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Friday, February 15, 2008

Cambodia: No Rush to Repay US Debt

PHNOM PENH, Cambodia — Cambodia has more pressing concerns than repaying millions of dollars it owes the United States, a government spokesman said Friday, rebuffing Washington's latest demand for settlement of loans from the 1970s.

"We have many affairs to attend to," said government spokesman Khieu Kanharith, noting that repaying $339 million to the U.S. was not high on Cambodia's priority list.

The comments came a day after Scot Marciel, the U.S. State Department's deputy assistant secretary for East Asian and Pacific affairs, urged Cambodia to sign a draft agreement on repaying the debt. Marciel made the remarks Thursday in Washington in testimony before the House Foreign Affairs Committee's Subcommittee on Asia.

The outstanding debt stems from rice, cotton and other agricultural commodities financed by low-interest loans the U.S. provided to Cambodia during the regime of Gen. Lon Nol in the early 1970s.

Lon Nol came to power in a 1970 coup that ousted Prince Norodom Sihanouk. The United States was the main financial and military supporter of Lon Nol's regime until it was toppled by the genocidal Khmer Rouge movement in April 1975.

The two countries have not yet come up with a repayment plan, partly because the Cambodian government refuses to accept responsibility for debts incurred by the Lon Nol regime, and partly because of a disagreement over the amount of debt owed, Marciel said.

After years of deadlock, Cambodia agreed "in principle with the amount of principal it owed" in 2006 but then refused to sign a draft bilateral agreement drawn up by the U.S., Marciel said. Cambodia has subsequently demanded additional concessions, including a lower interest rate, he said.

He said Cambodia also does not deserve any debt reduction from the U.S. because it is neither heavily indebted nor facing crisis of external balance of payments.

"Cambodia has accumulated arrears to the U.S., while paying other creditors on time, and in at least one case, early," Marciel said.

About $154 million of Cambodia's debt "would be due immediately," if the 2006 agreement is implemented this year, he said.

Khieu Kanharith said immediate payback was unlikely.

"Even if we have to repay it, we can't repay it because that would severely affect our financial and economic situation," he said.

Despite recent economic growth, Cambodia still relies on hundreds of millions of dollars in annual foreign assistance for development.

The government spokesman added that the United States "has not compensated the Cambodian people" for its bombing of Cambodia during the Vietnam war either.

The difficulties Cambodia faces today as it tries to rebuild after more than two decades of civil war "are also partly the result of the American bombing."

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Studying Angkor's demise, archaeologists warn of repeating the past

SIEM REAP, Cambodia: By destroying vast tracts of forest to enlarge their farm land, inhabitants of the wondrous city of Angkor lit the fuse to an ecological time bomb that spelled doom for what was once the world's largest urban area.

So believe archaeologists engaged in groundbreaking research into the ancient civilization of Angkor.

And they are warning that history could repeat itself through reckless, headlong pursuit of dollars from tourists flocking to see Angkor's fabled monuments.

"It's just a weird cycle. It seems like Angkor is self-repeating itself," said Mitch Hendrickson, who recently led an excavation as part of research into Angkor as a human settlement.

Conservationists have long expressed concerns about the state of the monuments, especially the stress from the tourist invasion. They also say the uncontrolled pumping of underground water to meet rising demand of hotels, guesthouses and residents in the adjoining town of Siem Reap may be destabilizing the earth beneath the centuries-old temples so much that they might sink and collapse.

"There's just so much building going on without any concern about the long term. Things are moving so fast in Siem Reap today that it's going to chew itself up very quickly and become unsustainable," said Hendrickson, an archaeologist from the University of Sydney, Australia.

From their city, Angkorian kings ruled over most of Southeast Asia during their pinnacle between the 9th and 14th centuries, overseeing construction of architectural stone marvels, including Angkor Wat, regarded as a marvel of religious architecture.

While the 1431 invasion from what is now Thailand has long been regarded as a major cause of Angkor's fall, archaeologists from the Australian university's Greater Angkor Project believe earlier ecological forces led to the city's demise.

Their findings supported a theory in the early 1950s by Bernard-Philippe Groslier, a prominent French archaeologist, that the collapse of Angkor resulted from over-exploitation of the environment.

Angkor's inhabitants started rice farming from the low lying area near the Tonle Sap lake just south of Siem Reap town, said Roland Fletcher, another archaeologist with the project.

But gradually, they cut down natural forest to extend their farm land up to the slope of Kulen mountain, 50 miles (80 kilometers) to the north, said Fletcher, who led 10 archaeologists to excavate various sites near the Angkor complex.

Flooding ensued, and huge amounts of sediment and sand were washed down to fill up canals — thus probably choking the vital water management system.

Using NASA's airborne imaging radar data, the project has conducted numerous aerial and ground surveys across nearly 1,200 square miles (3,108 square kilometers) which revealed that the city — with about 1 million inhabitants — was far larger than previously thought.

It covered some 385 square miles (997 square kilometers) and featured a sophisticated hydraulic system that proved too vast to manage.

Angkor was "a huge low-density, dispersed urban complex" comparable to Los Angeles and "by far the most extensive preindustrial city on the planet," Fletcher said.

Its water network included an artificial canal used for diverting water from a natural river about 15 1/2 miles (25 kilometers) north of Angkor, and two mammoth, man-made reservoirs known as the East and West Barays.

"They (people) probably didn't necessarily need any of this extra water ... because just a rain-fed rice agriculture is quite sufficient to feed a very substantial population," said Damian Evans, a project member.

One theory, he said, was that the Angkorian kings built the water system just "to demonstrate their power and their authority to rule."

But he said only excavations and soil analysis could yield more clues.

"It's a process of going to those sites on the ground and looking for finer detailed information like the profiles of the canals underneath the ground and the types of sediment that lie within those canals," he said.

Armed with a printed digital map of the Angkor area, Evans and Fletcher toured an excavation site at the West Baray where archaeologists dug trenches to seek traces of an ancient channel through the bank. They were trying to determine whether the channel really existed and could have served both as water inlet and outlet.

The reservoir is walled by four banks — now covered with jungle — each 40 feet (12 meters) high, 331 feet (100 meters) wide and about 12 miles (19 kilometers) in length. It can store up to 1.8 billion cubic feet (50 million cubic meters) of water.

Fletcher called it "the single largest artifact and piece of engineering in the preindustrial world."

"All of this work is aimed at understanding how the water management system of Angkor functioned ... and how it stopped working," he said, adding that forest clearance is "the current key piece of information" about the ecological peril that caused Angkor to tumble.

Although past environmental problems were associated with deforestation, they also underline the menace the tourism boom is posing to the temples, the researchers say.

"The same types of things which we knew were problems of Angkor are essentially being repeated in our modern day context in the Angkor area — things like unsustainable use of water, massive overdevelopment without any consideration of the long-term effects," Evans said. "There's definitely lessons to be learned from what happened here before."
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RIGHTS-CAMBODIA: Painter to Meet His Jailer at Khmer Rouge Trials

By Marwaan Macan-Markar

BANGKOK, Feb 15 (IPS) - Sometime this year, two men who stood on either side of the genocide unleashed in Cambodia in the 1970s may finally face each other in a special war crimes tribunal in Phnom Penh.

For one of them, Vann Nath, it is a moment that he has waited patiently for over almost three decades. He was one of only seven people who came out alive from Tuol Sleng, a high school in the Cambodian capital that was converted into a prison during the Khmer Rouge regime’s brutal grip on power from April 1975 to January 1979. At least 14,000 people who were imprisoned there were not as fortunate. They were all tortured and killed.

The other is Kaing Khek Eav, or ‘Duch’, who was the chief jailer of Tuol Sleng, or S-21, as it was known by the extremist Maoist group. He is currently under custody, along with four other surviving leaders of the Khmer Rouge, of the U.N.-backed war crimes tribunal. The Extraordinary Chambers in the Courts of Cambodia (ECCC), as the special tribunal is officially called, is expected to hear its first case this year.

’I have been hoping for this tribunal for nearly 30 years. I wanted the Khmer Rouge leaders to face justice for what they did,’’ says Nath, who has carried the torment of his one year in S-21 since he found freedom in January 1979. ‘’I will go and attend the trial of Duch to see if the tribunal will deliver a good verdict.’’

But the 61-year-old, who has a shock of white hair and thick black eyebrows that have whitened at the edges, is prepared to do more. ‘’I am ready to go and testify if the court needs me as a witness,’’ he said in an interview during a recent visit to Bangkok. ‘’I think it is a secret of the court: to invite me or not.’’

Such an appearance will inevitably add to Nath’s legendary status in his country. For not only is he an inmate who witnessed the horrors that unfolded in S-21, but he has made it his mission, since his freedom, to tell the story of his nightmare through paintings that have a raw, immediate and blunt quality. They are frozen moments of agony that have flowed from his memory.

The exhibitions of his paintings since 1980 -- the first in the Tuol Sleng Genocide Museum -- have scenes of prisoners being whipped and their fingernails pulled out, of one having his neck sliced by a Khmer Rouge guard, and of a mother being beaten as her baby is grabbed from her hands by a prison guard. His most recent exhibition, which opened in Bangkok this month, has disturbing portraits of prisoners in chains and an emaciated figure of Nath being led away by two prison guards.

They are paintings, moreover, that have come to graphically represent the horror of the Khmer Rouge regime, which was responsible for killing close to 1.7 million people, nearly a quarter of the country’s population at the time. Most of the Cambodian victims, even babies, were either executed or died due to forced labour or starvation. Among them were two of Nath’s sons, who died of starvation while he was imprisoned.

But dredging up such memories for his next canvas brings little relief or creative joy. ‘’When I paint the scenes of prisoners being dragged by the guards, it is still very hard for me,’’ he explained in a flat, controlled tone of voice. ‘’They bring back memories of my time there. It makes me go into the painting and remember the painful moments of that dark period.’’

In fact, a book Nath wrote about his experience in S-21 confirms how close to the truth his images of torment are. During an encounter with ‘’the former butcher of Tuol Sleng,’’ as he described a former prison guard, Nath asks him how accurate the images of the prison were. ‘’No, they are not exaggerated,’’ the guard had said during that early 1996 meeting. ‘’There were scenes more brutal than that.’’

‘’Did you see the picture of the prison guards pulling a baby away from his mother while another guy hit the mother with a stick?’’ Nath writes in his book, ‘A Cambodian Prison Portrait’, of the question he next posed to the now freed Khmer Rouge guard. ‘’What did you and your men do with the babies? Where did you take them?’’

‘’Uh ... we took them out to kill them,’’ the guard replies. ‘’We were ordered to take all of them to be killed.’’

‘’You killed those small babies? Oh God!’’ writes Nath of his pained response. Then, he adds: ‘’My words dried up. His last statement was not a lie. All these years, in the back of my mind, I had always thought that they had spared the children.’’

Yet the ‘Painter of Tuol Sleng’ is the first to admit his work as an artist, which evokes so much pain, is also the reason why he survived the prison. For when Nath, who was born into a poor farming family, was arrested and dragged into S-21, he was singled out for his talent. Till then, he had been a painter of billboards in Battambang, a city in north-west Cambodia some 300 km from Phnom Penh.

He was ordered by the prison’s tormentors to paint the portrait of a man he had little knowledge of -- Pol Pot, the Khmer Rouge leader. His first painting, in black and white, was based on a black-and-white photo of the reclusive tyrant. Later, he shifted to a painting in colour.

He knew, then, that he was painting for his survival. There was no provision for error. Some of the other imprisoned painters who had been ordered to do likewise had been executed for their failure.

The final arbiter was Duch, who had said ‘’good’’ and ‘’it’s all right’’ after studying one of Nath’s portrait of Pol Pot.

Yet how good Nath was in the eyes of Tuol Sleng’s chief jailer came to light after the Khmer Rouge was driven from power by the Vietnamese army. In 1980, while working at the Tuol Sleng Genocide Museum, Nath was shown a list by a researcher examining the prison’s documents.

It was a list of prisoners that Duch had authorised to be killed on Feb. 16, 1978. On it was Nath’s name. But next to it was an entry written in red ink. ‘’Keep the painter,’’ it is reported to have said.
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Next Stop for Big Oil: Cambodia?

By Susan Postlewaite

As Chevron and partner Mitsui Oil explore offshore, skeptics worry that Cambodia will fall prey to the "oil curse"

In the world of $90-a-barrel oil, oil companies have plenty of incentive to search in unusual places for the fossil fuel. One of the newest energy frontiers is in the clear blue waters off the coast of Cambodia. Here, where fishing sampans sail among scattered, picturesque islands in the Gulf of Thailand, U.S. oil giant Chevron (CVX) has drilled 15 exploratory wells 150 kilometers offshore from the tourist town of Sihanoukville. If all goes according to plan, Chevron will begin extracting oil and gas from these wells by 2011.

Onshore, many Cambodians are watching—some hopefully, others nervously—about what oil might mean for one of the world's poorest nations. Prime Minister Hun Sen has recently called discussion about the oil finds "premature" and "speculative," and will say little about the prospects, which Chevron initially estimated at 400 million barrels. That's not much compared to neighboring Indonesia, with 4.3 billion barrels in reserve, or Malaysia, with 3 billion. But for a poor country like Cambodia, which has precious few energy resources, it's a big deal. Quietly, the premier has been lining up undisclosed partners for a small domestic oil refinery while the Cambodia National Petroleum Authority has begun talking about setting up a national oil company.

How important is oil for Cambodia? The International Monetary Fund produced a "moderate economic scenario" last year that showed revenues to the government from oil could be $174 million when Chevron's production starts in 2011, peaking at $1.7 billion annually after 10 years. For a country with a total national budget of just $1.2 billion, such a windfall could bring such benefits as raises for public teachers now paid $80 a month, rebuilding the education and health systems destroyed during the Khmer Rouge era, or bringing electricity and clean water to the bypassed rural areas that make up almost all of the country. "There are a lot of uncertainties about the amount of oil available," says IMF Resident Director John Nelmes, who explains the $1.7 billion estimate is a conservative one based on total reserves of 500 million barrels.

Overlapping Claims With Thailand
Of course, the size of the estimated oil reserves hardly ranks Cambodia with the big leagues. But the current picture in Cambodia could change. In addition to Chevron's Block A, five other blocks licensed for exploration are so far unexplored. And in an overlapping claims area with Thailand there are huge unexplored oil fields that cover an area as much as all six existing blocks combined. Cambodia and Thailand signed a memorandum of understanding in 2001 to resolve the overlapping claims, but no progress has been made since then and diplomatic ties worsened after Cambodians burned down the Thai Embassy in Phnom Penh in 2003. Cambodia's Deputy Prime Minister Sok An says negotiations are expected to resume soon and he's willing to split the claims "on a 50-50 basis."

The question is, how should an undeveloped country like Cambodia proceed in tapping those resources? The possibility that Hun Sen's government might set up a state-owned oil company and a state-owned refinery horrifies some foreign advisors who worry that Cambodia could fall victim to what economists call the oil curse. That's the phenomenon of corruption in developing countries with state-owned companies that control abundant oil reserves. It's too easy for corrupt government officials to skim profits from state-controlled oil companies, says Warwick Browne, a former extractive industries project manager for Oxfam America in Cambodia.

Having a Phnom Penh-controlled oil and gas company would be "a very bad move," says Browne, adding that such state-owned entities "are black holes for corruption." He says a small national oil refinery would probably not be profitable and the government would have to subsidize sales to the population while forgoing the opportunity to earn needed foreign exchange by exporting to neighboring countries.

Other Obstacles
Government officials won't discuss these questions publicly. Chevron, after three years of exploration at a cost of more than $120 million, says in a public statement that the undersea reservoir has a complex design and contains "small dispersed fields, rather than one core field." Translation: It will take more technical expertise and cost more to extract. With partner Mitsui Oil Exploration (Moeco), Chevron is considering a third round of exploratory drilling in 2008 and 2009.

Another complication: a recent dispute between the joint venture and the government over the way Chevron would eventually be taxed on royalties. The two sides are expected to compromise eventually but won't discuss the matter. Even so, production will probably begin by 2011 under terms of Chevron's and Moeco's license with the government. (Chevron officials in Bangkok declined to comment.)

The licensing of the other blocks taking place is raising eyebrows. Browne says the information about the contracts is kept secret in the hands of Deputy Prime Minister Sok An, who signs the concessions, and Te Duong Tara, head of the Cambodia National Petroleum Authority. (Both declined BusinessWeek requests for interviews.) Quietly, the CNPA over the past year has handed out licenses for the five other blocks to three Chinese companies and two international partner groups.

Beefed-Up Security
One block went to a consortium including Singapore Petroleum, Malaysia's Resourceful Petroleum, and Thailand's PTTEP International. Another went to a consortium led by Indonesian company Medco Energi Internasional Tbk with partners Kuwait Energy and Sweden's Lundin Petroleum. The others went to Chinese companies, including Chinese National Offshore Oil (CNOOC) and China Petrotech Holdings.

Meanwhile offshore, the Cambodian Navy recently ordered patrols to ensure security in the Gulf surrounding the oil fields, an area where Cambodia and Thailand have had a border dispute.

Now all eyes are on Chevron. A petroleum consultant who asked to remain anonymous says the other companies are waiting to see; their contracts allow for six years of exploration before production is required. "They're gambling. Very often they sit back and wait and see if there are any hits. The strategy is to wait, watch, and then decide whether to drop out or resell their license," the consultant says.

Calls for Anti-Corruption Laws
The government is growing impatient with all the pessimists. Hun Sen, in a rare and testy public mention of oil, assured 600 people at a Nov. 7 investment conference in Phnom Penh that the country knows how to avoid the oil curse. "Cambodia is on the right path," the Prime Minister said. "I am hopeful Cambodia will be able to benefit from the sector in the near future."

Opposition party leader Sam Rainsy in December urged lawmakers to adopt an anti-corruption law before the oil begins flowing to prevent government "looting of the nation's oil wealth."

Andrew Symon, petroleum researcher with Menas Asia, a research company from Britain, says he's optimistic about the potential: "It's an exciting area and very contentious politically. If there were to be gas this would be very significant for Cambodia," But, he wryly notes, "There's no shortage of voices wanting this to be a curse. It almost makes it seem it should be left in the ground."

Whether Cambodia, with no oil expertise, will be able to, as U.S. Ambassador Joe Mussomeli put it last February, use its oil resources for "tossing off the shackles of the Pol Pot regime" remains to be seen. According to Mussomeli, oil has been a "horrific curse" in many nations, "rendering the population destitute while a small, corrupt elite siphons off revenue that should go to improving the welfare of all the people." He has called for Cambodia to sign onto a "transparent policy framework" that ensures no one misuses the revenues.
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