By Daniel Mitchell
Roughly three weeks ahead of the national elections in Cambodia scheduled for July 28, the House Subcommittee on Foreign Affairs held a hearing entitled “Cambodia’s Looming Political and Social Crisis” just as campaigning convoys of the two main Cambodian political parties passed each other on the streets without incident. As a Phnom Penh-based American businessman who testified at the hearing, I wanted to suggest to U.S. policymakers a different perspective on how the U.S. government ought to respond to the evolving socio-political situation in Cambodia.
The country’s dynamic press and nongovernmental organizations regularly report and document human rights, electoral, and corruption issues. Nonetheless, progress continues to be made. This election cycle has been relatively calm, and political violence has been nearly non-existent since the official campaigning started in late June. While Prime Minister Hun Sen’s party, the Cambodian People’s Party (CPP), is expected to win a majority necessary to form a government, it will likely lose some seats in Parliament to the Sam Rainsy-led Cambodian National Rescue Party. While the CPP can take credit for delivering strong economic growth and development, Cambodians are increasingly prioritizing concerns about human rights and corruption over other policy matters. This is a positive sign for democracy in Cambodia.
Having spent over a decade working in Cambodia, I intended to use my testimony to voice objective and reasoned assessments in a debate that has been burdened by hyperbole and rhetoric. I believe that U.S. policy initiatives to deal with political challenges in Cambodia should be better informed and formulated to address what could be important future trends and developments.
Recently, the government has enacted anti-corruption and anti-money laundering laws. Under an aggressive land titling program by the Ministry of Land Management and Urban Planning, over 3 million land titles were issued to villagers. ACLEDA Bank, which holds over 90 percent of bank loans in Cambodia, reported that one third of their new loans used these land titles as collateral. This is real progress.
The American Chamber of Commerce in Cambodia and the U.S. Embassy in Phnom Penh have played an important role in encouraging the government to continue these efforts through workshops and campaigns over the past year, including on compliance with the U.S. Foreign Corrupt Practices Act and the United Nations Guiding Principles for Business and Human Rights.
Despite tangible progress, a lack of consistency in the government’s implementation of other programs has frustrated both the foreign business community and the population at large. In this context, while Hun Sen may be a “strong man,” he is not a dictator, nor does he rule over a monolithic party. Ultimately, he needs to build consensus and support for his initiatives from a variety of constituents.
As an entrepreneur, I became interested in Cambodia because of its tremendous untapped human potential. Yet, this is also one of the country’s greatest challenges. Over 50 percent of the population is under 25 years old, and around 300,000 people enter the workforce annually. Absorbing these new workers and improving the overall standard of living will require a real GDP growth rate of 7-8 percent. The government needs significant capital investment in order to achieve that growth target, while at the same time ensuring socially and environmentally responsible investments and addressing the skill gaps of young graduates of Cambodia’s education system. Increasingly, the issue of youth skills and employability have greater potential for creating a social crisis than does the current headline-catching human rights situation.
Economic security is the most basic of all human rights. U.S. companies and those from other developed countries could lead by example in areas such as fair labor practices, environmental sustainability, and corporate social responsibility. Our behavior stands in marked contrast to that of Chinese investors, who have run into serious problems with local populations in many host countries. But in our absence, the Chinese stand ready with both investment and aid. We can be sure, then, that human rights and corporate social responsibility are not likely to be high on their agendas.
The truth is Cambodia-U.S. relations are at a crossroads. The leadership in Washington and Phnom Penh should use the opportunity to work together to achieve objectives that have universal appeal to both sides and benefit U.S. strategic interests in Southeast Asia.
Mr. Daniel Mitchell is the CEO and Managing Director of SRP International Group Ltd., and serves on the Board of Governors of the American Chamber of Commerce in Phnom Penh, Cambodia.