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The ‘Respectable’ Faces that Help Cambodia’s Elite Loot the Country
Source: RFA in English , RFA in Khmer, By Jack Davies
For 30 years international donors have poured money into Cambodia, and for 30 years international moneymen have helped siphon it out.
In August 1990, one year before he took up his role as U.S. ambassador to Cambodia, Charles Twining wrote that “the Phnom Penh regime is … acquiring a significant reputation for corruption.” Three decades later the country has the same prime minister, Hun Sen, and his government the same reputation for graft. Another constant for the last 30 years has been the apparent willingness of outwardly respectable banks, realtors and consultants to help politically connected Cambodians expatriate their country’s riches.
In recent months, an investigative series by Radio Free Asia examining the overseas real estate holdings of Cambodia’s ruling elite has turned up properties worth $30 million. Upcoming stories will reveal further properties, worth in excess of $100 million.
That figure is just a drop in the ocean of wealth that leaks out of the country illicitly each year. In 2016 alone, at least $1.8 billion was laundered out of Cambodia, according to an analysis by U.S. think tank Global Financial Integrity.
Cambodia is not alone. Global Financial Integrity estimates that economies around the world haemorrhaged more than $800 billion just in 2017. The global financial system is hardwired to facilitate the movement of capital across international borders as seamlessly as possible, and for as long as it’s been that way there have been well-dressed criminals taking advantage of it.
From Phnom Penh to Panama City
Few names symbolised the symbiosis of political power and commercial clout in 1990s Phnom Penh quite like Teng Boonma. When in 1997 Hun Sen orchestrated a bloody coup against his royalist coalition partners, Boonma admitted – but later denied – that he had stumped up more than $1 million to bankroll the bloodshed. Many observers viewed the cash as payback to a regime that had protected his lucrative businesses that skirted both sides of the law. He was a major importer and exporter of consumer goods and, according to the U.S. State Department, narcotics – a charge he repeatedly denied.
Having spent much of his life in Thailand, like many of Cambodia’s early tycoons he began cutting informal deals with the country’s government in the 1980s, before the economy had officially opened.
It was an open secret at the time that commercial success in Cambodia was only possible with political patronage, which came at a price. A 1994 internal memo from international cigarette manufacturer British American Tobacco stressed the “importance of Government, Provincial official contacts” for doing business in Cambodia, but cautioned, “it’s clearly somewhat of a ‘Pay your money, take your choice’ situation, as to who today of ‘influence’ will be in the same position tomorrow.”
What was true in 1994 was truer still five years earlier, but corporate records obtained by RFA show that did not deter lawyers in Hong Kong – then a British colony – from helping Boonma register and administer a string of Panamanian companies in 1989 to manage his commercial affairs. Meanwhile in Panama, Boonma shared a corporate lawyer with Osama bin Laden’s half-brother.
Passports to freedom
A decade later in 1999, Boonma found himself in trouble with authorities in Hong Kong, where many of his businesses were headquartered, when prosecutors charged him with making false statements to immigration officials. Somewhat ironically, they were forced to drop the charges when the tycoon claimed immunity on the grounds he held a Cambodian diplomatic passport.
Read More …‘Our survival is at stake now,’ Chinese Telecom giant Huawei crumbles after US ban on Semiconductor exports
Original Source TFIPost by Amit Agrahari 19 May 2020 in Opinions
Huawei, the largest Chinese technology giant with annual revenue of more than 120 billion dollars, has said that its “survival” is at stake after USA’s semiconductor (chip) export restrictions on the company. “We will now work hard to figure out how to survive,” said Guo Ping, rotating chairman, at Huawei’s annual analyst conference. “Survival is the keyword for us now.”
Earlier, on Friday, the US released new guidelines regarding the export of semiconductors, the most essential part of any consumer electronics and technology equipments. As per new guidelines, any foreign company which seeks to export semiconductors based on secret American design has to apply for a license to US Department of Commerce, which the department is most likely to deny.
The US Commerce Secretary explicitly said that the Department will “narrowly and strategically target Huawei’s acquisition of semiconductors”. Given the fact that semiconductors are the most essential device for any consumer electronics or telecommunication device; this ban would result in the collapse of Huawei.
“This new rule will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries,” Huawei said in a statement.
In May last year, the US put a ban on American technology export to Huawei by its companies, but many countries in East Asia like Taiwan, Japan, and South Korea manufacture consumer electronics essentials using American technology. Therefore, it was easy for Huawei to game the US export ban and import these products from other East Asian countries, but with new rules in place, even these countries will not be able to supply equipments to the Chinese giant.
Taiwan Semiconductor Manufacturing Company (TSMC), a Taiwanese company that manufactures semiconductors based on secretive American design, announced that the company would not take any new order from Huawei.
Huawei is the second-largest customer- accounting for 14 percent of total orders- to the Taiwanese company which manufactures semiconductors for all top consumer electronics of the world including Apple. Therefore, the ban is bound to hurt TSMC’s business but they would have to follow American rules, as they use secretive American technology to design chips.
Semiconductor, popularly known as the chip, is very essential in manufacturing any modern electronic equipment ranging from Smartphones to Refrigerators, and with the ban on access to it; Huawei would head nowhere in the global technology race.
Read More …Job losses, pay cuts, force Cambodians into bad debts
Job losses, pay cuts, force Cambodians into bad debts
VOA Khmer reported on Debts Disaster Cambodia
Sangeetha Amarthalingam
Original Reference: Phnom Penh Post
Publication date 14 May 2020 | 22:04 ICT
The unrelenting negative economic effect of Covid-19 on businesses and banks’ stringent procedures have put Cambodians in a bind over term loans
In the mid-1970s, when the city crashed and burned in a warped socialist uprising led by Communist Party of Kampuchea leader Pol Pot, untold fear gripped the people.
Today, although less menacing, the fear is surreal as Covid-19 does a number on the economy.
It has resulted in thousands of documented job displacements in the garment sector, and wage cuts among white collar workers in Cambodia, although this has yet to be quantified.
The situation is graver because garment workers, as past studies show, stimulate the economy in the informal sector which is made up of street food vendors, hairdressers and transport providers.
A rough estimate shows that each wage earner in the garment sector supports five to six persons in the informal sector via local economic stimulation.
The government estimates that the temporary loss of some 150,000 jobs in the garment sector would indirectly affect some one million people in the informal sector.
David Van, senior associate of Platform Impact, a public-private partnership, said: “The government’s so-called Covid-19 stimulus plan is [also] not leading anywhere as small- and medium-sized enterprises are finding difficulty securing loans.
“If they close shop permanently, then there would be fewer jobs in the future. The picture is very grim.”
As if that was not bad enough, nearly 90,000 Cambodian migrant workers in Thailand who flooded back home amid the crisis will likely raise the unemployment rate in the Kingdom.
All these could veritably point to an expected growth in indebtedness among Cambodians. Up to 2018, the Credit Bureau of Cambodia recorded $20.9 billion in overall outstanding loan balances, representing 3.3 million active borrowers from 157 financial institutions.
Besides, an updated May report by NGOs Licadho and Sahmakum Teang Tnaut (STT) on the debt crisis faced by the lower strata of the society revealed that more than 2.6 million Cambodian borrowers held more than $10 billion in microfinance debt by the end of 2019.
The report “Driven Out – One village’s experience with microfinance institutions (MFIs) and cross-border migration” said the amount constituted an average loan size of $3,804.
This is supposedly the highest figure in the world, and an increase on an “already troubling” average of $3,370 as of December 31, 2018.
“This debt, the majority of which is collateralised by land titles, continues to pose a significant threat to land tenure security for indebted families and has led to other serious and systematic human rights abuses across the country, including debt-driven migration,” Licadho and STT said.
Based on the report, the situation had already seemed compounding before Covid-19. But the pandemic has sent the Cambodian economy into a tailspin.
Read More …National Emergency Law of Cambodia during Covid-19
Reuters, HRW, New Mandala, UNHCR, Amnesty,
