverse background, I am confident that you will be able to offer new perspectives and path-breaking recommendations for our leaders' consideration."

Asean, founded in 1967 as a pro-Western bloc at the height of the Cold War, has now expanded to embrace the whole region.

Key members, led by Indonesia, have been rocked by economic and political difficulties since 1997, and the group's tradition of quiet consensus is now giving way to more frank exchanges and even open discord.

The "10 wise men" who will advise Asean include former ministers, ambassadors and academics.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Burma, the Philippines, Singapore, Thailand and Vietnam.

The EPG, patterned after advisory groups formed by international organisations seeking independent views on their future, will meet three times over the next 12 to 18 months and submit a report to the heads of government.

It was asked to make recommendations on how to promote peace and stability, develop Southeast Asia into an economic region with free flow of goods, services, investments and capital, and examine Asean's role in regional and international affairs.

The EPG members include Brunei's Foreign Ministry permanent secretary Lim Jock Seng, Cambodian Royal Academy president Sorn Samnang, Indonesian strategic analyst Cornelius Luhulima, Laotian Vice-Minister for Foreign Affairs Phongsarath Boupha, Burma's former ambassador to the United States U Ba Thwin and Singaporean law dean and MP Chin Tet Yung.

Oxford Analytical Daily Brief(c) Friday, June 4, 1999

Prospects for the Cambodian economy.
SIGNIFICANCE: Strong growth in the garment sector underpinned respectable export growth last year, despite the impact of the East Asian crisis. Greater political stability and a resumption of aid point to economic recovery in 1999 after zero growth in 1998.

ANALYSIS: Cambodian exports were relatively strong last year, despite the continuing East Asian crisis. Backed by strong growth in the garment sector, exports rose by 14.3% in value terms. Apart from garments, most of the country's exports are primary commodities which have been badly affected by slack world demand and the sharp fall in commodity prices. Imports rose 7.4% in 1998, resulting in a smaller trade deficit.

The garment sector continues to perform well. In 1998, exports grew by 66%, to 378 million dollars. This was followed in first quarter 1999 by year-on-year growth of 124%, bringing the value of garment exports in the first quarter to 132.6 million dollars. Garment exports now account for approximately one-third of total exports by value. Strong growth in the sector followed the award of normal trade relations (NTR) by the United States in 1996 along with similar privileges from the EU. In May 1997, Washington also awarded Generalised System of Preferences (GSP) privileges to Cambodian garment exporters. US trade privileges have given Cambodia an advantage over its neighbours, Vietnam and Laos, since neither has yet received NTR.

Rapid growth in the sector has continued despite the East Asian crisis and recent domestic political instability. In part, this is explained by the fact that around 70% of garment exports go to the United States, while the remainder go to Europe. However, it is also the case that the predominantly overseas Chinese investment which has underpinned growth in the sector has been relatively unperturbed by periodic outbreaks of instability. In the worst outbreak of political upheaval -- the 1997 coup engineered by the current prime minister, Hun Sen (see OADB, July 8, 1997, II) -- a number of garment factories were looted, but it was not long before they re-opened and new investment in the sector flowed in. At the end of last year, there were 139 garment factories in Cambodia. Although the industry's rapid rise has been accompanied by some labour unrest amid allegations of poor pay and labour conditions, this has generally been on a minor scale.

Market access for the garment industry is likely to become more of a problem in the future. In January, the United States imposed quota restrictions on twelve categories of Cambodian garments. As Cambodian garment exporters focus on increasing their penetration of the now less restricted European market, it is likely that the EU will follow the United States' lead. However, there is still scope for strong growth in the sector in the short and medium term.

Economic recovery drivers. After recording 2% GDP growth in 1997 and zero growth in 1998 as a result of a combination of political instability, loss of aid and the East Asian crisis, the outlook is for stronger growth in 1999. Apart from current trade growth, a number of other factors are likely to contribute to recovery this year: Short-term political stability. Following the November 1998 political settlement (see OADB, November 26, 1998, IV), the new coalition government is currently experiencing something of a honeymoon. Cambodian politics are still fundamentally unstable, but in the short term the economy will reap the benefit of enhanced business confidence. Membership of ASEAN, which Cambodia joined in April, has also buoyed confidence. This is likely to result in new domestic and foreign investment in 1999 despite the continued effects of the Asian downturn. The tourism sector is already benefiting from perceptions of greater political stability. According to the tourism ministry, foreign arrivals in the first quarter of 1999 were 60,770, up 22.0% on the same period last year. This compares with a 14.8% fall in arrivals for the whole of 1998.

Aid flows. In February, the meeting of the Consultative Group (CG) of multilateral and bilateral aid donors in Tokyo resulted in new aid commitments of 470 million dollars for 1999. This compares with 450 million pledged when the CG last met just before the 1997 coup. Those aid donors which suspended aid after the coup have now resumed funding. This is likely to have a beneficial effect on growth although the impact will be greater in 2000 than in 1999 given the time it will take to disburse the new money. The government has yet to sign an agreement with the IMF on a new structural adjustment programme. This could take some time because, after its recent experiences in Cambodia, the Fund will want to clarify reform targets before agreeing to lend. There have also been suggestions that Tokyo is considering resuming yen loans, but no timescale has yet been announced.

Agriculture. Agriculture accounts for over 50% of GDP. As a legacy of war and political conflict, rural areas remain extremely poor, with some of the worst health statistics in the region and rural infrastructure non-existent or in a bad state of repair. Recently, there have been reports of increased land disputes as demobilised soldiers (government and Khmer Rouge) reclaim or seize land. Nevertheless, the 1998-99 rice harvest was better than expected, producing around 3.4 million tonnes compared with 2.8 million the previous year. This is likely to have a beneficial impact on economic growth in 1999. Heavy rains have since caused some damage to the smaller dry season crop, but not significantly so. Moreover, reservoirs are currently full, which bodes well for the 1999-2000 rice harvest.

Inflation and the exchange rate. Inflationary pressure has eased since the second quarter of 1998. During 1999, inflation will continue to be modest on the back of lower food prices following the better-than-expected harvest. Furthermore, the likelihood of greater stability in the riel in the months ahead suggests a diminished risk of imported inflation during 1999. The riel has been more stable since the November 1998 political settlement. In the first quarter of 1999, it weakened but only slightly. This pattern is likely to continue over the course of the year, with large falls now unlikely.

There is some concern in relation to the fiscal deficit. Money supply growth continues to be rapid reflecting the monetisation of the deficit, which is inflationary. Moreover, the government announced a 30% increase in public sector wages in April, which will result in a large increase in current expenditure. The government says this is affordable given anticipated revenue increases from the newly introduced value-added tax (VAT). However, with economic growth likely to be still well below its trend rate -- if recovering -- in 1999, there is a danger that the government is being over- optimistic.

Reform outlook. Aside from political stability, the outlook for economic growth ultimately rests on the government's ability to implement reforms. Hun Sen recently emphasised the administration's reformist credentials, announcing plans to clamp down on illegal logging, reduce the size of the armed forces and streamline the civil service. In February, plans to privatise the rubber industry were also announced. Having now been admitted to ASEAN, Cambodia is required to begin lowering tariff barriers in line with the ASEAN Free Trade Area (AFTA). All of these reforms have major fiscal implications. The government's introduction of VAT in January was partly in preparation for the anticipated loss of customs revenue as trade tariffs fall. Tightening central control over public finances will be a particular test of the government's strength and reform commitments. Although some are suggesting that Hun Sen may emerge as the authoritarian leader capable of turning the country around, it is too early to say this with any confidence. In the short term, the obstacles to reform will remain substantial.

CONCLUSION: GDP growth of around 3% and inflation of around 10% are likely in 1999. In the longer term, growth depends on continued political stability and progress on reforms.

The Cambodia Report is compiled by Asia Pacific Research Institute
Unless otherwise noted, information is extracted from media reports.
Materials included in the Report do not necessarily reflect policies or opinions of the Board of Trustees or its members.

Compiler: Farib Sos, Asia Pacific Institute of New Zealand, PO Box 2152, Wellington New Zealand
Mobile phone: 021 660 947; e-mail:
Tel: +64 4 934 5133; fax: +64 4 934 5134
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