Cambodia Country Brief -
October 2008
Australia-Cambodia Relations
Overview
Australia entered into diplomatic relations with Cambodia over 55 years ago. Since then the relationship has grown and broadened into many areas of mutual interest. Australia's strong support for the Cambodian Peace Process in the late 1980s and early 1990s, including our lead role in the United Nations Transitional Authority in Cambodia (1992-93), still resonates positively with Cambodians. Both countries are working closely to combat people smuggling and trafficking, child sex tourism, narcotics trafficking and terrorism.
Australia maintains a strong commitment to Cambodia's development. This is reflected in our substantial Official Development Assistance (ODA) to Cambodia for which $54.9 million has been allocated for 2008-09 (making Australia the fourth largest bilateral donor). Through our ODA, we are working with Cambodia to improve productivity in agriculture, strengthen governance and the rule of law and assist vulnerable groups. Australia also has a defence cooperation program with Cambodia.
The bilateral relationship is supported by regular high-level exchanges between Australia and Cambodia. Cambodia's Prime Minister, Samdech Hun Sen, visited Australia as a guest of government in October 2006. During this visit, an Agreement between Australia and Cambodian on the Transfer of Sentenced Persons and a bilateral Memorandum of Understanding (MOU) on investment cooperation were signed.
Mr Bob McMullan MP, Parliamentary Secretary for International Development Assistance visited Cambodia in April 2008. A four-person parliamentary delegation visited Cambodia in July 2008 to observe the fourth National Assembly elections.
The Australian Embassy is staffed by representatives of DFAT, AusAID, Defence, the AFP and the Department of Immigration and Citizenship (DIAC).
Human Rights
The process of rebuilding Cambodia following the Khmer Rouge era continues. Despite increasing democratic freedoms, there are periodic reports of intimidation and political violence. Human rights concerns continue to be raised in relation to land disputes between residents and companies pursuing economic development.
Cambodia's legal framework remains weak in some areas. The Cambodian Government is working to develop legislation in a range of sectors and to strengthen Cambodia's judicial system to address inconsistencies in application of the law. While police and security forces can now be prosecuted for criminal activity, there remains a culture of impunity and a need to address corruption through legislation.
Australia's development assistance program has, since 1997, helped to strengthen the legal and judicial system in Cambodia including providing training and infrastructure support to assist reform. AusAID's Cambodia Criminal Justice Assistance Project has supported community-based crime prevention programs, improvements in prison management and development of a training handbook of court criminal law procedures for judicial officers. The third phase of this program will build on previous work in community safety, and the courts, police, and prisons. Assistance to vulnerable groups is a continuing priority. At Cambodia's request, opportunities for reform within the Cambodian National Police (CNP) were assessed by a senior AFP officer. Following this assessment, a senior Australian Police Adviser has been co-located within the CNP to work directly with a Deputy Commissioner on a range of strategic and police-related initiatives to strengthen the strategic, executive and technical capacity of the CNP.
The Extraordinary Chambers in the Courts of Cambodia (Khmer Rouge Tribunal)
In 1997 the Cambodian Government asked the UN to assist with the establishment of an internationally credible tribunal to try Khmer Rouge leaders most responsible for the humanitarian and other crimes committed between 17 April 1975 and 6 January 1979. UN Chief Negotiator, Hans Correll and Cambodian Senior Minister, Sok An signed an agreement on the terms of a tribunal in June 2003.
The Extraordinary Chambers in the Courts of Cambodia (ECCC) sit within Cambodia's court system. They comprise a pre-trial chamber, a trial chamber and a supreme court chamber. It is a hybrid court, with Cambodian and international judges presiding over each chamber. Decisions will be made by a super-majority.
Australia has to date contributed $4.3million to the ECCC. Australia has also provided funding to support public outreach campaigns and is an active member of the 'Friends of the ECCC' group. Cambodian and international judges (including Australian Rowan Downing QC) and prosecutors were sworn in on 3 July 2006. Five defendants are currently detained by the ECCC. The first trial is expected to commence early next year.
People smuggling
The Cambodian and Australian Governments enjoy high levels of cooperation in efforts to combat people smuggling and trafficking in people. Australia maintains an Australian Federal Police (AFP) liaison office in Phnom Penh to encourage and assist Cambodian law enforcement agencies to deal with transnational crime, including people smuggling. An MOU between the two countries which provides a framework for cooperative activities designed to combat people smuggling was signed in 2002. During March 2008, the AFP, in conjunction with the Australian Embassy, delivered a training program in Cambodia on ways to detect and investigate people smuggling.
Child sex tourism
Australia has played a leading role in international efforts to combat sexual offences against children, including by the enactment of extra-territorial legislation through the Crimes (Child Sex Tourism) Amendment Act 1994, and in the development of international treaties that address children's issues (including the 2002 Optional Protocol to the Convention on the Rights of the Child on the Sale of Children, Child Prostitution and Child Pornography and the 1980 Hague Convention on the Civil Aspects of International Child Abduction).
The Australian Federal Police (AFP) liaison office in Phnom Penh and the Cambodian National Police are providing mechanisms to assist effective investigation and prosecution of suspected offenders in Cambodia.
AusAID also supports the work of non-government organisations (NGOs) and international organisations in Cambodia providing direct support for victims of child sexual abuse, prevention programs and awareness-raising and advocacy activities.
Australian Community in Cambodia
The Australian community in Cambodia is modest - approximately 2500 Australians are resident in Cambodia, most being dual Cambodian-Australian citizens or expatriates involved in development assistance work or business. Approximately 5500 Australian tourists arrive in Cambodia each month.
Cambodian Community in Australia
The majority of the Cambodian-born community has been in Australia for a relatively short period of time. Small numbers of Cambodian refugees began arriving in Australia after Pol Pot gained power in 1975, numbers peaked in the 1980s. Between April 1975 and June 1986, 12,813 arrivals were sponsored under the Refugee and Special Humanitarian Program. Family stream migration increased the numbers of the Cambodia-born in Australia to over 20,000 by the mid-1990s. According to the August 2001 census, there were around 23,000 Cambodian-born people resident in Australia, with approximately eight thousand Australian-born children.
General Information
Background
Cambodia is divided into 20 provinces and 4 municipalities, including the capital Phnom Penh. A province usually has the same name as its major town. The city of Phnom Penh consists of four urban districts and three outlying districts and has a population of over one million people. During the dry season, many thousands of people move into the city from the countryside to seek work.
People
Cambodia is the most ethnically homogenous country in South-East Asia. Ethnic Khmer comprise 94 per cent of the population. The two main minority groups are ethnic Chinese (about 4 per cent) and the ethnic Vietnamese (about 1.1 per cent). The Chinese are primarily engaged in commerce, while the Vietnamese are mainly farmers, fishermen and semi-skilled workers. Two Islamic communities in Cambodia, the Cham and Chvea, represent 3.4 to 5 per cent of the population. A number of indigenous hill tribes live in the remote north-east of Cambodia. Ninety per cent of Cambodians live in the central lowlands region.
Language and Religion
The official language of Cambodia is Khmer. French is spoken by some older Cambodians. English is now more widely used, particularly among younger people.
Cambodia's population is predominantly Buddhist. Theravada Buddhism is a pervasive influence in Cambodian life and was reinstituted in 1989 as the state religion. Representatives of the Buddhist priesthood are on certain government bodies. Most villages have a wat (temple) and monks are a common sight around the country. Cambodia has a small Islamic community and a very small Christian community. Astrology is also widely practiced.
Political History
Khmer Empire (9th to 14th centuries)
Modern-day Cambodia is the successor state of the mighty Khmer empire, which ruled much of what is now Cambodia, Vietnam, Laos and Thailand during the Angkorian period (9th to 14th centuries). Following its decline, Khmer history is dominated for about a century and a half by dynastic rivalries and warfare with the Vietnamese and the Thais.
The French Protectorate (1863-1953)
In 1941, after nearly 80 years of French rule over Indochina, France placed Prince Norodom Sihanouk on the Cambodian throne. King Norodom Sihanouk dissolved the national parliament in January 1953, declared martial law and worked to gain international support for his country's independence. Cambodia was proclaimed on independent in 1953 and recognised by the Geneva Conference of May 1954.
Cambodian Independent Rule (1953-1975)
In March 1955, in order to enter politics, King Norodom Sihanouk abdicated in favour of his father and subsequently dominated Cambodian politics for the next 15 years. Sihanouk drew closer to North Vietnam and China and broke off diplomatic relations with Washington in 1965. As the war in Vietnam intensified in 1969, the United States began a program of bombing suspected Viet Cong base camps in Cambodia. During this period, the Cambodian guerrilla movement, the Khmer Rouge (KR), gained in strength and gradually assumed control over large parts of the countryside. In March 1970, General Lon Nol instigated a coup d'état and established a republic. Sihanouk established a government in exile in Beijing.
Khmer Rouge (1975-1979)
On 17 April 1975, two weeks before the fall of Saigon, Phnom Penh surrendered to the KR, led by Pol Pot (Saloth Sar). The KR implemented a radical and brutal policy of restructuring society. The country was renamed Democratic Kampuchea, currency was abolished and the cities were emptied. It is believed that up to one quarter of the Cambodian population died as a direct result of the policies of the KR Government. Sihanouk was permitted by the Khmer Rouge to return to Phnom Penh in December 1975. He presided over the promulgation of a new constitution in 1976 as Chief of State but subsequently resigned this position. He was confined to the royal palace until Pol Pot was overthrown.
People's Republic of Kampuchea (1979-1985)
On 7 January 1979, Vietnamese soldiers entered Phnom Penh toppling the Pol Pot Government. Vietnam installed the People's Republic of Kampuchea (PRK), led by former KR officer Heng Samrin, who had fled to Vietnam in 1978, and Pen Sovan (until the latter's downfall in 1981). Hun Sen, a former regimental KR commander (who fled to Vietnam in 1977) became Foreign Minister. The ousted KR forces continued their resistance from bases along the Thai border. In 1982, with other elements opposing the PRK, the KR formed the Coalition Government of Democratic Kampuchea (CGDK) as a government in exile. Following a renewed attack on their bases in 1985, the KR retreated into Thailand. The KR, and to a lesser extent the other two factions of the CGDK, continued to wage a guerrilla war on throughout the country during the 1980s, sustained by external support from countries opposed to the PRK. The KR is now a spent force.
The State of Cambodia (1985-1993)
In 1985, Hun Sen, at the age of 33, became Prime Minister in the government of the PRK in which his party, the Cambodian People's Party (CPP) held power. In September 1989 Vietnam withdrew its troops from Cambodia under international pressure and the PRK was renamed the State of Cambodia (SOC).
In May 1991, the warring Cambodian factions finally agreed on a voluntary ceasefire. On 23 October 1991, a Peace Agreement was signed in Paris, establishing the United Nations Transitional Authority in Cambodia (UNTAC). Australia actively supported the peace process and Australians played key roles in UNTAC. Australian Lieutenant-General John Sanderson, as Force Commander, led a force of personnel from 46 countries, including Australia, to supervise the ceasefire including demobilising and disarming military groups and demining.
Royal Government of Cambodia (1993 to present)
1993 National Assembly Elections: The first elections, conducted in May under the auspices of UNTAC, were generally regarded as an outstanding success with over 90 per cent of the 4.5 million electors turning out to vote. The National United Front for an Independent, Neutral, Peaceful and Cooperative Cambodia (FUNCINPEC) gained 58 seats in the 120-seat National Assembly, and the CPP 51 (with two minor parties providing the remaining 11). Subsequently a coalition was formed, led jointly by Prince Ranariddh, leader of the FUNCINPEC as 'First' Prime Minister and Cambodian People's Party (CPP) leader Hun Sen as 'Second' Prime Minister. A new constitution was promulgated on 24 September 1993, transforming Cambodia into a Constitutional Monarchy under King Norodom Sihanouk.
Prince Ranariddh exiled: After a period of calm, the political atmosphere began to deteriorate in mid 1994. By 1997 the two coalition parties were competing to gain the support of armed groups, including KR remnants. This precipitated a military clash in July 1997 when the CPP accused Ranariddh and his supporters of planning a coup d'état and moved decisively against him. A new first Prime Minister, Ung Huot (FUNCINPEC), was appointed by the National Assembly in August 1997 to replace Ranariddh whose forces were decisively defeated.
1998 National Assembly Elections: Ranariddh and other opposition exiled politicians returned to Cambodia in early 1998, following a concerted international diplomatic intervention by the 'Friends of Cambodia', including Australia, working closely with the ASEAN Troika (the Philippines, Thailand and Indonesia). Pressure from the 'Friends' and the ASEAN Troika also led to a National Electoral Commission and a Constitutional Council being established to prepare for the 26 July elections. Twenty-two Australian observers were deployed. This period was marked by violence and intimidation, although official observers reported the polling process itself was conducted satisfactorily.
Although the CPP obtained over 50 per cent of the seats it failed to achieve the two-thirds majority in the Assembly required to form government. A coalition was formed with FUNCINPEC, which held the second highest number of seats. Sam Rainsy accepted the role of opposition leader. Hun Sen was sworn in as Prime Minister and Prince Ranariddh as President of the National Assembly in November.
2002 Commune Council (Local) Elections: The first Commune Council elections took place in February 2002. Although Australia recognised that the local elections were an important step in the implementation of democracy at grassroots level, it condemned the murder of non-CPP candidates in the lead up to the election, and urged that the perpetrators of these crimes be brought to justice. The CCP won an overwhelming victory.
2003 National Assembly Elections: Cambodia's third national elections were held on 27 July 2003. Australia provided around $1 million support to Cambodia's National Election Commission to assist implementation of voter registration and education processes and enhance media access for all political parties in the lead up to the elections. Australia also sent a small parliamentary observer delegation. Violence and intimidation in the lead up to and following the election was less than in previous elections and the process was generally considered to be credible. Although the CPP received a simple majority it did not receive the two-thirds then required constitutionally to rule in its own right. A power-sharing arrangement with FUNCINPEC was not settled until 15 July 2004.
2006 Senate Elections: Cambodia's first Senate election was held in January 2006. The election was non-universal in nature - commune councillors and members of the National Assembly voted on behalf of their constituents. The CPP gained 45 seats, FUNCINPEC 10 and the Sam Rainsy Party (SRP) 2. In accordance with the Constitution, the King and National Assembly appointed a further two members each.
2007 Commune Elections: The second commune elections were held in April 2007. The CPP received the majority of total votes followed by the SRP. The CPP gained a large majority of commune chief positions, followed by the SRP and then FUNCIPEC. The newly formed Norodom Ranariddh Party (NRP) and other minor parties were largely unsuccessful in the poll.
2008 National Assembly Elections: A four-member Australian parliamentary delegation, together with volunteers from the Australian Embassy, observed the polls on election day. The 2008 elections are the first where government was determined by a simple majority. The fourth National Assembly elections took place on 27 July 2008. The Cambodian People's Party received 90 of the 123 of the National Assembly's 123 seats, the Sam Rainsy Party 26 seats, the Human Rights Party 3 seats and the Norodom Ranariddh Party and FUNCINPEC 2 seats each. Opposition parties received around 42 per cent of the vote.
Australia contributed $570,000 in support of voter education and civic participation in the lead up to elections. Australia also worked with the UN encouraging those eligible to register and to encourage independent news reporting and broadcasting time for political party campaigns.
System of Government
Cambodia is a constitutional monarchy. The King, Norodom Sihamoni (who succeeded his father King Norodom Sihanouk in October 2004), is the Head of State, but does not exercise executive power over the Kingdom. The Prime Minister is appointed by the King from the representatives of the party holding the majority in the National Assembly. Cambodia has a bicameral parliament. The lower house - the National Assembly - is made up of 123 members elected from 24 provinces and municipalities. The Senate is made up of 61 members of whom 2 are appointed by the King, 2 are appointed by the National Assembly, and the remainder is elected by non-universal election. The Council of Ministers (Cabinet) is formed by members of the Royal Government.
Provincial governments are presided over by governors appointed by the Prime Minister using a quota system. Local level government is elected through the universal Commune Council elections. Village chiefs are elected by Commune Council members.
Judicial system
Cambodia has a three tier judicial system: trial court, appeals court and supreme court. Each province and municipality has their own courts. Judges and magistrates are appointed, promoted and dismissed by the Supreme Council of the Magistracy, which is chaired by the King. The Supreme Council of the Magistracy consists of the Minister of Justice, the President of the Supreme Court, the Prosecutor General of the Supreme Court, the President of the Appeals Court, the Appeals Court Prosecutor and three elected judges, each with a five year mandate.
Authority to interpret Cambodia's Constitution and laws is granted to the Constitutional Council which comprises nine members with a nine year mandate. Three members of the Council are appointed by the King, three by the National Assembly and another three by the Supreme Council of the Magistracy.
Foreign Policy
Cambodia's foreign relations have historically been dominated by its geographical position between its two large and populous neighbours, Thailand and Vietnam. Since the establishment of the Kingdom of Cambodia in 1993 the foreign policy of the Cambodian Government has become increasingly outward-looking. The Cambodian Government places priority on developing its relations with regional neighbours. It also maintains strong relations with donor countries. The Cambodian Government recognises the need to work bilaterally and multilaterally to meet common regional and global challenges.
Cambodia has a well-developed relationship with Thailand. Thailand is Cambodia's third largest import source and there is considerable Thai investment in Cambodia, including in the tourism sector. National Highway 48 through Koh Kong Province, which was recently upgraded with the help of a Thai grant, is likely to become a major commercial and economic link between the two countries. However, border demarcation remains an irritant in the relationship fuelled by historical sensitivities. In July 2008 a major dispute arose on the border centred around disputed territory near the Preah Vihear historical site and tensions continue.
Relations with Vietnam are influenced by Vietnam's role in the governance of Cambodia during the 1980s.
Cambodia acceded to the ASEAN Treaty of Amity and Cooperation in January 1995 and participated in the ASEAN Regional Forum in 1995. Civil unrest in Phnom Penh in 1997 delayed Cambodia's entry into ASEAN until April 1999. As Chair of ASEAN, Cambodia hosted the ASEAN Summit meetings in 2002 and the ASEAN Post Ministerial Conference (PMC) and the ASEAN Regional Forum in June 2003.
Japan plays a constructive role in Cambodia, in line with its profile in the region. Japan is the largest donor to Cambodia. Prime Minister Hun Sen paid an official visit to Japan in June 2007. During the visit an Agreement on Liberalisation, Promotion and Protection of Investment was signed.
China's geopolitical interest in Cambodia changed significantly with the end of the Cold War. It retains considerable influence, including through close links with former King Norodom Sihanouk, many senior members of Cambodian Government and the ethnic Chinese community in Cambodia. There are regular high level exchanges between the two countries. Premier Wen Jiabao visited Cambodia in April 2006. Prime Minister Hun Sen paid a return visit the same year. China provides substantial bilateral aid, and economic links have increased in recent years.
While continuing indirect assistance through NGOs, in July 1997 the United States suspended its multimillion dollar aid program due to congressional concerns about the political situation in Cambodia. Foreign operations appropriation measures barred United States assistance to the central government of Cambodia. In February 2007 the US lifted the ten-year ban on direct bilateral aid to Cambodia. The United States is a major export market for Cambodia.
Commensurate with its role as Cambodia's former colonial administrator, France continues to take an active interest in Cambodia's development. French business linkages are also significant.
Economic Overview
Cambodia's economic infrastructure was devastated by the civil war of the early 1970s and the rule of the KR between 1975 and 1979. Cambodia's diplomatic isolation also stifled growth in the first half of the 1980s. Growth accelerated in the late 1980s with the government's gradual move towards free market economic policies.
The industrial sector is dominated by the garment and construction industries. The garment industry, built on a relatively cheap labour force and preferential trading arrangements with the United States and Europe under the Multifibre Agreement (MFA), grew rapidly to become Cambodia's dominant export product. Following the expiration of the MFA, subsequent quota agreements between the United States and China, and the EU and China (due to expire at the end of 2008), as well as product differentiation including a strong commitment to labour standards, helped sustain this sector. However, Cambodia is vulnerable to economic slowdowns of its major export market, the United States, and competition following Vietnam's entry into the WTO in January 2007 and relaxation of United States restrictions on China.
The services sector is growing steadily especially through tourism and hospitality. Tourism is one of Cambodia's most promising sectors, international visitors increased by 18.5 percent in 2007 over the previous year's arrivals, to over 2 million visitors. The average time spent in Cambodia has also increased.
A key disincentive to Foreign Direct Investment (FDI) has been the lack of an effective judicial and legal system and a poor corporate governance environment. FDI has tended to be concentrated in garment manufacturing, services, construction, tourism and, to a lesser extent, wood processing. Cambodia's largest investor in 2007 was Malaysia, followed by China and Vietnam. Official development assistance continues to be an important source of capital inflow.
Cambodia has a relatively open trading regime, and joined the WTO in 2004. Its membership provisions require Cambodia to enact and implement a wide range of commercial laws.
Cambodia does not have any bilateral FTAs, but is involved in negotiations to establish FTAs between ASEAN and China, Japan, India, the Republic of Korea, and Australia and New Zealand.
Cambodia remains one of the world's least developed countries, with an estimated GDP per capita in 2007 of US$600. In spite of some recent diversification, the Cambodian economy remains predominantly agriculturally-based.
Bilateral economic and trade relationship
Two-way merchandise trade between Australia and Cambodia in 2007 was worth $61 million. Australian exports to Cambodia are primarily toys, games and sporting goods, wheat, cereal preparations and medicaments (including veterinary). Major imports from Cambodia in 2007 included non-monetary gold, clothing and bed, table, toilet and kitchen linen. Australia is Cambodia's 14th principal import source.
Australian Government Trade and Investment Strategies
As part of the process of Cambodia's accession to the WTO, Cambodia and Australia concluded a bilateral market access agreement that covers current and prospective Australian exports in goods and services. While Australia's trade with Cambodia is not large, WTO membership created a good foundation for developing this trade.
Australia and Cambodia are parties to the recently concluded negotiations on the ASEAN-Australia-New Zealand Free Trade Agreement. It is hoped that the agreement will be signed by the end of 2008.
The FTA will be comprehensive, covering trade in goods and services, and investment and build on individual members' commitments in the WTO.
Trade has been recognised as integral to the region's efforts to reduce poverty and expand economic growth. Australia is working with ASEAN regionally and directly with Cambodia, to promote good governance, the benefits of globalisation and sustainable development. Australia provides funding for Cambodia's Private Sector Forum to facilitate discussion between the government and private sector representatives on sector specific issues. As a least developed country, Cambodian products are granted tariff-free access to Australia.
The Australian Business Association of Cambodia was established in 1995 to promote the interests of the Australian business community. Membership spans a wide-range of sectors, including construction, law, transportation, medical and education.
Export Opportunities
Despite poor commercial infrastructure and weaknesses in Cambodia's legal framework, opportunities exist for Australian companies.
Extraction of offshore oil and gas reserves are currently projected to commence by 2011. This will offer opportunities for companies servicing that sector. While comprehensive data is not available, Cambodia is also believed to have significant mineral deposits, including bauxite and gold. Large-scale minerals extraction has not yet commenced and the government is committed to developing the sector. Several Australian companies including BHP Billiton, OZ Minerals Ltd, Southern Gold and Liberty Mining International Pty Ltd are currently prospecting for gold, bauxite, aluminium and other metals in north-eastern Cambodia.
ANZ opened a joint venture bank with Cambodia's Royal Group - ANZ Royal Bank - in 2005. A range of relatively small Australian enterprises operate in Cambodia. Demand for Australian consumables, particularly dairy products, meat and beverages including wine, to service the tourism sector is increasing. Development activities financed by the World Bank, the Asian Development Bank and other donors provide opportunities for Australian firms to participate in infrastructure projects or provide professional services.