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Opportunity Knocks


new internationalist
issue 242 - April 1993

Opportunity knocks
Cambodians are getting a crash course in the new,
freewheeling world economic order. Paul Donovan explains
why the solutions to Cambodia’s burgeoning environmental and
economic crisis are often worse than the problem.

‘I am not an environmentalist, nor an economist. I’m just an opportunist,’ says a timber trader on the border with Vietnam. He was neatly summarizing what’s happening to Cambodia’s stricken economy and environment.

The country was once covered with dense forests, but in less than 30 years almost half of them have gone – in 1992 alone over one million hectares of forest were cut. The United Nations Development Programme (UNDP) estimates logging levels to be two-and-a-half to five times above the country’s sustainable yield. At this rate Cambodia will have lost what remains of its natural forest cover in less than ten years. Over 40 per cent of what was once farmland is now a wasteland covered with mines, and land is urgently needed for 360,000 refugees returning from the border camps.

The pressure for quick profits from timber is intense. All four Cambodian factions have raised funds via logging. The Khmer Rouge receive one million dollars per month from timber exported across the Thai border from the forests they control in the west of the country around Palin. The State of Cambodia Government (SOC) earns 80 per cent of its foreign exchange from logging activities. The SOC has signed concessions with companies from Thailand, France and Singapore and has contracts pending with Malaysian and Indonesian parties.

On 31 December 1992 a logging moratorium came into effect. Although this ban may reduce the export of raw logs, early indications suggest an increase in internal sawmill production. The Japanese have sawmills in Kompong Speu and just outside Phnom Penh. Much of the sawn timber on the road to Khompong Som is stamped for delivery to Japan. Internal demand for timber has also grown with the UN presence and the consequent construction boom.

In the south-western province of Koh Kong villagers are now using portable sawmills and netting up to $800 per month selling to Thai and Singaporean buyers who have ships anchored off-shore. Truck driver Seng Phon – formerly a government soldier – supports his family by transporting logs from Koh Kong to Kandal province. ‘I stopped being a soldier because I didn’t have enough food to eat,’ says Phon, who makes two runs per week netting $640 for each truckload of 12 logs.

The wider environmental costs of deforestation are rising sharply. Waterways are beginning to clog up. Fish are reportedly dying from the effects of siltation in the Tonle Sap river. Fisherfolk already avoid the most heavily muddied areas of the lake: the cumulative effect has been to reduce the spawning ground available for migratory fish. In August 1991 a flash flood in the Mekong waterway caused an estimated $150 million of damage to farms and fisheries. ‘The flood did more damage in 24 hours than the value of all the timber that had been extracted,’ says UNDP’s John Dennis.

‘Cambodia can never return to the way it was,’ says Gordon Patterson of the Mennonite Committee, one of the aid agencies most involved in forestry projects. ‘Each period of deforestation over the last several decades – Pol Pot, the reconstruction after Pol Pot or the latest period of cutting – contributes to the degradation of Cambodia’s natural resources and that is irreversible.’

Gem mining around Palin in the Khmer Rouge-controlled zone has created what soldiers from the United Nations Transitional Authority in Cambodia (UNTAC) describe as a ‘lunar landscape’. Trucks are operating 24 hours a day removing earth across the Thai border where it is panned and the valuable gemstones removed. The Khmer Rouge charge a 45-per-cent tax on all gems removed and sold in the areas they control. Some mechanical panning has been reported in Cambodia with the residue earth being washed away into the Tonle Sap River, where it adds to the siltation process.

Oil prospecting is also damaging the environment. Sonic booms threaten fish production. Drilling threatens to dump contaminated mud in internal waterways. Road building to provide access for seismic surveys is another potential cause of damage to ecosystems.

The Khmer Rouge are unrepentant. ‘After the peace agreement was signed in Paris our Chinese friends stopped all assistance,’ says Ieng Sary, a Khmer Rouge leader, ‘so we have to sell some trees to the Thais to meet the immediate needs of the people.’

In the markets the food may be there, but few can afford to buy it.

It is one of the more dreadful ironies of Cambodia that the best deterrent to further deforestation is the presence of land mines: the same weapons that stop the people growing sufficient crops to feed themselves and drive them to seek alternative sources of income. This is one of the many ways in which the destruction of the Cambodian environment is directly linked to the impoverishment of its people. There is as yet precious little sign that the multilateral agencies working through UNTAC have taken the environment on board as a priority or related it coherently to the urgent material needs of the Cambodian people.

For 12 years the country was subjected to a US-led trade embargo and was the only Third World country denied UN development aid. From 1986 the SOC began a transition from the old-style ‘command’ economy to a more liberal market model. But the Cambodian economy was knocked sideways by two serious setbacks. First Soviet aid and subsidies amounting to $100 million a year were removed. Then the withdrawal of Vietnamese troops in 1989 forced the SOC to spend more on arms to defend itself against the three opposing foreign-backed factions. Defence came to absorb half the government budget. Faced with a growing deficit and rampant inflation the government turned to printing money and selling off the country’s assets.

The result is an almost complete lack of regulation. While examining industrial enterprises in Cambodia UNDP found that out of 46 enterprises surveyed in Phnom Penh 76 per cent had either been sold outright or were in the process of being leased out for 20-year periods to foreign investors. There were no provisions for joint ventures, no competitive bidding in most instances, no requirement for development plans and no environmental-protection regulations.

The UN, for its part, bowed to Khmer Rouge insistence that the SOC should receive no direct financial support. So, as inflation and the deficit grow, the SOC gets blamed for worsening conditions of poverty. Roger Lawrence, the UN Economic Adviser and Cambodia’s representative at both the IMF and World Bank, proposes an all-too-familiar exercise in cost-cutting and increased revenue collection. In October Prime Minister Hun Sen said he could not cut government salaries because they were only enough to buy the equivalent of two cartons of cigarettes a month.

UNTAC nonetheless moved to control the money supply and stop the inflow of freshly printed bank notes from Russia. The value of the Cambodian riel fell from 550 to the US dollar in December 1991 to 2,280 in September 1992. The effect has been to take basic foodstuffs beyond the reach of the majority of Cambodians.

Public employees and soldiers have been hit particularly hard by inflation because of their fixed local-currency salaries. There has been increasing absenteeism and corruption among government employees. A sliding scale of corruption ranges from the sale of typewriters and office equipment at the lower levels to large-scale real-estate deals in the higher echelons.

Roger Lawrence denies any direct link between the exchange rate, inflation and the UN presence, claiming there is merely what he terms a ‘dollarization of the economy’. UN personnel pay their bills directly in dollars from their $140-a-day allowance. A whole new stratum of service industries has grown around the UN operation, including restaurants and hotels which are usually built, equipped, operated and staffed by foreigners.

The UN has in effect occupied the country, setting up separate structures rather than seeking integration with what already existed. ‘It is the same as under the Khmer Rouge, but there was not so much difference then between rich and poor,’ says Mao Sotha, who worked at a government-owned factory before it was shut down earlier this year.

During the years of the US-led economic embargo UNDP held $80 million of aid, unable to utilize the funds. In June 1992 the Secretary General of the UN requested $595 million for the rehabilitation phase of the UN programme to maintain essential services, including food security, agriculture, health, water, sanitation, education and training. The appeal highlighted the need for $111 million in public-sector financing, without which it predicted ‘the disintegration of the entire civil service’.

To date little of the $880 million pledged by donors has been forthcoming. One senior official confirmed that donors are waiting for the elections before finally committing the funds. Both the US and Japan have invested only in areas likely to prove profitable in the future: the rehabilitation and reconstruction component of the UN programme has been totally neglected. Voluntary agencies have had to play a major part in resourcing essential services such as health, education and social welfare. Any chance of a ‘peace dividend’ from the demobilization and disarmament of the four factions disappeared last June, when the Khmer Rouge refused to comply with the Paris Accords on demobilization and disarmament.

Roger Lawrence is keen to bring Cambodia firmly into the orbit of the IMF and World Bank. In September 1992 he attended their annual meeting on behalf of Cambodia. By the end of the year, once Cambodia’s $67 million arrears in payments had been underwritten, a senior UN source was able to boast there would be ‘full resumption of IMF operations in Cambodia by early 1993’.

Cambodia desperately needs financial help if it is to rebuild. Western donors argue that Cambodia lacks the infrastructure to absorb large amounts of aid. But there is no reason under the Paris Agreement why funds for rehabilitation could not be used to reduce the government deficit; at least then something of the civil-government structure could be salvaged and public employees could begin to contemplate raising more money through taxation. But the monetarist approach adopted by the UN – non-intervention and making cuts where possible – has simply worsened an already dire economic situation.

For Cambodia the future must lie in the painful reconstruction of an essentially agrarian economy. It would be a poor reflection on the UN operation if its legacy to Cambodia were little more than an environmental and economic ‘basket case’ suitable for treatment only by World Bank and IMF ‘structural adjustment’ programmes.

Freelance journalist Paul Donovan recently returned from Cambodia. He is the co-ordinator of the Cambodia Forum of worldwide non-governmental agencies.


Bitter sweet reunion
The old man is a survivor with a family savaged
by conflict but happy to be together again.

Photo: CLAUDE SAUVAGEOT The old man squats down on his heels in a classic Cambodian gesture. He is clearly at ease and relaxed. Behind him in the bamboo and blue-plastic hut the generations of his family attend efficiently to the everyday chores of life: the deft gesture to calm a baby, to secure a sarong, to lower a loaded shoulder pole carefully to the ground. This is Phnow Ta P’dai, a squatter village close to a mountain thickly sown with land mines. We are about an hour’s car drive from Battambang city. It is late in 1992 and the refugees have poured back into this dangerous wasteland from all along the Thai border. The old man nods a greeting.

I squat beside him asking the usual question: ‘How are you?’ ‘Khnhohm sahbay jeut...’ ‘My heart is happy,’ he answers. He wears only a faded kraomah, his face is lined and scarred, teeth are missing. He sits in an aura of patient waiting, as if waiting were the main occupation of his life. ‘What makes you happy?’ I ask. And the story pours out – the return of all his grown children from their places of exile and shelter during the fighting.

This daughter has been a refugee in Site 2 on the Thai-Cambodia border. She has a husband now and three children. This son was pressed into service as a porter for the Khmer Rouge and finished up in Site 8, known as the Khmer Rouge refugee camp. He did not wait for his official repatriation, he has come home. The other girl went only as far as an encampment for the displaced on the other side of Battambang, 60 kilometres away. She was the second wife of her husband and now he has moved on to his third, so she returns with only the children. The years of fighting have left women a large majority in this land and many now head households alone.

The grandfather’s face beams with pride as he surveys his returned children and new-found grandchildren, but darkens like a sudden storm as he recalls the death of his first child in an American bombing raid and of his youngest who died in the jungle fighting for the right-wing resistance. The suffering of his wife and two children at the time of their death in the Pol Pot era is too terrible to recall in detail. At least the others died quickly. The celebration of the return is clouded momentarily with the darkness of the unmourned dead. But he is a survivor. He shifts his position on his heels and calls his daughters to meet me.

Pretty girls with large dark eyes and brown curling hair, they wai (palms joined, head bowed) to me respectfully as they come to squat beside us. The youngest, the deserted one, carries a baby to her breast. We talk of life in the squatter village. A few months ago there was nobody here. Now there is a population of several hundred and still more to come. They do so against the advice of the United Nations High Commissioner for Refugees (UNHCR). They know that it is thought too dangerous because of the land mines and that one returnee, a young medic, has already lost a leg nearby. But if not here, where else would they go? Their land was here.

The grandfather nods to the nearby lethal mountain. He was born there. The girls were born there too. Their rice field is perhaps 70 metres away but must remain inaccessible.

I ask about other problems. They insist that if only the land mines could be cleared everything would be all right. They admit that there is no safe water, no chance at all of medical services for poor people such as themselves, no means of earning a livelihood that they can imagine, no certainty of where the food will come from when the UNHCR rice ration ceases 400 days after their return. But they remind themselves and me of the joy of their reunion. Truly they are sahbhay jeut, happy of heart.

I have asked so many questions. Now it is Grandfather’s turn. ‘Ayoop ponman?’ It is perfectly polite to inquire the age of a stranger in this land where age is honoured. I am asked so often that this is the question I answer fluently: ‘I am 57 years old’. The old man is delighted. My age is the same as his.

Two lives. I had never thought of 57 years as old. But this man’s 57 years has been a living of joy and sorrow, of terror and survival, of optimism and courage enough for a century. He beams at his reunited family with joy and pride. A singularly difficult life but the triumph of a family who remain ‘of one heart’... jeut tai moi.

Joan Healy

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