The power and the glory

Motorcycle taxi drivers wait for customers across a casino on Koh Kong. The development of the island has contributed significantly to the economy, but not without cost.

New cables show how Cambodia is caught in a tough balancing act between economic growth and fledgling efforts to curb corruption

1/08/2011
James O’Toole
Bangkok Post

“The tycoons help to finance the CPP, contribute greatly to economic growth, and undertake important charitable work,” the cable says. “However, Hun Sen’s very reliance on his tycoon network may hinder progress in battling corruption, illegal logging, and other sensitive issues that he claims are priorities.”

PHNOM PENH : “Mr Rough Stuff.” “The Gatekeeper.” “Gambling Kingpin.” “Hun Sen’s Money Man.”

These are just a few of the nicknames bestowed on some of the most prominent members of the Cambodian business community by American diplomats writing in a cable made public over the last few weeks by the anti-secrecy organisation WikiLeaks. The authors of the communique raise concerns about this collection of oligarchs, their close relations with Cambodian Prime Minister Hun Sen and the implications of such links for Cambodia’s avowed war on corruption.

Ranked 154th out of 178 on Transparency International’s global Corruption Perceptions Index, Cambodia has long been dogged by graft in both the private and public sectors. Hun Sen and his ruling Cambodian People’s Party (CPP) have publicly acknowledged the issue, and last year the country passed its long-awaited anti-corruption law, legislation years in the making that had long been urged by donor countries.

A few high-profile busts have been made since the law came into effect, but few doubt the systemic nature of Cambodia’s corruption challenge. Complicating the fight are the country’s well-connected tycoons, whose close ties with the government “reinforce the culture of impunity and limit progress on reforms such as Hun Sen’s self-declared ‘war on corruption”, the US cable says.

Among those listed in the cable, which dates from August 2007, is Ly Yong Phat, a Cambodian agriculture mogul who holds dual citizenship with Thailand and is dubbed “the King of Koh Kong” for his prominence in his home province. Also a ruling party senator, he operates a joint venture with Thailand’s Khon Kaen Sugar and has been accused of pushing thousands of Cambodian villagers off their land to clear the way for his plantations.

“Hun Sen’s Money Man” is Mong Reththy, another senator and agribusiness baron whose construction company reportedly received an exclusive contract to construct all of the buildings for Hun Sen’s charity projects.

Senator Lao Meng Khin and his wife are termed Cambodia’s “Power Couple“, having received hundreds of thousands of hectares worth of land concessions throughout the country, including one in central Phnom Penh that is set to displace 20,000 people.

“Mr Rough Stuff” is the president of the Cambodian Chamber of Commerce, Kith Meng, who heads the Royal Group conglomerate. A local businessman describes Mr Meng as “a relatively young and ruthless gangster”, according to the cable, while another says he is “notorious for using his bodyguards to coerce others into brokering deals”.

Mr Meng was travelling this week and declined to comment, though Stephen Higgins, the CEO of ANZ Bank’s Cambodian joint venture with Mr Meng’s Royal Group, defended his colleague.

“He is someone who in the past attracted a lot of rumours, the vast majority of which turned out not to be true,” Mr Higgins said. He added that while there were some tycoons listed in the cable with whom ANZ “would never have anything to do”, foreign companies were not put at a disadvantage by the existence of a local elite.

“The government is very supportive of foreign business, moreso than in other countries,” he said.

The tycoons themselves have partnered with the government in recent years to finance infrastructure projects and local charities, also funnelling millions of dollars to the ruling CPP. As such, the US cable describes Hun Sen’s relationship to the group as both “symbiotic and self-limiting”.

“The tycoons help to finance the CPP, contribute greatly to economic growth, and undertake important charitable work,” the cable says. “However, Hun Sen’s very reliance on his tycoon network may hinder progress in battling corruption, illegal logging, and other sensitive issues that he claims are priorities.“

An American businessman who works in Phnom Penh noted that cronyism is common in many countries, but said the challenge for Cambodia would be to enforce clear standards that apply to all businesses equally.

“You just want to know what the game rules are,” he said. “You don’t want someone moving the goalposts in the middle of the game, and that’s what they’re capable of doing.”