Has Chinese investment made Hun Sen immune to sanctions?
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Has Chinese investment made Hun Sen immune to sanctions?

TO witness the brazen nature of Cambodian Prime Minister Hun Sen’s crackdown on opposition, you would think he was operating in a vacuum, outside of the confines of international standards and expectations.

In the months leading up to the July 29 elections, he has repeatedly ignored calls to reinstate the main opposition party. He has rejected demands to free their leader Kem Sokha. He has denied allegations of suppressing press freedom. And he has frequently exhibited disdain for human rights defenders.

There has been speculation that his emboldened and seemingly unapologetic approach is in part due to the generosity of China’s “good neighbour” diplomacy strategy that has kept money flowing into the country despite an increasingly hostile human rights environment.

While the multi-billion-dollar investments from Beijing have undoubtedly given Hun Sen some wins in terms of development and economy, do they really make him immune to western sanctions and exempt from international standards?

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A supporter of Kem Sokha, former opposition leader and ex-president of the now-dissolved Cambodia National Rescue Party (CNRP), scuffles with a policeman near the Appeal Court in Phnom Penh, Cambodia, March 27, 2018. Source: Reuters/Samrang Pring

Waning reliance on the West

“Cambodia for the last quarter century has been highly reliant on western aid money, and what Chinese support does is reduce Hun Sen’s reliance on the West and his susceptibility to western demands to improve the democratic climate or to defend human rights,” author of Hun Sen’s Cambodia and research affiliate at the Carolina Asia Center at the University of North Carolina, Sebastian Strangio, told Asian Correspondent.

Strangio points out that while Hun Sen has long resented these demands from western countries, over his 33-year rule he has mostly been able to side-step and “manipulate” them.

But since his ruling Cambodia People’s Party (CPP) lost support in the 2013 election – therefore losing his mandate to negotiate – Chinese backing has given him the freedom to do what he needs to do to stay in power.

SEE ALSO: Everything you need to know about the Cambodian election

According to a new report funded by the US Department of State, Beijing invested US$9 billion between 2010 to 2016, making Cambodia one of the top recipients of Chinese aid in the world, coming second only to Malaysia.

In fact, in 2016 China surpassed Cambodia itself to become the largest source of investment capital in the Kingdom, according to figures from the Council for the Development of Cambodia (CDC).

And this looks set to increase dramatically.

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Chinese Defense Minister Wei Fenghe (L) shakes hands with Cambodia’s Prime Minister Hun Sen before a meeting in Phnom Penh, Cambodia June 18, 2018. Source: Reuters/Samrang Pring

In January, Chinese Premier Li Keqiang signed 19 agreements worth billions of dollars to develop Cambodia’s infrastructure, agriculture and health system.

While western governments were pulling their support for the election on grounds of rights abuses, China stepped into the breach to shower Cambodia in cash and voting equipment, including computers, printers, photocopiers, cameras, ballot boxes, and voting booths.

SEE ALSO:  Cambodia: ‘Sweeping restrictions’ in new media rules threaten press freedom

This pledge of support conveyed a firm message that Chinese aid to the Kingdom remains unaffected by human rights concerns.

Power through progress

The benefits of this investment are two-fold for Hun Sen.

On top of giving him the confidence to stand up to outside pressure on human rights issues, it has also provided the CPP a “financial legitimacy” that allows the ruling elite to survive, co-founder and vice-chairman of the Cambodian Institute for Strategic Studies, Vannarith Chheang, told Asian Correspondent.

“China has provided a new platform for Cambodian politicians to take, which is financial resources. They need money from China, they need investment and trade with China to strengthen their output legitimacy,” Vannarith said.

“For the ruling party and the ruling elite to survive, they have to give the people opportunities and infrastructure development as the main source of their legitimacy. So, output legitimacy (the public assessment of the quality of the institution’s performance) really defines the future of the ruling party here in Cambodia.”

SEE ALSO: The secret of Hun Sen’s power? His deadly henchmen

But this money injection only goes so far. There are other areas that, should the European Union and the United States choose to target with sanctions, could prove to be an Achilles heel for Hun Sen and Cambodia’s burgeoning economy.

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A garment factory in Sisophon, Cambodia. Source: Shutterstock

Hun Sen’s Achilles heel

Chinese investment can conceivably off-set the withdrawal of western aid, the removal of support for Cambodia’s elections, and even the reduced financial backing of the military – just last week, China announced a US$100 million injection to modernise the armed forces.

But “the main vulnerability that Hun Sen has is his strong reliance on the European and American markets for garment exports,” according to Strangio.

The garment industry makes up 72 percent of Cambodia’s exports and employs almost 850,000 people; that’s 86 percent of all those employed in the industrial sector, according to a 2018 report from the Ministry of Industry and Handicrafts. The bulk of that goes to the European Union and North America, who are the recipients of almost two-thirds of Cambodia’s total exports.

Cambodia’s reliance on this trade became clear last week after Hun Sen’s administration scrambled to send a diplomatic mission to the EU to mend ties after the bloc threatened to withdraw the country from its tariff-free trade agreement known as “Everything But Arms.”

SEE ALSO: ‘A bit harsh’: Cambodia’s response to its growing list of critics

“Chinese accord is unlikely to replace these vital export markets for the Cambodian government any time soon,” Strangio said. “Obviously they want to move towards that but it’s going to be a long time before the amount of garments that are going to the US and the EU are able to be replaced by Chinese demand.”

Sanctions targeting this area could be potentially devastating for Hun Sen’s grip on power.

As Vannarith points out, the garment industry is easy to shift and Cambodia is surrounded by neighbouring countries where competition remains steep. International business is unlikely to think twice about transferring to a more competitive market, leaving the garment workers – a significant chunk of Cambodia’s workforce – the hardest hit.

While Hun Sen may still be able to spin this as a “political path” to stoke anti-western nationalism, according to Vannarith, it is unlikely to have much credence as people face mounting unemployment.

“You need to give people a job,” Vannarith said. “What people want now is jobs, jobs, jobs. So Hun Sen has to ensure people have jobs so he can maintain his legitimacy and power base.”

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Garment workers welcome Cambodia’s Prime Minister Hun Sen during a rally in Kandal province, Cambodia May 30, 2018. Source: Reuters/Samrang Pring

Not the golden ticket

This economic noose is what prevents the Chinese investment from being the golden ticket that Hun Sen so badly wants it to be.

But, despite having to walk the economic tight-rope of oppression at home and diplomacy abroad, the financial support from Beijing has undoubtedly emboldened his approach and placed democracy even further down the pecking order.

As Strangio says: “China has enabled Hun Sen to do what he wants more openly without having to go through the ritual and theatre of maintaining the illusion of democracy in Cambodia.”