HOLLOW GROWTH LEAVES CITIZENS WANTING MORE
On the morning of Feb 14, about 100 villagers had gathered on a street near the official residence of Cambodian Prime Minister Hun Sen.
They tried to march to the residence to hand the prime minister a petition asking for his help in recovering their land, but they were forcefully removed by security forces guarding the premises.
“They grabbed me like a pig,” said one of the protesters, 40-year-old Nom Vannary, showing her bruised arms.
She and other residents of Prek Chik, a village in the southwestern province of Koh Kong, have been engaged in land disputes with a local sugar plantation and processing company for nearly a decade. Two days after the failed protest, they showed the Nikkei Asian Review how parts of their farmland had been enclosed by the company.
According to Housing Rights Task Force, a non-government organisation supporting the villagers, a district court ruled that the government’s concession to the company of an area including the local farm fields was legal and effective.
A sub-decree signed by the prime minister in 2009 defined the conceded area as being inside a different village called Chouk. The sugar company then obtained a document from the provincial government saying the lands were part of Chouk, not Prek Chik. The court’s ruling was based on the sub-decree and the provincial document — the latter of which the villagers and the NGO say is false.
One of the residents provided her national ID card, which clearly states her home address is in Prek Chik, but the court apparently ignored such evidence.
MISSING PIECES
For the past quarter century, Cambodia has seen rapid economic growth, with gross domestic product expanding an average of more than 7% annually. Per capita GDP jumped from US$250 in the early 1990s to more than $1,100 in 2015. Basic living-standard indicators have improved. Life expectancy at birth is approaching 70 years, compared with 54 years in 1992 and 31 in the late 1970s. The ratio of the population in poverty, defined as those living on less than $3.10 a day, has dropped to around 20% from 67% in 1994.
But other indicators paint a darker picture.
According to a recent World Bank report, the share of the Cambodian population that, though not impoverished, is economically vulnerable has been increasing since the early 2000s, while very few people are moving up into the middle class. This, it says, is “partly because of limited human capital and other assets such as land”.
Less than half of middle- and highschool age children are enrolled in school. Access to electricity remains limited to well below 50% of the total population and a further setback for schoolchildren.
Despite the years of economic growth, many government and social institutions are failing in their duty to protect citizens’ basic rights and security, as seen in the Koh Kong court ruling. One reason is the lingering influence of the Khmer Rouge, which ruled the country from 1975-79. It abolished private ownership of property and destroyed related public records, in addition to dismantling laws and other institutions.
Today, registering property, including automobiles and real estate, is still not common. Most landowners lack proper title to their lands, leaving them vulnerable to sudden claims of ownership by either the government or powerful businesses.
At the same time, due to pervasive corruption, few Cambodians trust either law enforcement or the judiciary to safeguard their rights and assets. Judges are basically in the pocket of the ruling Cambodian People’s Party, while many lawyers work for whoever can pay the most. As a result, most people avoid bringing lawsuits.
Preap Kol, an executive director with the Cambodian office of the global corruption watchdog Transparency International, said corruption is “the root cause of almost all social problems in Cambodia”.
Several Phnom Penh residents have said they avoid going to public hospitals when they fall ill because they would have to pay a bribe to receive even low-quality care. “When we get sick, we just go to a pharmacy to buy medicine. That’s why there are so many pharmacies on the streets,” one of them said.
For private businesses, too, corruption is unavoidable.
A 45-year-old Phnom Penh businessman who ran a construction company until recently, told the Nikkei Asian Review that it takes a bribe of around $1,000 — on top of official fees — to obtain each necessary licence and permit.
In a road-building project, the construction company typically must agree to inflate the overall project cost by submitting a “padded” material procurement estimate. In reality, the company buys only what it needs to complete the project, and the official and the company pocket the remaining money.
For irrigation projects, government officials have been known to embezzle as much as 40% of the inflated official cost. “Irrigation and dams are lucrative public works for officials because all the evidence sinks under water when the work is done,”
the businessman said.
Most publicly listed corporations from developed economies find it difficult to do business in such an environment due to strict compliance and accounting requirements in their home countries.
Transparency International’s Kol said Chinese businesses have an advantage in this area because their activities are not subject to strict oversight back home.
Cambodia ranked 156th out of 176 countries in Transparency International’s Corruption Perceptions Index 2016. It came 131st out of the 190 countries in the World Bank’s Ease of Doing Business ranking last year.
Nevertheless, there are some signs of improvements.
The Ministry of Commerce introduced a mandatory online business registration system in December 2015, which takes the human factor out of the process. Although it has been slow to catch on due to its clumsy user interface, it is expected to eventually reduce at least one form of corruption.
The Ministry of Public Works and Transport, meanwhile, launched online vehicle registration and driving licence exam systems in January. It should help reduce the number of unregistered cars, as many — if not most — used-car buyers skip registering their vehicles to avoid paying bribes.
The Ministry of Education, Youth and Sport started a strict crackdown on cheating on national exams in 2014, bringing an end to an epidemic of academic bribery.
LOOKING AHEAD
Cambodia’s economic growth has largely depended on the growth of its garment and shoe exports, supplemented by construction and tourism.
As the country moves into the lower-middle income bracket, garment factory wages will inevitably rise and international aid will taper off. For further growth, it needs to foster industries that do not depend on government spending or aid from abroad.
The Young Entrepreneurs Association of Cambodia, founded in 2009, now has over 100 members, including founders and chief executives of fledgling companies. One member said that most of his peers try to keep a distance from corrupt officials and maintain their own values. “We are different from the traditional chamber of commerce, which is mostly run by corrupt oknha [local tycoons].”
A survey by Transparency International shows a dramatic shift in public opinion in recent years. Today, over half of all respondents and 99% of young respondents say corruption is the number one obstacle to national development.
Back in 2010, two-thirds of respondents said corruption was a normal part of life, the group said.
“Today we hear people complain about corruption almost every minute. Taxi drivers, noodle vendors, all sorts of people do. This is a huge change from a few years ago,” said Kol, adding that social media is playing a big role in spreading information and changing perceptions.
Upcoming elections — provincial polls in June this year and national elections in July next year — will be the first to take place in this new social media-saturated environment. The question is whether politicians are prepared to face voters who now know just how much they have been missing.