Planning for success in Cambodia


October 14, 2017

Planning for success in Cambodia

by Jayant Menon

https://blogs.adb.org/blog/planning-success-cambodia

Weak human capital is arguably the biggest challenge for Cambodia to reach middle-income status.
Weak human capital is arguably the biggest challenge for Cambodia to reach middle-income status.

Cambodia recently made the transition from a low income to a lower middle-income country, according to the World Bank’s rankings.

This is good news, but it poses a question: Does Cambodia need to rethink its model of export-driven economic growth, as preferential access for its exports to developed countries is gradually reduced or as aid flows diminish? Not necessarily, at least for now. But it should start preparing immediately.

Cambodia still has least developed country or LDC status as defined by the United Nations, and will likely retain its trade privileges for a while yet. But it will likely transition out of LDC status by around 2030 if it maintains current growth rates. With adequate advance planning, Cambodia can avoid being a victim of its own success when it does so.

That means stronger efforts to improve the tax collection mechanism, and curbing tax avoidance and evasion. Strengthening institutions to improve tax collection, and creating a culture where businesses and citizenry feel an obligation to contribute towards the provision of public goods and services, can take years, so it needs to start now.

Weak human capital is top challenge for Cambodia to reach middle-income status

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Cambodia also needs to expand the tax base, and hasten the move from direct to indirect sources of tax collection, while reducing its reliance on trade taxes. These initiatives are essential to mobilize domestic resources to fund development, given that overseas development aid and concessional financing will wane as the country gets more prosperous.

Cambodia also has several domestic obstacles to overcome, not only to prepare for a transition to upper middle income status, but to speed up that journey.

Arguably the most important challenge is weak human capital, as well as a skills mismatch. To fix this requires a much greater investment in education – not only in vocational or higher education but also at primary and secondary school. The enormity of the task that lies ahead is underscored by the World Economic Forum’s Global Human Capital Report 2017, that placed Cambodia at the bottom of the list in ASEAN.

The goal is making sure all Cambodians have at least 10 years of schooling, forming the basic building block for a much more productive workforce. Then we can talk about specialized vocational or tertiary education, and matching employee skills to employer needs.

At this stage, and based on interviews with Japanese firms operating in the Phnom Penh Special Economic Zone (PPSEZ), what employers are seeking is not necessarily “trained” labor, but “trainable” labor, as skills required are quite job-specific and usually provided on-site.

Agriculture to remain backbone of Cambodia’s economy

Other challenges include the elevated cost of electricity, one of the highest in Asia. Apart from the skills constraint, the cost and unreliable supply of power is the other key factor limiting industry’s progression up the value chain from simple assembly to production of parts and components. If the former is labor intensive, the latter is energy-intensive, and remains uneconomical at current tariffs.

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Agriculture, however, will remain the backbone of the country’s economy for years to come, and during the transition to the next income bracket. Most Cambodians continue to be employed in this sector – either directly or indirectly.

To further reduce poverty and inequality, the agriculture sector must become more productive. To do this requires better irrigation systems, more fertilizer usage, and easier access to high-yielding varieties of crops. The size of farms and variety of their produce should also be enhanced to exploit economies of scale and scope, respectively. Land reform will be essential here.

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Another option is to pursue agro-processing to raise value-addition. Agro-processing combines agriculture and manufacturing. We can see this in products like pepper, cassava or coffee, which add value along the supply chain and boost economic returns.

Cambodia is making good progress towards upper middle-income status by diversifying its economy. There is a lot of new investment from Japanese firms in the PPSEZ that is plugging it into regional supply chains for the first time.  This trend will only continue to grow in the future, creating good jobs for more of the workforce.

Cambodia must plan carefully to preserve economic gains for next generation

While agriculture will remain important for some time yet, there is no denying the long-term trend decline in its share of economic output, and the increasing shares of services and manufacturing. These structural transformations will require reskilling of the labor force to reduce adjustment costs and unemployment.

The challenges in the labor market extend further, however, and involve demographic transitions in a young population seeking productive employment; the much-vaunted demographic dividend will only be realized if the jobs are there to be filled.

These structural changes will also result in rising urbanization as rural-urban migration increases. This must be managed by better town planning to prevent urban slums and create livable cities. One only needs to look at how Phnom Penh’s infrastructure has been stretched over recent years to appreciate the magnitude and importance of this challenge.

Cambodia’s socio-economic achievements since the early 1990s peace settlement have been remarkable. But success brings with it new challenges.If Cambodia plans carefully for graduation from LDC status, it would ensure that the hard-won economic gains are preserved for the next generation.

Why Cambodia is turning its back on the West


September 10, 2017

Why Cambodia is turning its back on the West

opinion September 10, 2017 01:00

By Shaun Turton, Mech Dara
The Phnom Penh Post
Asia News Network

With China throwing its support behind premier Hun Sen, both are protecting each other’s interests

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Their Forebears were abandoned by the United States and its allies; The United States bombed the Cambodian countryside, as Nixon and Kissinger expanded the war, and in the name of democracy and human rights brought tragedy and hardship to the Cambodian people. When it suited American interests, US administrations from Kennedy to Obama (and Trump too) have not hesitated to let history repeat itself.

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His Excellency  Samdech Techo Hun Sen, Prime Minister of Cambodia

Cambodians under the leadership of Prime Minister Hun Sen have learned well; they are naturally cautious and circumspect; and  they are  now seeking new friends and strategic partners who respect Cambodia’s sovereignty and territorial integrity in their effort to build national resilience through sustainable development. The country has enjoyed peace, stability and strong economic growth for more than 2 decades and the way forward for the Cambodian people, in my view, is promising.

The Asian Development Bank has called Cambodia an “emerging tiger economy”.  From a Miracle by the Mekong, the Kingdom is a key member of ASEAN and a proud nation ready to take its place in the community of nations. As a witness to its progress for more than 25 years, I am very bullish.–Din Merican

By Shaun Turton, Mech Dara
The Phnom Penh Post
Asia News Network

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The Cambodian National Flag with the The Independence Monument in the Background, Phnom Penh

Its president imprisoned on a charge of treason and its existence under threat, the Cambodia National Rescue Party last week renewed its calls for the international community to step in and stop what’s widely seen as an all out assault on the Kingdom’s democracy.

But with China throwing its support behind the premier Hun Sen, the West’s statements of condemnation and concern, which have flooded in from embassies, NGOs and the United Nations in recent days, will have little impact, particularly in the absence of concrete measures, analysts said.

Building on a statement of support from China’s Foreign Ministry, senior Chinese diplomat Wang Jiarui met on Thursday with National Assembly President Heng Samrin to offer private assurances amid the mounting criticism, according to Samrin’s spokesman Sorn Sarana.

Jiarui, the former head of the Chinese Communist Party’s international liaison department and current vice chairman of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), reaffirmed Beijing’s support following the late-night arrest of CNRP President Kem Sokha, Sarana said. He said the official, whose committee is described as a non-state organ that advises on state affairs, expressed the sentiment that “an obstacle for Cambodia is also an obstacle for China”.

“China is behind Cambodia to help and support,” he said, relating the discussion. “The success of Cambodia is also the success of China.”

 A representative from the Chinese Embassy in Phnom Penh did not respond to messages to verify Sarana’s characterisation of the discussion, but for analysts, China’s backing was hardly surprising given Hun Sen’s long drift into Beijing’s orbit.

 

Backed by more than $1 billion (Bt33 billion) in foreign direct investment and $265 million in overseas development aid, according to 2016 figures, Chinese support insulates the premier from external pressure, at least to a certain extent, analysts said.

Carl Thayer, a Southeast Asia expert at Australia’s University of New South Wales, said China had previously shown its willingness to supply military equipment and plug holes left by the withdrawal of Western aid. Cambodia, meanwhile, has repeatedly backed China’s position on the contested South China Sea.

“China will pick up the pieces if the US or other donor countries resort to sanctions or other punitive actions against Cambodia,” Thayer said, adding that nonetheless, the support was not a carte blanche endorsement of Hun Sen, who has ruled Cambodia for more than three decades.

“The message was subtle but clear. China will support Hun Sen under these conditions, but if Hun Sen cannot protect Chinese interests they will support a CPP leader who can.”

The premier himself has shown no signs he’s willing to cede power should his ruling Cambodian People’s Power lose next year’s election, announcing on Wednesday that he planned to rule for 10 more years.

Eleven months out from the crucial national ballot, the government has pursued what’s widely seen as a relentless crackdown against the opposition, independent media and civil society, culminating this week with the arrest of Sokha, who faces up to 30 years in prison on a “treason” charge for what officials say is a US-backed plot to topple the government.

A well-connected observer familiar with thinking inside the CPP said the government’s virulent anti-Americanism reflected a belief that the US and US-backed organisations were supporting the CNRP, as well as frustration over Washington’s reluctance to forgive war-era debt. Nevertheless, the observer, who requested anonymity because of the tense political environment, said the escalation against the US was a gamble.

He described anxiety in the CPP about the US’s recent announcement of visa restrictions for Cambodians, which came in response to Cambodia’s refusal to accept deportees as part of a controversial US programme to sends home long-term non-native residents who are convicted of a felony.

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Phnom Penh in the Land of Temples, Smiling People, and Wonder

The possibility of trade restrictions also worried many in the party, he said. The scrapping the EU’s “anything but arms” preferential trade arrangement, or the US’s zero tariffs for travel wares could have “devastating” economic consequences given European and American markets are vital to Cambodia’s almost $7 billion garment export sector. With the minimum wage rise in Cambodia making other countries in the region more appealing to manufacturers, lead ASEAN analyst for the Economist Intelligence Unit Miguel Chanco said such moves would be a stronger tool than aid cuts, which have long been threatened but without much impact.

However, in light of North Korea’s nuclear ambitions and the Myanmar military’s crackdown against ethnic Rohingya in Rakhine state – and considering the political upheaval in the US and EU – discussions of such actions were “unlikely” to feature high on the agenda, he said.

Simply put, the EU and the US have bigger domestic fish to fry. The former is dealing with the complexity of Brexit, while the latter is busy dithering on Donald Trump’s controversial domestic agenda,” Chanco said.

According to a government database, China last year provided about 30 per cent of Cambodia’s $1 billion overseas development aid budget, followed by Japan, which contributed 10 per cent, and is also second only to China for foreign direct investment.

Following Sokha’s arrest, the Japanese Embassy released a cautious statement calling on the ruling and opposition parties to “make efforts to create a suitable environment to realise a free and fair” election.

Deputy Asia Director of Human Rights Watch Phil Robertson urged Japan not to “soft-pedal”, and to use its central role at the UN Human Rights Council to take a strong position against threats to the legitimacy of next year’s election, noting Tokyo was a major supporter of preparations for the upcoming ballot and had led the UNTAC mission that staged Cambodia’s 1993 vote.

“I would take five statements of concern, and if I got something from Japan that was somewhat terse and tight and strong, I would match those up against the others,” Robertson said, noting Japan’s preference for closed-door diplomacy.

“Japanese critical statements are sort of like unicorns; you get a critical Japanese statement, it’s like, ‘Did I just see a magical creature?’”

A small glimpse of Japan’s behind-the-scenes courting of Cambodia emerged last month, when Hun Sen posted a video of a surprise birthday party organised in Tokyo by Prime Minister Shinzo Abe, complete with a personal rendition of “Happy Birthday” and a new set of golf clubs.

Paul Chambers, a Southeast Asia expert at Thailand’s Naresuan University, said Japan’s “jousting” with rival China would likely temper the strength of any public response, and the potential of punitive action.

“If Japan were to walk away from Cambodia, Tokyo would provide a vacuum which Beijing would only be too willing to fill,” Chambers said.

Noting Toyko had “little appetite for confrontation”, associate professor of diplomacy and world affairs at Occidental College, Los Angeles Ear Sophal said he saw little hope for anything “dramatic and coordinated” from the international community.

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A new Chinese-built bridge, on the right, spans the Tonle Sap River in Phnom Penh, running parallel to the bridge Japan helped construct in the 1960s.–Putting Words into Deeds is what counts.

“The last time anything serious happened in terms of aid suspension [1997], 100-200 people died,” he said, referring to the violent factional fighting in which Hun Sen ousted his royalist rivals from a coalition government.

“And, indeed,” he added, “China has already made a statement endorsing Cambodia’s actions.”

 

 

KayJay on ASEAN beyond 50


August 17, 2017

KayJay on ASEAN beyond 50

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As ASEAN celebrates its Golden Jubilee, it is opportune for us to take a step back and ask our people what they want of the regional bloc in the next 50 years before striving forward together as one community.

THERE has never been a better time to examine ASEAN as a regional bloc, how far we have come and where we are heading next. It has been exactly 50 years since ASEAN was formed and since then, this regional bloc has never been stronger and more prominent in the global stage.

Malaysia will always be a pro-active member of ASEAN and other multilateral organisations. Our success story as a nation has been predicated upon the stability provided by a multilateral framework. Malaysia as a country is one that reaches beyond its potential and one that has always set its sight on the distant future. For that reason, we must be integrated into a region that is greater than the sum of its parts.

The past is prologue while the future is ours to shape. While taking lessons from the past, we must continue the work of building the future.

Immediately after the 1969 riots, Malaysia embarked on the New Economic Policy, which was to be a new deal for Malaysia in eradicating poverty and rebalancing the economic distribution in the country. Thirty years later, that was followed by Vision 2020, which would leapfrog Malaysia to a country that is modern and developed.

As we are nearing 2020, it became imperative for us to ask ourselves “what’s next?”. The world in 2050 will be much different from the world today – what will guide us to face this future?

This is I have been tasked to reach as many youths as possible to get their aspirations of what they want to see the nation be in the future, to be recorded in a massive plan called the National Transformation 2050 (TN50).

TN50 is an initiative to plan for the future of Malaysia in the period between 2020 and 2050. From the vision of becoming a developed nation, we should strive to be among the top countries in economic development, citizen well-being and innovation.

For this, I’ve spent the first six months of 2017 traveling through all corners of Malaysia, reaching out to more than one million youths and what they aspire for. Most of them coalesce around wanting a future that is fair, sustainable, competitive, united and happy.

What that means is we want a future that goes beyond the old measurement of GDP growth as an indicator of success to one that looks at well-being more comprehensively. One that looks into wealth and income inequality, healthcare, access to quality education, environmental protection, a good standard of living, integrated public transport, sporting achievement, civic consciousness and greater investments into scientific research, among many others.

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With shared dreams come shared responsibility – and nothing binds a society better than having a common weight on their shoulders. Similarly, as ASEAN heads towards 2050, it is opportune for us to take a step back, ask our people what they want of ASEAN in 2050 and then strive forward together as one community.

The challenge of automation and robots, the need for a differently-skilled and adaptive workforce, the breakdown of societal fabric into smaller family units, the shifting powerhouses in global trade and many other challenges await us in the near horizon.

Though individual countries are looking at these in their own way, there are many areas we can embrace together, leveraging on individual strength to compensate for individual weaknesses, so ASEAN can future proof the region and truly become a global powerhouse in the next 33 years.

What would we like ASEAN to be in the next decade, or five decades? The current generation entrusted with the responsibility to shape the future of ASEAN would like to see an ASEAN that will be able to realise all of its potential. An association consisting of 10 sovereign high-income nations fully developed with prosperity for all. It is indeed a tall objective, but not an impossible one, for ASEAN is a work perpetually in progress passing from one generation to the next, a sacred trust to be upheld.

I am an optimist on the future of ASEAN and I am a firm believer in its role as the catalyst for peace and prosperity in this region. Our fate in ASEAN has been pre-determined by our geography. As the saying goes, we can choose our friends but we cannot choose our neighbours.

The success of one nation in the region will have a positive bearing on all, while the failure of any will have a calamitous effect on all. ASEAN’s future is in its togetherness. We can either leverage on our collective strengths to soar together towards greater heights or go separately to face a more dangerous and challenging world.

Economically, we must continue to build upon the ASEAN Economic Community. More integration is needed, not less. By all means draw lessons from Brexit but the right ones not the wrong ones. We must be serious to further bring down barriers to trade both tariff and non-tariff.

We must work to better integrate our economy and welcome investments, ease the process of doing business, and protect intellectual property while better leveraging our various competitive advantages. Healthy competition coupled with pragmatic cooperation must be the way forward.

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ASEAN leaders must focus on good governance, fight corruption, end crony capitalism and work for peace, stability and development with equity. Make ASEAN relevant to the lives of Southeast Asians. That means more action and less talk.–Din Merican

We must work to make ASEAN more relevant to the needs of members and the challenges that they are facing, be it political, security or economic. ASEAN will continue to thrive, despite its many challenges, if every member perseveres to make it a national priority; for the national interest of each member could only be advanced effectively through ASEAN collectively.

The first 50 years is coming to an end, so let us now turn the work at hand to the next 50 years dedicating it to the future generation. Let us continue to build on the dreams of the founding fathers of ASEAN who started a journey so improbable that they themselves in their wildest imaginations never could have thought how successful it would eventually be.

That 50 years later, we are marveling at their collective wisdom in every capital of a united ASEAN is the most fitting tribute of all to this greatest and most enduring of endeavours.–by Khairy Jamaluddin

Khairy Jamaluddin is the Youth and Sports Minister. The views expressed here are entirely the writer’s own.

Cambodia–Civil Servants and the State


August 5, 2017

Cambodia–Civil Servants and the State

by David Hutt

http://www.newmandela.org

There are times when the work of a journalist in Cambodia is made so easy. Compared to some other countries, where politicians rarely say what they think (or think beyond what they are told), Cambodian officials tend to wear their innermost thoughts on their sleeves, words rolling from the tongue in almost stream-of-consciousness fashion.

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Prime Minister Samdech Techo Hun Sen delivers peace, stability and development. Young Cambodians are proud of their country

Such an occasion happened on Monday when Vong Sauth (sometimes spelled Vong Soth), the social affairs minister, spoke at a small gathering for the appointment of new civil servants. The Phnom Penh Post quoted him: “Officials eat the state’s salary, and are asked to be neutral, but do not forget that the state was born from the party, and I think all of our officials must have the clear character of firmly supporting the party.”

Oh, such honesty. By officials, he means civil servants. And by saying this, he echoed what pundits have long accused the ruling Cambodian People’s Party (CPP) of doing: making civil servants’ jobs dependent upon their support of the party. Indeed, Sauth went on to say that civil servants can’t support the political opposition, the Cambodia National Rescue Party (CNRP). “If anybody does not support the CPP, submit applications of resignation, and I can help you [with that], but if you are loyal to the CPP you must vote for the CPP, and then you can stay,” he said.

Knowing where the State begins and Party ends in Cambodia entails a microscopic study. It used to be said of Prussia that it was “not a country with an army, but an army with a country”. Might Cambodia be rendered “not a country with a party, but a party with a country”?

The military, supposed to be an independent of political parties in any democratic society, is already firmly symbiotic to the CPP’s interests. Last year, Chea Dara, a high ranking military officer who was incorporated into the CPP’s Central Committee, said: “Every soldier is a member of the People’s Army and belongs to the CPP because [Prime Minister Hun Sen] is the feeder, caretaker, commander, and leader of the army… I speak frankly when I say that the army belongs to the [CPP].”

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Cambodia at Sunrise–Calm, Serene and Captivating

And now we have Sauth demanding loyalty declarations from civil servants. Phil Robertson, Deputy Asia Director of Human Rights Watch, wrote in an email to journalists that he “should be immediately fired for his outrageous remarks that demonstrate he knows nothing about either human rights or democracy.” Robertson went on: “He shows his ignorance of modern democratic principles when he fails to recognize that in a democracy, it is politicians who are elected to make decisions on law and policy, but the civil servants have different duties, such as carrying out the day to day functions of government in an impartial and professional way”.

Prime Minister Hun Sen publicly responded to Robertson by saying he was “better off focusing on his chaos-ridden, war-mongering U.S. home that was unfit for the premier’s grandchild”, as the Cambodia Daily phrased it.

Since 1979, the State has been fashioned by the CPP—or “born from the party”, as Sauth said—and, like any offspring, it shares much maternal DNA. And, although the CPP supposedly discarded its communist credentials in the early 1990s, they weren’t completely lost. As I wrote at The Diplomat:

“Not dissimilar to the reign of Norodom Sihanouk, or the Angkor “god-kings” of earlier centuries, Cambodia operates a system noblesse oblige. Education, roads, and other basic services are, typically, not provided by the state but by the ruling CPP – at least this is how the government spins it. Rather than a welfare state, Cambodia has a philanthropic party. And all of this development work comes with the express condition of voting CPP when elections come around.

In an earlier article I described the ethos this creates amongst ordinary Cambodians and the civil servants: “because basic services are doled out by the party and not the State, they have to be earned.” One might also add employment for civil servants to this.

If this is a problem now, it will become even more apparent as the next general election approaches (it is set for next year). Sauth seems to think victory for the CPP is assured: it has the human resources, money, and power, he said. In his speech, he also imparted what was discussed at an internal meeting the day before, at which, he said, Prime Minister Hun Sen laid out the party’s strategy: “This election, if there are more problems with protests, your heads will be hit by the bottom of bamboo sticks.”

Elections in Cambodia are testing anyway but added to this is the knowledge that a handover of power to another political party (if that ever happens, or is allowed to happen) also entails the reformation of much of the State apparatus. Indeed, the question for the opposition CNRP is not just whether it can win next year’s general election but whether it can take over a State that appears inseparable from the CPP. This, in fact, might be the more difficult task.

David Hutt is a journalist and writer based in Phnom Penh. He is also the Southeast Asia Columnist for the Diplomat, and a contributor to numerous regional publications.

 

Promises and Pitfalls of the Belt and Road Initiative


July 20, 2017

Asia Pacific Bulletin
Number 388 | July 19, 2017
ANALYSIS

Promises and Pitfalls of the Belt and Road Initiative

By Bipul Chatterjee and Saurabh Kumar

China’s signature economic and foreign policy project – the ‘Belt and Road Initiative’ (BRI), also known as ‘One Belt, One Road’ (OBOR) – is the most ambitious global connectivity project ever launched by China or any country. The project aims to connect 65 Asian, African, and European countries comprising two-thirds of world’s population, through various sub-projects. The estimated investment cost for realizing this project is $4-8 trillion.

The goal of BRI is to connect China with Asia, Europe, and Africa through a network of railways, highways, oil and gas pipelines, fiber-optic lines, electrical grids and power plants, seaports and airports, logistics hubs, and free trade zones.

The promise of BRI

First, a promising aspect of this initiative is the potential reduction in transportation costs which would reduce the price of trade more broadly. At a time when countries are looking for specific measures to reduce trade costs and shying away from free trade agreements, a reduction in transportation costs as a substitute for trade deals can effectively widen the volume of international trade. A Bruegel study pointed out that a 10% reduction in railway and maritime costs can increase trade as much as 2%, while the effects of a reduction in tariffs would take a much longer time to be felt. An Asian Development Bank and Purdue University study estimated that improvements in transport networks as well as trade facilitation measures could increase the gross domestic product (GDP) by 0.3 % for India and 0.7 % for the South Asian region as a whole.

Second, BRI presents huge business opportunities for companies engaged in infrastructure development. A total of over $900 billion is expected to be invested in roads, ports, pipelines and other infrastructure as part of the project. This could immensely benefit countries suffering from inadequate infrastructure for their economic development.

Third, from the point of view of trade facilitation there are a number of factors that will create dynamic effects. China may accrue significant long-term trade benefits if it reduces tariffs through free trade zones, particularly on products from BRI countries. Beijing is also expected to reduce some of the non-tariff barriers hampering the prospects of foreign firms doing business in China including in those emerging areas such as internet banking and electronic commerce.

Potential Implications

Apart from the sheer number of participating countries, BRI appears to be both economic and strategic in nature. This became visible during the recently held Belt and Road Forum for International Cooperation in Beijing. The initiative came under scrutiny after European Union officials voiced apprehensions over transparency, labor, and environmental standards. This resulted in the EU’s refusal to endorse a trade statement tied to BRI. India’s non-participation due to sovereignty issues relating to the China-Pakistan Economic Corridor passing through part of Jammu and Kashmir also served as a serious dampener.

Even though BRI seeks to create trade infrastructure around India, it also encircles the country by creating a ring through land and sea routes passing through several countries with which India has sensitive relationships. However, India – with around 90% of its international trade through maritime routes and only 10% by rail and road – is comparatively less likely to see much benefit through enhanced connectivity under the initiative. Most of India’s maritime trade occurs from its western ports located in Arabian Sea and via land routes within the Bangladesh-Bhutan-India-Nepal network.

In presenting BRI, China appears to be unaccommodating with respect to political and diplomatic issues as well as economic concerns. Trade facilitation alone cannot drive trade flow upward. There needs to be smart and secure management of trade routes so that end-to-end supply and value chain networks can be strengthened. In recent times, piracy has emerged as a major potential threat for railways and highways as well as maritime routes. BRI does not address these challenges in a meaningful way.

Although the project was launched around four years ago, it suffers from a lack of key information, operational strategy, terms of reference, and detailed work plan for the role of partner countries. This has eroded trust.

The Next Steps

While it is true that China’s economic and strategic interests are intertwined, it would have been beneficial for the BRI to be planned more holistically in order to give due consideration to the economic and political interests of other participating countries. For a large project like BRI, an international governance structure involving all the participating countries to institutionalize objectives and safeguard the interests of participants has to be established now with a particular emphasis on financial mechanism. The decision-making structure for the execution of BRI should be based on consensus.

“While it is true that China’s economic and strategic interests are intertwined, it would have been beneficial for the BRI to be planned more holistically in order to give due consideration to the economic and political interests of other participating countries.”

Several sub-projects of various Chinese companies to receive political and financial support from the Chinese government are being touted as part of this initiative but have nothing to do with it and should be de-coupled so that ambiguity can be cleared and only official BRI projects can be materialized. Participating countries should also get equal treatment in the financing of BRI, so that they can also reap the long-term benefits of the project, a step in this direction could be the revamping of the New Development Bank. A clear operational strategy for the entire project with an economic and political matrix should now be made to increase trust and transparency. This should clearly indicate relative as well as absolute potential losses and gains of participating countries. Active participation of global institutions such as the United Nations, the International Court of Arbitration, and International Court of Justice should be included for reliability as well as to resolve a potential dispute.

BRI should be executed in a selective manner with focus on economically viable sub-projects developing trade and economic corridors, for example a Bangladesh-China-India-Myanmar Corridor in the case of South Asia.

About the Authors

Bipul Chatterjee and Saurabh Kumar are Executive Director and Policy Analyst, respectively, at CUTS International. They can be contacted at bc@cuts.org and sbk@cuts.org.

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.

Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.

APB Series Editor: Dr. Satu Limaye, Director, East-West Center in Washington
APB Series Coordinator: Peter Valente, Project Assistant, East-West Center in Washington

The views expressed in this publication are those of the authors and do not necessarily reflect the policy or position of the East-West Center or any organization with which the author is affiliated.

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Cambodia-Vietnam Ties Turn 50


June 21, 2017

Cambodia-Vietnam Ties Turn 50

http://www.eastasiaforum.com

by  Vannarith Chheang, ISEAS-Yusof Ishak Institute

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Cambodian Prime Minister Samdech Hun Sen with Prime Minister Nguyen Tan Dung  of Vietnam (photo: Duc Tam/ VNA)

2017 marks 50 years of diplomatic relations between Cambodia and Vietnam. Both countries have organised a series of events to commemorate their time-honoured traditional friendship that is bound by strategic convergence, common vision and shared interests.

Over the past fifty years, the relationship ebbed and flowed with changing geopolitics and domestic politics in both countries before settling since 1979. Yet anti-Vietnamese sentiment in Cambodia — mainly driven by domestic politics — has constrained both countries from deepening their strategic partnership.

Cambodia’s opposition party tends to use ‘Vietnam threat’ rhetoric to gain popular support. In an attempt to delegitimise the governing Cambodian People’s Party (CPP) ahead of the upcoming elections, former President of the opposition Cambodia National Rescue Party has posted a series of short video clips explaining the roots of the CPP and its connections with the communist party of Vietnam. But Cambodian voters are increasingly concerned about their livelihood, social justice, good governance, human rights and environmental protection much more than the Vietnam factor.

There is political cost attached to strengthening bilateral relations with Hanoi, including potentially losing votes to the opposition. Despite this, the long-ruling CPP remains committed to maintaining and enhancing the Vietnam relationship for the sake of national and regional peace and development.

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A new bridge is now linking Vietnam and Cambodia after being inaugurated on April 24, 2017 by Vietnam Prime Minister Nguyen Xuan Phuc and his Cambodian counterpart Samdech Hun Sen. The Long Binh-Chrey Thom Bridge is built over the Binh Di River and connects the provinces of An Giang in South Vietnam with Cal Dal in Cambodia. It is 442 metres long and 13 metres wide and is designed to withstand speeds of 80km/h and allow cars to cross at a speed of 80 km/h.

It is clear that Cambodia is unable to enjoy peace and development without having good and stable relations with its immediate neighbours. Both countries understand that without sticking together under the ASEAN umbrella, their regional role and leverage will be weakened. As a result, Cambodia and Vietnam’s foreign policies have both focused on regional integration and community-building.

Cambodia and Vietnam also share the concern that rivalry between major powers is threatening regional peace and stability. Learning from their Cold War experience, they must stay united to survive and thrive.

In early 2017, Vietnam’s Prime Minister Nguyen Xuan Phuc visited Cambodia three times, including to attend the ground-breaking opening ceremony of Chrey Thom–Long Binh Bridge (connecting Cambodia and Vietnam), pay an official state visit and attend the World Economic Forum on ASEAN. Cambodia’s Prime Minister Hun Sen is planning to visit Vietnam later this month to commemorate 40th anniversary of his struggle against the Khmer Rouge regime. Such frequent high-level bilateral talks significantly contribute to nurturing political and personal trust, which are the foundations of the relationship.

Early in 2017 at the 4th Meeting on Cooperation and Development among the Border Provinces, both countries’ deputy prime ministers underscored the need to develop the Vietnam–Cambodia border area. They agreed to modernise infrastructure facilities, promote trade, investment, services and tourism and build border economic zones and markets.

Vietnam is now the fifth largest investor in Cambodia after China, South Korea, the European Union and Malaysia — it has invested in 183 projects with an aggregate value of US$2.86 billion. The investment projects target rubber plantations, telecommunications and banking. Vietnam is also Cambodia’s third largest trading partner with about US$3 billion over the last few years. They aim to achieve a US$5 billion trade volume in coming years. The planned construction of 116 warehouses at strategic border crossings between Vietnam, Cambodia and Laos — expected to be completed by 2035 — will improve trade flow between the two countries.

People-to-people connectivity between Vietnam and Cambodia has been markedly strengthened over the years. There are currently more than 400 Cambodian students pursuing their higher education at various universities and institutions in Vietnam. And Vietnamese are the largest group of tourists to Cambodia, accounting for 19 per cent of all visitors.

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The  Neak Loeung Bridge located in the Prey Veng Province is 2,220 metres long, 13 metres wide and 37.5 metres above the water level. It will have two wide lanes for traffic. When completed it will facilitate trade between Cambodia, Vietnam and Thailand.

Looking ahead to the next fifty years, Cambodia–Vietnam relations will evolve in tandem with the speed of ASEAN community building. ASEAN provides institutional and diplomatic leverage for its member states to strategically manoeuvre and collectively hedge against major powers to minimise risks while maximising interests where possible. Collectively advocating for a rules-based regional order will help smaller countries like Cambodia and Vietnam to protect their legitimate interests.

To reduce ‘Vietnam threat’ perceptions in Cambodia, both countries need to promote engagement at all levels. Right now there is a lack of academic or intellectual dialogue between the two countries. Exchange programs among students, youth leaders, future leaders and community leaders need to be further promoted. Political parties in Cambodia should not use Vietnam for their own political gains — such a strategy is obsolete and does not fit into the evolving dynamics of ASEAN regionalism.

Differences over the management of the Mekong River and the South China Sea dispute need to be resolved the ASEAN way — through consultation and consensus. Cambodia and Vietnam might have different views on these complex issues, but they need to respect each other’s national interest and position without harming bilateral friendship and ASEAN unity.

Vannarith Chheang is a Visiting Fellow at ISEAS-Yusof Ishak Institute in Singapore