The Asia Reassurance Initiative Act: Overlooking Smaller Players in Southeast Asia

By Adrien Chorn —

President Donald Trump signing bills including S. 2736, the Asia Reassurance Initiative Act of 2018, on December 31, 2018. Source: The White House’s flickr photostream, U.S. Government Work.

The Asia Reassurance Initiative Act (ARIA), which passed through bipartisan support in both chambers of the U.S. Congress and was later signed into law by President Donald Trump on December 31, 2018, may be overlooking the potential of smaller players in Southeast Asia. Former president Barack Obama’s then secretary of state Hillary Clinton announced the “Pivot to Asia” in a Foreign Policy article in October 2011 as a declaration of intent by the U.S. government for establishing a more involved foreign policy in the Asia-Pacific, while President Trump widened this involvement to include the Indian subcontinent in his support for a “Free and Open Indo-Pacific” since his tour of the region in November 2017. However, the U.S. government has thus far lacked long-term plans to actualize true engagement with key smaller members of Southeast Asia, like Cambodia.

ARIA states the U.S. commitment to promoting its security interests, economic interests, and values in the Indo-Pacific. It also includes the U.S. government’s pledge to “conduct regular bilateral and multilateral engagements, particularly with the United States’ most highly-capable allies and partners, to meet strategic challenges,” in the Indo-Pacific, such as China’s ramping foreign policy through its Belt and Road Initiative (BRI). To enhance U.S. presence in the Indo-Pacific, ARIA is set to authorize $1.5 billion annually for 5 years (2019-2023), particularly to combat security concerns such as China’s aggressive actions in the South China Sea. ARIA also seeks to enhance U.S. economic engagement with countries in the Indo-Pacific, while promoting democracy and human rights where they are currently being neglected. Coupled with the recently enacted Better Utilization of Investments Leading to Development (BUILD) Act on October 5, 2018, which promises to double the U.S. government’s development financing capacity to $60 billion to better address development challenges around the world, the U.S. government is nearing a concrete foreign policy in Southeast Asia to counter China’s rising influence.

However, ARIA overlooks smaller players in Southeast Asia in a way that threatens U.S. interests in the region. Cambodia, for example, is not expected to receive funding support through ARIA due to its increasing neglect of democratic practices and human rights. Cambodia’s Supreme Court ruled to dissolve the opposition Cambodia National Rescue Party (CNRP) in November, allowing for the ruling Cambodian People’s Party (CPP) to win every position uncontested during general elections in July 2018. The U.S. government responded by slamming the Cambodian government for its undemocratic elections and halted assistance funding to Cambodia. The U.S. government also placed visa restrictions on “individuals both within and outside the Cambodian government who are responsible for the most notable anti-democratic actions taken in the run-up to the flawed July 29 election.”

ARIA accordingly states that until Cambodia has taken the effective steps to improve its human rights and democratic issues, “none of the amounts authorized to be appropriated…may be made available for U.S. assistance programs that benefit the Government of Cambodia.” ARIA refers to standards set by the Consolidated Appropriations Act, 2018, which amended funding allocations to different U.S. government services, including aid to Cambodia. The United States Congress also expects the Cambodian government to demonstrate its resolve to counter China’s growing influence in the Indo-Pacific and its aggression in the territorial disputes in the South China Sea, before financial assistance can be made available to them.

ARIA continues the U.S. policy of conditional aid without giving the Cambodian government enough incentive to comply. It does not help that the Trump administration continues to request that Cambodia repay $500 million of war-time debt that the U.S. loaned to the country during the Cold War. Growing contempt among Phnom Penh’s elite toward the United States over the past decade has pushed Cambodia very close to China’s orbit – which has welcomed Cambodia with an abundance of unconditional financial assistance. In fact, China has become Cambodia’s leading source of overall military aid, investment, and tourism, and is Cambodia’s largest bilateral trading partner ($6 billion in 2017). The Consolidated Appropriations Act, 2018 does allow funding for “programs in the Khmer language to counter the influence of the People’s Republic of China in Cambodia,” in an effort to promote balance in Cambodia’s reliance on China. However, the Cambodian government may have fallen too deep into China’s grasp, particularly due to China’s willingness to counter U.S. criticisms of Cambodia’s governance with more unconditional funding.

As a result, the Cambodian government has become one of China’s biggest supporters of two geopolitical policies that go against U.S. interests. First, the Cambodian government has been the staunchest backer of China’s maritime claims in the South China Sea. Cambodia demonstrated this in 2012 during its ASEAN chairmanship and in 2016 following the international court ruling against China where Cambodia alone blocked ASEAN from making joint statements condemning China’s belligerence in the South China Sea. Here, Cambodia demonstrated its capacity to jeopardize regional stability and unity in the face of a rising China as an equal member of ASEAN, despite that Cambodia is one of the least developed members of ASEAN and lacks a legal stake in the South China Sea disputes.

Second, Cambodia is also a steadfast and an important participant in China’s BRI, while other countries in ASEAN have been more cautious. Though a great deal of investments have gone toward power plants and offshore oil operations, the bulk of China’s investment is in Sihanoukville, previously a sleepy resort town, where over the past two years China built nearly three dozen Chinese-run casinos, four-lane highways, and other developments. Some analysts have argued that China eyes the centrally located Cambodian port in Sihanoukville as an essential “pearl” in the presumed “string of pearls” strategy, a plan for China to establish nodes of military and economic power that extends from China’s mainland to Port Sudan. Access to Sihanoukville and other crucial ports would provide an excellent base for projecting maritime power and conducting maritime trade in the Gulf of Thailand and the Straits of Malacca, counterbalancing the U.S. presence in the Indo-Pacific.

However, ARIA is also following a trend of initiatives that are applying increased pressure on the Cambodian government in the hopes for improved human rights and a more balanced relationship with China. The United States has recently threatened to remove Cambodia’s General System of Preferences status as punishment for Cambodia’s democratic backsliding and the government’s abuse of human rights. The European Union is similarly looking to remove Cambodia’s Everything But Arms preferential trade status by February 2020. Global money-laundering watchdog, the Financial Action Task Force, put Cambodia on its gray list in February due to its high levels of corruption, sabotaging Cambodia’s international financial, investment, and trade flows.

This slew of economic pressures has created a dilemma for the Cambodian government, who make contradictory statements regarding the danger of these financial punishments to Cambodia’s economy. Rising anti-Chinese sentiment from ordinary Cambodians who are suffering from problematic Chinese investment projects may also cause  overall tolerance of Cambodia’s government practices to deteriorate and provoke dissatisfaction with the status quo. Only time will tell if the Cambodian government will succumb to these pressures to improve their human rights record and ease their reliance on China. If not, ARIA may just be another policy of the United States that improperly engages with smaller players in Southeast Asian like Cambodia, who will fall deeper into China’s grasp.

Mr. Adrien Chorn is a research intern with the Southeast Asia Program at CSIS.


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