Author: Vannarith Chheang, CICP
2015 was a year of mixed fortunes for Cambodia. Cambodia maintained a relatively high economic growth rate of about 7 per cent in 2015, largely due to the expansion of garment manufacturing, construction and services.
And Cambodia’s foreign policy gained new momentum through enhanced relationships with major powers. But tensions between the two main political parties — the ruling Cambodian People’s Party (CPP) and the opposition Cambodia National Rescue Party (CNRP) — pose serious challenges to economic development.
By 2015, Cambodia’s poverty rate had been reduced to 14 per cent, down from 53.2 per cent in 2004. Millions of people have moved out of extreme poverty. According to the United Nations, Cambodia has achieved all of its Millennium Development Goal targets, most notably in maternal health, infant mortality and literacy. Education and electoral reform have also seen some concrete results.
The government also issued a significant new economic policy called the Cambodia Industrial Development Plan 2015–2025. This policy aims to develop agro-industry, small- and medium-sized enterprises, skilled labour and human resources, transport and logistics, as well as to reduce electricity price while expanding coverage and strengthening reliability of electricity supply.
On the foreign policy front, Cambodia has actively diversified its core strategic partners. The Cambodia–US bilateral relationship has been constrained by differences on democracy and human rights, but Cambodia has cemented its ties with other major powers such as China, Japan, India and Russia.
In September, the Indian Vice President Mohammad Hamid Ansari visited Cambodia to boost bilateral ties. The two countries signed memorandums of understanding on tourism and infrastructure development, and on health and the empowerment of women.
Hamid Ansari confirmed the importance of India–Cambodia ties and stressed the need to increase bilateral trade and investment. He stated that ‘geographically, Cambodia lies at the heart of ASEAN. For us in India, our relationship with Cambodia is a key element of our engagement with ASEAN’.
In October, during the summit between Cambodian Prime Minister Hun Sen and Chinese President Xi Jinping in Beijing, China reaffirmed its commitment to strengthen ties with Cambodia and stressed their strategic importance. He said China was ready to work with Cambodia to actively expand bilateral strategic cooperation and forge an unbreakable community of shared destiny.
China pledged to import 100,000 tons of rice from Cambodia annually beginning in 2016, construct a hospital in Tbong Khmum Province and give Cambodia a US$157 million grant — most of which would go the construction of a national stadium.
Then, at the Cambodia–Japan bilateral summit in November, Japanese Prime Minister Shinzo Abe committed to a 17 billion yen (about US$137 million) loan for the development of National Highway 5 and promised to deepen bilateral relations.
Most remarkably, Russian Premier Dmitry Medvedev visited Cambodia in November, marking a significant milestone in the bilateral relationship. The last visit from a senior Russian official was when then Russian foreign minister Eduard Shevardnadze visited Cambodia in 1986. The two countries signed 10 bilateral agreements and memorandums of understanding, including cooperation on money laundering, civilian nuclear energy, health, air transport, investment and terrorism.
But domestic political tensions have cast a dark cloud over these successes.
The prospects for Cambodia’s continued political development are highly uncertain after political tensions between the ruling CPP and the opposition CNRP remerged in late November. The assaults on two CNRP parliamentarians, the removal of CNRP Vice President Kem Sokha from his position as First Vice President of the National Assembly as well as the arrest warrants issued against opposition leader Sam Rainsy have dramatically escalated tensions.
These events have drawn international criticism. The UN Secretary General Ban Ki-moon called the arrest warrant issued against the opposition leader ‘worrisome’. The UN Special Rapporteur on human rights in Cambodia, Rhona Smith, also expressed her deep concern that this could lead Cambodia to ‘a dangerous tipping point’ if the trend is not reversed. And the European Parliament issued a resolution calling on the Cambodian government to ‘explore ways and means of resolving the issues at hand through political dialogue and to enable Sam Rainsy to resume his activities as rapidly as possible’.
Yet, the prospect of reaching a political resolution at this stage is slim. The trust gap between the leaders of the two parties have been widening over the past three months. And there is no direct channel of communication between them. To make matters worse, international diplomatic pressures have little impact on the Cambodia government.
Given Cambodia’s existing political culture, the most viable solution for Cambodia’s political woes would be to restore trust and personal ties between Prime Minister Hun Sen and the opposition leader Sam Rainsy. Finding a way to do this will be a major challenge for Cambodia in 2016.
Vannarith Chheang is a Senior Fellow at the Cambodian Institute for Cooperation and Peace.
This article is part of an EAF special feature series on 2015 in review and the year ahead.