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Generational Dynamics Web Log for 16-Aug-2018
16-Aug-18 World View -- China-Cambodia grow closer militarily, as Hun Sen steals parliamentary election

Web Log - August, 2018

16-Aug-18 World View -- China-Cambodia grow closer militarily, as Hun Sen steals parliamentary election

China's military aid and infrastructure investments bring debt trap to Cambodia

by John J. Xenakis

This morning's key headlines from

China-Cambodia grow closer militarily, as Hun Sen steals parliamentary election

New casinos in Sihanoukville, a byproduct of Chinese investment (Bloomberg)
New casinos in Sihanoukville, a byproduct of Chinese investment (Bloomberg)

Nobody is surprised that the Cambodia People's Party (CPP), led by Cambodia's dictator Hun Sen, won the recent national parliamentary election. Still, it's breathtaking that the National Election Committee (NEC) announced on Wednesday that the CPP had a clean sweep, and had won all 125 parliamentary seats up for election.

65 year old Hun Sen came to power in 1985, in the midst of an invasion by Communist Vietnam (1979-89), which followed the "Killing Fields" civil war, where Communist leader Pol Pot led the Khmer Rouge to kill some two million civilians.

Cambodia used to have reasonably fair elections. It was an ally of the United States, the European Union and the West in general, helping it on the road to a democracy with fair and free elections. Everything was swell, as long as Hun Sen was the overwhelming victor in elections.

All that changed with 2013 election, when the opposition party, the Cambodia National Rescue party (CNRP) came close to winning, with 44% of the vote compared to 48% for the CPP. Rather than risk losing an election, Hun Sen became increasingly authoritarian. Political opponents were jailed or assassinated, and Hun Sen took control of all the media, making the once independent newspapers nothing more than government CPP party organs, and closing all radio stations critical of the government, including Voice of America.

The coup de grâce came last year when the leader of the CNRP, Kem Sokha, was jailed on trumped-up charges of "treason." Then the court, under Hun Sen's control, ordered the complete dissolution of the CNRP, the only viable opposition party. So that explains how Hun Sen's party was able to win all 125 parliamentary seats.

These actions by Hun Sen in the last few years have come under increasing international criticism by human rights organizations, and by pressure from the West, including the United States, Australia and the European Union. The United States has already sanctioned the commander of Hun Sen’s bodyguard unit, for carrying out “serious acts of human rights abuse against the people of Cambodia.”

The European Union is threatening to go farther, by threatening trade sanctions against Cambodia, particularly by withdrawing the "Everything But Arms" (EBA) trade preferences that Cambodia enjoys with the EU. The EBA grants developing countries such as Cambodia quota free and duty free access to the EU market. In 2017, Cambodia had $6.2 billion in revenue from exports to the EU, and avoided paying $676 million in duties because of the EBA.

That money would have to be paid if the EBA were withdrawn, resulting in high unemployment among Cambodia's 700,000 garment workers, many of whom are heavily indebted. Because withdrawing the EBA would hurt the Cambodian people, rather than Hun Sen and the Cambodian leaders, there is a big reluctance to do it. Reuters and The Conversation and VOA and Al-Jazeera

China's military aid and infrastructure investments bring debt trap to Cambodia

As the West has been increasingly critical of human rights abuses in Cambodia, Cambodia has gotten closer and closer to China, where human rights abuses, including torture, rape, jailings and assassinations are perfectly OK.

In March of this year, hundreds of Cambodian and Chinese soldiers held "Golden Dragon," a 15-day joint military exercise in central Cambodia, involving live-fire rocket launches from helicopters, mock tank battles, and anti-terrorism and emergency relief training.

Last year, Cambodia suspended a planned joint military exercise with the U.S. Army, called Angkor Sentinel, that was to have been held for the eighth year straight. Also canceled was a long-running U.S. Navy program that provided humanitarian assistance in the country. Cambodia said its forces were too busy to join the annual exercise.

Then in June, China pledged $100 million in military grants for training and equipment for the Cambodian military. These grants are, of course, made with no concern for human rights, as would be the case with Western grants.

China is also providing funding for major infrastructure projects, including dams along the Mekong River and hydroelectric plants. In June 2018, a leaked environmental impact assessment report on the proposed Sambor Hydropower Dam project in Cambodia revealed that constructing a dam at the proposed site could "literally kill the [Mekong] River."

Developing hydropower dams is the Cambodian government’s highest energy priority. Currently, the government is aggressively pursuing this goal with the help of Chinese companies, for which a series of dam projects have been granted approvals.

So far, all of Cambodia’s hydropower plants have been developed under 50-year build–operate–transfer contracts. Under these contracts, all revenue accrued will flow to the Chinese companies operating the dams. Only at the conclusion of the contracts will each plant’s ownership and revenue be transferred to the Cambodian government. Before this time, the current hydropower plants are creating very little income for Cambodia.

In fact, this is turning into yet one more example of a China "debt trap" situation, in many ways similar to the situation in Pakistan that I described yesterday, and in other countries as well. China has made huge infrastructure developments in the capital city Phnom Penh, and more so in the Sihanoukville seaport. One resident is quoted as saying:

"Everything has changed in Sihanoukville in just two years. Before it was really quiet here, but not any more with all the Chinese construction. I am worried that it’s very destructive to the environment, all this building.... And what will happen when all the construction is finished and thousands more people come? There will be no Cambodia left in Sihanoukville."

Sihanoukville has given itself over entirely to Chinese investment, with a $1.1 billion investment from China in just the past year. Chinese casino owners have also taken advantage of the nonexistent gambling regulation and lax money-laundering laws to set up an empire that is accessible only to foreigners – because gambling is still illegal for Cambodian locals.

The key complaint for many in Sihanoukville is that even though Chinese investment brings wealth, it is mainly kept within their own community. Chinese residents and visitors buy from Chinese businesses and visit Chinese restaurants and hotels, ensuring the trickle-down effect is minimal.

However, Cambodia has the fastest growing debt in all of Southeast Asia. The debt trap will occur when Cambodia is unable to make the payments on its debt. At that point, China will do as it's done before: Take control of the infrastructure assets it funded, and leave the country with a large enclave of Chinese workers and their families, and enclave that will be there forever. VOA and The Diplomat and East Asia Forum and Asia Nikkei and Reuters

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(Comments: For reader comments, questions and discussion, see the 16-Aug-18 World View -- China-Cambodia grow closer militarily, as Hun Sen steals parliamentary election thread of the Generational Dynamics forum. Comments may be posted anonymously.) (16-Aug-2018) Permanent Link
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