The very name Cambodia evokes many different
responses among outsiders. There is first of all, of course, the association
with the magnificent and extraordinary ruins of Angkor, which are unparalleled
and remain etched in the memory long after the initial viewing. Then there
are other more traumatic associations with violence: the appalling and
massive illicit carpet bombing of the Cambodian countryside by the United
States military as it struggled to cope with its losses against Vietnam
in the early 1970s; the subsequent, much-publicised atrocities of the
Khmer Rouge against its own population between 1975 and 1977; the quieter
but systematic economic and political violence of the US-led international
community which penalised Cambodia with more than a decade of sanctions
and isolation until 1991.
For others, there would be the association of Cambodia with other Least
Developed Countries, a poor backward nation with an anguished history
and little development. It is this feature which has spawned what may
well be the secret response of many outsiders who are at present living
in Cambodia, which of course would almost never be admitted to. The country
is a haven for the international do-gooder. And the past decade and more
of international manipulation and interference in Cambodia's polity and
economy, while it may have contributed little to the living conditions
of the average Cambodian, has enriched and even captivated the lives of
the many expatriates who have flocked there over the years.
It is this which makes Cambodia so very different, and yet so disturbingly
similar, to other less developed countries. It is a poor and beautiful
country, with citizens who are remarkably gracious and friendly to foreigners,
despite (or perhaps because of?) their uncertain experience of them. Of
course the dependence upon tourism encourages this, but the warmth of
Cambodians extends well beyond that found in other countries of Southeast
Asia. The extremes of wealth and poverty that now appear characteristic
of almost the whole world, are also found in their extremes in this country
as well.
One of the first things that strikes the visitor, is how this small and
backward economy is almost completely dollarised. The US dollar apparently
forms the medium of exchange for as much as 90 per cent of the total value
of domestic transactions, according to one estimate. This obviously renders
domestic monetary policy completely ineffective, but even more than that,
it reveals the extent of dependence of the economy to the inflow of aid-related
dollars.
Around 43 per cent of the government's budget is financed by aid. In addition,
there are aid inflows to NGOs, many of whom then fund other NGOs within
the economy. These flows may be relatively small in the total portfolio
of donors, but they are huge in relation to Cambodia's tiny economy, and
dwarf the effects of other sources of foreign exchange, which are mainly
through tourism and more recently, garment exports.
Such aid is what explains how the capital Phnom Penh is literally swarming
with donors and experts of all varieties and many nationalities. Multilateral,
bilateral, non-governmental – they are all there, in activities
as disparate as the crucial clearing of landmines and dealing with disabled
people, to advice on education and plant regeneration, to macroeconomic
policy guidance. The largest number of NGOs deal in some way with human
rights, even though, on civil and political rights, the current government's
record is probably better than that of say, the administration of George
Bush.
The personnel of these outfits range from experienced and perceptive old
Cambodia hands to young people who have barely graduated from college,
eager to impose their expertise, however inappropriate, on the hapless
residents. And young Cambodians with education see the most rapid route
to mobility and success as being achieved through working with such organisations,
or even through forming NGOs of their own which will receive aid funds.
Phnom Penh is not a big city – the population is just above a million
people - but it must boast of one of the widest ranges of international
cuisine available in the region, in chic restaurants, cafes and bistros
that cater dominantly to the expatriate population. Many of the restaurants
and smaller boutique-style hotels that dot the city as well as the town
of Siem Reap (the base for visiting the famous Angkor sites) are actually
owned and run by foreigners, who originally came as part of the aid-disbursing
community.
Lives of expatriates in Cambodia are not just pleasant but typically delightful,
with a little discount for some inevitable inconveniences of living in
a poor country. Not only can resident foreigners have lavish lifestyles
with all the consumption goods that are now international, but they live
in a country where labour is cheap and generally obedient. Unlike in some
other recipient countries, aid-givers and other foreign do-gooders are
treated with great respect, hospitality and generosity, and are easily
allowed to persuade themselves of their usefulness and importance. It
is little wonder that very few people leave this paradise.
Yet the record of economic and social outcomes of the donor community
over the past decade is not an impressive one. While political stability
and peace have come to the country after years of devastating fighting,
the economic growth of the past decade has not translated into any decline
in the incidence of poverty.
Instead, there are indications that the lot of most ordinary people has
worsened. Per capita consumption has fallen even as inequality has increased
substantially. Infant and child mortality is on the increase again after
the recovery of the 1980s. There is growing landlessness in the rural
areas. Rapidly rising unemployment along with underemployment have become
even more significant given Cambodia's relatively young population. Public
education facilities are poor and deteriorating. Public health services
are poor or non-existent in most of the rural areas. Basic economic services,
including agricultural extension services to farmers, are simply non-existent.
The past few years have seen deterioration even in more conventional macroeconomic
performance as well. Agricultural output and rural incomes have both been
on the decline since 1999. Foreign direct investment – mainly in
the garments sector and in non-tradeable services such as telecom –
has been declining for the past two years. The big source of export growth
in garments was the filling up of MFA quotas made available to Cambodia
by the US and the European Union; as these get filled, such exports are
tapering off and in the past two years several garments factories have
closed.
Much of this poor economic and social performance is the direct result
of the advice doled out by aid-givers, especially the multilateral institutions
including the IMF and Asian Development Bank, which have encouraged, and
sometimes even forced, the government to cut down its own provision of
basic goods and services, and allow “market forces” to flourish.
Government investment has fallen and the state has stopped trying to fulfil
a number of basic commitments. Established state structures and institutions
have been run down, and allowed to be replaced by private profiteering
or even by nothing more than a vacuum.
Instead, the basic activity of the state and its various organs and personnel
today seems to be in participating in the free-for-all looting of the
natural and human resources of the country. While “corruption”
and “bad governance” have become grossly misused terms that
are often used to camouflage more serious structural issues, there is
no doubt that in Cambodia these issues have become so significant as to
dominate everyday reality.
Corruption is now so widespread and so extreme that it can be mind-boggling.
The enormous mansions of the rich – some of them taking up several
acres and fulfilling the most expansive and flamboyant Bollywood dreams
of luxury – bear witness to the gains made by the political and
military elite. Several of these houses are said to be owned by former
and current generals and other military officers, who have been associated
with the extensive sale of forest rights to plantation owners and loggers,
including multinational companies.
At the other end of the spectrum, the appallingly low salaries paid to
teachers and other civil servants have created other parallel payments.
The common practice in government schools is for children to carry every
day an amount to be handed over to the teacher – usually up to a
dollar a day; if not, the child may well fail. This practice extends even
to rural areas, and helps to explain the high dropout rate especially
for girls after some basic schooling.
Western donors like to point to such practices to explain why their aid
has not been more effective. But in fact this misses the point, that the
donors themselves have been responsible for a lot of this dubious culture.
Of course, corruption is not new to Cambodia – the Lon Nol regime
propped up by the US government in the early 1970s was famously corrupt,
to the point of ensuring their own undoing by some officers even selling
military equipment to the enemy Khmer Rouge for a fee.
But the period of the 1980s was marked by quite a different social reality.
Despite the international isolation and the continuing war against the
Khmer Rouge (which was then supported, ironically, by Sihanouk's forces
and assistance from western countries) the People's Republic of Kampuchea,
led by Hun Sen's government, struggled to rebuild society and economy
after the horrific violence and the continuing instability.
Reports of corruption were rare, and while economic conditions were parlous,
there was some stability in food consumption and income distribution was
much more egalitarian. At that time, the main forces making for instability
in the country were openly and covertly helped by western powers anxious
to reduce Soviet and Vietnamese influence. The collapse of the Soviet
Union set in train a set of processes in the region which culminated in
the growing power of the Khmer Rouge and Sihanoukist faction, forcing
a peace agreement on the government in 1991.
Thereafter, the UN stepped in, and UNTAC (the United Nations Transitional
Authority in Cambodia) was born in 1993. UNTAC had a very wide mandate,
which it did not fulfil. It barely kept the peace, which was finally maintained
only through the consolidation of power by the Hun Sen group, and several
observers point out that UNTAC personnel were involved in attempts to
destabilise the regime and promote more rightwing and openly pro-Western
alternatives.
The dollarisation of the economy was generated by UNTAC, coming in with
resources which were huge relative to the size of the economy, and spending
in what turned out to be indiscriminate and sometimes counterproductive
fashion. UNTAC also set the pace for privatisation, reduction of state
responsibility over a range of basic goods and services, aid dependence
and also the bending of laws, especially in business dealings and parallel
payments, that has now become the norm.
By the time of the 1998 elections which confirmed the control of the Hun
Sen regime, the pattern had set, and the government since then has done
little even to try and change the general direction of change. Nevertheless,
despite the evident cynicism operating at the level of government, and
the apparent reneging of the state's basic responsibilities towards the
people, the general impression is that this government is better than
the available alternatives. Elections are due in July.
The current darling of the Western powers is the Opposition leader Sam
Rainsy, who lived for decades in France prior to the 1990s, and who has
been pushing a right-wing agenda including inciting hatred against ethnic
Vietnamese living in Cambodia. This support for Rainsy is rather absurd,
because the current regime has already given in on economic policies,
virtually everything that can be given to the advantage of the West. Changing
it would only involve a political shift to the right which could be very
destabilising in a country and region that has a lot of recent history
of potential and actual explosion.
This is not to deny the role played by internal factors in creating the
inequalising tendencies in the economy, or to downplay the very positive
role played by some expatriates, who have contributed and continue to
contribute greatly to Cambodian society. Even granting all this, the net
effect of foreign – especially US – influence on Cambodia
in the past decade has been largely negative.With its small size and complex
recent history, it may be that the current situation in Cambodia is the
very extreme case of what can happen once donor domination sets in. But
it may well be that it is a pointer to the new forms of twenty-first century
dependency of developing countries. We now live in a world characterised
by a combination of rampant and bare-faced imperialism on one hand, and
on the other a more sophisticated and less obstreperous, but still insidious
and dangerous proto-colonialism.