The price of peace

Today marks the anniversary of the 1991 Paris Peace Accords - the agreement which signalled the beginning of the end of decades of violent conflict in Cambodia and the start of the biggest and most costly peacekeeping operation in history. Yet 16 years later, the country once regarded as the international poster-boy for post-conflict nation building is fast becoming South-East Asia's newest kleptocracy; its reputation marred by allegations of massive corruption, impunity, human rights abuses, and repressive, undemocratic governance. The international community - whose money has bankrolled this shattered state's rehabilitation - has singularly failed to stop the rot. Lessons must be learned if other fragile, newly post-conflict states are to avoid a similarly disastrous outcome.

On paper, Cambodia's natural resources and state assets - the land, forests, minerals and heritage sites - were the basis for kickstarting the post-conflict economy. The revenue generated from this exercise should have gone towards poverty alleviation and rebuilding infrastructure. Instead, systematic and institutionalized corruption has deprived the entire population of the revenue that could have come from these public goods.

A cursory glance at today's Cambodian business sector reveals the country's forests, land, mining, ports, national buildings and casinos to be predominantly controlled by a handful of government-affiliated tycoons or family members of senior political figures. Information about these deals is not made available to the Cambodian people to whom the state's resources belong. Similarly, consultation with local populations dependent upon the country's forests or land for their livelihoods is often non-existent. For many Cambodians, the first they know of such deals is the sound of a chainsaw revving or a bulldozer arriving to flatten their crops.

Cambodia's forests are a case in point. In the 1990s they were described by the World Bank as the country's "most developmentally important resource". Today they are largely degraded, having been sold off over the years by the political elite to private companies or individuals intent on logging as much as possible to turn a quick buck. Most of the vast wealth generated from this logging has not reached the national coffers: instead it appears to have been siphoned off into the private bank accounts of the loggers and their political patrons.

While a booming textile and tourism industry has resulted in double-digit economic growth in recent years, the reality is that Cambodians are still among the world's poorest people and wealth inequality is increasing. With an estimated 35% of the population living below the poverty line, and the vast majority without electricity or mains water, survival remains a challenge for millions. Meanwhile, government-sanctioned forced evictions and land grabs are rife, human rights violations are common, corruption is endemic and impunity is the norm. Over the past five years, this has been accompanied by a backward-slide in space for civil society and political opposition to operate, resulting in a governance system recently described by the UN Rapporteur on Human Rights as "a shaky façade of democracy".

Cambodia's donors have provided the equivalent of over 50% of the government's annual budget for over a decade now. Having spent billions of dollars in setting up a democratic system in Cambodia, one would assume that its donors and their domestic tax payers have an interest in preserving it. Yet the international donor community has consistently failed to bring the government to book for blatant violations of its commitments to protect human rights, fight corruption, and ensure the protection of land and natural resources. In the 1990's, turning a blind eye to these actions was justified by the need to ensure 'stability'. From stability would flow economic development, and from economic development would flow political pluralism. The past 16 years have revealed the impotence of such logic. With each successive failure of the donor community to ask tough questions and deal realistically with the regime's failure to honour commitments to good governance, those responsible have increased their wealth and impunity. The end result is that Cambodians find it harder and harder to call their government to account.

It is not too late for the international community to redefine its terms of engagement with Cambodia, but it will require a fundamental shift in mindset. At its core must be a recognition that stripping a country of its assets for personal gain represents a mass violation of the social and economic rights of the country's people. Next, Cambodia's donors must impose sanctions on those individuals and their family members who they have good reason to believe are corruptly profiteering from the exploitation of the state's resources. These measures should include a freeze on all assets, restrictions on international travel and a ban on doing business with nationals of the donor country.

This will be a bitter pill to swallow for those donors who would prefer to enjoy an amicable relationship with the Cambodian government. Yet, if the international community cannot get it right in a small and relatively non-strategic country such as Cambodia, what hope for the likes of Sudan, Liberia, Sierra Leone and the Democratic Republic of Congo? To continue to give overseas aid without the courage to tackle blatant mass corruption and poor governance is the equivalent of pouring good money after bad. Worse, it confers a badge of approval and reinforces the legitimacy of a government which is not acting in the interests of its own population. Cambodia and its people deserve better.


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ADM tackles distressed situation in Cambodia

By Simon Osborne

Hedgies Appleby, Botsford and Firth aim to clean up drugs and child prostitution in Sihanoukville.

1,000 street kids are being fed, educated and helped by Hong Kong special situations fund managers ADM Capital, whose philanthropic fund ADM Foundation is ploughing money into worthy causes in Asia.

Cambodia, a borderline failed state, does not protect the most vulnerable in its society. Children in erstwhile seaside resort Sihanoukville, particularly those subject to dodgy parenting and chronic poverty, frequently descend to a life of drug abuse and child prostitution.

A new facility for local kids is being opened this week by the three ADM principals. It has been built for Sihanoukville foundation M’Lop Tabang and it includes classrooms, sports facilities, a canteen and a health clinic. advertisement

As well as this project, ADM takes an interest in the animal kingdom, by virtue of Rob Appleby’s period in academia as a marine biologist, and it contributes to programmes that seek to keep sharks from the cooking pot. (ADM’s corporate insignia is a shark.)

On dry land in Hong Kong, the ADM Foundation has commissioned a study into Hong Kong’s feculent air, and found that contrary to popular spin-doctoring, all the foul pollution does not blow in from across the PRC border.

“A great deal of it comes from the vehicles in Hong Kong, especially the ships in Hong Kong waters burning bunker fuel, which is incredibly dirty and a major pollutant,” Rob Appleby tells AsianInvestor.

In Asia, as well as the ADM Foundation, there is the Rice charity, which is run by a number of figures from the alternative investment industry. Charity among hedge fund managers is perhaps best known in Europe, with donations from Christopher Hohn’s Children’s Fund making him one of the world’s most generous benefactors. He donated $230 million during the last year and over $1 billion in total.

ADM Capital, founded by Chris Botsford, Denys Firth with Robert Appleby, is one of Asia’s best known distressed and special situations funds managing assets of over $1 billion. It won Asian Investor’s award for Best Distressed Fund in 2007 for its triptych of Maculus Funds.

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U.S. striving to improve ties with Cambodia

PHNOM PENH — The U.S. has improved its relations with Cambodia and increased assistance as the country and its growing economy become more strategically important in Southeast Asia.

Chevron's recent discovery of offshore oil and gas deposits, and concern about China's rising influence in the region, are among many factors that contribute to U.S. policy here.

Cambodia's location between fast-growing Thailand and Vietnam, and its natural resources and potential for growth, could make it an important ally.

"We believe the extractive industries — gas, oil and mining — have a huge potential in Cambodia," said U.S. Embassy Charge dAffaires Piper Campbell. "But there is concern about how those resources will be managed."

The U.S. is encouraged by recent dialogue about cracking down on corruption, but is awaiting solid results, she said.

"We are engaged in a fruitful discussion with the government regarding corruption and anti-corruption legislation," she said. "We are very encouraged by what the government has said."

The U.S. expects to provide more than $65 million this year for a wide range of programs aimed at improving education and public health, preventing corruption, and managing natural resources.

In February, the guided missile frigate USS Gary became the first United States warship to visit Cambodia in more than 30 years.

In August, Hawai'i-based Adm. Timothy Keating, commander of the U.S. Pacific Command, met with Cambodian defense minister Tea Banh here and offered to provide military training and other assistance meant to prevent the country from becoming a haven for international terrorists.

The U.S. had ended military assistance after a 1997 coup, in which current Prime Minister Hun Sen ousted his co-premier, Prince Norodom Ranariddh.

Cambodia's navy is now expanding to better secure the coastline and protect offshore drilling sites. Cambodia and Thailand have contesting claims to some potentially lucrative oil and gas fields in the Gulf of Thailand.

The U.S. recently established its first-ever contingent of Peace Corps Volunteers here.

"Cambodia is a country that is rich with hope and talent," U.S. Ambassador Joseph Mussomeli said during a swearing-in ceremony for the volunteers in April. "Cambodia is a country with a nightmare past and a future of bright dreams. Cambodia is a country that was once isolated and is now eagerly embracing the world community."

More than $30 million from the U.S. Agency for International Development will pay for health and education programs and infrastructure this year.

The money will help promote a variety of activities meant to reduce the transmission and impact of HIV/AIDS, and control major infectious diseases such as tuberculosis.

U.S. Pacific Command has pledged nearly $2.4 million to build and repair schools and medical clinics, and distribute mosquito nets in impoverished rural provinces.

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Short on time? Try Creative Holidays’ Taste of Cambodia

A holiday is a holiday no matter how long or short, so make the most of it. If you have a little less time take advantage of Creative Holidays’ three-night Taste of Cambodia. This short journey will take you to the amazing Temples of Angkor and the beautiful Toule Sap River.

Taste of Cambodia priced from $430 per person, twin share (land only). Package includes three nights accommodation (at your choice of the three star - Royal Crown Hotel, four star - Angkor Palace Resort and Spa or five star - La Residence D'Angkor Hotel), breakfast daily, transportation and sightseeing as per itinerary, all entrance fees and local English speaking guides.

The highlights of the itinerary include:

*Siem Reap – see the fabled temples of Angkorm the ancient capital of the Khmer empire. A tour of the temples includes the South Gate of Angkor Thorn, the famous Bayon, Baphoun, the Terrace of Elephants and Terrace of the Leper King.
*The magnificent 12th century Angjor Wat
*See the sunrise over Siem Reap and Angjor Temples
*Visit Srah Srang, Banteay Kdei, Chau Say Tevoda, Thommanon and the fabulous Ta Prohm Temple
*Tonle Sap River - visit a local village and embark on a local boat for a cruise on the great lake, Tonle Sap
*Visit the Rolous Group of Temples including Preah Ko, Bakong and Lorei temples.
Package is priced on three-star accommodation option (price varies for four and five star option). Package is valid for sale and travel until 30 September, 2008. Conditions and seasonal surcharges may apply.

Creative Holidays is Australia’s leading independent holiday company with a range of holidays to suit everyone, especially those who enjoy the independence and flexibility of planning their own holiday.

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