KHMER INTELLIGENCE

Khmer Intelligence (KI) is a non-government organisation whose objective is to collect sensitive information from non-easily accessible sources to help Khmer and foreign observers better follow and understand the situation in Cambodia. KI finds out what is behind the latest news and news to come. For security reasons KI must preserve anonymity for its informants. Information is classified according to five levels of reliability: Official or Semi-Official (1), Very Reliable (2), Reliable (3), Insistent Rumour (4), Rumour (5).
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3rd Quarter 2002   4th Quarter 2002   1st Quarter 2003   2nd Quarter 2003   3rd Quarter 2003   4th Quarter 2003   1st Quarter 2004   2nd Quarter 2004   3rd Quarter 2004   4th Quarter 2004   1st Quarter 2005   2nd Quarter 2005   3rd Quarter 2005

30 June 2004

No secret ballot for “package vote” (2)
Because he suspects that a number of National Assembly members from his own party (CPP) will not vote to reelect him as Prime Minister (KI, 19 December 2003: “Chea Sim is CPP’s backup candidate for Prime Minister”), Hun Sen will suppress secret ballot for the “package vote” to be organized in July (29 June 2004: “A coup against the King”). This will be another violation of the Constitution as well as the Internal Rules of the National Assembly (Article 10: “The National Assembly gives birth to the Government by a two-thirds majority vote of confidence approving a list of candidates for all the positions in the Cabinet. This vote of confidence must be conducted by secret ballot under the chairmanship of the President of the National Assembly”). When they have to approve the “package” submitted to them, parliamentarians will be asked to raise their hands instead.  

29 June 2004

A coup against the King (1)
In the latest version of the CPP-proposed “package vote” to be implemented when Parliament convenes on 8 July 2004, the simultaneous election of both the President of the National Assembly and the Prime Minister by a single vote by National Assembly members, implies the suspension of Article 119 of the Constitution, which says: “At the recommendation of the President and with the agreement of both Vice-Presidents of the Assembly, the King shall designate a dignitary from among the representatives of the winning party to form the Royal Government (...) ”. The “package vote” unconstitutionally denies any role to the King in the government formation process, besides being contrary to the democratic principle of separation of powers (legislative and executive branches of the government). Some observers consider that such an expedient suspension of any portion of the Constitution is tantamount to a constitutional coup d’état. In this case it will be a coup against the King (KI, 28 June 2004: “King will be asked to endorse violation of the Constitution”).  

Football and politics (1)
Statements by:
- King Norodom Sihanouk: “On the football (soccer) field, the referee is an absolute monarch (...)”. [Excerpt from “Mon 1er texte pour le 22 juin 2004” posted on the King’s website].
- Hun Sen: “The political situation in Cambodia is like a match of football, where anything can happen. My negotiation strategy in politics is like a football strategy. A football team is usually divided into [a goalkeeper,] three forwards, four midfield players, and three defenders. But I am following my own strategy with only two forwards, three midfield players, and five defenders. For a caretaker government, we need more defenders, and an attack strategy would be inappropriate.” [Excerpt from a speech by Hun Sen published in Rasmei Kampuchea, 26 June 2004].  
- Sam Rainsy: “The opposition SRP would support the CPP-proposed « package vote » only if the King explicitly – not tacitly – agrees to this extraordinary procedure because, like in football, one cannot change the rules of the game without the approval of the referee. In our case related to Cambodian politics, the referee is the King.” [Excerpt from Cambodge Soir: “Après l’accord Funcinpec-PPC, Sam Rainsy circonspect”, 29 June 2004].

28 June 2004

King will be asked to endorse violation of the Constitution (2)
While some observers consider the “package vote” required by the CPP as a constitutional coup (KI, 12 June 2004: « “Package vote” requires King’s involvement »; KI, 19 December 2003: « “Package deal vote” intended to tie down parliamentarians from both Alliance and CPP »), French lawyer Claude Gour – who is currently employed by the Hun Sen government – has a different opinion (KI, 19 December 2003: « “Package deal vote” is the brainchild of Frenchman Claude Gour » ).
According to Gour the Constitution can be “slightly” violated provided the King endorses the violation: « Cette très relative audace constitutionnelle n’est réalisable qu’avec l’accord tacite du Roi, “garant du fonctionnement régulier des pouvoirs publics” (Article 9 de la Constitution). (...). Il est donc facile de faire endosser au Roi la responsabilité du non respect littéral de la règle. » [This slightly daring interpretation of the Constitution is possible only with the tacit approval of the King, “guarantor of the regular functioning of the government” (Article 9 of the Constitution). (...). It is therefore easy to make the King bear the responsibility for the non respect of the text of the rule].

The world’s largest Cabinet (1)
According to the June 26 agreement signed between Mr. Hun Sen (CPP) and Prince Norodom Ranariddh (Funcinpec) the next Cambodian government will be the world’s largest Cabinet with 327 members: the Prime minister will lead a team of 5 Deputy Prime Ministers, 10 Senior Ministers, 30 Ministers, 141 Secretaries of State, and 140 Under Secretaries of State.

Several “ministers without portfolio” in the new government (2)
In order to secure the vote of some Funcinpec parliamentarians who have been ministers in the outgoing government but will lose their position in the new Cabinet, Hun Sen and Prince Ranariddh will appoint them “ministers without portfolio”, a title previously never heard of in Cambodia.

Government to be formed before Hun Sen’s daughter’s wedding day (2)
In his negotiation with Prince Ranariddh, Hun Sen insists that a new government be formed before July 15 corresponding to the Prime Minister’s daughter’s wedding day (Opinion, 27 June 2004: “Regarding the work being done in front of Hun Sen’s house”). On that occasion the father of the bride wants to appear as the prime minister of a new, legal government, and not as the head of a lame duck government in order not to bring bad luck to the to-be-married couple (KI, 21 June 2004: ”Hun Sen as superstitious as Lon Nol”).

24 June 2004

IMF denounces a “mafia State” in a non published report (2)
On June 22, the French newspaper Le Figaro published from Paris an article titled “Le Fonds monétaire international dénonce la dérive mafieuse de l’Etat cambodgien” (The International Monetary Fund denounces the drift of Cambodia into a mafia State) by François Hauter, who based his writing on a “non published, very strongly worded IMF report presented to Finance Minister Keat Chhon last May”. The IMF reportedly points to the fact that the “Cambodian State no longer plays its role” – which explains lawlessness and the continuous aggravation of poverty – and recommends that international assistance be reconsidered. Eight hundreds NGOs are accused by the IMF of being part of a network that annually siphons some US$ 250 millions from international assistance under the cover of “technical assistance” (making useless reports, etc). Development prospects, especially in agriculture, are described as bleak.
See original text at http://www.lefigaro.fr/international/20040622.FIG0062.html

23 June 2004

CPP’s strategy in the allocation of government positions (2)
Regarding the allocation of government positions in the ongoing negotiations with Funcinpec, the CPP’s strategy consists primarily in retaining the control of all ministries that are in a position to collect revenues for the State, while relinquishing ministries that only have a spending mission and rely on others for their functioning.
The main ministries or institutions under the control of the CPP are involved in the collection, management and handling of State income:
- The Office of the Council of Ministers (currently run by Senior Minister Sok An) controls a number of State Secretariats (in particular Civil Aviation) and Authorities (in particular Petroleum, Natural Disasters, AIDS, CDC in charge of private investments, APSARA in charge of Siem Reap/Angkor) that are source of important revenue.
- The Ministry of Finance collects taxes and non-tax revenues as well as a portion of foreign financial assistance. Besides, it helps arrange biased public biddings in order for CPP-friendly companies to win contracts related to State procurement.
- The Ministry of Planning spells out government priorities and channels assistance from the Asian Development Bank to CPP-controlled sectors.  
- The Ministry of Agriculture controls three important sources of revenue: forest, rubber plantations, and fisheries.
- The Ministry of Industry, Mines and Energy collects (official and unofficial) fees, rents and royalties from related companies.
- The Ministry of Commerce collects the proceeds from the sale of garment quotas granted by the USA and various revenues from companies involved in foreign trade.
- The Ministry of Post and Telecommunications makes huge profits (officially about US$ 30 million but in fact more than US$ 50 million a year) from its control of the telephone system.
- The Ministry of Land Management, by its control of the land titling process, is turning State-owned land (80 percent of Cambodia’s land area) into properties owned by the CPP, its apparatchiks and their business associates. While Agriculture/Forest has been a predominant source of income for the CPP for many years, Land Management is becoming the ministry that generates the largest amount of money for the ruling party, followed by Finance (smuggling, tax evasion and inflated State procurement bills), Telecommunications, and Civil Aviation.
- The National Bank of Cambodia derives various (official and unofficial) revenues from its controls of the commercial (private) banks and from the issuing of the national currency and the management of national reserves.
Through the above ministries and institutions the CPP diverts a large portion (up to 50 percent) of State domestic revenue into its own coffers or the pockets of its leaders (up to US$ 500 million a year), which enables them to run a parallel Budget and a parallel State in the form of a vast patronage system: 95 percent of schools throughout the country bear Prime Minister Hun Sen's name (being his “donations”), and millions of people in the countryside survive on hand-outs from the ruling party and its leaders.
At the other end of the Cabinet, the most important ministries traditionally controlled by Funcinpec (Education, Health, Public Works, and Rural Development) have no significant source of income and, most of the time, are deprived of the funds they have been theoretically allocated on the basis of the National Budget adopted every year (KI, 11 June 2004: “Drastic spending cuts in social sectors”; KI, 13 February 2004: “Social ministries go short of cash”).

MPs request ADB to investigate allegations of corruption (1)
On behalf of a group of 23 Members of Parliament, opposition parliamentarian Keo Remy on 10 March 2004 sent a letter to the Director of the Asian Development Bank’s Office of the Auditor General / Anticorruption Unit, requesting an investigation into “the manner in which the ADB Country Department in Cambodia has managed ADB loan funds.” The letter points to ADB-funded projects such as Primary Road Restoration (US$ 68 million), the Emergency Food Rehabilitation (US$ 58 million), Northwestern Rural Development (US$ 31 million), Road Improvement (US$ 56million), and stresses that foreign grants and loans “have been used to serve the political interests of the ruling party” while encouraging corruption in general.
On 11 March 2004, Keo Remy received an answer from A. Michael Sevens, Principal Audit Specialist (Financial Investigator) informing him that the ADB Anticorruption Unit had “opened case C 2004 00028 to review [his] concerns of misappropriation of loan and technical assistance funds” and that “the Anticorruption Unit is the sole office responsible for investigating concerns of fraud and corruption related to ADB-financed activity.”
Former ADB Resident Representative Urooj Malik, who had spent ten years in Cambodia, is reportedly being interrogated (KI, 27 October 2003: “ADB engaged in dubious projects”).

World Bank is asked to show more transparency (1)
On behalf of the same group of Members of Parliament as above, Keo Remy on the same day sent a letter to the Director of the World Bank’s Department of Institutional Integrity, requesting an investigation into “the manner in which the World Bank Country Department in Cambodia has managed World Bank loan funds.” The letter points to World Bank-funded projects such as the two Social Funds (US$ 35 million), the Structural Adjustment Credit-SAC (US$ 30 million), the Agriculture Productivity Improvement Project (US$ 27 million), the Road Rehabilitation Project (US$ 45 million), the Flood Emergency Rehabilitation Project (US$ 35 million), and recalls the suspension in 2001 for “lack of reform progress” of a SAC loan that was finally disbursed in December 2003 “without any visibly justifiable reform progress” (KI, 14 May 2004: “Corruption at the World Bank”).
Keo Remy has not received any answer yet from the World Bank as of today.

22 June 2004

Caretaker government accelerating sales of State assets (2)
Current caretaker government officials and powerful CPP apparatchiks behind them have taken advantage of the 11-month-long political deadlock to increasingly selling off State assets or granting land and forest concessions (KI, 3 March 2004: “Lame duck authorities intensify plunder”). Thanks to a non-functioning National Assembly and the impossibility for parliamentarians to effectively monitor the government's action, some corrupt officials have amassed a fortune for themselves and for the CPP by fraudulently and surreptitiously disposing of important elements of the public domain.
- Examples of State-owned properties recently disposed of: Red Cross compound and Army High Command Headquarters in Phnom Penh (both properties are on Norodom Boulevard), Sihanoukville Municipality Headquarters of the Military Police, Siem Reap City Stadium, Siem Reap's old military hospital, Siem Reap National Conference Hall, Siem Reap District Office, and Siem Reap National Police Headquarters.    
- Examples of land or forest concessions recently granted in officially protected areas: Cambodia Wildlife Sanctuary in Oddor Meanchey, Siem Reap and Preah Vihear provinces (402,000 hectares to Sokimex); Botum Sakor National Park in Koh Kong province (18,300 hectares to Green Rich Co. from Taiwan); Samlaut Multiple Use Area in Battambang province (46,000 hectares to Chilbo Industrial Co. from South Korea); Roneam Daun Sam Wildlife Sanctuary in Pailin Municipality and Battambang province (40,000 hectares to Sun Weeve and Oriental Grass from Japan);  Phnom Aural Wildlife Sanctuary in Kompong Speu province (900 hectares to New Cosmos associated with Attwood with Commerce Minister Cham Prasidh as a major shareholder).

The most beautiful villa in Kep (2)
The largest and most beautiful villa in Kep (a small but more and more fashionable sea resort close to the border with Vietnam) has just been completed at a cost of about US$ 500,000. It belongs to Commerce Minister Cham Prasidh, who has reportedly amassed a fortune by selling garment quotas granted by the USA.

21 June 2004

Negotiations will resume this week on a 115-point “Cooperation Agreement” (1)
The CPP and Funcinpec working groups will resume their negotiations aimed at forming a new government on Wednesday, June 23. They will discuss a draft “Cooperation Agreement” between the two parties, which contains 115 points relating to a large number of issues: provisions detailing some of the 73 points forming the political program that was agreed upon earlier this month, reform of the election system, reform of the justice system, redefinition of government structures, allocation of government positions, term limitation for the position of Prime Minister, procedures for the organization of the “package vote” (KI, 12 June 2004: «“Package vote” requires King’s involvement»).

Hun Sen as superstitious as Lon Nol (3)
Local newspapers (The Cambodia Daily, 17 June 2004: “Park Near Hun Sen’s House Gets Face-Lift”; Cambodge Soir, 14 June 2004: “Les jardins du monument de l’Indépendance en cours de rénovation”) have reported the ongoing renovation works on the park adjacent to Independence Monument, in an effort to raise its surface level by 30 cm and to replace old trees with new ones. The official reasons put forward for the renovations are “beautification” and “flood prevention”.
But for a poor country like Cambodia, where many people suffer from food shortage, the park was already very beautiful, and the concerned area has never been flooded contrary to some other parts of the city. The real reason behind the renovations is related to Prime Minister Hun Sen’s superstition and belief in predictions made by some astrologers, who have suggested the type of renovations to be conducted (ground elevation, type of trees to be planted). In 2002, Hun Sen ordered the cutting of thousands of “umbrella trees” (a tropical tree with big leaves looking like a big umbrella) throughout Phnom Penh, following the advice of an astrologer who told the Prime Minister that the “umbrella tree” would bring him bad luck. More recently, to the astonishment of the public, Hun Sen has ordered the removal of several statues from public gardens after his astrologers had warned him that those statues would bring him bad luck  ("The Two Lions", "The Giant Breaking the Neck of the Monkeys' King", "The Mythological Bird", etc). Hun Sen’s superstition is reminiscent of Lon Nol’s in the early 1970’s, when major decisions by the government were actually made by astrologers.

20 June 2004

King says he will return in October if deadlock is resolved (1)
In a today’s message to the nation King Norodom Sihanouk wrote from Pyongyang that he would not return to Cambodia before next October, and he would do so only if the current political deadlock is resolved in the meantime by the concerned political parties.
The message was issued at a time when Funcinpec and the SRP on the one hand, and the CPP on the other, disagree on the constitutional role of the King as the “supreme referee” who could help break the eleven-month-long deadlock. Before taking any initiative in the near future the King apparently wants to leave enough time to political parties to come to the conclusion that they have exhausted all possibilities of solving their dispute by themselves.

CPP disseminates anti-King leaflets (2)
On June 18, a faction of the CPP, under the cover of a “pro-Republic group”, disseminated in Phnom Penh a leaflet under the form of an open letter to King Norodom Sihanouk, whom they abundantly insulted.
The CPP's maneuver has a twofold objective:
1- Make the King angry and hurt by the insults poured out, so that he would further distance himself from the political arena.
2- Warn the King against getting involved in the ongoing dispute between political parties since such an involvement would be “illegal”. The leaflet says Marshall Lon Nol was right when he staged his coup to depose the constitutional Head of State [then Prince] Norodom Sihanouk in 1970 because the latter “did not respect the law” in some of his undertakings.

Reasons for CPP’s reluctance to accept King’s intervention (2)
The CPP has so far strictly abided by its strategy as previously elaborated (KI, 13 May 2004: “CPP’s strategy and tactic”). A key point of the strategy consists in isolating and marginalising King Norodom Sihanouk for the following reasons:
1- External reasons: Vietnam insists that King Sihanouk be deprived of any political power or influence (KI, 15 June 2004: “CPP top leaders currently in Vietnam”). Hanoi fears King Sihanouk’s determination to defend Cambodia’s territorial integrity (therefore encouraging demands for a revision of border treaties signed under the Vietnamese occupation in the 1980’s), as well as his human rights-based attitude towards refugees – especially hill tribe people or Montagnards – from Vietnam (therefore encouraging a continuous exodus as long as the human rights situation does not improve in Vietnam).
2- Internal reasons: The CPP fears the King’s future influence on any new government formed with the help of the Monarch. If the King fully plays his constitutional role as “the supreme referee who guarantees the regular functioning of the government” and effectively succeeds in resolving the current political deadlock, he would have much clout with the future government. He then could have conflicting views with the dominating CPP and, with the support of other political parties (KI, 15 March 2004: “King clearly shows preference for three-party government”), could push for reforms to tackle issues for which he has been most critical of the government: human rights abuses, deforestation, human trafficking, land grab, worsening poverty, government corruption and inefficiency, Cambodia’s excessive reliance on international assistance leading to a beggar mentality (KI, 13 June 2004: “King blames government”).                 

15 June 2004

CPP top leaders currently in Vietnam (2)
CPP President Chea Sim, Vice-President Hun Sen and Honorary President Heng Samrin are today in Vietnam meeting with leaders of the Vietnamese Communist Party and Hanoi government officials. They are likely discussing the political situation in Cambodia (formation of the new government, refugee problems). Hun Sen last met with Vietnamese leaders in Vientiane (Laos) in the second week of May this year.

End of quotas will seriously hurt Cambodian textile industry from 2005 (2)
"Studies by the World Bank and the U.S. government support the argument that China, India and Pakistan are likely to be the major beneficiaries of the quota phase-out. That's because those countries boast large, modern factories, a cheap labor force and access to locally produced cotton and other raw materials. The most vulnerable are countries such as Cambodia and Bangladesh that have relied on quotas to give their less-efficient manufacturers a boost into competitive world markets." (From Los Angeles Times, 14 June 2004). The Cambodian textile industry, which accounts for 95% of the country’s exports, currently employs 230,000 workers whose earnings are crucial for the survival of some 1.5 million people including relatives in the countryside.

Gold mines in Cambodia (2)
Non exhaustive list of gold mines in Cambodia with names of companies involved and geographical areas covered corresponding also to forest concessions:
 - Wang Fa (from China) and Pheapimex (Ms Phou): area size unknown, in Phnom Prich Wildlife Sanctuary, Kratie province.
-  Oksan (from South Korea) and Pheapimex (Ms Phou): gold and lead mines, area size unknown, in Kratie province.
-  Neoneer (from South Korea) and Pheapimex (Ms Phou): 2,800 hectares, Phnom Chi, in Kompong Thom and Kratie provinces. Neoneer also exploits the Andaung Bar gold mines in Oddor Meanchey province.
The above companies are responsible for mercury and cyanide dumping in waterways and forests (KI, 23 April 2004: “Gold mining destroys environment along Mekong River”). They are all associated with Ms Phou (KI, 11 October 2003: “Ms. Phou, Cambodia’s richest lady”).    

14 June 2004

Economic growth lower than expected (2)
International financial institutions assisting Cambodia are to release new estimates for GDP growth for 2004: about 2.6% instead of 4.6% as previously expected.

Strong message from a delegation of 15 EU ambassadors (2)
Last week 15 ambassadors from the European Union (France, Germany, The United Kingdom, Italy, Spain, The Netherlands, Belgium, Austria, Portugal, Sweden, Finland, Poland, Czech Republic, Slovakia, European Commission) gathered in Phnom Penh (some of them are normally based in Bangkok) and went as a big delegation to deliver a strong message to Prime Minister Hun Sen about refugees (Montagnards) fleeing Vietnam’s Central Highlands and the necessity for Cambodia to respect its obligations as a signatory of the 1951 Geneva Refugee Convention. Representing Cambodia’s largest group of donors, the delegation also met with Prince Norodom Ranariddh and Sam Rainsy to enquire about the current political deadlock, the economic situation and the program of reforms of the future government.

13 June 2004

King blames government (1)
In an annotation next to a recent press article (The Cambodia Daily, June 11: “World Bank Draft Report Slams Graft”) King Norodom Sihanouk wrote today: “Our present Cambodia beats other poorest countries in the world with regard to general corruption, government inefficiency and social/economic injustices.” This is not a compliment to the current government.
See original annotation in French at http://www.norodomsihanouk.info/mes%2004/juin/1306txt5.htm

Gambling makes Cambodians poorer and contributes to the increase in crime (2)
Over the last ten years there has been a spectacular development of gambling in Cambodia: casinos, lotteries, betting systems, etc. Most operators are foreign companies with possible connections with the mafia (drug trafficking and money laundering). There is no regulation whatsoever to ensure a minimum of transparency and fairness for the public, who is often cheated by misleading commercials and a lack of relevant information.
Regarding lotteries for example, operators never indicate the prize payout ratio (or percentage of the money from ticket sales that is returned as prizes: normally 60% to 70% in the West, but possibly as low as 10% in Cambodia) or the odds to win a prize (1 in less than 3 for a “rationally” attractive lottery, but possibly as unfavorable as 1 in 100 in Cambodia). One of the major lottery companies belongs to the Malaysian-based Ariston group, which also operates the Naga Casino in Phnom Penh. While unsuccessfully trying to get listed at the Singapore Stock Exchange in 2003, the Naga Casino declared a net profit of US$ 20 million (KI, 22 January 2004: “Hun Sen holds stake in Malaysian leisure company”).
A relatively new but already devastating form of gambling is football-related betting represented by “CamboSix”, which has become very popular among the young.
Besides making Cambodians poorer the development of gambling has resulted in a frightening increase in crime (KI, 22 January 2004: “Cambodia plagued by crime and lawlessness”).

Appointment of new ambassadors to the UK and the EU (2)
Hor Nambora, son of CPP Foreign Affairs minister Hor Nam Hong and currently ambassador in Canberra, has been appointed ambassador to the United Kingdom (the Cambodian embassy in London will re-open later this year after being closed since 1975). At the same time, Ms Sun Saphoeurn, niece of Hor Nam Hong and currently an under-secretary of state at the Ministry of Foreign Affairs, has been appointed as the first ever Cambodian ambassador to the European Union – and the three Benelux countries – to be based in Brussels.

All citizens to be delivered ID cards (2)
In order to strengthen the rule of law and to address shortcomings and irregularities in the organization of elections, there is a provision in the draft Cooperation Agreement between Funcinpec and the CPP saying that all citizens are to be delivered an ID card in the near future. At the present time, less than one third of the population over 18-year-old hold a standardized and computerized “Cambodia Citizen Identification Card”, which helps explain why 1.5 million eligible voters were unable to register as voters or to cast their ballots at the last elections (KI, 1 March 2004: “National ID: Cambodia versus Thailand”). In the Bangkok Post dated 10 June 2004 (“ID cards on-line”) there is the following information: “On-line computer services for issuing identification cards are now available at civil registration offices nationwide [in Thailand]. People can apply for new ID cards at any district and civil registration offices, and obtain new ID cards within 15 minutes.”   

12 June 2004 

“Package vote” requires King’s involvement (2)
Legal experts asked by political parties to assess the feasibility of a “package vote” whereby the National Assembly would, by a single vote, simultaneously elect the leaderships of both the executive and legislative branches of the government, have come to the conclusion that such an extraordinary move would need the approval and the involvement of the King.
The “package vote” is obviously an unconstitutional procedure that could be justified only at a time of crisis, as a means to address a nationally dangerous situation and to ensure the regular functioning of the government. Under such circumstances, only the King can make a non partisan judgment – acceptable to all – that the country is facing a crisis whose solution requires an exception to the letter of the Constitution while respecting its spirit as enshrined in Article 9: “The King is the supreme referee who guarantees the regular functioning of the government.”  

11 June 2004 

Drastic spending cuts in social sectors (1)
For the first four months of 2004, government expenditures in social sectors (Health, Education, Agriculture and Rural Development) dropped by 22 percent compared to the same period of last year (KI, 29 Mai 2004: “Sharp decrease in government spending due to political crisis”). The sharpest decrease is in Health (-51 percent). The level of public spending in the four “priority sectors” is even lower than in 2002 (-11 percent).
                                         IMPLEMENTATION OF THE 2002, 2003 AND 2004 NATIONAL BUDGETS
                                       FOR THE FIRST FOUR MONTHS OF EACH YEAR (Source: Ministry of Finance)      

(*) Because the National Assembly is not functioning, the 2004 Budget has not been officially adopted, but the government is legally entitled to spend each month the equivalent of one-twelfth of the total spending for the whole year 2003.

3 June 2004

Government blocks publication of World Bank document detailing corruption (2)
The Cambodian government is trying to prevent the publication of a World Bank-sponsored document titled “Draft for Decision Meeting – Towards a Private Sector Development Strategy for Cambodia – Investment Climate Assessment”. The document was completed in 2003 but has not been published yet. It contains, among other things, the result of a survey (Chapter 2) that says: “The theme emerging from the survey is one of weak rule of law, bureaucratic costs and corruption (...). 82% (368 firms) reported a positive level of bribe payments, and 71% of large firms suggest such payments are frequent. Using the average of 5.2% of sales paid in the form of bribes in manufacturing and services and multiplying this by the sectors’ contribution to GDP, a rough estimate of bribe payments for these sectors amount to around $120 million.” (In 2003 the government spent only $43 million on public health, or $3.3 per capita).

UNDP recognizes poverty has increased over the last ten years (1)
After the Asian Development Bank (KI, 6 February 2004: “ADB report shows worsening poverty”) and the World Bank (KI, 2 May 2004: “World Bank confirms increase in poverty”), the United Nations Development Program last week published a case study (“The Macroeconomics of Poverty Reduction in Cambodia”) showing “there are signs that economic growth during the past decade has not produced any significant poverty reduction. Indeed, there are some signs that the situation is worsening.” According to the UNDP report, between 40 percent to 45 percent of Cambodians “subsists below the poverty line and there is no evidence that this situation is improving.” Combined with a misallocation of resources due to corruption – there are fewer public health facilities now than in 1989 – the increasing poverty has resulted in a rising infant and child mortality. Almost one in every 10 babies born in Cambodia does not live to their first birthday, a sad record in Asia.

2 June 2004

King expresses his frustrations and wishes (1)
In a May 31 message to the nation, King Norodom Sihanouk expressed his frustrations and wishes in the following terms: “In my capacity as King, who is the symbol of the unity and continuity of  the nation, I have the duty to solve [the current] political crisis. I have strived to end this serious crisis since November 2003. More recently, on 13 May 2004, I suggested that the three major political parties designate their representatives [to meet with me in Pyongyang] to exchange views in order to help solve this serious crisis (...). In response, only the Sam Rainsy Party agreed to my suggestion, while the two other parties did not want me to help them (...). On 5 November 2003, I succeeded in laying the ground for a quick solution to the crisis since the powerful Samdech Hun Sen agreed to form a three-party government with, according to my suggestion, the participation of the Sam Rainsy Party. I had asked Samdech Hun Sen to give H.E. Sam Rainsy the position of Deputy Prime Minister in the new Royal Cambodian Government. Samdech Hun Sen generously agreed to my demand. Samdech Hun Sen also considered appropriate to create a position of Vice-President of the National Assembly for the Sam Rainsy Party (...). On several occasions, I have told the three political parties we should first form the new National Assembly and Government. We must not put the cart before the oxen [when trying to solve problems]. We should start to work together in a three-party government and strive to progressively address the issues that have been raised (...). ” This King’s latest message is consistent with what the Monarch had been saying (KI, 13 April 2004: “Reasons behind the King’s frustration”; KI, 3 May 2004: “Political crisis to be compounded by institutional crisis with King’s semi-abdication”).
See original text in Khmer at: http://www.norodomsihanouk.info/mes%2004/mai/3105txt5.htm

29 Mai 2004 

Sharp decrease in government spending due to political crisis (1)
The latest figures from the Ministry of Finance show that government spending sharply decreased during the first three months of this year compared to the same period of 2003: -26.7% for Current Expenditure (that is financed by Domestic Revenue) and -45.3% for Capital Expenditure (that is essentially financed by international assistance).
Confirming an established trend (KI, 10 May 2004: “Caretaker government begins to feel the pinch as a result of the political deadlock”), Defense and Security remained practically stable with a decline of only 2.8%, while Health and Education plummeted by 40.7% and 18.3% respectively. Compared to 2002, Defense and Security increased by 89.6%, while Health and Education combined decreased by 8.3%.    

IMPLEMENTATION OF THE 2002, 2003 AND 2004 NATIONAL BUDGETS
FOR THE FIRST THREE MONTHS OF EACH YEAR

(*) Because the National Assembly is not functioning, no official budget has been adopted for 2004, but the government is legally entitled to spend each month the equivalent of one-twelfth of the total spending for the whole year 2003.

28 May 2004

World Bank will multiply independent audits in Cambodia (1)
While attending a conference of the “Parliamentary Network on the World Bank” in Paris last February (KI, 15 February 2004: “Parliamentarian Tioulong Saumura meets with World Bank President James Wolfensohn”), the Cambodian MP asked the World Bank chief to push for “independent audits – by internationally reputable firms – of a number of institutions, projects and ongoing operations where systemic corruption possibly deprives the State of an amount of revenue higher than that of international assistance Cambodia receives annually.” She further elaborated: “Among the institutions and industries where an independent audit can help put things right and lead to an improvement in the ordinary people’s living conditions, I would mention the forestry sector, fisheries, State-controlled rubber plantations, telecommunications, air traffic control, airport management, and management of the tourism-oriented Angkor Wat region.”
World Bank Vice-President (for East Asia and Pacific Region) Jemal-ud-din Kassum responded in detail on behalf of the President in a 6 May 2004 letter: “Regarding your specific request, we understand that the National Assembly does play an important role in development issues, as it has responsibility for approving the budget and within that the overall ceiling for external borrowing – including from the World Bank. We do currently require that [World] Bank-financed projects be audited by independent auditors in Cambodia and around the world. In Cambodia, these audits are conducted by independent auditors – private firms – which have been found to be acceptable to the Bank. Both KPMG and Price-Waterhouse Coopers are qualified to audit Bank projects (...).”
However, in practice, very few – if any – independent audits have been conducted and made public as of today as evidenced by the ongoing implementation of controversial projects related to forest management, demobilization, etc (KI, 14 May 2004: “Corruption at the World Bank”). This happens at a time when the World Bank recognizes it has failed in its mission to reduce poverty in Cambodia (KI, 2 May 2004: “World Bank confirms increase in poverty”).  

25 May 2004

Today’s last round of negotiations on a policy platform ended with small additional results (1)
At today’s last round of negotiations on a policy platform for the future coalition government, the CPP and Funcinpec delegations agreed on guidelines for some reforms to be implemented (anti-corruption, forest, fishing lots, land distribution for demobilized soldiers) and confirmed that the School Accreditation Committee would be placed under the authority of the Ministry of Education.
The remaining issues to be solved through direct talks between top party leaders, possibly under the chairmanship of King Norodom Sihanouk, include a salary increase for civil servants, the institution of a “Question Time” at the National Assembly, the collection of tolls for the use of National Route # 4, and – most important – annulment of border treaties with Vietnam, illegal immigration, and the judicial reform.   

Hun Sen pushes Prince Ranariddh to oppose his father the King (2)
An important piece of Prime Minister Hun Sen’s CPP’s strategy consists in isolating and marginalising King Norodom Sihanouk (KI, 13 May 2004: “CPP’s strategy and tactic”). On May 12, Hun Sen convinced Funcinpec President Prince Norodom Ranariddh to sign a joint letter with him turning down a King’s invitation for a summit meeting in Pyongyang (KI, 13 May 2004: “King’s stern reaction to Hun Sen and Prince Ranariddh’s letter”).
Hun Sen has been clever in playing on Prince Ranariddh’s complex and sometimes uneasy relations with his intimidating father.
Hun Sen seeks to avoid the King’s involvement in the current negotiation process because of the Monarch’s extremely firm position on many sensitive issues (defence of the country’s territorial integrity, preservation of Cambodia's remaining forest, condemnation of government corruption, denunciation of the prevailing beggar mentality and the lack of dignity on the part of our current leaders, necessity to promote social justice and human rights), and his preference for a three-party government.
However, Hun Sen needs the King to approve any future government as required by the Constitution, as he needs the King to continue his figurehead role in order to bring legitimacy for the regime. Therefore, Hun Sen needs the King to come back to Cambodia as soon as possible. But the King, now in a self-imposed exile in North Korea, seems reluctant to come back to resume his frustrating role in Cambodia in the present circumstances (KI, 3 May 2004: “Political crisis to be compounded by institutional crisis with King’s semi-abdication”; KI, 8 May 2004: “Will CPP support King’s request to amend Constitution?”).
CPP mouthpiece “Rasmei Kampuchea” today published a front page article titled “The CPP wants the King to preside over a summit meeting between Prince Ranariddh and Hun Sen”. The article ironically says, “negotiations have just reached the point where they should have started”, meaning that negotiation results have been minimal so far, and serious (difficult) things are to start only now, which will require direct talks between Prince Ranariddh and Hun Sen. More importantly, the article makes a surprising announcement: the CPP will invite King Norodom Sihanouk to preside over a summit meeting in Phnom Penh between Prince Ranariddh and Hun Sen. But the CPP spokesman is quoted as saying also that the King’s effective participation in any summit meeting will actually depend on Prince Ranariddh: would he mind the CPP’s inviting the King? This is apparently a trap for Prince Ranariddh that has been designed, if he refuses to invite his father, to put all the blame on him for any reaction from the King with possibly serious consequences.

A Cambodian MP in Kabul (1)
Cambodian Member of Parliament Tioulong Saumura is currently in Kabul for a conference on “Elections in Afghanistan” organized by the Washington-based National Democratic Institute for International Affairs. Also attending the conference is Professor Reginald Austin who was the Head of the UNTAC Electoral Component in 1992-1993.  

23 May 2004

Food shortage looming (1)
Farmers in several provinces (Kompong Cham, Prey Veng, etc) are complaining about deteriorating living conditions as a result of drought, rats eating the little crop left, fish catches falling to a record low, and soaring food and gasoline prices.
The persistent drought can be largely attributable to deforestation (KI, 29 April 2004: "Economic, social and environmental cost of deforestation exceeds $500 million a year").
The rat invasion is related to their abnormal proliferation because of the absence of normal flooding in some areas (drought), and the systematic capture of snakes – that eat rats – for export to Vietnam.
The diminution in fish stocks and catches is due to a disruption of the ecosystem (destruction of the forest around the Tonle Sap, soil erosion, sedimentation of rivers and lakes) and unabated illegal fishing (KI, 8 January 2004: “Cambodia heading for famine”).
As for inflation, rice and gasoline prices have increased by 15 to 20 percent over the last few months.
A food shortage is looming for hundreds of thousands of people in the countryside that could be averted only by a very good wet season rice harvest by the end of this year.   

More than 800 Generals in the Cambodian Army (2)
There are currently more than 800 Army Generals in Cambodia. In 1994 their number reached 2,000 before declining to 300 before the 1997 coup d’état. The number of Army Generals has increased again over the last two years with Prime Minister Hun Sen striving to secure, through quick promotions, the loyalty of the armed forces.
The Cambodian Army has on paper 100,000 soldiers, but 30,000 to 40,000 of them are believed to be ghost soldiers. Therefore, each “General” has under his command approximately 80 soldiers.

Jewelleries offered to wives of Western ambassadors (3)
The wives of ambassadors from two Western countries have been frequently seen in Phnom Penh visiting jewellery shops accompanied by the wives of Senior Minister Sok An (who is in charge of the Office of the Council of Ministers) and Commerce Minister Cham Prasidh. It is a tradition in Cambodia for wealthy people (Sok An and Cham Prasidh are reportedly among Cambodia’s richest men) to offer jewelleries to their friends through their respective wives.

22 May 2004

Virtually no progress in Friday's negotiation (1)
Negotiation on Friday, May 21, on a policy platform for a new government to be formed, yielded little results with negotiators only confirming an agreement related to the mining industry (KI, 19 May 2004: "Some progress in today's negotiation"). A small number of fundamental problems (border treaties with Vietnam, illegal immigration, fight against corruption, judicial reform) remain unresolved, which will be reexamined on Tuesday, May 25. Those problems will not likely be resolved this month by the current negotiation teams and -- in line with the CPP's tactic (KI, 13 May 2004: “CPP’s strategy and tactic”) -- will require the personal intervention of Hun Sen and Prince Norodom Ranariddh sometime in June.
After May 25, the current negotiation teams are expected to suspend their talks on the policy platform and start discussing the substance of a cooperation agreement between the CPP and Funcinpec.  This "Cooperation Agreement" includes a reform of the election system, amendments to a number of laws and regulations, and the structure and functioning of the future government.

19 May 2004

Some progress in today’s negotiation (1)
Some progress was achieved today in the negotiation to form a new government so that only 4 last points need to be discussed at the next meeting scheduled for Friday, 21 May ( KI, 17 May 2004: “No progress in today’s negotiation”). After a compromise was reached on the creation of a National Human Rights Commission and issues related to the mining industry, road maintenance, and education (KI, 14 May 2004: “Slow progress in today’s negotiation”), the remaining negotiation points are the institution of a “Question Time” at the National Assembly, border treaties with Vietnam, the creation of a Ministry of Immigration, and – last but not least – a number of reforms including the judicial reform and a general salary increase for State employees to help curb corruption. 

18 May 2004

Cambodia’s protected areas are in danger (2)
Please read the relevant “Opinion” posted today.

17 May 2004

No progress in today’s negotiation (1)
Out of the remaining eight points that were supposed to be discussed today by the CPP and Funcinpec negotiation teams (KI, 14 May 2004: “Slow progress in today’s negotiation”) there was no agreement whatsoever on any point during this afternoon’s latest round of talks.
For the 8th point however – control of the School Accreditation Committee – there was an indication that the CPP would accept to consider the Funcinpec’s demand that the Committee be placed under the control of the Ministry of Education instead of the Office of the Prime Minister.
The CPP seems to be strictly following its negotiation tactic as previously explained (KI, 13 May 2004: “CPP’s strategy and tactic”).

15 May 2004

King elaborates on the “slap on the face” he received (1)
In a today’s message to the nation King Norodom Sihanouk details how he feels about what he considers as a “slap on the face” he received when CPP and Funcinpec leaders turned down his invitation for a summit meeting in Pyongyang (KI, 13 May 2004: “King’s stern reaction to Hun Sen and Prince Ranariddh’s letter”). The King notices that the national and international opinion has been shocked by this “slap on the face”, and confirms: “Yes, it was actually a slap on the face” because the answer he received from the two Cambodian political leaders shows a “lack of politeness and savoir-faire”. The King also says he wants to meet with, and listen to, the three parties including the Sam Rainsy Party, which “should not be excluded from the negotiation process because this party won a significant number of parliamentary seats at the last elections.”

Prince Ranariddh and Sam Rainsy confirm Alliance’s position (1)
Funcinpec President Prince Norodom Ranariddh and SRP President Sam Rainsy met this morning at Phnom Penh international airport to discuss the position of the Alliance of Democrats in the ongoing negotiations to form a new government. After the behind-closed-doors meeting attended by only three persons (the third person being Funcinpec Secretary-General Prince Norodom Sirivudh), the Alliance leaders confirmed the unity of Cambodia’s democratic forces and their common goals and strategy (KI, 14 May 2004: “Alliance of Democrats holds firm to its commitments”).
Immediately after the meeting, Prince Ranariddh left Phnom Penh for a two-week private visit to the USA.      

14 May 2004

Alliance of Democrats holds firm to its commitments (1)
Some observers are wondering whether the Alliance of Democrats (Funcinpec + SRP) is still holding after Prince Ranariddh signed with Hun Sen a letter to King Norodom Sihanouk rejecting a royal invitation to a summit meeting in Pyongyang (KI, 13 May 2004: “King’s stern reaction to Hun Sen and Prince Ranariddh’s letter”), while Sam Rainsy accepted the King’s invitation.
Today, the pro-CPP newspaper “Koh Santepheap” and its pro-opposition competitor “Moneaksekar Khmer” published the same transcript of an interview given yesterday by Prince Ranariddh, in which the Funcinpec president is quoted as saying: “For the ongoing two-party negotiation [aimed at forming a new government] we have already received the clear support of Mr Sam Rainsy; therefore there is nothing that affects the Alliance of Democrats.” The same newspapers reported – also in identical terms – that Sam Rainsy on the same day reconfirmed his support for the ongoing negotiation between Funcinpec and CPP and recalled the Alliance’s five main commitments: Cambodia’s territorial integrity, stringent implementation of the immigration law, fight against corruption, reform of the justice system, and reform of the election system.

Slow progress in today’s negotiation (1)
After a two-week interruption (KI, 29 April 2004: “The 13 remaining points in the negotiation aimed at forming a new government), CPP and Funcinpec teams resumed their talks today and reached agreement on five additional points of a draft government program (in brackets are the points’ serial numbers in the original draft):
1- Institutionalization of the role of the Opposition, which will be entitled to some government-provided facilities (#9).
2- No government subsidies for NGOs that are controlled by political parties (#11).
3- Rural credit: application of lowest possible interest rates, taken into account their levels in neighbouring countries (#34).
4- Control of inflation: reduction in gasoline prices, taken into account their levels in neighbouring countries (#53). Regular gasoline price should go down from 2700 riel/litre to 1500 riel/litre.
5- Preservation of historic temples and surrounding areas: no harmful or dangerous commercial activities on the premises (#70).

Remaining 8 points to be discussed on May 17:
1- Creation of an independent National Human Rights Commission, as opposed to a much-decried government-controlled human right commission (#6).  
2- Institution of a monthly “Question Time” and a quarterly “People's Forum” in order to increase transparency and accountability (#7).
3- Reforms (#15). Only one agreement was reached today: the present village chiefs will be replaced in a democratic manner before 2005. The vast issue of corruption is still unexplored. Judicial reform also will have to be addressed. Electoral reform will be discussed at a later stage (KI, 26 April 2004: “Reform of the election system”).
4- Creation of a Ministry of Immigration and Naturalization (#21).
5- Border issue: annulment of treaties with Vietnam (#25).
6- Mining industry, especially the exploitation of oil and gas offshore deposits in overlapping zones disputed by Thailand (#44).
7- Road construction and maintenance, especially the collection of tolls on the busy National Road # 4 from Phnom Penh to Sihanoukville (#48).
8- Education, especially the control of the School Accreditation Committee with at stake a $30 million assistance from the World Bank (#58).

Corruption at the World Bank (1)
At a yesterday’s hearing on Capitol Hill (KI, 13 May 2004: “US Senate Hearing on Corruption and Multilateral Development Banks”), Senator Richard Lugar, chairman of the Foreign Relations Committee, said that “corrupt use of World Bank funds may exceed $100 billion, and while the institution has moved to combat the problem, more must be done”. Senator Lugar cited experts who calculated that between $26 billion and $130 billion of the money lent by the World Bank for development projects since 1946 has been misused.
Jeffrey Winters, an associate professor at Northwestern University, said his research suggested corruption wasted about $100 billion of World Bank funds, and when other multilateral development banks are included, the total rises to about $200 billion. Winters testified that the World Bank's anti-corruption effort was having "minimal effects" and the banks should all focus on supervising and auditing their lending. "The lion's share of the theft of development funds occurs in the implementation of projects and the use of loan funds by client governments," he said.
Specific bank projects under review by the committee include the Yacyreta dam on the Argentina-Paraguay border, the Lesotho Highlands Water Project, and projects in Cambodia.
In Cambodia, independent observers have questioned procedures followed by the World Bank in the financing of a bogus demobilization program and the assistance to a corruption-plagued and devastating forestry policy including the recruitment of a dubious “monitor” (SGS).   

13 May 2004

King’s stern reaction to Hun Sen and Prince Ranariddh’s letter (1)
In an extremely and unusually short letter in Khmer sent today from Pyongyang to Hun Sen and Prince Ranariddh in Phnom Penh, King Norodom Sihanouk just acknowledged their yesterday’s joint letter turning down the King’s invitation for a meeting with him (KI, 11 May 2004: “King invites party leaders to Pyongyang”). The Monarch seems to be deeply hurt.
In their letter Hun Sen and Prince Ranariddh told the King that negotiations between CPP and Funcinpec aimed at solving the current political crisis were moving forward and that the two delegations had already “agreed on 60 points out of the 73” that form a draft policy platform for the next government. “In this spirit , Hun Sen and Prince Ranariddh wrote, we ask your royal permission to give time to the [CPP and Funcinpec] working groups to continue their negotiations [in Phnom Penh] until a final result is achieved, and then they will report directly to you [in Pyongyang] by submitting to you the positive result of these negotiations in order to respond to your wish and your concern.”
In a separate message to the nation issued later today, the King said he received “a slap on the face”, while noticing that even though his proposal to hold a summit meeting in Pyongyang was rejected, his initiative did push CPP and Funcinpec to show a new resolution to work out a solution to the crisis.

CPP’s strategy and tactic (2)
CPP top leaders have recently confirmed their support for Hun Sen-proposed strategy and tactic in the ongoing negotiation process for the ruling party to remain in power.
Strategy:
1- Divide the non-CPP forces; especially break the Alliance of Democrats at any cost, and never accept a formal three-party government.
2- Isolate and marginalize the King, who must remain on the throne to provide legitimacy for the regime; but the constitutional monarch must be given nothing more than a puppet role.
Tactic:
1- Create periodic tension in order to divert attention and manipulate Funcinpec, but in a gradual manner by testing the waters first, so as not to confront the international community.
2- Negotiations between CPP and Funcinpec teams must be suspended after buying maximum time and dealing “successfully” with a large number of minor issues, so as to let Hun Sen and Prince Ranariddh in the end cut a deal on a few crucial issues in a face-to-face meeting.

US Senate Hearing on Corruption and Multilateral Development Banks (1)
The US Senate Foreign Relations Committee is holding today a hearing on “Combating Corruption in the Multilateral Development Banks”. The Committee will hear from the US Executive Directors to the World Bank, the Inter-American Development Bank, and the African Development Bank respectively. Representatives from the civil society will be present.
The Asian Development Bank (ADB) will also be discussed even though the US Executive Directors to ADB will not be testifying at this time.
Some development programs implemented in Cambodia by the World Bank and the ADB may be discussed from an efficacy and transparency point of view: Over the last ten years these two international financial institutions have poured $1.2 billion into this small and poor country with a GDP of only $3 billion, yielding no results but an increase in poverty (KI, 2 May 2004: “World Bank confirms increase in poverty”; KI, 6 February 2004: “ADB report shows worsening poverty”).
A report on the ADB and corruption is available at: http://www.bicusa.org/bicusa/issues/asia/1369.php

11 May 2004

King invites party leaders to Pyongyang (1)
King Norodom Sihanouk today issued a message to the nation in which he invites leaders of the three political parties to meet with him in Pyongyang this month in order to find a solution to the 10-month-long political deadlock. He reasserted that he would not return to Cambodia as long as there is no functioning National Assembly and no legal government there.
Hun Sen’s CPP is preparing an appropriate answer to politely turn down the King’s invitation because they are considering using undemocratic means to preserve the status quo at any cost (KI, 5 May 2004: “CPP dodges discussing long-awaited reforms”; KI, 9 May 2004: “Hun Sen’s tension-based strategy”). Hun Sen is saying to the King that negotiations in Phnom Penh are still going on and that he will report any “results” to the Monarch.
Even though the Pyongyang meeting may not take place, the King’s initiative may prove a good move to help break the deadlock in that it will oblige Hun Sen to show “results” from Phnom Penh and to refrain from political violence. If there are no concrete and positive results in the next few weeks, Hun Sen will have no grounds for rejecting the King’s arbitration proposal in line with article 9 of the Constitution: “The King is the supreme referee who guarantees the regular functioning of the government”.   

10 May 2004

Caretaker government begins to feel the pinch as a result of the political deadlock (1)
According to the latest figures from the Ministry of Finance, the present caretaker government is confronted with increasing budget difficulty. For the first two months of 2004 (*), foreign financing of the budget dropped to $15.4 million, versus $31.0 million for the same period last year (- 50 %). In spite of an increase in domestic revenue from $65.6 million to $86.5 million (+ 32%), the government was led to reduce its total spending from $63.6 million to $43.6 million (- 31%).
As for current expenditures, the reduction mainly affected the civil administration with a 48% decrease, while defense and security suffered only a slight decrease of 9%.
Confirming a sad pattern and alarming trend (KI, 13 February 2004: “Social ministries go short of cash”), among the most affected sectors were education (where government spending for the first two months of this year reached only 5% of the amount spent in the whole year 2003), and health (1% of the 2003 spending) (**). Actual expenditures in education and health have been dramatically decreasing over the last few years with tragic consequences on mortality and illiteracy rates (KI, 1 April 2004: “Medical expenditures per capita drop to nearly zero”).
Some corrective measures will have to be implemented in the next few months since the recent drastic spending cuts are leading to administrative paralysis and are socially and politically explosive in the medium term. Even though the cash situation is not alarming yet following the above-mentioned spending cuts, the overall financial situation will be increasingly difficult for the caretaker government if international assistance continues to decrease.
(*) Because the National Assembly is not functioning, no budget has been adopted for 2004, but the government is legally entitled to spend each month the equivalent of one-twelfth of the total spending for the whole year 2003.
(**) The ratio should be 2/12 = 17%.  

9 May 2004

Hun Sen’s tension-based strategy (2)
To remain in command while facing challenge from both the opposition and elements within the ruling party (KI, 27 March 2004: “Hun Sen must reach definite agreement with Prince Ranariddh before April 13”) Prime Minister Hun Sen has been following a strategy that consists in creating and increasing tension in order to ensure the unity of the CPP behind him. Only when tension increases can Hun Sen consolidate his authority within his own party by silencing those who have reservations about his leadership. Tension allows Hun Sen to invoke the necessity for the CPP to stick together in order to confront an external “enemy” and remain the ruling party.
This tension-based strategy has recently led to the suspension of talks with Funcinpec (KI, 3 May 2004: “Aggravation of the politi