Cambodia's Hun Sen looks safe despite some unease

By Ek Madra


PHNOM PENH (Reuters) - Trouble is mounting for Cambodia's long-serving prime minister, Hun Sen, with rising unemployment and an economic slowdown on top of growing criticism from diplomats, rights activists and political rivals.

But analysts see little threat to his power or the long-term investment outlook in a country that has made great strides after decades of poverty, brutalilty and instability.

"Things are far from perfect in Cambodia, but democracy is a slow process and we have to see the bigger picture," said Pou Sothirak, a senior research fellow at Singapore's Institute of South East Asian Studies (ISEAS).

"Hun Sen's priority has been the economy, social order and the avoidance of conflict, and the current situation is a significant improvement from the past."

Hun Sen's government has come under fire recently, accused of corruption, abuse of power, and undermining the judiciary, raising concerns about future stability and its sincerity about carrying out long-awaited reforms.

Tens of thousands of people have been driven out of their homes in a slew of land seizures, while critics have blasted Hun Sen for filing lawsuits they say are merely attempts to intimidate journalists, activists and political opponents.

However, Hun Sen gets plenty of plaudits as well, and some analysts say the firm hand of the undisputed strongman is exactly what Cambodia and its economy needs.

"It's easy to criticise Hun Sen as a single-party ruler, authoritarian and totalitarian, but he's a pragmatist -- he does what he needs to do," said Ian Bryson, a regional analyst for Control Risks.
"There's no reason to forecast any instability in the near future. Cambodia's pretty rock solid. Hun Sen is healthy and he really is quite well-regarded."

Given the steady turnaround in Cambodia's fortunes since Hun Sen came to power 25 years ago, the popularity of the Khmer Rouge defector and former farmer and monk, comes as no surprise.

RECOVERY COURSE

Six years after Vietnamese invaders ended the Khmer Rouge's 1975-79 "killing fields" reign of terror, Hun Sen became premier and cultivated a reputation as a moderate, investor-friendly democrat, which helped put Cambodia on the road to recovery.

Until the global economic crisis struck, Cambodia had seen four straight years of double-digit growth fuelled by Hun Sen's pro-business policies, which created new jobs and infrastructure and raised living standards among the rural poor, many of whom live on less than $1 a day.

With backing from the poor, his Cambodian People's Party (CPP) scored 73 percent of the vote in 2008 elections, which observers said had only minor irregularities, to win its first outright majority after years of bickering coalition governments.

"I see no party that can challenge the CPP. They've improved the livelihoods of the poor and boosted their hopes and expectations for the future," said a Cambodian political science lecturer, who asked not to be named.

"The criticism Hun Sen has received does not reflect the overall situation. I can see the ruling party will continue to hold power ... and foreigners will continue to invest here."

Analysts say complaints about graft, cronyism, lawsuits and forced evictions from donors, rights groups, diplomats and financial institutions have irked Hun Sen, but will have little impact on his popularity.

The biggest challenge for the CPP, they say, is to revive the economy and ensure jobs are created to minimise the threat of social problems or civil disorder that could undermine its grip on power.

Foreign direct investment has slowed since the global financial crisis took its toll. Economic growth slowed to 5.5 percent in 2008 and the economy is forecast to shrink by 0.5 percent this year, according to the International Monetary Fund.

With a slump in demand from key markets like the United States, at least 130 garment factories have closed since late last year, prompting an estimated 50,000-60,000 lay-offs in an industry that brought in $3.8 billion in 2007.

But analysts say workers have accepted this is not the fault of government mismanagment, and that it looks unlikely to pose a threat to Cambodia's stability.

Neither, they say, will long-running diplomatic disputes with traditional foe Thailand over border demarcations, near the 11th-century Preah Vihear temple and in the Gulf of Thailand, where oil and gas deposits have been found.

Both sides have beefed up their military presence in the areas and seven soldiers died in skirmishes over the past year. But too much is at stake for both countries, and that is preventing the disputes from escalating significantly.

"It's been a bumpy ride for Cambodia, but stability is, and will remain, very much intact," added Pou Sothirak of ISEAS. "And for that reason, I expect foreign investors will return when the global economic situation improves."