Tuesday, April 29, 2008

A United Opposition - A Dream?

Many attempts have been made by the various opposition parties to form a coalition so as to be in a stronger position for the coming election in July. All these attempts have floundered on account of the very disparate personages leading the respective parties, each claiming a singular right for their own party. A recent article in The Asia Times more than aptly describes the current situation of the political landscape in Cambodia. (See http://www.atimes.com/atimes/Southeast_Asia/JD29Ae02.html )

Undoubtedly the SRP is the strongest party with the most popular support as the previous elections clearly showed. But that in itself does not indicate that it will continue to be as strong as before in view of the latest publicly debated dissension within the party and the party defections, whether for monetary gain or dissatisfaction with the leadership and direction of the SRP.

As in previous posts on this site it is held (not only) by this author that Sam Rainsy does not have the political acumen to even lead his own party let alone the country. Again, that is not to say that the author believes the current prime minister is better qualified or suited for the job. But as the article in the Asia Times points out the CPP can pretty much do what they want in the present circumstances – having virtually no real opposition. The opposition is in disarray, fighting each other rather than trying to build a united front by forming a coalition, mostly because of apparently unreasonable pre-conditions by each party while it is clear to even the uninitiated that only such a coalition might unseat the CPP. The next question arising from such a possible scenario, of course, is whether those parties would have the capability to form a government. Coalition governments have the tendency to fail due to in-fighting and petty squabbles, more over individual power rather than political objectives. No real leader seems to have what it takes to turn the country around from its current free-for-all, swim-or-sink political and social climate and environment.

The formerly strong FUNCINPEC has lost its popular footing almost completely and could practically be discounted as it put itself firmly in the CPP’s corner. However, since it is expected to get at least 2 or 3 seats it could tip the scale in a play for power. Its former chairman Ranariddh and his new party have great name recognition but it is widely reported to have no real support among the people. Ranariddh has been in exile for 2 years now and a political comeback seems more than unlikely. Real contenders for a coalition, even though it might include the Ranariddh party without him, are then only the Human Rights Party and the SRP.

At look at the past attempts for a coalition, which have been published on KI-Media by anonymous but obviously inside sources (KI-Media is a blog heavily in favor of the SRP) demonstrates the apparent rift and general failure of especially Sam Rainsy to assess the political landscape objectively. (The comments have been slightly edited for syntax, content remained untouched.)

1st Source:
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A few days after the coup (in 1997) Western powers gave great support to the idea of the 3 main democratic parties to form a UCD (United Cambodian Democratic Party). They asked Kem Sokha to be the deal broker (the middle person). Son San accepted it. Ranaridh was OK with it. But Rainsy refused. He said the same thing now "His party will win. His party does not need anyone else". If they had united, they would already have won over the CPP at that time. After seeing Rainsy's attitute, Son San's team later joined FUNCINPEC.
After staying with FUNCINPEC for awhile Kem Sohka saw no hope that FUNCINPEC would go up but to come down. He then secretly talked to Rainsy to bring about the defection half of FUNCINPEC's team to join Rainsy. But Rainsy refused again.Later on Kem Sokha started his Human Rights group organization (CCHR) and gained (considerable) popularity. Seeing and fearing Kem Sokha’s popularity, Rainsy and his wife then secretly met Kem Sokha and offered him a Vice Presidency at the Sam Rainsy Party. But it was Kem Sokha's turn to refuse. Later in 2006 one of the Western countries tried to put these two men together at a round table in Phnom Penh and asked them to work together. But Rainsy refused again. He said, "His tree has grown strong roots. His ship is going toward the goal. His party is OK. He does not need anyone."Again in 2007 after Kem Sokha launched the Human Rights Party, a group of Western countries tried to put them together. They arranged for both of them to meet in Switzerland. Kem Sokha showed up, but Rainsy did not. Rainsy and his wife went to Paris instead.I think it was the final attempt of the West to help these two groups to unite. And I think they will never be able to come together. In their heart they have become the enemies now.They are both now trying so hard to gain votes and seats in order to be a partner with CPP to run the government. But they are wrong again. FUNCINPEC will win a few seats (2 or 3 at least) that will add up to 50+1 with CPP. Then they (FUNCINPEC) will still be strong partner in the government.It is too late for Kem Sokha, Rainsy or anyone else to call for the unity.
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2nd Source
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Before forming the Human Rights Party, Kem Sokha met with San Rainsy in Son Soubert's house. Kem Sokha at that time requested the meeting as the last hope for forming an alliance. At that meeting Kem Sokha's conditions was that Sam Rainsy restructure the ever more autocratic internal party structure and address the internal fracture within the SRP. Close observers knew all along of the disgruntled steering committee members--about half of the SRP's steering committee members have never made a single decision, and about the other half was not happy. Lots left the party without speaking out to avoid further fracture. At some point, the steering committee made decisions only to be overturned by the so-called "permanent committee" which according to the internal rule of the SRP has the power to make or overturn any decision; and it is the president who has the final say.
Please check the members of this "permanent committee"--it consists of the Eng's clan and the Sam's clan--husbands and wives and in laws (one example of this is the nomination of Mr. Ket Key to the deputy president position at the National Authority on Land Conflicts which was overturned by Sam Rainsy and his wife within the "Permanent Committee" to hand the position to Eng Chhay Eang instead. The position is lucrative and Eng Chhay Eang was silent within this position for more than 2 years until recently. Other examples include the nomination of two people to the National Election committee, etc. Had Sam Rainsy made an effort to unite, it would have been a lot easier then. He only needed to reform the steering committee and make the steering committee a true assembly with certain ability (authority) for oversight. One of the other main ideas was to limit the maximum number of the steering committee to avoid a power struggle and a dilution. Unfortunately, Sam Rainsy did not accept. Worse, there was a promise not to speak to anyone outside of the few people who attended the meeting—but less than one month after the meeting, Mr. Sam Rainsy himself gave an interview to Rasmey Kampuchea, a CPP's paper, with all the details. In so doing he prevented any future meeting, as no one trusted Sam Rainsy anymore. Sam Rainsy wanted to destroy other people involved so they lose the funding and show that he made an effort to unite but in reality all he did was criticize Kem Sokha in the whole meeting. It was unfortunate!!!
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3rd Source
Quote
There is no doubt that the SRP is loosing ground in a number of places to HRP. They no longer enjoy the support they had before the commune elections in 2007, at least in the places we supported, as in Kampong Cham, in Battambang, in Takeo and in PNH.Our message to SRP overseas supporters is to audit your financial supports given to and received by the SRP elite. As activists on the ground we see no overseas financial support is being used as intended. We are operating with our own funds for the benefit of a small elite based in Phnom Penh and abroad. We, in Cambodia, have lost faith in the SRP leadership for many reasons. They are ineffective in making the case. They have been in opposition for more than a decade and they will be the opposition again if they are as arrogant as today. They spend our time, resources even lives, all for nothing. They are still fighting internally and are trying to sideline the party base, as they want to run the group for life. They never treat the differences as assets. There is no point in supporting them any more.
Unquote

No doubt if this were published in a major publication and not just on blogs this would create a major outcry and backlash by Sam Rainsy’s supporters. But time and again exactly those supporters have shown themselves to be rather ignorant of the real internal struggles within the party. Sam Rainsy’s suave and gentle demeanor has fooled them. By all accounts, many journalists included, he is, however, a power-hungry autocrat who has delusions of grandeur packaged in political speak that appeals to the poor and uneducated and to Western liberal movements.

And it is precisely his autocratic, intolerant attitude that prevents such a coalition, which would offer the only chance for an electoral victory. His inability to compromise and make deals for the greater good, not just his own, and his inability to build a majority among even his followers will eventually be Sam Rainsy’s undoing.

Friday, April 25, 2008

Amateur Night

Here was Sam Rainsy at his best again speaking to a gathering of, lo and behold, 60 people in the U. S. He wants to win the election and remove Hun Sen from power. Well, that is legitimate but will prove tricky. If his overseas supporter show up in such huge numbers we can only surmise the amount of money raised for his election campaign. One thing is for sure, it won’t be too much.

One really needs to take a closer look at the politically active overseas Khmer. First how many are there? Altogether it is estimated that there are about 500,000 Khmer living outside Cambodia with about 300,000 in the U. S. As everywhere the majority is politically disinterested, more concerned with their daily problems and how to make a living. Going by normal standards about 10% are politically active, which would translate to 50,000. Compared to more than 7 million voters in Cambodia – in other words they can be discounted for all intents and purposes. But this is just an aside.

Sam Rainsy wants to return land back to their original owners. He must mean illegally obtained land. Well, nothing wrong with that either. But who is to determine which land was stolen and which land was rightfully purchased? He will create such confusion and bureaucratic entanglements the likes of which he has not seen since his return to Cambodia, not to mention the possible responses from disgruntled owners (and possibly sellers too). If he were to go after investors, most of them from abroad, one can only hope Sam Rainsy will be driven out of office after 6 months, because that would be like cutting the lifelines of Cambodia.

About free medical care – another noble and commendable goal. Where will he find the money to pay for this? Even the U. S., arguably the richest country is debating how to achieve this? Some don’t even want to touch this subject, like John McCain.

And now the two great opportunities that would sway the voters - inflation makes people angry and they blame it all on the government. Mr. Sam Rainsy please tell us how you would fight inflation when most factors are out of your control, e. g. oil prices, imported inflation because of the dollar-based economy, etc.?

And the joke of the evening: if John McCain is elected president he will help Cambodia with all his might. Come on, Sam Rainsy, where do you live? On another planet? John McCain will be busy with Iraq, Iran, and China, and his domestic problems. Cambodia won’t be on his schedule the first 36 months in office, if at all. As for the FBI report - don’t be so na├»ve to believe that will ever be released to the public. The U. S. government itself had a hand in suppressing it. Don’t expect any help there. You will find a wall of silence on that subject.

And if Kenya and Zimbabwe are any yardsticks to go by, the U. S. will not move a finger to help, or should we say intervene in, Cambodia. And those are not the only examples – Darfur, Zaire (now the Congo), Rwanda, Burundi, Liberia were all countries sinking into chaos and mayhem with the U. S. standing idly by.

In summary, Sam Rainsy started out well in the 1990s, but after the last election he has undergone an incisive change in his attitude and pronouncements and it looks like he has lost his look for reality.

Sunday, April 20, 2008

The Food Crisis and the SRP

Notwithstanding that the food crisis is a worldwide phenomenon caused by factors largely beyond the control of governments, the SRP wants to again stage a demonstration protesting the recent drastic increase in food prices, solely blaming the government for doing nothing about it, and its cronies for pocketing inordinate profits.

Major internationals newspapers as well as the Cambodian press, both in English and Khmer, have reported widely on the true causes of that crisis. See www.nytimes.com, www.voanews/khmer.com, www.phompenhpost.com, just to name a few, so this blog will abstain from repeating them here again.

This crisis has led to demonstrations and riots in some countries where the poor can no longer afford to buy their main staple, mostly rice.

In continuation of its populist stance the SRP tries to take advantage of this crisis to foment unrest. Yes, demonstrations are legitimate, but they must be for a worthy cause. To exploit the fears of the masses for the party's and his own political gain is irresponsible and reprehensible. The SRP continues to claim this is the government’s entire fault and the result of unscrupulous businesspeople squeezing the poor people dry. Economists all over the world paint a different picture. But in spite of this, and it is hardly believable that the SRP officials don’t read the international press, they have embarked on a voyage of obstructionism, which may eventually even lead to riots – and this is something Cambodian most certainly doesn’t need.

Given the present incendiary rhetoric by Sam Rainsy and other party officials, one cannot but wonder about their motivation. Do they just strive to enhance their profile or do they really want to help the people? As mentioned many times previously, the SRP is long on words and condemnations but short on action and proposals of real solutions for the problems facing Cambodia. They have not introduced a single detailed program outlining concrete steps in the fight against inflation.

As the current Democratic presidential debates in the U. S. more than clearly show, politicians are fair game and their mistakes, faults, and blunders receive public airing ad nauseum, whether relevant or not. By the same token, the CPP is an easy target for its lack of progress on the social front, and its unwillingness to earnestly fight corruption. The passage of that long awaited anti-corruption law, still mired in committees, would be a step in the right direction and a welcome signal to the population at large, and the donor community in particular.

Contrary to what conservative readers of this blog maintain, this writer is not a supporter of the CPP. What is desirable, however, is a strong constructive opposition that puts forth genuine action plans and does not only engage in oftentimes unsubstantiated allegations and accusations. When some regional party official utilizes his position for his own gain, the SRP collectively condemns the CPP as a whole, and not only the one official. The business community is painted as the common enemy of the people, reminiscent of Communist times, when the then government denounced the private sector as bloodsuckers of the common people. The SRP, which wants to present itself as a morally superior party that only has the interest of the common people at heart, miserably fails in this respect. The international press makes hardly any mention of Sam Rainsy. In the international arena he is a virtual non-entity. His current trip to the U. S. more than clearly shows this. It does not appear that any meeting even with lower-ranked U. S. officials is planned. Of course, the largely anti-government Khmer conservative, backward-looking Diaspora supports him as their hero who they hope can bring about change. Why they want change remains somewhat of a mystery. Most of them are either U. S. or French citizens. They chose to leave their country and build new lives in their new home country. They apparently have no intention of ever returning to their birth country. Why do they keep meddling in Cambodia’s affairs? But they will soon find out that their financial support is a wasted effort. Sam Rainsy will never win an election.

But if indeed it came true, they would be in for a big surprise. He would plunge the country into chaos if he follows through with his general policy pronouncements. But then, it won’t happen and this is why Hun Sen likes Sam Rainsy so much for what he really is – a basically weak opposition leader that only lends credibility to Cambodia’s status as a democracy. Sam Rainsy cannot rally the masses; he is not a fervent orator who can motivate people. He is not an opponent to be taken seriously.

His biggest drawback is that he doesn’t have the support of the incipient middle class, let alone the upper class, which in any modern society, gets the president or prime minister elected. To counter their influence, the opposition leader must be a convincing public persona with charisma. And this is something Sam Rainsy most definitely is not. In other countries, opposition leaders went to prison for their convictions and beliefs. Sam Rainsy chose to spend one and a half years in comfortable exile. When he returned he had turned into a virtual puppy. Only lately has he begun to be more outspoken in his criticism. But this won’t be enough to turn the tide. Although it is too late now for the coming elections, the SRP ought to re-invent itself, starting with a new name and a new, more charismatic leader. Perhaps then they might have a chance of changing the course of this beautiful country. It would deserve it.

The Increase in Food Prices

In the context of the above article we are publishing this op-ed.

To some extent the surge in food prices is driven by corporate greed. That greed is fueled by the basic capitalist market principle of supply and demand. When suppliers recognize that demand outstrips supply they raise their prices – it is as simple as that. The food producers are at the bottom of the food chain and will apply this economic law as readily as the wholesaler and retailer. In the end, it is the consumer who ends up paying the bill. That applies to food the same way as it does to oil. Why is it that Exxon records the largest profits in its history? Additionally, higher oil prices also add their share to higher food prices.

Sadly, it is true that the poor suffer the most. With $50 a month who can survive when the average inflation is 11% across the board, and food prices have risen 24%? The recent increase in the minimum wage to $55 a month was supposed to compensate for inflation. Of course, we all know that everybody was caught more or less unawares when the price surge hit the consumers, and that the 10% increase in their wages was a mere drop in the bucket for most Cambodians.

But even in the U. S. and in Europe consumers are hit hard by price increases. The U. S. economy is in a recession, consumer prices are up, and statistics show that the average American makes less money in 2008 than in 1998, when adjusted for inflation. As an example, imported Jasmine rice from Thailand saw a price increase of up to 20% in recent weeks, affecting most Asian consumers there.

Of course, we can’t compare the U. S. or Europe to Cambodia. But this just goes to show that this is not an exclusive Cambodian problem. Now, did the Cambodian government do enough to fight the increase? Probably not. The implemented export ban was undermined by its exclusion of cross-border sales to Vietnam in the Eastern provinces. The government cited that the livelihoods of a large part of the population there who depend on that trade would be put at risk if the ban was to apply to them for a longer period of time. Well, it sounds logical but is it true? Naturally, pundits will quickly point to the government’s Vietnam-friendly attitude, but this seems to be as partisan as everything else that is coming from those quarters.

Everybody, many self-appointed experts among them, quickly hopped on the bandwagon blaming each and everybody in perceived power positions on that crisis. But does it really affect Cambodia this hard? What is widely forgotten is the fact that 65% of the rural population lives on subsistence farming. These people do not buy their rice. If they don’t grow it themselves they barter it. This translates into roughly 50% of the population, or roughly 7 million people, existing on subsistence farming; in other words, they are not as affected as wage earners. A look at the relevant statistics also reveals that there are about 1 million people employed in the service and industry sector. These are the sectors where those wages of $55 a month are paid. Again, this translates into 4 million of the population who are dependent on those incomes. The public sector employs about 1 million as well, which means another 4 million people of the population depend on that sector. Does this affect these people? Yes, by all means, but they have a way of making ends meet. We all know how that works, don’t we? It’ll just mean that, for instance, elementary students will have to give their teachers 750 riel instead of the 500 per day. It is sad, yes, it is.

Even given the increase of corruption in the public sector as a result, the numbers indicate that about 20 % of the population or roughly some 3 million people will suffer from the recent price increases. But can the government do anything about it in the short term? The answer is a definitive no. No government in the world can grapple problems of that magnitude in a couple of weeks or months. The ban on the export of rice was the correct step to take but it needs to be enforced strictly, and it must be extended for at least a year. The economic police are hardly in a position to safeguard against gouging. The vendors just put the fix in and the problem has gone away. A second, but much more drastic step would be to implement a temporary price freeze on rice in the markets. Although this is anathema to the principles of a free market economy, into which Cambodia has successfully transformed itself, this might be worth a second look.

Cambodia is self-sufficient in rice; it has even become a rice-exporting nation. The interest of its own people must be the foremost priority, so the export ban is the one tool that will bring relief. Regulated prices in the basic food industry ought to be mandated. Regulation of industries, if in the public interest, is an established tool in the government’s arsenal, as has been shown in many developed countries. Subsidies, widely used in the industrialized world, are out of the question for lack of funds.

So to alleviate the plight and to avoid widespread hunger among a large part of its population the government should have the courage to take these drastic measures. It will take a strong political will to follow through with such a policy. It remains to be seen whether this can be a defining moment for the government. It would certainly add to their appeal in the coming elections.

Monday, April 7, 2008

People Power and Mass Demonstrations

Or Who has the Cure for the Present Woes?

This was once again a very interesting weekend in Phnom Penh, at least for politically inclined people. The Sam Rainsy Party had called for a mass demonstration to protest the recent surge in consumer prices, most notably rice, the main staple for most Asian countries. They expected 5,000 people to show up. Originally it was supposed to be a march from market to market but the Ministry of Interior only approved a demonstration in front of the previous assembly hall.

Unfortunately, it was anything but a mass demonstration as only 300 to 500 people heeded the SRP’s call. The party tried its best to put a good face on it but the fact remains that this was an ill-conceived demonstration to begin with and the underlying cause was dubious at best.

Demonstrations are a legitimate form of making the people’s thoughts, ideas, grievances, and demands heard and known to their political leaders, employers’ associations, or even their churches. It is very often a necessary and vital instrument in the political process and in labor/management relations. Many such demonstrations turn into people power, as in the Philippines, Indonesia, Thailand, East Germany, the former Czechoslovakia, East Timor, the Ukraine, and others. Many a time these demonstrations brought down governments, as in the Philippines, Thailand, Indonesia, and the Ukraine. It even brought down the entire European Communist system when the East Germans started their Monday demonstrations, which led to the demise of the German Democratic Republic as the Soviet Union, facing its own internal problems, did not move to come to their rescue. This example spread across the East-European Communist bloc like a wildfire, eventually reaching Moscow and toppling the Soviet government and the rest of Communist regimes. Some of them resurfaced under the guise of quasi-democratic elections but were essentially a continuation of the old regime as in Belarus and the Ukraine, and though under different auspices, Cambodia.

Sam Rainsy may have had something like those almost revolutionary and legendary demonstrations in mind when he spoke about people power in the context of the possible rigging of the upcoming elections. But Cambodia is not Eastern Europe, nor is its people ready and educated enough to understand this; nor could Cambodia afford to go through a period of unrest again so shortly after its tragic history. The precarious but stable situation of the country in 2008 would be severely impaired by large-scale demonstrations. The people who would suffer the most would again be the poor. The economic achievements, although far from satisfactory overall, would be severely imperiled, if not altogether destroyed.

People power is a veritable and mighty weapon in making the people’s voices and will heard. But such peaceful demonstrations must involve more than a mere handful of activists. With 7 million voters nothing less 100,000 demonstrators would be a force to reckon with. This number would mostly likely swell with each demonstration, and the government would then most certainly pay attention. It would be very hard for any government to use force against such a huge number of its own people. Only the most ruthless regimes, like the one in Myanmar or even China, would not shrink back from brute force in putting them down.

But 5,000 or 10,000 just won’t make a dent in the government’s impression of what the people want and think. These numbers are nothing but a slight irritation and a disruption of public life. The people calling for those demonstrations must realize this and also expect hampering and intimidating tactics like buses and trucks with demonstrators being stopped on access roads. The demonstrations in Eastern Europe spilled over into the ranks of the security forces. The activists engaged them by convincing them that everybody has to gain from a drastic change. This won’t happen in Cambodia.

In the end it would indeed be a situation as the one to which Hun Sen referred when he indirectly ridiculed the term people power in Cambodia. He said Cambodia doesn’t need people power when 7 million voters have decided and the results are clear only to have 2,000 demonstrators question the veracity of the outcome.

It appears as if Sam Rainsy and his party wanted to try their mettle in organizing a mass demonstration as a test of things to come. The rising cost of living gave them a legitimate theme. If they managed to raise 5,000 for this, so their thinking might have gone, they would be able to raise 10,000, 20,000 or even 50,000 after July 28, if they thought the elections were fraudulent.

It must have been a bitter disappointment for them to see their concerns echoed by only so few. Nobody has so far found a reason for the masses abstaining, but perhaps most of them saw it for what it was, an electioneering event. The SRP needs all the publicity it can get as currently their profile is definitely somewhat hazy in the public’s eye as they have not been able to really motivate the broad masses with their campaign rhetoric, and more prosperity has reached even rice farmers who sold their land for good money.

Even their rallying cry was so transparent in its populism and, moreover, patently wrong and disingenuous.
Here are some excerpts from their flyer they distributed throughout the city.

Quote
When H.E. Sam Rainsy was the Minister of Economy and Finance between 1993 and 1994, the prices of goods on the market were low and stable. At that time, the price of one liter of gasoline was only 600 riels, and one kilo of rice cost only 600 riels.
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His tenure did not even last one year. No new government can make any tangible impact on the economy in such short a time. Additionally, he was in over his head as well. Without the French bureaucrats left over from UNCTAC time he would have been completely lost.

The prices were stable on account of the neighboring economies, which supplied most of the goods to Cambodia at that time, including about 50% of their rice requirements, and the prevailing economic climate.

Oil was about $15 a barrel in 1994; in March it reached its peak at slightly over $110 per barrel. In 1993 gas prices at the pump were $.23/ltr in the U.S. and $1.1/ltr. in Europe, now they are $1.00/ltr in the U. S. and $2.16/ltr in Europe.

The rice shortages in several rice-exporting countries as far away as Egypt have their impact on Cambodia, believe it or not. Importing countries turned to other rice producing nations, e. g. Cambodia - a simple supply and demand situation, which drives prices up everywhere, not only in Cambodia. The same pinch is felt in Vietnam, Thailand, Malaysia, etc.

To attribute the relatively stable price levels of the early 1990’s to Sam Rainsy is plain hogwash. To say it caught the government unawares may be telling the truth. But there wasn’t one government not completely taken by surprise by the sudden emergence of that problem.

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1- Lower taxes on gasoline and lower the profit margin made by gasoline distributors.
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The budget listed approximately $101.5 million in tax revenue on gasoline (import duties and tax on petroleum products). On the one hand the SRP calls for increased salaries/wages in line with inflation and on the other hand it wants to cut revenue from a state budget that is 50% funded by foreign donors? That isn’t very prudent, is it?

Lowering the profit margin of an enterprise is state intervention in a free market economy. They can tax profits higher than they currently do, but prescribing profit levels is not line with a free democratic society and market economy. Again, it doesn’t seem as though a lot of thought had gone into this - and this from a banker/finance expert?

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2- End the commercial monopolies granted to a number of cunning merchants and dishonest companies, which allow them to increase the prices of goods as they please because of lack of effective competition.
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I don’t know whom they are referring to as ‘number of cunning merchants’ and ‘dishonest companies’ that have monopolies. But it seems like a bit of a reach to claim the price of rice solely has to do with what’s called gouging in the West, that is, taking advantage of an emergency situation to increase price to usurious levels. Most certainly, there have been such practices, and the government needs to clamp down on those, but to condemn businesses across-the-board again looks like a populist shot.

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3- Ensure an adequate economic, financial and monetary policy so as to preserve the stability of the riel.
Unquote

The riel is pegged to the U. S. dollar, in other words part of the inflation is imported. The Cambodian economy is overheated in the construction and real estate sector considerably contributing to inflation. As most of the economy is cash-based there is very little the government can do to curb inflation, e.g. raise interest rates, other than implement price controls, which is anathema to the principles of a free market economy. Financial stability will be a challenge for the years to come for any government of Cambodia.

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4- Control the printing of bank notes so as to avoid issuing paper money in an irresponsible and disorderly manner. If the government continues to inflate money supply, the riel will continue to depreciate and inflation will continue to accelerate.
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What they are saying is correct but monetary policy will largely hinge on the further economic development. Whether or not the government prints more riels right now will have little impact on inflation as long as this is a virtual dollar-based economy and consumers continue to spend their money with abandon, as is the case now, at least in Phnom Penh. The price of gasoline doesn’t seem to influence the purchase of cars, SUVs, and motorbikes.


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5- Implement land reform by distributing unused state-owned lands to landless farmers or those who do not have enough land to live on, so as to increase agricultural production nationwide. For the tens of thousands of hectares of lands grabbed or stolen from the State or from the people by corrupt government officials and cunning businessmen, they must be returned back to the people so that Cambodian farmers can effectively plant crops needed to counter inflation.
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Well, land reform is certainly needed and giving farmers state-land to cultivate is a noble undertaking. Right now, the government, however, is selling state-owned land to the highest bidder with deep pockets for extra expenses in order to bolster their revenues. Agricultural production could be vastly increased if more modern methods were taught and applied, e. g. irrigation of rice paddies so as to enable them to grow two crops a year. That would also alleviate any shortage of rice in the future.

If the prices of goods double, salaries must also be doubled.

This, of course, is as populist as it gets. They contradict themselves with their demand for lower gasoline taxes and don’t point out where that money should come from. Curbing corruption is not the panacea they make people believe it is. Corruption in its present form is more of a special tax levied by officials in compensation for their low salaries. It is a myth to believe the $300 to $500 million referenced in various tracts is money the government loses in revenue. It is money people pay for services that would otherwise be free or provided for a nominal charge. The only way to increase state revenues in the short term is to institute a comprehensive tax collection system that targets the people and businesses, which make enough profits in the Cambodian economy so they should also pay back what they rightfully owe to Cambodian society.

And, finally, let me quote the latest country rating by Standard & Poor:

Standard & Poor's Ratings Services said it affirmed its 'B+' long-term foreign and local currency and 'B' short-term foreign and local currency sovereign credit ratings on the Kingdom of Cambodia.S&P said the ratings are supported by the country's record of strong growth in a framework of prudent macroeconomic policies and continued engagement of international donors, in addition to the concessional nature and favorable terms of Cambodia's debt that ensures continued external liquidity improvement.However, the ratings on Cambodia are constrained by vulnerability of growth and external liquidity due to the country's underdeveloped and narrow economic profile, S&P said.The outlook remains stable, but could improve if the government implements measures to boost the chronically low revenue collection.

This again flies in the face of all the SRP’s public announcements. Unfortunately, as so often in the recent past, Sam Rainsy just plays on the fears of the ignorant public hoping to garner their votes in the upcoming election. By the same token, the unsuccessful ‘mass demonstration’ must be seen as just another attempt to influence the masses in this vein with half- and even untruths. One can only hope that, given the reins of power, Sam Rainsy would know how to handle a situation as the present one. A 24% increase of food prices in the last 6 months, and an 11% overall inflation, are very somber signs on the horizon for Cambodian people. It appears doubtful that the opposition would indeed have recipes to keep it in check. If they have them they haven’t shown them to anybody yet, but they ought to for their own good. They way the SRP leadership campaigns at the present time does not lend itself to their enhanced credibility. Quite the opposite.

Jay Rupert

Wednesday, April 2, 2008

Dysfunctional Democracy Revisited

On March 26 Dr. Lao Mong Hay published an op-ed on UPI online, which can be accessed here http://www.upiasiaonline.com/Human_Rights/2008/03/26/cambodias_dysfunctional_democracy/4948/

Here is a complementary op-ed.

Without justifying any of the current government's actions, one must realize that we cannot expect a country like Cambodia to become a perfect democracy in only 15 years. Dr. Lao, though Khmer, makes the same mistake all Westerners make. They expect Asian cultures to imitate and emulate Western ideals of democracy in its purest and most ideal form. These people, and it is rather amazing to see they are highly educated people, forget that it took the West more than 3 centuries to evolve into democracies, and they are far from perfect. A look at France and the U. S., the birthplaces of modern democracy, makes this abundantly clear. But these same people expect Cambodia to be a shining example, a country that has never known anything even remotely similar to democracy, whose elite was wiped out by the Khmer Rouge, whose Communist successors acted at the behest of their Soviet and Vietnamese masters. The woes Cambodia is going through are the birth pangs of an emerging democracy. Sometimes it takes a near dictatorial regime to ease the passage into this form of government. Time will prove that Cambodia will be no exception to that rule. It took Indonesia more than 40 years to become what it is today - the best democracy in SE Asia. Wait what Cambodia will be like in 10 years - you won't recognize it. Impatience has never contributed to the resolution of any problem.

Of course, it is legitimate and necessary to list and condemn all these violations of the Cambodian constitution and to call upon the government to uphold the rule of law. But in this context one must not forget the culture and heritage the current leadership comes from. People who followed Pol Pot, then changed allegiance to the Communist Vietnamese, and after the fall of the Soviet Union changed their political convictions once again, to finally become democrats in the U. N. sponsored elections, is a paradox in itself. This leadership is largely uneducated and its actions are guided by self-preservation. Getting rich along the way is an added boon. This leadership has withstood, defied, or even challenged any pressure from outside and inside the country. The outcries and outrage emanate mostly from human rights organizations and NGOs. Both friendly and critical governments have voiced only tepid condemnations. Donor nations have only made token comments on governance and human rights realizing that to punish the government with curtailment of foreign aid only punishes the poor people.

One must remember the outcome of the 1993 elections. The CPP lost but did not recognize the election results claiming they were rigged. After all FUNCINPEC and the CPP had never been partners in a common struggle, like FUNCINPEC and the Khmer Rouge, as ironic as this may sound.

At that time it was clear to the world that the turncoat CPP would never be a truly democratic party. They wanted to hold onto power by all means. No one could exert any pressure to change the position of the CPP, which even threatened to partition the country and were going to declare the eastern provinces an autonomous region.

Anybody who believes that those people would adhere to the principles of a Western-style democracy is a fool and dreamer. Unfortunately, Cambodia had no powerful big brother as East Germany did when it collapsed. West Germany took over the whole governing apparatus and industries practically overnight and installed their own people. Only token positions were awarded to liberal East Germans because they were all suspect and the West Germans knew that once a Communist, always a Communist. They were proven right as all those ministers were driven from office amongst financial scandals and abuse of power. There is only one shining exception – the current female chancellor who, though born and raised in East Germany, had never been a Communist and is a model democrat and highly respected throughout the world.

This could obviously not be duplicated in Cambodia. Furthermore, the CPP controlled the armed forces, which to this day only serve one purpose – to preserve power for the CPP. There are many parallels with the former Communist Germany. Many of their party functionaries appropriated, that is stole, state funds, converted the East German currency into rubles before the unification and exchanged those rubles back into West German currency at normal exchange rates after the unification. They became respected and established businessman in the aftermath, oftentimes buying former state enterprises for a pittance. Many CPP officials, and quite a few FUNCINPEC functionaries as well, did the same thing with state enterprises or land the government sold. They were the first to know and the first to buy at prices beyond the pale.

How can one seriously expect this type of leadership to ever become democrats? This is not to say that calls for the respect of human rights and the rule of law should not continue be made to remind the people in power that their autocratic rule is permanently under scrutiny by the outside world.

But in today’s realpolitik one must also recognize that this leadership and its power structure are here to stay for some time. One must seriously ask whether it might not be better to engage these people in a non-confrontational way and work with them from within the system to initially implement smaller reforms that everybody can live with and then slowly ease into wider-ranging systemic changes.

After all, the people in power can accumulate only so much wealth. Perhaps they will one day be content to enjoy the fruits of their wealth in peaceful retirement. Even though their offspring have inter-married and are supposed to be a perpetuation of the current power structure, history shows that those strategies have always failed. Most Russian rulers, from the tsars to the Stalin tried this without lasting success. Oftentimes the successors have completely different ideas gained from higher education mostly in Western countries. Though this is far from a sure bet, it is a possibility. And one must not forget the young and better-educated generation.

One cannot impose and coerce people to be or become democrats. It must come born of conviction. This is an evolutionary process. Or to use an old saying, ‘You can’t teach an old dog new tricks’. Sadly though, the current leadership missed their opportunity to become large personages in Cambodia’s history. This will fall to the next generations. And maybe, just maybe, the leadership will make changes of its own accord. There are modest signs of change for the better evident in today's political life in Cambodia. Perhaps these have been brought on by the spreading wealth and thus more independence in Phnom Penh's middle class. Certainly, confrontation is counteproductive in this evolution.

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