Democracy Lab

Betting on a Cambodian Spring

Why Cambodia’s opposition faces a steep uphill battle in its effort to oust Prime Minister Hun Sen.

This coming Sunday, Cambodians will head to the polls to vote in local elections. Whatever the result, though, the politics of the country are unlikely to change much. Prime Minister Hun Sen, Asia's longest-serving leader (in office since 1985), has the country firmly under his control. Shrewd and relentless in eliminating his political foes, Hun Sen has established a pervasive patronage system and played regional and global powers to his advantage. The local media is firmly under the government's thumb. But perhaps most importantly, the prime minister has overseen years of strong economic growth and a sharp decline in poverty.

The leader of Cambodia's opposition, Sam Rainsy, is undeterred. "We don't need to convince anybody about the bad will of the Hun Sen government. Everybody sees it [for ] himself," Rainsy said. "So actually the environment is rather favorable for us."

To most onlookers, Rainsy's optimism may seem quixotic. But he and his colleagues are feeling a tailwind these days. The Arab Spring has shown that democratic reformers can triumph even under the most improbable of circumstances. Closer to home, recent developments in Burma (aka Myanmar), where the military-backed government has embarked on a series of democratic reforms, serve as a reminder that political change can take unpredictable paths. If Burma succeeds in shedding its pariah status, countries like Cambodia, Laos, and Vietnam will find it harder to rationalize their own poor records on human rights. Those governments know that the changes in Burma have made it harder for them to legitimize their own authoritarian rule, said Ou Virak, president of the Cambodian Center for Human Rights.

Now Rainsy is going for broke. As he told me in a recent interview, he is now openly advocating a strategy to lead a "revolt" against Hun Sen: "The objective is to bring down the Hun Sen regime."

Rainsy has long been a thorn in Hun Sen's side. As finance minister in the country's first democratically elected government in 1993, Rainsy quickly lost his position after speaking out against corruption. He formed his own opposition group in 1995, now known as the Sam Rainsy Party. He's since been fending off myriad forms of intimidation, ranging from bureaucratic intrigues to assassination attempts. Since 2010, he has been forced to remain in exile to avoid imprisonment, on what he claims were trumped-up charges of defacing government property and forging official documents.

In 1997, Rainsy was nearly killed when assailants hurled grenades at him while he was speaking at an anti-corruption rally in Phnom Penh, leaving 16 dead and 150 injured. Human rights investigators concluded that Hun Sen's bodyguards provided cover for the attackers, but no one has been brought to justice for the incident. "He's tried to kill me many times," Rainsy says. "Having failed to kill me physically, now Hun Sen is trying to kill me politically. Given the context, remaining alive is quite an achievement."

Cambodia's opposition has seen its position erode in recent years. The power of Hun Sen's Cambodian People's Party (CPP) appears to have only grown, as it has neutralized previous rivals, leaving Rainsy and his party the only viable challengers. The once powerful royalist Funcinpec -- which won the 1993 elections only to be out-maneuvered and out-gunned in a 1997 coup d'état by Hun Sen's forces -- has withered into a corrupt, minor coalition partner.

Robust economic growth, and the absence of political competition, have allowed Hun Sen's party to entrench its patronage networks and extend control over all arms of the state, from the judiciary to the national election committee. After sweeping the 2008 parliamentary elections, the CPP turned its attention to opposition lawmakers and activists, pursuing them through the courts by launching criminal defamation suits.

Today, Rainsy faces a 10-year prison sentence on charges arising from an incident in 2009, when he pulled out border posts to protest alleged Vietnamese encroachment on Cambodian peasant farmland near the border. His conviction has prevented him from leading his party ahead of Sunday's elections, and also blocks him from contesting crucial parliamentary elections scheduled for next year. Rainsy is calling upon foreign donor states to abstain from sending observers or certifying the election results, unless he is allowed to participate in politics and reforms are implemented to ensure a free and fair election.

"If Hun Sen refuses to change the election system... then my party will follow a second part of its strategy, inspired by what happened in Tunisia, Egypt and Libya," Rainsy told me. "We have to go through elections first. We cannot challenge him and encourage an uprising now, because he is still legitimate. But he will lose legitimacy following the next election if he does not implement those reforms. And we are in a legitimate position to revolt against him."

But Rainsy's strategy is premised on a shaky gamble: That the Cambodian people will risk the stability gained in recent years to confront a powerful and entrenched elite with control over all arms of the state. Analysts describe such a scenario as farfetched. "Rainsy is living a comfortable life in exile, making increasingly radical comments in an effort to stay in the minds of international observers rather than ordinary Cambodian people," says Virak.

The effectiveness of the electoral reforms Rainsy is demanding, moreover, may be undercut by the patronage networks that Hun Sen has created throughout the country. The cozy relationship between the CPP and private business poses the main challenge for the opposition, said Caroline Hughes, an associate professor and director of the Asia Research Center at Murdoch University in Australia. "Businessmen give donations to party development funds, which are used to pay for lavish schemes in the electoral heartland," says Hughes. "The opposition can't compete with this."

While there have been some calls for Rainsy to receive clemency in the interests of political reconciliation, the government has little reason to make such a move. "Sam Rainsy has to show a really good example to the Cambodian people that he abides by and respects the law," says government spokesman Phay Siphan.

Rainsy may have better luck focusing on the rising discontent among those who haven't benefited from Cambodia's recent boom. Over the past few months, government forces have opened fire on people protesting evictions, organizing for improved factory conditions, or investigating illegal logging and corruption. At the end of April, a well-known activist named Chut Wutty was killed under murky circumstances after leading a campaign against unlawful logging.

The incidents reflect the heightened and widespread conflicts between regular citizens and entrenched elites over complicated issues of land ownership, economic development, and corruption.

The government has awarded long-term leases for huge tracts of land to private companies -- invariably under opaque bidding procedures that are rife with irregularities. Many of the companies are registered overseas, and operate with the cooperation of local businesses that often turn out to be front companies for tycoons or politicians. An estimated 22 percent of Cambodia's surface area has been parceled out to mining and other business concessions, according to a recent analysis by the local rights group Licadho. Critics say the government has done nothing to ensure that local communities benefit from such deals, which have concentrated control over land and resources in fewer hands.  As many as 400,000 people have been displaced by the concessions or received inadequate compensation, while more than half of the arable land has been turned over to private agro-industry projects, especially rubber, sugar, cassava, palm, cashews, and acacia.

"The Hun Sen regime is killing the Cambodian people slowly" by depriving them of land and natural resources, says Rainsy. In a predominantly agrarian country, more than 70 percent of Cambodians depend on the land for their livelihoods, he points out. "Hun Sen wants to give Cambodia to the big companies and to organize Cambodia in a system of big concessions. The small farmers will lose their land -- they will become workers or laborers for big companies." The government, for its part, disputes the figures about the effects of land transfers, but it has provided little data to back up its claims.

In a sign of the issue's sensitivity, earlier this month Hun Sen ordered a moratorium on new land concessions, and a review of all existing ones, in order to prevent future land-grabbing and illegal logging.

Yet days after the prime minister's directive was announced, a 14 year-old girl, Heng Chantha, was shot and killed by security forces during a forced eviction at a rubber plantation province. Several hundred local residents armed with crossbows and axes fought with police at the site. That was just the latest in a series of large-scale clashes around the country.

The opposition has a long way to go before it can capitalize on the discontent. Rainsy's party is beset by internal rivalries of its own, and it has yet to build strong alliances with other forces of grassroots protest in the country. Rainsy insists that it's too early to give up: "You think that absolute power is eternal, but it is not eternal." Even a few months before the revolutions began in Tunisia, Egypt, or Libya, he notes, few people there would have believed that their dictators could be forced out of power. Cambodia, he believes, still awaits its spring.


Democracy Lab

The Window is Closing for Riyadh

The oil won’t last forever -- so Saudi Arabia’s government has to reform its economy if it wants to survive.

With its coffers still overflowing, Saudi Arabia appears to have avoided contagion from the Arab Spring through massive government expenditures ---what amounts to hush money for disaffected youth and minorities. But the country's surface calm is just that; peek a few metaphorical inches down, and one discovers a dysfunctional society that is becoming unmanageable.

Initially caught off guard when the Arab Spring movement erupted in early 2011, Saudi officials scrambled to stave off unrest in the way that comes naturally to this authoritarian kingdom awash in oil revenue. Their response focused largely on the immediate problem of easing the country's surprisingly high unemployment, shelling out $120 billion on social programs, government and private-sector job creation schemes, and subsidies to household income. But pouring money on the problems goes only so far; the economy must find better ways to cope with an entitled, skill-short Saudi workforce, not to mention religious restrictions that constrain efforts to modernize the economy. Indeed, a little over a year after the pot boiled over in Tunisia, new danger signals are emerging, prompting Maplecroft, a political risk assessment consultancy, to rank the kingdom 15th out of 15 emerging market economies -- below Nigeria and Iran. A more nuanced approach, one that walks the tightrope between reform and the country's byzantine interest group politics, will almost surely be needed if Saudi Arabia is to adjust to the realities of the post-Arab Spring Mideast.

Many of Saudi Arabia's domestic problems stem from demographics. The country's citizenry grew from 15 million in 1990 to 28 million in 2011, an average annual increase of nearly 3 percent. That pace would be manageable in an economy that was on the familiar developing-country track, of rapid modernization of agriculture combined with labor-intensive manufacturing growth. But it's proved a daunting problem in an economy dominated by oil.

Saudi Arabia arguably has the financial wherewithal to skip the intermediate steps to industrialized country status. But the key to pulling off this trick is the rapid accumulation of human capital, along with the growth of a highly productive private sector. And thus far, Saudi Arabia's largely religious, tradition-bound educational system has been slow to modernize, leaving most graduates sorely under-skilled and most businesses hiring workers from other countries.

The government has attempted to compensate for the skills deficit by heavily subsidizing higher education. An estimated 800,000 Saudis are enrolled in universities at home, with another 110,000 in school abroad. But the system falls way short; even those who graduate typically can't find jobs because they can't perform to global standards. Tellingly, 90 percent of Saudis currently in prison have university degrees.

Unofficial figures peg youth unemployment as high as 40 percent. Their time in economic limbo is softened by the government's generous social spending. But it's hard to imagine that welfare-as-usual is sustainable indefinitely. In part, that's because most long-term unemployed are demoralized by their marginal role in society; in part, because the government's coffers aren't bottomless.

The government's primary weapon in addressing unemployment has been "Saudization," a carrot-and-stick approach to persuading employers to replace foreign laborers with Saudi nationals. Saudization programs have been around for years, but apparently to little consequence. The original goal was to pare the job roles by 320,000 foreign workers between 1995 to 2000, replacing them with Saudis. In fact, the number of immigrant laborers actually grew by 58,000 during this period.  In the early 2000s, Saudi Arabia's consultative assembly, the Majlis as-Shura, decreed that Saudi nationals must comprise 70 percent of the country's workforce by 2007. But employers have found ways around the mandate, and today, Saudis account for only 10 percent of private sector employees.

It's easy to see why Saudization has failed to meet its targets. The program levies fines on employers that are out of compliance -- what amounts to a tax by another name. Many businesses have relocated to avoid it, with most moving to the business-friendly United Arab Emirates, where they have no obligation to replace skilled foreign workers with more expensive, less qualified locals. Firms that do attempt to comply, by offering training for their Saudi workers, find retention difficult, as their best employees are bid away by other enterprises seeking to meet their Saudization quotas.  But even businesses determined to play by the rules are often stymied by regulations that change without warning.

The government's immediate response to the Arab Spring was to double-down, rolling out a new, more bureaucratic version of Saudization (dubbed the Nitaqat program) that is designed to close loopholes. It's hard to imagine it will succeed, though, at boosting private-sector employment when previous versions have failed so miserably. To make things worse, Nitaqat works at cross-purposes with other government initiatives ---in particular, a big, job-killing hike in the minimum wage and an expansion in high-paying government positions.

A longer term program for reducing the distortions in the Saudi labor market, dubbed the "new economic cities" program, holds more promise. The program takes its inspiration from the success of Jubail and Yanbu, industrial cities created from scratch in the 1970s. More than 30 years in, initial skepticism as to their economic viability has been dispelled thanks to the successful development of downstream industries (notably petrochemicals) that feed off the oil industry. To date, the two cities have created over 100,000 jobs in 233 businesses, many of which are competitive in export markets.

The Saudis are now aiming to mimic these earlier successes more rapidly and on a bigger scale -- this time with an emphasis on preparing Saudi Arabia for a post-oil future. The new cities are to serve as the basis for creating a modern knowledge economy. Located in areas that now trail the rest of the kingdom in economic activity, they will support a diversified mix of industries that can fit Saudis into their workforce. The government is plainly serious: In 2008, it allocated $400 billion to fund the program through 2013, after which it hopes to attract private investment to complement ongoing government support.

The new cities program is especially important in light of the kingdom's fiscal outlook. Riyadh-based Jadwa Investment estimates that Saudi finances will remain viable for the next decade under reasonable assumptions about the future price of oil. Thereafter, all bets are off: Oil revenues are projected to decline, even as the population continues to grow. Saudi Arabia's estimated breakeven, inflation-adjusted oil price will increase from a manageable $90.70 a barrel in 2015, to $175.10 in 2025 and $321.70 by 2030 -- numbers that, at least for the moment, are off the prognosticators' charts.

The Saudis thus face a relatively rapidly closing window to make the transition to an economy less dependent on oil and more capable of diversified, job-creating growth. The good news is the new cities program may pay off within a decade, before the government budget is likely to slip into chronic deficit. For while Jubail and Yanbu took 15 to 20 years to come into their own, the government now has considerably more expertise and resources at its disposal to undertake ventures of this size and scope.

The Saudis' problem is analogous to the one we will all face from global warming. Year-to-year developments don't produce enough change to yield the collective will to face the issues squarely; yet the endgame is not in doubt.

Actually, Saudi Arabia's dilemma is bleaker. Unless climate change triggers truly unmanageable consequences, rich nations will be able to mitigate the problem by throwing money at it. Saudi Arabia's failure to make the transition to a modern, diversified economy, by contrast, will almost certainly open the door to religious and tribal conflict that will be very hard to close.