Double Bind: The Politics of Reform in Cambodia by World Politic Review

Posted by: | Posted on: July 19, 2015

Double Bind: The Politics of Reform in Cambodia

Silas Everett Thursday, July 16, 2015
Op-Ed: World Politic Review
Independence Monument, Phnom Penh, Cambodia, June 17, 2015 (photo by Flickr user phalinn licensed under the Creative Commons Attribution 2.0 Generic license).

Independence Monument, Phnom Penh, Cambodia, June 17, 2015 (photo by Flickr user phalinn licensed under the Creative Commons Attribution 2.0 Generic license).

Cambodia’s July 2013 national elections were a watershed moment in the country’s recent political history. Amid charges of electoral fraud, long-ruling Prime Minister Hun Sen’s Cambodian People’s Party (CPP) was declared the winner of the polls by the National Election Committee. Despite the irregularities, the opposition Cambodian National Rescue Party (CNRP) still saw its support surge, winning 55 out of the 123 seats in parliament. The result represented an unprecedented loss of 22 seats for the CPP and prevented it from wielding the two-thirds majority necessary to amend Cambodia’s constitution.

Following the announcement of the results, anti-government demonstrations in the capital, Phnom Penh, reached an estimated 100,000 people. Corralled by security forces, barricades and barbed wire, protesters marched peacefully through the city’s large avenues. Their many grievances included state impunity, corruption, deforestation, forced evictions and land grabbing. But the CNRP’s threat to boycott the national assembly and continued claims that the elections were in effect stolen by the CPP served to band together the multitude of complaints into a single narrative with clear demands: new elections, the overhaul of the election committee and Hun Sen’s resignation.

In January 2014, in response to the unrelenting street protests, government security forces cracked down, suppressing the demonstrations, arresting dozens of activists and closing Freedom Park, which had become a rallying point for the opposition. Almost overnight, the protests were subdued. Without a viable endgame on the streets, the CNRP had few real options but to conclude a negotiated settlement with the CPP in July 2014 and to take its seats in the National Assembly.

Since then, the political stand-off has entered a state of limbo. But while the opposition has had mixed success in advancing its reform agenda, the lack of clear progress does not necessarily benefit Hun Sen and the CPP, which could see their support further eroded in the event they do not respond to the gathering popular demand for change.

As local and national elections loom in 2017 and 2018, respectively, Cambodia’s near-term future is uncertain. The CPP has provided few, if any, signs that it intends to make a peaceful transition of power possible, if the elections make one necessary. Indeed, Cambodia’s recent history gives ample reason to believe that a win by the opposition may only lead to larger-scale unrest and violence.

To win at the ballot box, the CPP will need to pull off a tricky combination: erode the opposition’s base of support; push through social and economic reforms—particularly in the areas of education, health and commerce—to win back the electorate; and close the space for dissent.

However, in the short term, these tactics are likely to create other problems for the CPP. Demographic trends suggest that voters’ expectations of the state will continue to intensify. The need for alternative outlets to let off pressure will only increase. Tamping down dissent is likely to be met with blowback, domestically and abroad. Many of the meaningful social and economic reforms will require breaking up or bypassing patronage networks. This would risk undermining loyalty within the CPP in uncertain times when loyalty is most critical.

As a result, Cambodia’s stability in the medium to long term will ultimately rest on the CPP leadership’s ability to prepare state institutions for a peaceful transition of power. In order to do that, Cambodia will also need to diversify its economy, strengthen rule of law and find ways for China to continue to play a constructive role without creating further dependency. Clearly, this will be a tall order to fill.

Rules of Engagement and the “Culture of Dialogue”

Hun Sen, who led Cambodia out of civil conflict and navigated the CPP into a post-communist era, has been at his country’s helm for 30 years. After two decades of increasing success at the ballot box, the 2013 national elections surprised Hun Sen and the CPP, which found itself within almost 300,000 ballots of losing the popular vote to the CNRP. The CPP went from 90 seats in the National Assembly to 68. The CNRP holds the remaining 55 seats.

With local elections scheduled in 2017 and national elections in 2018, the CPP faces a bulging youth demographic, widening middle class, an impoverished country in need of deep reform and rising expectations in an increasingly globalized society. Hun Sen and the CPP must somehow win back the legitimacy they lost in 2013 to retain power.

Hun Sen’s success at navigating similar transitions in the past has followed a strategy that begins with dividing and isolating the opposition. That will not be easy in this case, as the opposition today is unified and popular. Nevertheless, while it attempts to hold fast, the CNRP certainly risks isolation from its supporters.

The July 2014 accord that brought the post-election standoff to an end just weeks from the one-year anniversary of the disputed 2013 polls followed a violent clash at Freedom Park between opposition protesters and private security guards hired by the municipality.

After months of previous negotiations during which neither side budged, senior opposition leaders ended up dropping their demands for an early election, and the ruling party acquiesced to demands for an independent electoral commission. The settlement ended the opposition’s 10-month boycott of the National Assembly.

Since then, opposition and ruling party leaders have codified their engagement into what they now call the “Culture of Dialogue,” which CNRP President Sam Rainsy described as a “turning point” in Cambodia’s politics.

Nevertheless, almost a year on, Rainsy is still at pains to convince his supporters of the Culture of Dialogue’s benefits. What has emerged out of the arrangement is a set of principles to prevent threats and insults between the ruling and opposition parties. These include a seven-point list outlining what party members are allowed to say in public speeches. For example, the code of conduct bans the CNRP from employing anti-Vietnamese rhetoric against the CPP andostensibly prohibits the ruling party from threatening civil war or arrest. The stated goal is to establish a framework of civility to avoid political differences from escalating into violence.

But as a result of having effectively traded in its most effective means of pressuring the government, namely public criticism and protest, the CNRP has found itself hamstrung.

Meanwhile the CPP’s powers to constrain the opposition movement may be getting stronger due to what the Culture of Dialogue doesn’t cover. In particular, Hun Sen has stressed that it is a political principle that has no bearing on legal actions taken by the courts. This took on added significance after the CPP passed three laws on the judiciary in early 2014 that purported to provide the government the means to clean up the courts, but which in fact gave the executive branch effective control over the judiciary. The courts have since then accused and indefinitely detained dozens of opposition activists for inciting violence.

As the courts apply pressure from the outside, maintaining trust and cohesion within the CNRP is becoming an increasing challenge. Since the CNRP was formed in 2012, the CPP has tried to play on its inner party fissures. This has included tactics such as leaking tape recordings of arguments between Rainsy and the party’s vice president, Kem Sokha. Compared to Rainsy, Sokha is viewed as a more outspoken critic of the CPP-led government and more ready to mobilize CNRP’s supporters to protest as a tool to seek political advantage. Kem Sokha has continued to express concerns over the July 22 political deal and, unlike Rainsy, has avoided public appearances with Hun Sen.

Nevertheless, Kem Sokha has so far been unwilling to sacrifice the CNRP’s unity. Instead, he has himself endorsed the Culture of Dialogue, explaining that dialogue “doesn’t mean surrender.”

But the danger for the CNRP is real, as Hun Sen has used similar tactics in the past to delegitimize rival parties. In the 1990s, for instance, after the Royalist party FUNCINPEC won the 1993 elections and shared power with the CPP, it was unable to show results from its privileged access to power and soon largely disappeared as a political force.

Chheang Vannarith, a lecturer at Leads University, argues there is a fundamental difference between the 1990s and today, however. “The [CNRP] is utilizing the parliament to work with the government on reforms,” Vannarith explained, rather than sharing power.

The Culture of Dialogue could end up dividing the CNRP or isolating the party from its supporters. But even if the CNRP is not yet weakened, Hun Sen has bought himself time to shore up internal party support in the CPP.

The CNRP’s Mixed Record on Reform

For some in the opposition, the current state of affairs may seem like a spectacular reversal of fortune, especially considering the excitement and euphoria that gripped the country leading up to the 2013 elections and its tense aftermath. At that time, it seemed a new day for Cambodia’s political system had dawned. The easy return to a “business as usual” environment after July 2014 may disappoint many of those who hoped for change in 2013, but they need not be so disheartened.

Though the CPP has grown comfortable in its seat in power, it appears to have accepted the need for a legitimate, if peripheral, opposition. Unlike Vietnam or China’s single-party systems, there are no term limits on the top leadership positions within the CPP. With limited competition inside the ruling party, Cambodia’s political system has arguably remained stable because of the presence of an opposition to provide at least a modicum of accountability and a check on power, albeit in a Cambodian version of democracy.

It is also unfair to argue that the CNRP has brought no change. Within months of entering parliament after the July 2014 deal, it was able to deliver on the promised electoral reforms to be incorporated in the country’s constitution, such as recomposing the National Election Committee  so that “no one party has the upper hand on another,” as Rainsy put it.

Observers note that the NEC deal was far from perfect, as it left out every other political entity besides the CPP and CNRP. Meaningful civil society participation was left out of the debates during the drafting of the accompanying election law. Moreover, critics contend that the new election law curbs media and NGO scrutiny of the election process.

For some, the CNRP’s record in parliament has fallen short of the rich, public debate on priorities and programs for reform that was hoped for. To be fair, CNRP promised “democratic transformations” only after winning the 2017 and 2018 elections.

Still, the Cambodian electorate gives signs of undergoing a significant evolution compared to the country’s past. Rather than loyally following any particular party, the increasingly younger electorate is making support contingent on progress toward reform. Cambodia’s 10 million young people under the age of 30 account for 70 percent of the population. Moreover, an increasing number of Cambodians are accessing “independent” news outlets to follow current events, and they are more and more discerning about news and information.

This explains why, apart from focusing on getting electoral reforms passed, the CNRP made it a priority to win the rights to a TV station license. The station represents a crack in the wall of the largely CPP-controlled media. However, with social media on the rise, television news must now compete with other readily available online content.

In such an environment of choice, the CNRP may find it harder to convince voters of the merits of its platform. At the least, the party will have to do more than harvest anti-CPP sentiment. Critics argue that by entering parliament, CNRP has a lot to show for itself, yet little to show for the democratic principles it touts.

On the one hand, the CNRP is delivering on what it promised: electoral reforms, power-sharing in parliament and obtaining a TV license for the opposition. On the other hand, supporters of the CNRP cannot help but compare its current softened line with its more militant demands from a little over a year ago, when it still called for Hun Sen to step down and the CPP to relinquish power.

The CNRP is now tacitly asking its supporters for patience. With a tamed opposition undoubtedly playing into the CPP’s hands, the likely question on the lips of CNRP supporters will be increasingly, “Patience for what?”

The CPP’s Shaky Commitment to Reform

After the July 2013 elections, the CPP paused briefly for introspection and considered how it had lost 2.5 million votes compared to the previous election. The CPP’s leadership appeared to understand that reform was needed to keep the electoral slide from continuing in the future. “Nepotism, the gaps of policy enforcement, corruption, abuse, loss of confidence in the judicial system, inequality before the law, land grabbing, deforestation and questions of border and migration” all contributed to the party’s losses in the 2013 elections, according to a leaked internal party report.

In September 2013, Hun Sen gave a six-hour speech at the Peace Palace directed at his newly appointed ministers. In his words, “Deep reforms will be focused on legal and judicial reforms, anti-corruption, good governance and land and forest management.” He added that if government officials abuse their positions, “people [have] the right to point their fingers at ministers or officials.”

In December 2013, Hun Sen elaborated further, underlining the “imbalances” Cambodia faces, including its monetary policy, trade deficit, weak infrastructure, low wages, poor human resources, lack of jobs, migration for labor abroad and a domestic labor deficit. A raft of reforms were articulated in the 2014-2018 National Strategic Development Plan.

Clearly, then, the signal for change is strong. The question remains how committed the CPP really is to following through on reforms when the going gets tough.

Hun Sen declared in April that he will seek a fifth term as prime minister, which seems to suggest business as usual. And in the wake of the death of longtime CPP President Chea Sim, who was once considered to head a faction that rivaled Hun Sen within the party, Hun Sen has moved to unify the CPP. By installing himself as party president, Hun Sen now appears unrivaled within its central power structure.

At the same time, though the CPP’s top leadership remains the same in many ways, the party’s upper ranks has started to renew itself. At its extraordinary congress in January 2015, the CPP added 306 new members to its Central Committee, including all provincial and municipal governors, and representatives of the security forces chairing the committees overseeing the military and police. While the move ushered in some much-needed younger blood, one can assume that loyalty to the party requires obedience, which can easily morph into impunity. The impact of the changes in the party structure on reform is therefore likely to be mixed.

Within his Cabinet, Hun Sen appears to have found capable champions for his reform agenda. Since the elections, he has appointed at least three new ministers who are now visibly pushing forward with reforms in education, as well as economic and environmental policy.

In particular, Minister of Education Hang Choun Naron developed a comprehensive education reform plan that appears nothing short of revolutionary. If carried through, the plan will help Cambodia prepare for a much more globalized economy, especially in light of the establishment of the ASEAN Economic Community this year. The government has also agreed to add an Education Committee to its ongoing Government-Private Sector Working Group, an entity that under Hun Sen’s leadership meets regularly to try and resolve problems of mutual concern. Insiders say the working group has achieved a number of major successes in improving the business climate over the years.

The education reforms appear to be resonating with Cambodians, an extremely positive sign that reform can work in the party’s favor. Nevertheless, the constraints to reform are sizeable and systemic. From school management and teacher qualification to annual budgets and building maintenance, considerable political and financial capital is needed to transform a sclerotic system characterized by neglect and impunity for those who use their positions for personal gain.

Last year at a university graduation ceremony in Phnom Penh, Hun Sen himself reflected on the source of the gridlock. He publicly complained that “institutions are responding slowly and ineffectively” to the demands of the country, blaming the CPP and the judiciary.

Given the difficulty of transforming such institutions from the inside, one would think the CPP would seek out help from civil society. Instead, the CPP has drafted a package of laws on cybercrime, labor unions and nongovernmental organizations and associations that limit civic engagement that could provide useful feedback to institutions in need of deep reform. Critics contend that these laws are all designed to give the CPP tools to douse any flames of dissent.

Balancing Foreign Benefactors to Maintain Freedom of Action

Cambodia’s political trajectory is highly dependent on external powers. Flanked by Thailand and Vietnam, and colonized by the French, Cambodia has a long history of domination by external forces. Over the past 150 years, Cambodia has navigated its relations with foreign powers through projecting a neutral stance in political relations, while hitching itself to a major power as a benefactor.

In the past decade, the role of Cambodia’s largest benefactor has shifted to China, the most dominant extra-regional player in the Association of Southeast Asian Nations (ASEAN). For China, Cambodia has become part of the supply chain in its expanding political and economic relations within Southeast Asia and beyond.

While China’s loans and grants outnumber U.S. assistance to Cambodia by 5-to-1, the U.S. is the second-largest overseas market for Cambodian goods, behind the European Union, which accounts for about half of the country’s garment exports.

However the U.S. is seeking not only to improve trade relations with Cambodia, but also to improve governance in the country as well. That puts considerable obstacles in the road for Cambodia-U.S. relations.

In his recent nomination hearing, incoming U.S. Ambassador Bill Heidt promised, “If confirmed, I will make it a priority to work with the government, opposition, and civil society to strengthen Cambodia’s democratic institutions and raise the level of public confidence in them.”

However, in the words of Sebastian Strangio, author of “Hun Sen’s Cambodia,” at a recent Brookings Institution event, “the influence of international donors who had sought to push Cambodia towards more democratic form of governance has begun to wane.”

An example came in advance of the 2013 polls, when the U.S. Congress, recognizing the gaps in Cambodia’s election system, threatened to review its assistance program to Cambodia if the national elections weren’t free and fair. In response, Prime Minister Hun Sen dared the U.S. to carry out its threat. Although U.S. development assistance totals more than $70 million a year, Hun Sen quickly warned that Cambodia would simply turn to China to make up for any losses. The same year Cambodia concluded an agreement with China for $500 million in low-interest loans and $48 million in grants. In 2014, China pledged an additional $500 million in aid.

China’s role in backing the ruling party’s policy priorities appears to make it possible for the government to push back against pressure from the U.S. and other international development donors seeking to improve the quality of governance.

China’s development assistance to Cambodia has now reached an estimated $3 billion, largely in the form of concessional loans, grants and Chinese-built infrastructure. Furthermore, Chinese companies have invested an estimated $10 billion in Cambodia. This makes China by far the country’s largest foreign investor, with the Cambodian economy becoming increasingly dependent on Chinese capital as a result.

In recent years, China has also provided support to the Cambodian armed forces in the form of military equipment including trucks, tanks, helicopters and aircraft, most notably when fighting broke out between Cambodia and Thailand near the Preah Vihear temple in 2010. With the largest defense attaché office in Phnom Penh, China has built military training and medical facilities, and has upgraded the Cambodian navy’s base in Ream. A shipment of small arms from China arrived in Cambodia days after the disputed 2013 elections, and Chinese helicopters were used in the January crackdown on demonstrations in which five protesters were killed.

In return for China’s “no strings attached” assistance program, Cambodia has religiously followed a “One China” policythat excludes diplomatic recognition of Taiwan and has supported China’s position in territorial disputes in the South China Sea. During the 45th ASEAN Ministerial Meeting (AMM) held in Phnom Penh in July 2012, Cambodia, then occupying the organization’s rotating chair, blocked mention of the South China Sea in the meeting’s customary joint statement, resulting in the group being unable to issue a joint statement for the first time in its 45-year history. Among military analysts, there is speculation that if major conflict broke out in the South China Sea, Cambodia might allow China to use the Ream naval base for refueling purposes.

The U.S. is presented with both opportunity and challenge in managing its relations with Cambodia. The U.S. has a sizable Cambodian diaspora in Long Beach, California, and Lowell, Massachusetts, many of whom are anti-CPP and seek to weigh in on elections in Cambodia. However, Washington’s governance agenda grates on the CPP, master of its own purpose-built political system. As a result, the U.S. faces an uphill battle winning over the powerbrokers in Phnom Penh. Meanwhile, there is little consensus among traditional development assistance providers on the way forward in Cambodia.

For the medium term, one can expect that the CPP will be able to juggle relations in a way that will bolster its hold on power. We are likely to see Cambodia deepen its dependency on an increasingly assertive China. As a hedging strategy, Cambodia is also likely to continue to strengthen its economic and security relations with some Western partners, as well as with South Korea and Japan.

Reforming the Economy to Reduce Inequalities

Investor confidence in Cambodia suffered due to the upheaval caused by the July 2013 elections, but following the July 2014 agreement between the political parties, foreign and local direct investment in Cambodia bounced back. In the first quarter of 2015, it reached $2.87 billion, a 573 percent increase from the same period in the previous year, according to the Council for the Development of Cambodia, the government agency that tracks aid and investment. Citing a calmer domestic political environment, the Asian Development Bank, the World Bank and the International Monetary Fund forecast Cambodia’s GDP to grow from 6.9 percent to 7.5 percent for 2015 and 2016.

Such swings put political risk, along with corruption, among the top concerns for foreign investors in Cambodia. It is easy to see why. Cambodia has a rigid, top-heavy political system. The base has called for change.

Until the 2013 elections, increases in economic prosperity had coincided with the CPP’s increasing popularity at the polls. Poverty rates have fallen precipitously, from 52.2 percent in 2004 to 17.7 percent in 2012, according to the World Bank. Cambodia’s GDP per capita reached $1,130 per year in 2014, moving the country into “lower middle income” status in World Bank parlance.

Yet, the 2013 elections were a signal that the economic expectations of many Cambodians had shifted.

Without sufficient employment opportunities at home, Cambodians have increasingly flocked abroad in search of low-skilled work in Thailand, Malaysia and South Korea. Roughly 700,000 Cambodians are believed to work in Thailand alone. These migrants see firsthand Cambodia’s relative deprivation compared to its neighbors.

Cambodia still has the second-lowest GDP per capita in ASEAN behind Myanmar. According to data from the U.N.’s Food and Agriculture Organization (FAO), one out of three children under the age of five is suffering from stunted growth due to malnutrition.

At the other end of the economy, foreign investors find human resource capacity-building a perennial concern also. Brett Sciaroni, the chairman of the American Chamber of Commerce in Cambodia, argued recently in a Phnom Penh Post op-edthat few Cambodians come out of tertiary education with the soft skills required to make Cambodia competitive enough for businesses to set up in the country.

While a significant segment of the population struggles to keep up, a much smaller but highly visible group of Cambodian elites has become extremely wealthy in the past two decades. Those who have become rich are not shy about displaying their wealth or status either, as evidenced by the enormous new villas that have sprung up in Phnom Penh and provincial capitals. Phnom Penh, which has grown substantially in recent years and now has a population of about 2 million, is said to have around 60,000 Lexus SUVs on its increasingly crowded streets, most of them owned by senior government and military officials or wealthy businessmen.

The problem is not merely about conspicuous wealth or the redistribution of it—extensive patron-client relationships shape the overall economy. Cambodia’s business elite have emerged from a tight network of relationships woven by Hun Sen. Most of these are Sino-Khmer businesspeople—many of whom act as “gatekeepers” between Chinese firms and Hun Sen—who have put together multisector conglomerates worth multiple millions of dollars. The result is that there are a lot of small businesses, relatively few medium-size enterprises, and a number of bigger conglomerates, often with monopoly positions in their sector.

Without openly confronting entrenched interests, the government has recognized that it is necessary to even out the benefits of growth. In addition to the education reforms discussed earlier, the government has sought to increase agricultural efficiency and improve the regulatory environment for small and medium-size enterprises (SMEs). For example, for the latter, newly appointed Minister of Commerce Sun Chanthol, a dynamic, former General Electric executive, has introduced ways to cut red tape and create a supportive regulatory environment. Among other things, he has created an online system that cuts the time for registering new businesses to a matter of hours.

It is uncertain whether these improvements will be enough or will resonate with the electorate in order to improve the CPP’s popularity. Regardless, the foreign investors remain generally bullish about Cambodia in spite of ongoing concerns and complaints about persistent corruption, a lack of judicial independence, a government bureaucracy that is seen as less than fleet-footed, very high energy costs when compared to other countries in the region, human resource shortcomings and the ever-nagging impunity issues with regard to those in power.

Looking Ahead 

Over the past 17 years, the Cambodian economy has witnessed remarkable growth. The country’s resilience is due to its proximity to the high-growth regions of East and Southeast Asia, from which has come substantial foreign direct investment in that time. Its greatest risk is the potential for disruption due to political instability, itself driven by the unequal distribution of the fruits of growth discussed above.

With the political climate calm for now, the Cambodian economy is forecasted to bump along in the years ahead at above 7 percent growth. Should growth continue uninterrupted through the 2017 and 2018 elections, it will undoubtedly be a major boost for the government.

However, one can’t help but consider the significant distance Cambodia needs to cover in order to catch up to its neighbors in terms of GDP. In closing the income gap for all Cambodians, further diversification and inclusiveness in Cambodia’s economy is necessary, which requires an internal and external political alignment that can sustain deeper reforms. This is the fundamental challenge, and opportunity, presented to the country’s current leadership and electorate in Cambodia today.

Silas Everett is a development professional concentrating on the political economy of reform in conflict-affected, nascent democracies.  Prior to serving as country representative in Cambodia for The Asia Foundation from 2013 to the present, he served in the same position in Timor-Leste from 2008-2013.  He previously worked at Mercy Corps as senior conflict and governance adviser for South and Southeast Asia.