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Posted by: | Posted on: March 27, 2019

Japan Should Stop Acting Like China in Cambodia

Japan Should Stop Acting Like China in Cambodia

Tokyo is fighting a losing battle for Hun Sen’s support, and selling its own legacy in the democratization of Cambodia short. Published in The Diplomat

Brad Adams, Asia Director, Teppei Kasai Program Officer, Asia Division

2013_Cambodia_Shinzo
Japan’s Prime Minister Shinzo Abe speaks at the ASEAN Plus Three Summit in Bandar Seri Begawan on October 10, 2013.
  © 2013 Reuters

In a dimly lit ballroom at a Tokyo luxury hotel, Sok Chenda Sophea, the secretary general of the Council for the Development of Cambodia and the minister attached to Prime Minister Hun Sen, persistently asked about 200 Japanese businesspeople to invest in Cambodia.

“Cambodia is not mini-China, come [visit],” Sophea said at the Cambodian Investment Forum on March 5. Sophea’s 30-minute speech mentioned everything from special economic zones to Japanese Overseas Development Assistance.

But Cambodia’s major crackdown on dissent and its ban on the main opposition party before last year’s election were not on his agenda. When questioned by Human Rights Watch about whether the Cambodian government has concrete strategies to ensure rights protections for the Cambodian people amid a growing number of foreign investments and development projects, Sophea dodged the question.

“I’m sorry to say, but we’re in a business seminar,” Sophea said, apparently not concerned that illegal land confiscation for business projects and the abuse of workers are among the country’s biggest rights problems.

Japan has been important to Cambodia, for decades its largest aid donor and one of its largest foreign investors. Now, with China surpassing Japan in both areas, the Japanese government appears willing to throw its principles out the window to compete with China for Hun Sen’s affections.

Given Hun Sen’s dictatorial and violent record, this is a contest that Japan can’t – and shouldn’t want to — win.

Despite Sophea’s denials, in recent years, Hun Sen, who has held power for 34 years, and Chinese President Xi Jinping have been inseparable. They kicked off 2019 by striking a deal involving what Hun Sen described as a Chinese grant of nearly $600 million and a pledge to import 400,000 tons of Cambodian rice. The two agreed on a target of $10 billion in bilateral trade by 2023.

The deal was topped off by smaller investments and loans, including an agreement from China to provide a bodyguard compound for Cambodia’s Council of Ministers. This is very worrisome, given that Hun Sen’s bodyguard unit has long been responsible for bloody attacks on the prime minister’s critics, including an infamous 1997 grenade attack on a political demonstration by the then-leader of the opposition, Sam Rainsy.

For Xi Jinping and Hun Sen, it was business as usual. Since the 1998 demise of the Khmer Rouge, which China helped propel to power, leading to the deaths of as many as 2 million Cambodians, China has poured billions of dollars into Cambodia in loans, aid, and investments. By 2010, China became Cambodia’s largest foreign donor, though much of its aid is in loans that Cambodia may never be able to repay. In 2018, China accounted for nearly half of Cambodia’s $6 billion foreign debt.

Presiding over a one-party state at home, the Chinese government doesn’t have to consider public opinion when supporting dictatorships or account for the expenditure of its funds. It can bribe officials with impunity. Things are different in Japan.  

This has left Japan in a bind. Despite the worsening climate for human rights in Cambodia, Japan still shies away from open and clear criticism, while continuing to provide large amounts of aid and staging high-level visits, all to charm the deeply unpopular Hun Sen.

But Japan is fighting a losing battle for Hun Sen’s support. Japan can’t outspend China or deliver sweetheart contracts to Cambodia, yet its overt and clumsy attempts to ingratiate itself have led to a backlash among Cambodian activists, who see Tokyo selling out democracy and human rights to maintain a friendship with a dictator. Activists see this “values free” Japanese diplomacy contributing to the seemingly irreversible decline of democratic values in Cambodia.

That became increasingly apparent in the lead-up to the July 2018 Cambodian national elections. Fearing defeat, the government dissolved the opposition Cambodia National Rescue Party (CNRP), kicked out its members of parliament, and imposed a five-year political ban on 118 of its senior members. Hun Sen also cracked down on independent media outlets, journalists, and independent organizations promoting the rule of law, democracy, and human rights.

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Posted by: | Posted on: January 17, 2018

WHY DID JAPAN KEEP ASSISTING NEC?

Op-Ed: CSIS

By Sek Sophal

After a series of crackdowns by the Cambodian government on independent media, civil society organizations, and a main opposition party in late 2017, Western countries swiftly responded by imposing visa restrictions on Cambodia’s high-ranking officials and terminating development aid. However, Japan, as a treaty ally of the US and a democratic country sharing the values of freedom and human rights, has neither terminated its Official Development Aid (ODA) to Cambodia, nor cut its technical and financial assistance for the National Committee for Election (NEC).

Camboda NECSpeaking to the Voice of America on Dec. 22, 2017, Japan’s Ambassador to Cambodia Hidehisa Horinouchi argued that assuring the opportunity for the people of Cambodia to express their political will and strengthening the credibility of the election process were Japan’s motivations to keep assisting the NEC. But Japan’s decision to remain engaged with a troublesome NEC goes beyond transparency of the election to a long-term strategic end to shape Cambodian politics amid growing competition with China for influence.
Cambodia has become an important destination for Japan’s investment, given its supply of low-cost labor, the potential for stable economic growth (averaging 7 percent for the last two decades), and the increased purchasing power of Cambodian people. The growing significance of bilateral diplomatic relations was evident when Prime Minister Abe Shinzo and Prime Minister Hun Sen upgraded diplomatic relations to a “strategic partnership” in 2013. Since then, the number of Japanese companies investing in Cambodia has rapidly increased. According to the Japan External Trade Organization (JETRO), there were just 19 Japanese companies in Cambodia in 2010. By 2015, the number had jumped to 250, making Japan the third largest foreign investor in the country.

Cambodia’s geography plays a crucial role in Japanese thinking: physical infrastructure in Cambodia links Japan’s industrial bases in Thailand and Vietnam. Japan’s East-West Economic Corridor (EWEC), which was initiated in 1998 and became operational in late 2006, relies not only on human and financial capital and industrial bases in newly industrialized countries, such as Thailand, Vietnam, and Malaysia, but also on connections of physical infrastructure in mainland Southeast Asian countries. Although Cambodia was not included in the EWEC at the beginning, political instability and natural disasters in Thailand during the past decade elevated the role of Cambodia in minimizing trade and investment risks and increasing resilience of the supply chain. Massive floods in Thailand in 2011 taught Japan a bitter lesson. According to the World Bank, estimated losses were no less than $4 billion, of which Japan’s investment, particularly in the automobile industries, accounted for a considerable share.

Over-reliance on Thailand is proving to be a dangerous strategy. Oizumi Keichiro, an economist at the Japan Research Institute, notes that “80 percent of investment approvals granted to Japanese business by the Thailand Board of Investment (BOI) relate to investments in Bangkok and the eight surrounding provinces” and all of them are prone to annual flooding. To cope with this growing challenge, the Thailand-Plus-One business model was initiated in 2013 not only to minimize investment risks, but also to increase Japanese competitiveness in both the regional and global supply chain. In this model, Japanese companies are advised to move labor-intensive production to one of Thailand’s neighboring countries such as Cambodia, Laos and Myanmar, while Thailand plays a role as hub of Japan’s investment and production clustering. In this strategy, Japan depends on Cambodia to supply low-cost labor and facilitate its supply chain through the country’s road network and scores of Special Economic Zones (SEZs), which were largely developed and funded by Japan’s ODA and Japanese firms.

The Thailand-Plus-One strategy facilitates Japan’s EWEC and offers Cambodia great economic opportunities. Japan can expand its economic power to slow China’s growing influence in Cambodia. Although trade volume between Japan and Cambodia is far smaller than that between China and Cambodia, Japan can at least prevent China from dominating and monopolizing the Cambodian market as it did in Myanmar. Japan is optimistic that the economic opportunities facilitate stronger and deeper engagement to shape Cambodia’s politics.

Direct engagement with the NEC is strategically important for Japan’s foreign policy. Japan’s ODA wins the hearts of Cambodian people, but not those of Cambodian politicians from the ruling party. Its ODA is vital for Cambodia’s development, but less effective to challenge China’s growing influence in Cambodia. Helping the NEC, a national institution with a notorious history of alleged fraud and election manipulation, is a strategy of choice for Japan to remain a key player to engage, monitor, and if necessary put Cambodia’s election on the path of democracy.

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