Sam Rainsy following the grenade attack
A wounded Chea Vichea (L) sitting next to Sam Rainsy following the attack
Scene of the carnage following the grenade attack on 30 March 1997
FBI Should Revive Probe of Alleged Perpetrators Promoted by Hun Sen
(New York, March 30, 2008) – The US Federal Bureau of Investigation (FBI) should reopen its long-stalled investigation into the grisly grenade attack on an opposition party rally in Phnom Penh 11 years ago that left at least 16 dead and more than 150 injured, Human Rights Watch said today. The FBI investigation, which made significant progress in 1997, has been effectively abandoned.
On March 30, 1997, a crowd of approximately 200 supporters of the opposition Khmer Nation Party (KNP), led by former Finance Minister Sam Rainsy, gathered in a park across the street from the National Assembly to denounce the judiciary’s corruption and lack of independence. In a well-planned attack, four grenades were thrown into the crowd, killing protesters and bystanders, including children, and tearing limbs off street vendors. The grenade attack made headlines and provoked outrage around the world. On June 29, 1997, the Washington Post wrote:
"In a classified report that could pose some awkward problems for U.S. policymakers, the FBI tentatively has pinned responsibility for the blasts, and the subsequent interference, on personal bodyguard forces employed by Hun Sen, one of Cambodia’s two prime ministers, according to four U.S. government sources familiar with its contents. The preliminary report was based on a two-month investigation by FBI agents sent here under a federal law giving the bureau jurisdiction whenever a U.S. citizen is injured by terrorism. ... The bureau says its investigation is continuing, but the agents involved reportedly have complained that additional informants here are too frightened to come forward."
"The FBI was close to solving the case when its lead investigator was suddenly ordered out of the country by the US ambassador, Kenneth Quinn," said Brad Adams, Asia director at Human Rights Watch. "The FBI has damning evidence in its files that suggests that Prime Minister Hun Sen ordered the attack, but it has refused to fully cooperate with congressional inquiries or follow through on its initial investigation. Instead of trying to protect US relations with Cambodia, it should now finish what it started."
The FBI investigated the attack because Ron Abney, a US citizen, was seriously injured in the blast, which the United States at the time deemed to be an "act of terrorism." Abney had to be evacuated to Singapore to treat shrapnel wounds in his hip.
Instead of launching a serious investigation, then co-Prime Minister Hun Sen announced that the demonstration’s organizers should be arrested and instructed police not to allow them to leave the country. (To read an Agence France-Presse account published at the time, please visit: http://hrw.org/english/docs/2006/03/28/cambod13086.htm).
On the day of the attack, Hun Sen’s personal bodyguard unit, Brigade-70 (B-70), was, for the first time, deployed at a demonstration. Photographs show them in full riot gear. The police, which had in the past maintained a high-profile presence at opposition demonstrations to discourage public participation, had an unusually low profile on that day. Officers were grouped around the corner from the park, having been ordered to stay away from the park itself. Also for the first time, the KNP had received official permission from both the Ministry of the Interior and the Phnom Penh municipality to hold a demonstration, fuelling speculation that the demonstration was authorized so it could be attacked.
Numerous eyewitnesses reported that the persons who had thrown the grenades were seen running toward Hun Sen’s bodyguards, who were deployed in a line at the west end of the park near the guarded residential compound containing the homes of many senior Cambodia People’s Party leaders. Witnesses told United Nations and FBI investigators that the bodyguard line opened to allow the grenade-throwers to escape into the compound. Meanwhile, people in the crowd pursuing the grenade-throwers were stopped by the bodyguards at gunpoint and told they would be shot if they did not retreat.
"This brazen attack, carried out in broad daylight, ingrained impunity more than any other single act in recent Cambodian history," said Adams. "But that appears to have been one of its purposes – to send the message that opposition supporters can be murdered without ever facing justice."
In a June 1997 interview with the Phnom Penh Post, Hing Bun Heang, deputy commander of Hun Sen’s bodyguard unit and operationally in charge of the bodyguards at the park on March 30, 1997, threatened to kill journalists who alleged that Hun Sen’s bodyguards were involved. Hing Bun Heang has since been promoted as deputy director of Hun Sen’s cabinet and, in September 2006, appointed as supreme consultant to Cambodia’s Senior Monk Assembly and assistant to Supreme Patriachs Tep Vong and Bou Kry.
The bodyguard unit B-70 remains notorious in Cambodia for violence, corruption, and the impunity it enjoys as the de facto private army of Hun Sen. According to a 2007 report by the nongovernmental organization Global Witness, "The elite Royal Cambodian Armed Forces Brigade 70 unit makes between US$2 million and US$2.5 million per year through transporting illegally logged timber and smuggled goods. A large slice of the profits generated through these activities goes to Lieutenant General Hing Bun Heang, commander of the prime minister’s Bodyguard Unit."
In one notorious case in 2006, two soldiers from B-70 shot a Phnom Penh beer promotion girl in the foot for being too slow to bring them ice. They were arrested by military police, but released hours later by their commander. A representative of the commander said the victim would be paid $500 compensation by B-70, but no criminal investigation or prosecution ensued.
"Instead of investigating the senior officer in charge of the bodyguard unit implicated in the 1997 grenade attack and who threatened to kill journalists reporting on it, Hun Sen has promoted him,” said Adams. “Apparently, Hun Sen considers such a person qualified for a senior position in the country’s official Buddhist hierarchy."
Given the serious and credible allegations of the involvement of the Cambodian military in the grenade attack, Human Rights Watch expressed concern that the United States has increased military assistance and training to the Cambodian military before it completed its investigation into the 1997 attack.
Human Rights Watch called on the US to ensure that it is not providing any assistance or training to current or former members of B-70 or other Cambodian special military units with records of human rights abuse. In an effort to solidify counterterrorism cooperation, the FBI in 2006 awarded a medal to the Cambodian Chief of National Police Hok Lundy for his support in the US "global war on terror." Hok Lundy was chief of the national police at the time of the grenade attack and has long been linked to political violence.
"No credible explanation has ever been offered for the deployment or behavior of Hun Sen’s bodyguards on March 30, 1997," said Adams. "Their actions may reach the highest levels of the Cambodian government, yet the FBI investigation has been dropped. The fact that the US is providing military assistance instead of investigating the grenade attack shows that it is effectively complicit with the Cambodian government in abandoning any hope for justice for the victims of this horrific attack."
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SOURN SEREY RATHA
China, which Cambodian Prime Minister Hun Sen
China, which Cambodian Prime Minister Hun Sen referred to as “the root of everything that was evil in Cambodia” in a 1988 essay, has emerged as a major donor to Cambodia and, unlike aid from the West, Chinese assistance comes with no strings attached for promoting democracy or good governance. China is also a major investor in Cambodia, mainly in the garment industry, but also in agriculture, mining, hotels and tourism.
The Chinese are coming. If the plan holds, the small and sleepy capital of Laos, Vientiane, might look like Manhattan on the Mekong. More than architectural statement, the construction of the new Chinatown in Laos will mark the newest evidence of China’s rising influence in Indochina, once the playpen of Vietnam.
An artist’s impression in state-owned media shows the shape of new development that will turn marshland into a modern city, populated by an estimated 50,000 migrants from China. The Associated Press reports that a Chinese company leased the land.
China’s profile and influence in Laos have grown steadily over the past few years at the expense of the landlocked country’s longstanding friendship with Vietnam. Similar development has taken place in Cambodia, another close ally of China’s longtime rival in the region, Vietnam. China, which Cambodian Prime Minister Hun Sen referred to as “the root of everything that was evil in Cambodia” in a 1988 essay, has emerged as a major donor to Cambodia and, unlike aid from the West, Chinese assistance comes with no strings attached for promoting democracy or good governance. China is also a major investor in Cambodia, mainly in the garment industry, but also in agriculture, mining, hotels and tourism.
This development has not gone unnoticed in Vietnam. In the case of Laos, to alleviate fears of a shift in foreign allegiances, the official media have over the past year protested a bit too much about the traditional friendship with Hanoi, repeatedly mentioning the 1977 Treaty of Friendship and Cooperation between the two communist-ruled countries. Symbolically, a stylistic painting showing Lao and Vietnamese soldiers and civilians linking arms under national flags won first prize in a Vientiane art competition 19 September 2007, the 20th anniversary of the treaty’s signing. On Lao television, Lao and Vietnamese dignitaries meet and proclaim the “everlasting friendship” between the two countries.
But Laos’ allegiances have changed and that’s reflected in the history of three apartment blocks on the road to Vientiane’s Wattay Airport. Built in the early 1970s to accommodate operatives of the US Central Intelligence Agency and other American advisers, the buildings were taken over by Soviet technicians when the communist Pathet Lao took over in 1975. Today, the Mekong Hotel and Apartments cater to a mainly Chinese clientele, with one floor housing the Beijing Restaurant.
The number of Chinese working in Laos has increased in recent years. According to official statistics, about 30,000 Chinese now live in Laos, but the real figure could be 10 times greater. Thousands of Chinese work on the Asian Development Bank–funded Route 3 that runs from Boten, on the border with the southern Chinese province of Yunnan, through Luang Nam Tha in Laos, down to the Mekong River at the Houei Xay ferry crossing opposite Chiang Khong in Thailand, where a bridge is planned as well. When finished, the highway – and Laos – will be China’s main overland connection with Southeast Asia.
At the same time, China has become a major investor in Laos with 236 projects worth around US$876 million, a considerable increase from US$3 million worth of investment in 1996. The total Chinese direct investment approved by Laos’ Committee for Planning and Investment up to August 2007 amounts to US$1.1 billion, second only to Thailand’s projects worth US$1.3 billion. About a third of the Chinese investment is in hydropower, and the Laos government has granted Chinese companies concessions to mine gold, copper, iron, potassium and bauxite. Vast tracts of land have been farmed out to Chinese interests for rubber plantations.
China’s assistance to Laos since the late 1990s has reached nearly US$500 million in grants, interest-free loans and special loans. China has built a huge Culture Hall in Vientiane, ostensibly in traditional Lao style. In November 2004, China beautified the park around the Vientiane landmark Patouxay, the capital’s Arch of Triumph, and now constructs a stadium for the Southeast Asian Games, which Laos will host in 2009.
According to a June 2007 report in the English-language Vientiane Times, special loans from China helped establish the Lao Telecom Company and Lao Asia Telecom, and also funded a cement factory, the purchase of two MA 60 aircraft for Lao Airlines, as well as several government internet projects. The Chinese ambassador in Vientiane participates in donors’ meetings and plays an active role in the social life of Lao-based diplomats. Soon he’ll be joined by thousands, perhaps tens of thousands, of Chinese citizens in Vientiane’s new Chinatown, which, for reasons of sensitivity, is called a “New City Development Project.”
In Cambodia – where China once supported the dreaded Khmer Rouge regime both when it was in power and later as a resistance force against the regime that Vietnam installed in Phnom Penh in January 1979 – the political situation began to change when Hun Sen ousted his then coalition partner, royalist leader Prince Norodom Ranariddh, in a June 1997 coup. Cambodia’s Western donors were not amused: The US and Germany suspended non-humanitarian aid until a free and fair election was held. Japan, Cambodia’s largest donor, said it would halt new projects.
But China came to Hun Sen’s rescue. Longtime Cambodia watcher Julio Jeldres notes that China was the first country to recognize the regime after the coup; in December that year, Beijing delivered 116 military cargo trucks and 70 jeeps valued at US$2.8 million. In February 1999, Hun Sen paid an official visit to China and obtained US$200 million in interest-free loans and US$18.3 million in foreign-assistance guarantees. The number of Chinese settlers in Cambodia is unknown, but estimated to be in the thousands.
The “new” Chinese, who for various reasons have settled in countries such as Cambodia and Laos, are more assertive than older Chinese communities in the region. According to Andrew Forbes, a Thailand-based China expert who spent more than 20 years studying China’s relations with Southeast Asia: “They’ve grown up in a country which is stronger and far more unified than before. There’s a new sense of being Chinese: the new migrants are patriotic and loyal to the motherland.”
This sense of national pride provokes tensions between new-generation migrants and older settlers, who fear the newcomers’ outward display of nationalism could rekindle longstanding suspicions towards ethnic Chinese communities in their adopted countries.
There have been incidents of anti-Chinese hostility that bear out those concerns. For example, in May 1999, 300 “new” Chinese massed outside the US embassy in the Cambodian capital Phnom Penh to protest the bombing of the Chinese embassy in Belgrade. A smaller gathering of ethnic Chinese Cambodians, in the country for generations, held a counterdemonstration, heckling the protesters: “You’re not our brothers,” one yelled, referring to the suffering of Cambodia’s Chinese during the 1975-79 Khmer Rouge regime. “Your people killed my people during Pol Pot’s time.”
But the Vietnamese have greater reason to fear China’s rising economic, political and demographic clout in the region. Vietnam, once a leading force in Indochina, is becoming isolated from traditional allies. It still retains some influence in Laos, and trade between the two countries is not insignificant. But once Vientiane’s new Chinatown is built, that may change and the people of Laos have to adjust to their country’s becoming an extension of Yunna
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What will this mean for people such as Sang Run
Sang Run, his hair stiff with sea salt, chugs out into the Gulf of Kompong Som in his weather-beaten turquoise boat, looking for blackling. He scours the shallow, blue water, waiting for a shoal to appear, before skimming his net across the water. He does the same every day, taking his catch to auction on Independence Beach in Cambodia's southern port city of Sihanoukville.
It looks like a scene Sang Run was born into. But 20 years ago the beach was deserted, and he was a schoolteacher in Mondulkiri, a forested province hundreds of miles away in the east of the country. Back then, he could talk all day about palm sugar and betel nuts. He was something of an amateur botanist, but had never seen the sea - nor had any of the group who today gather around his silvery haul flapping in the sand on Independence Beach. Former nurse Srey Pov, who runs a Khmer restaurant along the beach, also came from a province many miles away. She still cannot swim, she says, shrugging. Heads nod around her. Cambodia is a nation that would drown if their boat tipped over; it is also a country whose citizens mostly do not belong to the places where they have ended up.
The Khmer Rouge saw to that, eviscerating the kingdom after coming to power. It was a movement that drew inspiration from Mao's Cultural Revolution, collectivising all the land; but it grew to love terror more than ideology. The ferocity of the regime sent more than 300,000 rushing into exile. At least two million urban Cambodians were route-marched into the paddy fields to near certain death. Worst hit was the Eastern Zone, bordering Vietnam, where Sang Run came from. Its people were derided as "duck's arses with chicken's heads" as the Khmer Rouge grew to mistrust the Vietnamese and accused Mondulkiri people of being disloyal - too sympathetic to their neighbours across the border. Their names were added to those who were to be purged; the catalogue of "crimes" became so long, so general, that anyone could stand accused. The wave of random violence and retribution that scythed through the countryside for three years, eight months and 21 days killed one in five of the population.
Sang Run's family all vanished, but he survived, hiding in the forests, living off what he could pluck and hunt. When the Vietnamese invaded in 1978 - overthrowing the Khmer Rouge a year later - Sang Run found his way, like thousands of others, to Cambodia's 300-mile long shoreline. Stretching between Thailand and Vietnam, the region had been a Khmer Rouge stronghold, controlled by Pol Pot's notorious commander, Ta Mok, who was known as The Butcher. In the 80s, when the fishing shacks and noodle stores went up along the Sihanoukville coast, there was no development plan. There had never been a tradition of thriving fishing communities along the coast - few Cambodians lived there except in the old French colonial towns. The shoreline had been empty - miles of palm-fringed beach front interspersed with the few port towns, including Kep, Sihanoukville and Ream.
Survivors began to build new lives there, learning to love the sea. Some took boats to a nearby archipelago of 22 coral-fringed, uninhabited islands, building up clusters of villages on atolls with names such as Rabbit, Snake and Turtle. Within 10 years, the whole coastline had been patchily settled by newcomers, among them a former farmer, Soch Tith, a stocky man with corncob hands, who was sick every time he got in a boat, but still found his way to faraway Koh Rong, the largest of the islands - 7,800 hectares of jungle. There he cleared small patches to grow fruit.
By 2006, these communities had schools, political representation, and many householders even had papers, stamped by the Sihanoukville governor, Say Hak, which guaranteed them the permanent right to stay under the 2001 Cambodian Land Law. The central government in Phnom Penh had in the 90s designated the entire coast and its islands as State Public Land that could not be bartered or developed.
Then, during the past couple of years, a disturbing wave of rumours swept the coastal communities. Sang Run says that in September 2006 he heard that Snake Island, half a mile out to sea, had been secretly sold to Russians. He did not check. Cambodians ask little from their government; a wariness of authority is a legacy of years of blood-letting under Pol Pot. In any case, it was a familiar story. Shortly after Hun Sen, Cambodia's prime minister, came to power in 1985, frenzied landgrabbing began: influential political allies and wealthy business associates raced to claim land that the Khmer Rouge had seized, gobbling up such large chunks of the cities, forests and paddy fields that Cambodians used to say the rich were eating the country. By 2006, the World Bank estimated that 40,000 had been made homeless in Phnom Penh alone. But, until now, no one had bothered with the coast. Sang Run paid no particular attention to the Snake Island rumour. He should have - it signalled a radical new course for the Cambodian government.
Three months later, Sang Run was out in his boat at 7am when disaster struck his village. He arrived back at 11am to find bulldozers had flattened his home and those of the 229 families who lived beside him. He heard from neighbours that it had happened in an instant. Uniformed men, sent in by governor Say Hak, used electric batons to chase terrified residents from the burning ruins; three of Sang Run's neighbours were knocked unconscious. Village Number One - a mundane name that failed to capture the beauty of its uninterrupted sea views and vegetable gardens that ran to the beach - had been erased. Sang Run heard that a hotel was planned, although no information was given to the people evicted from their homes for a further 18 months.
Nurse-turned-restaurateur Srey Pov tells us that, by early 2007, rumours were buzzing around Sihanoukville's covered market that virtually every island in the region was up for sale. Over the following months, Koh Russei and Koh Ta Kiev, Koh Bong and Koh Ouen, Koh Preus, Koh Krabei and Koh Tres were all snapped up by foreigners, who then started negotiating for mainland sites, too, among them public beaches with names such as Serendipity, Occheuteal and Otres. In February, 47-year-old Srey Pov was evicted, too, her Independence Beach restaurant shut down to make way for another rumoured hotel. "All I've got left is the chairs and tables," she says - they're stacked up in the cramped living room of her Sihanoukville home. Former farmer Soch Tith, on Koh Rong, was the last to hear that last month his island had been sold, too, to a British developer.
What none of these people knew was that the troubled kingdom of Cambodia, a precarious debtor-nation underpinned by more than £500m of hand-outs from the international community, had suddenly found itself a refuge for cash and speculators fleeing paralysed western financial markets. As London and New York, overcome by the US sub-prime crisis, began grinding to a halt last year, many in the City had moved on, transferring liquid assets to the east.
Foreign fund managers had started pitching up in Phnom Penh wearing linen shirts and khaki drip-dry jungle wear, alerted by the country's unexpected boom in tourism that in 2006 had seen one-and-a-half million visitors overcome the west's collective memories of Cambodia's recent past to travel to the temples of Angkor Wat. Enticed also by indicators that suggested the feeble economy was turning a corner, super-rich, predominately British, French and Swiss speculators, fuelled by a high-risk machismo, came hunting for profits of 30% or more. Their interest was land speculation: buying up large sites in developing countries that they would then sit on in the hope that, with the influx of tourists, land values would soar.
Hun Sen and his ruling Cambodian People's Party (CPP) have, in effect, put the country up for sale. Crucially, they permit investors to form 100% foreign-owned companies in Cambodia that can buy land and real estate outright - or at least on 99-year plus 99-year leases. No other country in the world countenances such a deal. Even in Thailand and Vietnam, where similar land speculation and profiteering are under way, foreigners can be only minority shareholders.
There were other inducements. Many foreign funds - hedge funds, property funds, private equity funds - operating on the outer margins of the financial world thrive on complexity, risk and maximising profit. In Phnom Penh, they found an ideal partner in the prime minister, who has created a unique business environment. Since the mid-90s, Hun Sen and the CPP have declined to enforce money-laundering legislation and have concerned themselves little with the probity of investors. Foreign businessmen were offered nine-year tax holidays, and were allowed to hold their cash in US dollars in banks outside the country.
"Only recently, no one would touch us," Brett Sciaroni, a Phnom Penh-based US lawyer who acts for many new western investors, tells us. "We were dirt. And suddenly we were gold." John Brinsden, a British banker, now vice chairman of Cambodia's national Acleda Bank, agrees: "In 2001, only 200 people came to the government's investment conference. At our most recent, we ran out of chairs."
In July 2007, Hun Sen, gambling on his people's tenuous connection with the land, changed the designation of the southern islands so they could be sold. The forests, lakes, beaches and reefs - and the lives of the thousands of residents - were quietly transferred into the hands of private western developers. Arguing that Cambodia could become a tourist magnet to challenge Thailand, the prime minister began a fire sale of mainland beaches. By March this year, virtually all Cambodia's accessible and sandy coast was in private hands, either Cambodian or foreign. Those who lived or worked there were turfed out - some jailed, others beaten, virtually all denied meaningful compensation. The deals went unannounced; no tenders or plans were ever officially published. All that was known was that more than £1,000m in foreign finance found its way into the country in 2007, a 1,500% increase over the previous four years. It was as if Alistair Darling, the British chancellor, had decided to raise some extra cash by trading the Isles of Wight, Man and the Hebrides, throwing in Formby Sands, the entire Cornish coastline and Brighton seafront - before trousering the proceeds.
It was abundantly clear to observers, including the World Bank and Amnesty International, that by making these private deals, Hun Sen was denying prosperity to most of his people, causing the country's social fabric to unwind like thread from a bobbin. Today, more than 150,000 people are threatened with eviction. Forty-five per cent of the country's entire landmass has been sold off - from the land ringing Angkor Wat to the colonial buildings of Phnom Penh to the south-western islands. Professor Yash Ghai, the UN human rights emissary to Cambodia, warned, "One does not need expertise in human rights to recognise that many policies of the government have... deprived people of their economic resources and means of livelihood, and denied them their dignity." He added, "I believe that the deliberate rejection of the concept of a state governed by the rule of law has been central to the ruling party's hold on power."
It was Hun Sen who, as early as 1989, realised the power of land. Rhodri Williams, a researcher for the Geneva-based Centre on Housing Rights and Evictions, points out that, as Hun Sen privatised the land, "he simultaneously cut off the rights of 360,000 exiled Cambodians, awarding prime slices to political allies and friends." The exiles were Cambodians who had fled the Khmer Rouge into Thailand and beyond in 1975; they had titles to the land, but this counted for nothing when they returned to claim it. Hun Sen said Cambodia should start again.
Although he bathes his speeches in socialist values, even his closest aides told us that Hun Sen was more often than not a pragmatist. He joined the Communist party in the 60s and enlisted in the Khmer Rouge in the 70s, before defecting to the Vietnamese-backed government in the 80s. In the 90s, he embraced the free market. Tourism was not a promising prospect in the early days - the remnants of Khmer Rouge, violently hostile to outsiders, were too much of a risk. When western travellers did begin to explore, they were taking their lives in their hands. In 1994, Briton Mark Slater, Frenchman Jean-Michel Braquet and Australian David Wilson were kidnapped while riding a train through Sihanoukville, and all of them executed. Two years later, Christopher Howes, a British de-mining expert, together with a Cambodian colleague, were murdered as they worked 10 miles north of Angkor Wat.
By 2006, the country seemed safer, and was finally becoming a tourist destination. That September, the CPP received its first foreign offer in the coastal area: a Russian investor living in Phnom Penh wanted to buy an island. This deal would become the template for every developer to come. Alexander Trofimov created a Cambodian shell company to buy Koh Puos, or Snake Island. With cash apparently no object, he proposed to stunned government officials that he would link the island to a mainland beach - known as Hawaii - with a 900-metre suspension bridge. "He also asked to buy Hawaii beach," the official who oversaw that meeting told us. "And we gave it to him." No figures were published. The official claimed he didn't know them.
Locals who used the beach and island were kept in the dark. No one quizzed Trofimov. He produced a book of cut-and-paste designs that he said would encompass a £150m resort consisting of 900 tightly packed villas, a dolphin aquarium, two hotels, a shopping centre and a marina - all crammed into an egg cup-sized island. It was enticing stuff for the CPP, although the project faltered when Trofimov was accused of having sex with underage girls, and jailed this year. However, two more Russian businessmen seamlessly emerged to take up the reins, representing a Cypriot-holding company that, it later transpired, had owned the Koh Puos project from the off.
Arnaud Darc was quick off the mark, too. A quietly spoken and likeable French businessman, Darc had arrived in Cambodia in the 90s, building a hotel and restaurant business in Phnom Penh. In 2006, after hearing from a French colleague working at Sihanoukville's provincial airport that the runway was likely to be extended, he identified two massive beach-front sites totalling more than 220 hectares that he liked the look of. He brought in Jean-Louis Charon, a Parisian real estate tycoon, whose Nexity company is the largest in France, and whose name brought in "40 French high-net worths", as Darc described them; they raised £12.5m to be held by City Star, a foreign-owned investment company. "The maths was easy, and the returns potentially fantastic," Darc said. City Star's land values quadrupled as soon as the Cambodian government confirmed the airport rumours, a spokesman for the Sihanoukville governor's office told us.
The investors could have sold up and come away rich. But this was development with a difference. City Star investors wanted more, but did not want to go to the trouble of constructing anything. They were speculating on the future value of the land, believing that by adding only modest infrastructure, perhaps attaching big-name hoteliers, they would reap vast profits in seven to 10 years. Darc's group continued buying, snapping up 333 hectares on Koh Russei and Koh Ta Kiev, two islands off Ream. Such was the appetite for easy money that City Star raised a further £30m in a matter of days from a second group of French high rollers last July, this time to buy in Phnom Penh.
Darc's model appealed to British investors behind LimeTree Capital, a Hong Kong-based private equity group that in 2007 bought up chunks of beach front near Ream; sites it planned to leave idle for many years until prices peaked. This spring, a third entrepreneur, Frenchman Alain Dupuis, through his Cambodian company LBL International, bought Koh Sramaoch. Soon after, Koh Tonsay, or Rabbit Island, was auctioned off to Chinese investors; 14 fishing families were evicted to make way for a casino and a golf course.
On the mainland, Sang Run returned to the beach to find his village in Sihanoukville destroyed to make way, supposedly, for a hotel. A few hotels have been built, but generally the sites remain empty. The Cambodian economy has grown by more than 24% over 18 months and land values have in some cases risen by more than 100%, so there are fortunes to be made from doing nothing but wait.
Australians Rory and Mel Hunter were the only investors who made an attempt to incorporate into their plans the people whose land they were buying. An advertising executive, Rory had come to Cambodia to work for an agency in Phnom Penh. During a week-long vacation in 2006, he and his wife, Mel, had set out on a diving trip around the Koh Rong archipelago and fell in love with the twin islands of Koh Bong and Koh Ouen, attached to one another by a coral reef and cupped in a shallow strait - they were known collectively as the Sweethearts. "We dreamed of a beautiful resort where people could immerse themselves in a new part of Asia," Mel said. They began negotiations with two village men to buy their houses and those owned by 60 other families. "They thought we were nuts," Rory said. "The two head guys wanted £7,500 each. We agreed and signed the contract in a boat out in the strait. We helped take down their tin shacks, and slowly relocated all the families and their homes to Koh Rong, across the strait." They worked for weeks to clear 20 years of debris, while beginning negotiations with the government to buy the islands themselves.
The Hunters drummed up backing from a handful of British speculators, including a currency broker who (preferring we didn't use his name) tells us why he leapt at the opportunity. "I loved the deal from the start. Let's be honest, who wants 6%? I wanted a deal that would wake me up in the night, sweating. We could make good money," he says over drinks in Phnom Penh, his City suit exchanged for shorts and a T-shirt. "There was a buzz about Cambodia you don't get elsewhere. It's Cambodia, the killing fields and all that stuff. Something different to show your mates back home. I show them the visa in my passport. I have something they don't."
But the Hunters' enterprise would soon be challenged by a cascade of deals involving neighbouring islands. While they worked on retraining local fishermen on neighbouring Koh Rong, British property developer Marty Kaye bought the ground from under their feet. Kaye, who had spent much of his career working on construction in Hong Kong, had spotted the island while planning an £800m luxury tourist development on a nearby Vietnamese island, Phu Quoc. He told us: "I was walking down the beach on Phu Quoc, seeing where we were going to put the golf course, and I spotted another island. No one knew what it was. We looked on Google Earth and it seemed to be Koh Rong, in adjacent Cambodia. I said, 'Let's see if we can get anywhere on Koh Rong, too.'"
Kaye, who runs Millennium property fund, began negotiating. "Here was a chance to buy an undeveloped island almost as long as Hong Kong," he said. "Nowhere else in the world could you create your own kingdom from scratch - unlike the car-crash planning of Thai islands like Koh Samui." The Cambodian government gave him 18 months to produce more details, and he worked on an outline plan whose initial development would cost £100m. When the government signed the deal, it made no mention of the census it had just carried out recording how many thousands of people (the government won't reveal the figures) live on the 7,800-hectare island.
Kaye is not worried: "Two guys and a lawyer will see everyone. But what most of them don't understand is that even if they have papers, they are not worth anything. All of them are registered only locally, not in Phnom Penh, so they will have absolutely no case. Others are just squatters with no papers at all." It helped that Kaye's Cambodian partner was tycoon Kith Meng, a multi-millionaire with interests in banking, mobile phones and real estate - and a close friend of the prime minister, Hun Sen.
"Kith Meng wants everything done yesterday," Kaye said. "We are going to move as fast as we can. It's fantastically exciting, the opportunity to zone the whole island, to see where the luxury exclusive villa plots will be, for the Brad Pitts, etc." It is an investment that gives the present residents of Koh Rong just over a year to make a solid case for keeping their homes or finding new ones.
If they are evicted, places in the area to make a new home are becoming scarce. With all the big islands sold, even smaller outcrops have gone, too, including a clump of rocks known as Nail Island, bought by Ukrainian entrepreneur Nickolai Doroshenko, who has transformed it into a James Bond-style lair, complete with a giant fibre-glass shark that soars over the fortress-like construction. He already owns Victory Beach, in Sihanoukville, a restaurant stuffed with live snakes and a bar that advertises "swimming girls".
The sale of the century continued with the mainland beaches. At the end of January, the Sokha Hotel Group, run by Sok Kong, a Cambodian oligarch and Hun Sen ally, was confirmed as the new owner of the lion's share of Occheuteal Beach, the largest and most popular public dune in the region, which was closed off to make way for a 1,000-room hotel and golf course. The deal was originally negotiated in June 2006 when, local fisherman told us, bulldozers and 10 trucks of armed men demolished 71 homes and 40 local restaurants.
Not wanting to be left out, Say Hak, Sihanoukville's governor, acquired a small island for himself, on which he built a villa and jetty; while Sbaung Sarath, the wife of his deputy, bought half of Sihanoukville's public Independence Beach in February 2008, evicting scores of families in the process. Among them was Srey Pov. She travelled to Phnom Penh with 27 other families to protest, but returned with nothing. "The developer issued a warning," she says. "They threatened to pay the city authorities to get rid of us. We knew what that meant." Independence Beach now languishes behind high fencing, as Srey Pov feared, waiting for the five-star tourists who will enjoy exclusive access to the powder-white sand.
Days later, Sbaung Sarath struck again, securing part of Sihanoukville's Otres Beach, one of the last public dunes, where Queenco, a London-listed casino company, also announced in February that it had bought 56 hectares. Queenco declined to comment on its Sihanoukville project, but it has already had consequences - 100 fishing families have been evicted. They have built a row of makeshift bamboo shacks, held together with plastic sheeting and whatever rubbish they could recycle, along a 200-yard stretch of a nearby main road. On the day we visited, they were drying out from an overnight storm that had filled their ramshackle homes with rainwater.
Aom Heat, 63, used to have a wonderful view over Otres beach and the gulf beyond. She was forced off her land last April. Now all she can see are the hubcaps and exhaust pipes of lorries that tear by. She and many of her neighbours had arrived on Otres Beach after fleeing the Khmer Rouge in the early 80s, building a fishing village they christened Spean Ches, or Burning Bridge. "When the eviction notices were served on us in September 2006, we were determined to fight," she says. She could not bear to lose everything again. "We lodged a complaint with the Senate Committee on Human Rights that ruled it was a matter for the courts." But the Sihanoukville governor's men did not wait for a court order. They turned up at the seaside village in April last year, Aom Heat says, and, "they burned down 26 houses and bulldozed 86 more, destroying all the pots and pans, clothes and food supplies. We were in a blind panic." Thirteen injured men were arrested and jailed, including one of Aom Heat's sons. Although made homeless, they were charged with "wrongful damage of property", and nine of them found guilty without witnesses or evidence produced. Despite having served their time while waiting for the case to be heard, the men were thrown back into jail pending an appeal from the prosecution, who complained they had been dealt with too leniently.
No one can agree what impact the foreign land sales will have on the Cambodian economy because so little information is made public. Although Cambodia is nominally a democracy that has held three general elections to date, and has a nominal opposition party, the CPP parliamentarians and cabinet are remote and dismissive of their people. They are not required to report on their interests or assets, making it impossible to deduce how much Hun Sen and his cabinet have personally benefited - although the World Bank reported last year that corruption, coupled with a lack of transparency, was "choking economic growth".
Since the land sell-offs, members of the government and its allies have been splashing huge sums around. A Korean developer told us that when he marketed Phnom Penh's first skyscraper, the 42-storey Gold Tower project in February, all two dozen £750,000 penthouse suites were bought within 24 hours by "an honour roll of the CPP and its friends in the military". There are other telltale signs, such as the canary yellow Hummers and hi-spec Range Rovers with blacked-out windows that rumble around Phnom Penh, in a country where the average annual income is less than £150.
Simon Taylor, the director of Global Witness, an international NGO that was forced to leave the country last year, having accused the CPP of running a logging racket, paints a depressing picture: "A shadow state has grown up, a government that misappropriates public assets, extorts from businesses and manages an extensive illicit economy. It is administered by senior ministers who are fluent in the jargon of good governance and sustainable development." One of Hun Sen's closest advisers, who requested anonymity, disagrees, telling us: "Hun Sen believes that liberal democracy is unsuited to a country whose skills have been drained and demographics wildly skewed by the Khmer Rouge."
Everything comes down to how much money you have in your pocket, according to Doug Clayton, from Leopard Asia, a fund of Swiss and British bankers that is about to invest £25m in Cambodia. "This kind of money opens any door," he says. How does Clayton pitch the Hun Sen brand back home? "Candidly? In investment circles, no one knows anything about this place. It's off the radar. In our pitch I talk up the new economic figures. I talk up stability." Clayton adds: "When the dust settles, the government here will probably end up looking something like the one in Singapore." There, Lee Kuan Yew served as prime minister from 1959 to 1990. Cambodian pollsters, looking to the general election that will run this July, predict a clear CPP victory, putting Hun Sen at the helm for many more years, too.
What will this mean for people such as Sang Run, who is now surviving in a makeshift home behind Independence Beach? Has the legacy of the Khmer Rouge been purged? Naly Pilorge, director of Licadho, a local human rights NGO, thinks not: "Everyone claims Cambodia has come through the period of barbarism, but the sadism is still bubbling beneath the surface. Extreme violence, greed and disregard for the most basic human rights - of giving people a place to live - are still with us daily. The methods of the past are being used to dictate our future."
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Cambodian and activity
Ninety percent of
Angkor Wat
Over a period of 300 years, between 900 and 1200 AD, the Khmer Kingdom of Angkor produced some of the world's most magnificent architectural masterpieces on the northern shore of the Tonle Sap, near the present town of
During the 15th century, nearly all of
MODERN HISTORY
Although Cambodia had a rich and powerful past under the Hindu state of Funan and the
Full
Sihanouk's actions hastened the French Government's July 4, 1953 announcement of its readiness to grant independence, which came on November 9, 1953. The situation remained uncertain until a 1954 conference was held in
Neutral
Neutrality was the central element of Cambodian foreign policy during the 1950s and 1960s. By the mid-1960s, parts of
Throughout the 1960s, domestic politics polarized. Opposition grew within the middle class and among leftists, including Paris-educated leaders such as Son Sen, Ieng Sary, and Saloth Sar (later known as Pol Pot), who led an insurgency under the clandestine Communist Party of Kampuchea (CPK).
The
In March 1970, Gen. Lon Nol deposed Prince Sihanouk and assumed power. On October 9, the Cambodian monarchy was abolished, and the country was renamed the
The
On New Year's Day 1975, communist troops launched an offensive that, in 117 days of the hardest fighting of the war, destroyed the
Democratic
Many Cambodians welcomed the arrival of peace, but the Khmer Rouge soon turned
Within the CPK, the Paris-educated leadership--Pol Pot, Ieng Sary, Nuon Chea, and Son Sen--was in control, and Pol Pot was made Prime Minister. Prince Sihanouk was put under virtual house arrest. The new government sought to restructure Cambodian society completely. Remnants of the old society were abolished, and Buddhism suppressed.
Agriculture was collectivized, and the surviving part of the industrial base was abandoned or placed under state control.
Democratic
In mid-1978, Vietnamese forces invaded
The Vietnamese Occupation
On January 10, 1979, the Vietnamese installed Heng Samrin as head of state in the new People's Republic of
The international community responded with a massive relief effort coordinated by the
Within
Peace Efforts
From July 30 to August 30, 1989, representatives of 18 countries, the four Cambodian parties, and the UN Secretary General met in
Cambodia's Renewal
On October 23, 1991, the Paris Conference reconvened to sign a comprehensive settlement giving the UN full authority to supervise a cease-fire, repatriate the displaced Khmer along the border with Thailand, disarm and demobilize the factional armies, and prepare the country for free and fair elections. Prince Sihanouk, President of the Supreme National Council of Cambodia (SNC), and other members of the SNC returned to
On March 16, 1992, the UN Transitional Authority in Cambodia (UNTAC) arrived in
Over 4 million Cambodians (about 90% of eligible voters) participated in the May 1993 elections, although the Khmer Rouge or Party of Democratic Kampuchea (PDK), whose forces were never actually disarmed or demobilized, barred some people from participating. Prince Ranariddh's FUNCINPEC Party was the top vote recipient with a 45.5% vote, followed by Hun Sen's Cambodian People's Party and the Buddhist Liberal Democratic Party, respectively. FUNCINPEC then entered into a coalition with the other parties that had participated in the election. The parties represented in the 120-member assembly proceeded to draft and approve a new constitution, which was promulgated September 24, 1993. It established a multiparty liberal democracy in the framework of a constitutional monarchy, with the former Prince Sihanouk elevated to King. Prince Ranariddh and Hun Sen became First and Second Prime Ministers, respectively, in the Royal Cambodian Government (RGC). The constitution provides for a wide range of internationally recognized human rights.
On October 4, 2004, the Cambodian National Assembly ratified an agreement with the United Nations on the establishment of a tribunal to try senior leaders responsible for the atrocities committed by the Khmer Rouge. Donor countries pledged the $43 million international share of the initial, expected three-year tribunal budget, while the Cambodian Government's share of the budget was $13.3 million. The tribunal plans to begin trials of senior Khmer Rouge leaders in 2008.
GOVERNMENT AND POLITICAL CONDITIONS
The executive branch comprises the king, who is head of state; an appointed prime minister; eight deputy prime ministers, 14 senior ministers, 28 ministers, 135 secretaries of state, and 146 undersecretaries of state. The bicameral legislature consists of a 123-member elected National Assembly and a 61-member Senate. The judiciary includes a Supreme Court, lower courts, and an internationalized court with jurisdiction over the serious crimes of the Khmer Rouge era. Administrative subdivisions are 20 provinces and 4 municipalities.
Compared to its recent past, the 1993-2003 period was one of relative stability for
National Assembly elections in July 2003 failed to give any one party the two-thirds majority of seats required under the constitution to form a government. The CPP secured 73 seats, FUNCINPEC 26 seats, and the SRP 24 seats. As a result, the incumbent CPP-led administration continued in power in a caretaker role pending the formation of a coalition with the required number of National Assembly seats to form a government.
On July 8, 2004, the National Assembly approved a controversial addendum to the constitution in order to require a vote on a new government and to end the nearly year-long political stalemate. The vote took place on July 15, and the National Assembly approved a new coalition government comprised of the CPP and FUNCINPEC, with Hun Sen as Prime Minister and Prince Norodom Ranariddh as President of the National Assembly. The SRP and representatives of civil society non-governmental organizations (NGOs) have asserted the addendum was unconstitutional. The SRP and representatives of civil society non-governmental organizations (NGOs) have asserted that the addendum was unconstitutional. The SRP boycotted the vote and currently is in opposition. In February 2005, the National Assembly voted to lift the parliamentary immunity of three opposition parliamentarians, including SRP leader Sam Rainsy, in connection with lawsuits filed against them by members of the ruling parties. One of the MPs, Cheam Channy, was arrested and later tried, while Sam Rainsy went into self-imposed exile. In October 2005, the government arrested critics of
On October 7, 2004, King Sihanouk abdicated the throne due to illness. On October 14, the Cambodian Throne Council selected Prince Norodom Sihamoni to succeed Sihanouk as King. King Norodom Sihamoni officially ascended the throne in a coronation ceremony on October 29, 2004.
The constitution provides for a wide range of internationally recognized human rights, including freedom of the press. While limitations still exist on mass media, freedom of the press has improved markedly in
Principal Government Officials
King and Head of State--His Majesty Norodom Sihamoni
Prime Minister and Head of Government--Hun Sen
President of the Senate--Chea Sim
President of National Assembly--Heng Samrin
Cambodia's embassy in the United States is located at 4530 16th Street NW, Washington DC 20011; tel: (202) 726-7742; fax: (202) 726-8381.
ECONOMY
Since 2004, the Cambodian economy has expanded by more than 10% per year, with the garment sector and the tourism industry driving the growth. Inflation has remained relatively steady and at low levels, not rising above 6% since 1998. The economy is heavily dollarized; the dollar and riel can be used interchangeably.
Manufacturing output is concentrated in the garment sector, which started to expand rapidly in the mid-1990s and now employs 350,000 workers. Garments dominate
In spite of recent progress, the Cambodian economy continues to suffer from the legacy of decades of war and internal strife. Per capita income and education levels are lower than in most neighboring countries. Infrastructure remains inadequate, although road networks are improving rapidly. Most rural households depend on agriculture and its related subsectors. Corruption and lack of legal protections for investors continue to hamper economic opportunity and competitiveness. The economy also has a poor track record in creating jobs in the formal sector, and the challenge will only become more daunting in the future since 50% of the population is under 20 years of age and large numbers of job seekers will begin to enter the work force each year over the next 10 years.
FOREIGN RELATIONS
U.S.-CAMBODIAN RELATIONS
In the past two years, bilateral relations between the
The U.S. supports efforts in Cambodia to combat terrorism, build democratic institutions, promote human rights, foster economic development, eliminate corruption, achieve the fullest possible accounting for Americans missing from the Indochina conflict, and to bring to justice those most responsible for serious violations of international humanitarian law committed under the Khmer Rouge regime.
Between 1955 and 1963, the
The U.S. Mission in Phnom Penh opened on November 11, 1991, headed by career diplomat Charles H. Twining, Jr., who was designated U.S. Special Representative to the SNC. On January 3, 1992, the
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Cambodia fighting with thai
A Cambodian soldier examines the body of a comrade killed in fighting near Preah Vihear temple Wednesday.
TWO Cambodian soldiers were killed and at least two others wounded in heavy fighting near Preah Vihear temple Wednesday that also wounded five Thai troops, as a standoff over disputed border territory that has simmered since July erupted in violence.
At least three separate clashes broke out in more than two hours of fighting, Foreign Minister Hor Namhong told reporters in
"We have been patient for a long time ... of course we'll continue to be patient, but at the same time we have the right to defend our country," he said.
Cambodia's ambassador to the United Nations will inform the UN Security Council about the fighting, he added, while diplomats present at the briefing said they hoped the dispute could be resolved through talks rather than bloodshed.
"We've been watching the situation with concern.... It is our hope that both sides will continue to show restraint," said Piper Campbell, charge d' affaires at the
A statement from the Foreign Ministry accused
The two sides battered each other with rockets and automatic weapons around Veal Antri, the scene of a clash earlier this month between troops, military commanders said, adding that a Thai helicopter also fired on Cambodian lines.
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