Target Cambodia

[Editor's note: This morning Cambodia arrested a french citizen allegedly at the behest of China. China charged that the man was involved in the ongoing Bo Xilai fallout, where a leading politician has been linked to the murder of an Englishman. At the same time, it was announced that an anonymous Chinese investor would put up almost $400 million to build a coal plant in Kampot province.

Yesterday, the Cambodia government signed a final agreement with Vietnam over their mutual border. Cambodia has agreed to cede a number of villages to their former rival. The oppostion party's opposes the move, complaining of increasing Vietnamese encroachment and a ruling party with close ties to Vietnam.

In the current issue of World Policy Journal, Laura Rena Murray supplies crucial background as she explores how the country is effectively selling itself off to China and Vietnam.]


PHNOM PENH—The 328 acres known as Boeung Kak Lake still appear on maps of Cambodia’s capital as a large blue patch, though its waters are now only a memory. Pumped full of sand, the area is being readied for a promised development that has already displaced some 4,000 families. Looming over the puddles and dirt, two massive billboards display portraits of the high-end residential and commercial wonderland intended for the plot.

In 2007, the Cambodian government handed Boeung Kak Lake to Phnom Penh-based Shukaku Inc. in the form of a 99-year lease, which allows the company to clear the land for economic development. The local company belongs to Lao Meng Khin, a close friend of Prime Minister Hun Sen and a senator from the ruling Cambodian People’s Party, but several Chinese companies also have a share in the new development project. The Inner Mongolian firm Erdos Hongjun Investment Corporation has a 50 percent stake in Shukaku. Another Chinese firm, Guangdong New Golden Foundation, has also announced its intent to invest in the project.

Cambodia today is quite literally giving itself away, especially to China and Vietnam—two rivals vying for regional influence. As the Cambodian government welcomes millions of dollars in investments from both nations, the land concessions handed out to these foreigners are forcing tens of thousands off their property and imperiling Cambodia’s future. Over the last 30 years, the Sino-Vietnamese rivalry has shaped Cambodia militarily, politically, and economically, and there are no signs this will change.

Much of the backdrop for this current activity was set during the 2008 financial meltdown that took a wrecking ball to the world economy and sent investors searching for stability in unexpected places. Mineral resources continue to deplete, while the costs of labor are rising in the mega manufacturing centers of southern China. Neutral, well-positioned smaller nations in Southeast Asia like Cambodia have become alluring targets for new investments. Although the commercial benefits have bolstered the economies of such nations, the smaller states have become ground zero in the struggle for resources by more dominant countries.

[To read the rest of this article click here]

[Photo: Christopher Shay]

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