China and Cambodia grow closer

In the past few years, China has become the largest foreign investor in Cambodia, with more than six billion US dollars (4.5 billion euros) approved since 2006. Beijing is also a generous donor, having granted around two billion dollars in aid over the same period.

China is the kind of friend Cambodia’s Prime Minister Hun Sen openly appreciates, since its money comes with no human rights or governance strings attached – unlike that of other donor countries, which gave hundreds of millions of dollars to the Cambodian government last year.

But as China and much-smaller Cambodia draw closer – at least financially – some are questioning what Phnom Penh might be getting into.

Good governance, transparency and environment at risk

Chea Vannath, an independent political analyst in Phnom Penh, pointed out good governance, transparency and the environment as being especially at risk.

When it comes to transparency and corruption, Cambodia sits near the bottom of Transparency International's corruption index of 180 countries. China is 79th, around halfway up the ladder.

"Do we need China with that score to be our grade teacher for good governance? Cambodia needs good democratic governance and to have sustainable economic progress," she said.

However, Cheang Vanarith, who heads a local research body called the Cambodian Institute for Cooperation and Peace, thought that China’s influence was broadly positive.

"We need China in terms of socio-economic development in Cambodia. Chinese financial assistance – grants, loans – to Cambodia is playing a significant role in poverty reduction and building infrastructure."

China providing cash for roads and dams

Cambodia emerged around 10 years ago from decades of civil strife with its infrastructure shattered. Donor money has helped to rebuild some of that. China is providing plenty of cash for roads and investment projects such as hydropower dams.

Its assistance is welcome, but the small-print of those infrastructure deals has come in for scrutiny – from the opposition, from civil society, even from the International Monetary Fund.

The opposition party says the deals for the dams – which are funded by China, and which will be built and operated by Chinese firms on a 30-year basis – are not transparent, and riddled with corruption.

China not necessarily a good teacher

For its part, the IMF is concerned that Phnom Penh’s blanket guarantee to buy all the power produced by the dams could prove unaffordable, and might even jeopardize the country’s fight against poverty.

Chea Vannath said that apart from its infrastructure needs, Cambodia also needed to continue rebuilding its institutions of democratic governance. She worried that China was not a good teacher when it came to human rights and governance.

"With the money come a lack of transparency and a lack of democratic governance – not just governance, but democratic governance – the participation of people in state affairs. That concerns us. Yes, it concerns me."

It concerns others too. But those concerns were not voiced publicly by the Chinese or Cambodian officials, so one could perhaps assume they do not share them. Possibly their interests lie elsewhere.

Author:Robert Carmichael
Editor: Anne Thomas