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On 25 August a UN expert team arrived in Phnom Penh to advise the Royal Government of Cambodia (RGC) on a proposed genocide law for trial of top Khmer Rouge leaders. Their arrival has been soured by a dispute on whether the court (which the UN concedes may be on Cambodian soil) should have a non-Cambodian prosecutor and a majority of foreign judges. The Cambodian Government (both Hun Sen and his coalition partner Prince Ranariddh) reject this condition as a violation of Cambodian sovereignty. Opposing them are powerful UN and US human rights secretariats and lobbies, their Cambodian out-rider Non-Government Organisation, the US State Department, and the Sam Rainsy Party. The question goes to the international credibility of the Cambodian Government. Hun Sen is under great international pressure to concede that his country is not competent to control these trials. Sam Rainsy is exploiting the issue as a means to revive his flagging political fortunes and to discredit Hun Sen. At this stage it is not clear which side will concede: the best guess is that the UN will.
Despite such pressures, Cambodia's steady recovery of international and regional standing continues. ASEAN Secretary-General Severino visited Cambodia in July for cordial summit talks. Hun Sen pledged that Cambodia will observe ASEAN's spirit and solidarity. Land and sea border negotiations with Thailand and Vietnam are making steady progress. More border crossings are being opened. A new United States Ambassador (Kent Wiedemann) took up duty after a lengthy Sam Rainsy-inspired Congressional challenge to his credentials. International media coverage of Cambodia improved, with favourable feature stories by Barry Wain in the Wall Street Journal and Asian Wall Street Journal and favourable editorials in the Bangkok "Nation".
The economy is now growing at an estimated 4 per cent per annum. Tourist arrivals grew 21 per cent over the past 12 months and are now almost back to pre-1997 war levels. Cambodia's fastest-growing and leading export industry – garments – doubled its output from 1998 to 1999, and now employs an estimated 100,000 workers. The industry is being developed with capital and management from Malaysia, Taiwan, China and Singapore (Cambodia's four leading sources of private foreign investment). The United States – the main market - has imposed quotas but will ease them as labour conditions improve. Suzuki and Honda are to open motorcycle assembly plants in Cambodia to serve the growing local market. Oil handling and storage facilities in the main port Sihanoukville are to be substantially expanded, and the rubber industry rehabilitated. On balance, things are going well for Cambodia.
WATCHPOINT: Will Hun Sen's international and local opponents succeed in exploiting the Khmer Rouge trials issue to destabilise the continuing steady recovery in Cambodia's international standing and national morale?
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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