Diplomacy, Gunboats and Money
Good morning, Cambodia. It's Friday, June 4. Welcome to the inaugural edition of The Weekly Dispatch.
Top news this week was the state visit by the U.S. Deputy Secretary of State, who held “candid” talks with the government. Phnom Penh Covid-19 case numbers became even harder to find. “New” health restrictions sent people scrambling for clarity. And NagaWorld — after losing every previous fight — started yet another conflict with its workers' union.
THE LEDE
Money Talks
The arrival of U.S. Deputy Secretary of State Wendy Sherman came with a big question: Would she meet with Kem Sokha?
She did, and the pair “discussed issues of shared importance, including ensuring a peaceful, prosperous, sovereign, and democratic future for Cambodia,” according to an embassy statement.
The first official visit of the Biden administration comes after years of a government clampdown on Cambodia's civil space. Relations with the U.S. have been rocky since 2017, when authorities arrested Sohka on treason charges and the Supreme Court outlawed the main opposition party, the CNRP.
That hasn’t deterred trade, however. Exports to the U.S. reached $6.6 billion in 2020 and are on pace to surpass that in 2021.
That policy looks like lots of carrot and very little stick. As long as the government suffers no penalties for backsliding, an embrace of multiparty democracy seems improbable.
China, China, China
The other big topic on the U.S. agenda: China.
The U.S. has for years been uncomfortable with Cambodia’s tightening embrace of China, notably its construction of a massive resort and runway in Koh Kong and its funding for new development at Ream Naval Base.
Sherman told Prime Minister Hun Sen the Chinese military presence undermines Cambodia’s sovereignty, threatens regional security and negatively impacts U.S.-Cambodia relations.
But Hun Sen is a master at playing the two superpowers against each other, and China has been happy to comply, giving the government hundreds of millions in financial aid each year.
Cambodia would love millions from the U.S., too. But without a more robust democracy, U.S. largesse appears remote, and American influence in the kingdom looks likely to remain a whisper.
The Money Lon Nol Took
In a pivot from his long-standing refusal to pay, Hun Sen now appears open to tackling Cambodia’s 50-year-old debt to Washington.
During the early 1970s, the U.S. loaned the Lon Nol government about $270 million — about $700 million today, with three percent interest — that Cambodia has never repaid.
Cambodia argues the cash was given under vague terms. It remembers the money as aid, not loans. Since taking power in the 1980s, Hun Sen has declined to pay, calling the money a “dirty debt.” America was, after all, bombing the holy hell out of the countryside at the time, and Cambodia needed the cash to support a displaced and hungry population.
In talks with Sherman, Hun Sen implied that under the right terms, Cambodia might be willing to repay some of the debt — but not all. And only at a lower interest rate. Maybe.
For now, the move looks more like a negotiating strategy than a genuine policy shift. It could be an easy way to give a little on less important issues while giving nothing on the hard topics — like loosening the vice-like grip on civil discourse, or letting Kem Sokha back into politics.
TOP STORIES
Covid-19 Case Numbers, Where are Thee?
Why are consistent Covid-19 infection figures so terribly elusive?
The Ministry of Health stopped reporting provincial numbers weeks ago, leaving each province to make its own announcement. Then last Friday, Phnom Penh stopped announcing daily totals. Researchers have been able to tease out numbers, adding from here, subtracting from there, but credible results have been uneven at best.
Covid-19 definitely has gained a foothold in the provinces.
On Tuesday, Kampot banned alcohol sales and imposed an overnight curfew after 57 casino workers tested positive. On Thursday, Kep did the same, closing restaurant dining and imposing an overnight curfew. Alcohol sales remain banned in Siem Reap and Sihanoukville, and at least a dozen provinces have reported double-digit new cases over the last week. Four have reported triple-digit increases.
Phnom Penh is probably worse. But maybe not. Who knows? The lack of information borders on dereliction.
Some good news: More than 2 million Phnom Penh residents are fully vaccinated, and the Ministry of Health predicts the campaign to vaccinate the capital will be completed by the end of June.
No, Covid-19 Restrictions Have Not Changed
As the capital nervously watches daily Covid-19 case numbers creep toward earlier highs, Phnom Penh City Hall issued yet another 14-day extension on health restrictions for high-risk venues.
The news, topped by a poorly worded headline, sent many scrambling for clarity. A new lockdown? Restaurants are closed again? What’s going on?
In fact, nothing changes except the rule regarding public gatherings, which officials have increased from 10 to 15.
Otherwise, things that have been shut since Feb 22 stay shut, including schools, KTVs, nightclubs, discos, beer gardens, casinos, resorts, museum, parks, massage parlors, cinemas and sport centers.
Act accordingly.
Dividends, Pitch Forks, and Picket Signs
NagaWorld this week handed layoff notices to roughly 600 employees, including every top union official, potentially setting up a protracted labor clash as the company eyes a return to business.
The move against union leadership is surely a bad bet, as union leaders are certain to file a complaint with the Ministry of Labor. But that may be the least of NagaWorld’s problems.
In what in hindsight looks like a calculated affront, the company in March announced a special Hardship Relief Dividend to “loyal” shareholders, to help them “alleviate any sufferings.” The payout totaled roughly $81 million.
And for loyal employees? Pink slips.
As NagaWorld surely knows, the union will not go quietly. And when the post-pandemic gold rush finally arrives, casino bosses could very well be dealing with picket signs instead of punters.
THE WEEK IN HISTORY
Concerns Voiced as Donor Meeting Nears
June 4, 2001
With the international donors’ meeting less than a week away, pressure is mounting both within and outside Cambodia for donors to take a harder line with the government and demand more progress on reform.
Loggers Clearcut Sanctuary
June 5, 2001
Phnom Proek District, Battambang province – Deputy Prime Minister Sar Kheng warned local RCAF soldiers at a ceremony Monday against illegal logging and forcefully expanding their farmland.
Sam Rainsy Press Talk Barred from Assembly
June 5, 2001
What began as an opposition call for human rights, solutions to poverty and electoral reforms Monday also turned into a partisan argument over the freedom of the Cambodian press.
WEEKEND READING
Coal-powered developments threaten Cambodia’s largest national park
Within a protected area covered by a patchwork of plantations, Cambodian officials are making space for yet another industrial zone, and a new coal-fired power plant.
How the US Can Help Cambodians Restore Their Country’s Democracy
The U.S. should propose a post-pandemic development program based on human rights, democratic principles, and the rule of law, Mu Sochua writes.
‘Vaccinating Southeast Asia’s migrant workers isn’t just right, it’s common sense’
While healthcare workers, the elderly and sick are high priority for vaccination, so too should be migrant workers. Among Southeast Asia's most mobile and vulnerable populations, prioritizing them is not just a matter of principle, but a vital pandemic control measure.
In Cambodia, Siem Reap airport feels the full force of tourism downturn
As flights to Siem Reap airport dropped to an unprecedented zero last month, workers at the once-bustling entry point are facing reduced pay and layoffs. Like their tourism counterparts across the struggling city, many make ends meet with loans and ad hoc work.
Is there such a thing as a ‘green’ SEZ in Cambodia?
By definition, special economic zones are not green. Yet Cambodia, now overrun by foreign-financed SEZs, is trying to rewrite the concept. Success remains elusive.