Cambodia: Political Deadlock


Dr Milton Osborne

Fifty years after achieving independence and ten years after the United Nations-sponsored elections that ushered in the country’s new political system, Cambodia (as at the time of writing in December 2003), still did not have a government. This is despite nearly five months having passed since elections were held at the end of July. In those elections Hun Sen’s Cambodian People’s Party won 73 of 125 seats in the National Assembly, nine seats short of the two-thirds majority that would have allowed him to form government in his own right. This left FUNCINPEC, with 26 seats, and the Sam Rainsy Party, with 24 seats, in a position to bargain for inclusion in a coalition government.

At the beginning of November it appeared that a deal along these lines was possible after King Sihanouk intervened to broker a settlement between the squabbling politicians. Under the settlement FUNCINPEC’s leader, Prince Ranariddh was to remain President of the National Assembly while Sam Rainsy was to occupy the position of Vice-President. The coalition deal came undone when Hun Sen sued Ranariddh for defamation in connection with remarks the latter allegedly made concerning those purported to be involved in some way in the murder of a reporter with links to Ranariddh’s party, FUNCINPEC.

Sihanouk has described this rather surreal situation as ‘Kafkaesque’. More to the point, as the political stalemate continues Cambodia’s economic situation is being put at some risk. There are already suggestions that various aid donors will not consider allocation of funds to Cambodia while there is no government in place. Lack of transparency has already led to Belgium and the Netherlands suspending aid to Cambodia.

While there is no indication of when and how the situation will be resolved, it is interesting that Sam Rainsy is speaking with great confidence of the National Assembly meeting and of a government being installed early in 2004.

Environmental issues have been receiving considerable attention in Phnom Penh in recent weeks. There is considerable concern at the damage being caused as a result of unannounced water releases from Vietnam’s Yali Falls dam which is located on the Se San River (the river rises in Vietnam but flows through Cambodia’s Ratanakiri and Stung Treng provinces into the Mekong River). Lives have been lost and riverside agriculture badly affected by the water releases. Cambodia has opened negotiations with Vietnam in the hope of receiving compensation, but so far Vietnam has not agreed to make any payments.

Meanwhile, controversy has arisen over plans to construct a heavy-fuel-oil electric power plant in Siem Reap province, about 15 kilometres from the famed Angkor Wat temple. The project proposed by a Taiwan-United States consortium is opposed by both the World Bank and the Asian Development Bank and by environmentalists who fear that the plant would emit large amounts of sulphur dioxide which would fall as acid rain on the Angkor temples during the wet season. Debate over this issue is taking place against the background of Cambodia’s very real need to find a way to lower the cost of electricity.

WATCHPOINT: Will a resolution of the political stalemate that prevents further policy paralysis be achieved? When will that be?


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.

Go to top