Cambodia in 2015: Achievements and Challenges

The Khmer Times, 3 December 2015

The year 2015 has been a year of mixed fortunes. The country maintained a relatively high economic growth rate of about 7 percent, largely due to the expansion of garment manufacturing, construction and services.
And foreign policy gained new momentum through enhanced relationships with major powers.
But tensions between the two main political parties – the Cambodian People’s Party (CPP) and the opposition Cambodia National Rescue Party (CNRP) – pose serious challenges to economic development.
The poverty rate has been reduced to 14 percent, down from 53.2 percent in 2004. Millions of people have moved out of extreme poverty. According to the United Nations, Cambodia has achieved all of its Millennium Development Goal targets, most notably in maternal health, infant mortality and literacy. Education and electoral reform have also seen some concrete improvements.
The government also issued a significant new economic policy called the Cambodia Industrial Development Plan 2015–2025. This policy aims to develop agro-industry, small- and medium-sized enterprises, skilled labor and human resources, transport and logistics, as well as to reduce electricity prices while expanding coverage and strengthening the reliability of electricity supply.
On the foreign policy front, Cambodia has actively diversified its core strategic partners. The Cambodia–US bilateral relationship has been constrained by differences on democracy and human rights, but Cambodia has cemented its ties with other major powers such as China, Japan, India and Russia.
In September, Indian Vice President Mohammad Hamid Ansari visited Cambodia to boost ties. The two countries signed memorandums of understanding on tourism and infrastructure development, and on health and the empowerment of women.
Hamid Ansari confirmed the importance of India–Cambodia ties and stressed the need to increase bilateral trade and investment. He stated that ‘geographically, Cambodia lies at the heart of ASEAN. For us in India, our relationship with Cambodia is a key element of our engagement with ASEAN.’
“Despite extremely cordial political relations and the diverse areas of cooperation, our bilateral trade and investments remain much below its potential,” he said.
“As part of our initiatives, the government has recently set up a special purpose vehicle to attract Indian investments into Cambodia and other CLMV countries. We hope to launch this new initiative soon,” he added.
In October, during the summit between Cambodian Prime Minister Hun Sen and Chinese President Xi Jinping in Beijing, China reaffirmed its commitment to strengthen ties with Cambodia and stressed their strategic importance. He said China was ready to work with Cambodia to expand bilateral strategic cooperation and forge an unbreakable community of shared destiny.
China pledged to import 100,000 tons of rice from Cambodia annually beginning next year, construct a hospital in Tbong Khmum Province and give Cambodia a $157 million grant – most of which would go the construction of an 83-hectare national stadium in the capital, which will host the 2023 Southeast Asia Games.
And at the Cambodia–Japan summit last month, Japanese Prime Minister Shinzo Abe committed to a 17 billion yen (about $137 million) loan for the development of National Highway 5 and promised to deepen bilateral relations.
Most remarkably, Russian Prime Minister Dmitry Medvedev visited Cambodia last month, marking a significant milestone in the bilateral relationship. The last visit from a senior Russian official was when then Russian foreign minister Eduard Shevardnadze visited Cambodia in 1986.
During Medvedev’s visit, the two countries signed 10 bilateral agreements and memorandums of understanding, including cooperation on money laundering, civilian nuclear energy, health, air transport, investment and countering terrorism.
But domestic political tensions have cast a dark cloud over these successes.
The prospects for Cambodia’s continued political development are highly uncertain after tensions between the CPP and the CNRP re-emerged last month. Political bashing between the two parties has damaged hard-earned political trust.
The prospect of reaching a political resolution at this stage is slim. The trust gap between the leaders of the two parties has been widening over the past three months. And there is no direct channel of communication between them.
To make matters worse, international diplomatic pressures have had little impact on the government.
Given our political culture, the most viable solution for our political woes would be to restore trust and personal ties between Prime Minister Hun Sen and the opposition leader Sam Rainsy and revive, nourish, and sustain the “culture of dialogue” between the two main parties.
Finding a way to do this will be a major challenge for Cambodia in 2016.

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