Thursday, August 8, 2013

Beijing Loses the Cambodian Election

New challenges may force Hun Sen to tack away from China

Last week’s election marked a sea change in Cambodian politics, but Prime Minister Hun Sen is a canny politician who can be counted on to adapt to the new environment. The biggest loser is likely to be China, which made the Cambodian strongman its new BFF after Burma began democratic reforms two years ago. Now Beijing is unlikely to get the return on investment it expected from Phnom Penh.

To recap, the opposition National Rescue Party won almost half the seats in the National Assembly on July 28, and credibly claims that without blatant vote rigging it would have won a majority. There’s little chance Hun Sen will cede power, although his Cambodian People’s Party (CPP) has agreed to a cursory investigation.

The real question is how Hun Sen will alter his governing style to shore up his base of support in the countryside over this five-year term. He could double down on repressive measures to silence opposition and rely on aid and investment from China. Or he could address citizens’ concerns about corruption and the lack of rule of law, and court greater Western support as a reward, much as Burma has done. The latter course offers greater upside.

Until this election, the CPP has been able to chart a middle way with support from both China and the West. Over the last few years Hun Sen has tacked toward China, whose budget for aid, soft loans and investment by state-owned companies has grown dramatically. It is now Cambodia’s largest source of foreign direct investment, with $1.2 billion in 2011 alone, about 10 times the amount from American companies.

Hun Sen says he prefers Chinese help because unlike the West’s aid it comes with “no strings attached.” It’s certainly true that Beijing doesn’t lecture him on human rights and democracy. But it is hardly subtle about pulling Phnom Penh’s strings in other ways.

As the chair of the Association of Southeast Asian Nations in 2012, Cambodia earned the scorn of its neighbors for squelching discussion of their South China Sea territorial disputes with China at three critical meetings of regional leaders. Days before the first one in April, Chinese supremo Hu Jintao paid a visit bearing $70 million in new grants and loans.

Hun Sen’s aide Sry Thamrong told the media that the two leaders agreed that Asean should not “internationalize” the South China Sea issue. At the same meeting, the Cambodian Prime Minister asked for $300 million to $500 million in soft loans for irrigation, electricity and other projects.

At the February meeting, Phnom Penh simply used its prerogative as chair to take the South China Sea off the official agenda. In July, the Cambodian Foreign Minister cut the Secretary General of Asean off in the middle of his speech when he began to talk about territorial tensions; the group was unable to agree on a communique for the first time in its 45-year history. Then at the November East Asia Summit, Hun Sen raised the chutzpah bar even higher when he announced Asean had reached a consensus not to internationalize the disputes, which led to a formal protest by the Philippines.

Not surprisingly, in September Beijing gave Cambodia the full $500 million in loans Hun Sen asked for. But now he must live with poisoned relations with all his neighbors aside from Laos, another Beijing ally. Vietnam, which is one of the South China Sea claimants, still has plenty of influence within the ruling CPP, having installed Hun Sen in power in the 1980s.

Ordinary Cambodians are also growing uneasy with Chinese dominance over the economy. 

Beijing’s infrastructure projects use a high proportion of imported Chinese workers, limiting their benefit to locals. Chinese businesses, especially those connected to illegal logging and mining, feed the corruption of CPP officials. Reuters reported in February on an $11 billion Chinese plan to build a seaport, railroad and steel complex in Rovieng. That mini Chinese invasion is all too reminiscent of the $3.6 billion Myitsone hydroelectric dam that Burma has now suspended.

This puts Hun Sen in an awkward position politically. In recent years China has provided about half the foreign aid Cambodia received, reducing Western donors’ leverage. But he can’t afford to bank on China alone, since aid still accounts for nearly half the government’s budget. More importantly, the newly reinvigorated opposition demands political reform to fight corruption and improve accountability. Reliance on Chinese money would only make it harder to respond to this challenge.

Beijing once again finds itself knobbled by its own tendency to throw its considerable weight around in the region. So it will be no surprise if Hun Sen’s knack for self preservation causes him to tack back toward his Western benefactors, strings and all. Wall Street Journal

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