Democracy Lab

Cambodia's Long March Toward Democracy

Cambodia has just taken a crucial step toward more participatory politics. But further progress toward democracy is likely to be slow and evolutionary rather than sudden and dramatic.

On July 22, Cambodian opposition leader Sam Rainsy and Prime Minister Hun Sen finally announced a deal to end a ten-month standoff between the government and the opposition, which has been boycotting parliament as part of its protest against disputed elections last year. Rainsy has now agreed to let his party take up seats in the National Assembly in exchange for an overhaul of the election commission, the release of eight opposition leaders arrested in recent clashes with government security forces, and a grab-bag of other reforms. Though still controversial, the deal may yet herald a new turn in Cambodian politics.

Since 1993, the Cambodian People's Party (CPP) led by Hun Sen has dominated Cambodian politics in semi-authoritarian fashion. The CPP held regular elections, but the opposition never had a chance of winning due to widespread fraud, intimidation, and lack of capital. In 2013, however, the Cambodian National Rescue Party (CNRP) shattered this paradigm. The new opposition coalition came within a whisker of beating the CPP on a platform saying that they'd had "enough" and promising "change," which appealed to a youthful, tech-savvy, and urban-centric demographic excluded from the spoils of political power, tired of rampant corruption and the oligarchic management of the economy, and unhappy at the prospect of dynastic succession among nouveau-rich families and clans.

Though the change and fallout of the Arab Spring reverberated globally, Cambodia's "almost democratic breakthrough" in 2013 and this week's deal are best understood as part of a slow evolution rather than a "revolutionary" change or upheaval as in the Middle East. The CNRP's near victory was possible because of elite miscalculation and infighting within the CPP, the opposition's newfound organization, and tacit support from Cambodia's neighbors. (Both Vietnam and China are equally weary of Hun Sen's reign.)

Hun Sen has long recognized that the CPP, which initially came to power on the coattails of the Vietnamese in 1979, needs legitimacy from the ballot box to cement its claim to rule. Periodic elections, however flawed, offered a fig leaf for continued authoritarian rule, allowing Cambodia's leaders to assert their superiority to Vietnam and China. They also set the stage for the genuinely contested parliamentary election last year.

Dissent within the party has been simmering for years. Over time, Hun Sen has become an institution that eclipses all others, including the CPP, the military, and the police. The party and its leader habitually renew their vows, but for at least the past five years Hun Sen has ruled by fiat, ignoring the CPP's Standing and Central Committees, and in no small way contributing to the CPP's malaise. In fact, Hun Sen has been running the country through his public speeches much like Cambodia's ex-King Sihanouk did in the 1950s and 1960s. The discord came to a head in the wake of the 2012 local elections, when -- despite another landslide victory for the ruling party -- the opposition made clear inroads in the CPP heartland provinces of Prey Veng and Kampong Cham. The loss of influence clearly reflected party dissent. According to the Economist, of the 5.7 million CPP members, roughly half failed to vote for the CPP. At an internal party meeting in August 2012, just 11 months before the 2013 elections, Hun Sen berated individuals by name for sloth, corruption, and ostentatious displays of wealth, and ordered CPP parliamentarians to spend their weekends in the provinces with their constituencies.

After their surprising gains in 2012, the Cambodian opposition approached the 2013 elections with gusto, knocking on provincial doors well in advance of the campaign period. Two of the parties, the Sam Rainsy Party and the Human Rights Party, joined together to form the CNRP and developed a national platform to increase monthly salaries and the minimum wage and improve access to health care.

After winning 55 of 123 parliamentary seats in 2013, the CNRP cried foul, citing widespread vote tampering to buttress its claim that it deserved a much greater share of the seats than awarded to it. Opposition leaders then decided to boycott parliament unless the government granted concessions. Under this week's compromise, the CNRP will take its seats in return for reform of the National Election Commission and an enhanced role in the National Assembly, including the chairmanship of several legislative committees. The opposition also won a marginal concession from Hun Sen to bring forward the next national elections by five months to February 2018, in which they hope to fare even better. Finally, the prime minister allowed the release on bail of eight opposition leaders who are currently in jail on charges of abetting insurrection; they will acquire parliamentary immunity upon taking their seats. (The photo above shows parliamentarian-elect Ho Vann greeting supporters after his release from prison on July 22.)  Though both Hun Sen and Sam Rainsy are lauding the compromise that ends nearly a year of political deadlock, critics see it as temporary fix, kicking the can down the road for future institutional reforms.

But those critics may be missing one crucial facet of the bargain: It emerges at a moment when the country's main partners, China and Vietnam, are equally frustrated with the CPP. In 2005, the Vietnamese Prime Minister Phan Van Khai publicly denounced corruption in Cambodia, and in 2007 a Vietnamese delegation delivered blunt messages to the CPP. Vietnam might not be a democracy, they argued, but it does allow for change within the leadership; Cambodia should follow its lead. Similarly, they said, Vietnam debated policy in its national assembly; so should the Cambodians.

China, meanwhile, has quietly given the Cambodian leadership similar messages, pointing out to CPP chiefs that the Chinese Communist Party has now set a retirement age of 68 for top leaders, and 65 for senior officials. At 61, Hun Sen still has another seven years left -- but there many old-guard CPP members who are long past their due date. The problem for the CPP is that internal differences of opinion have made it virtually impossible to agree on deadlines for retirement and generational renewal of the party's senior leadership bodies, the Standing Committee and the Central Committee. The CPP is struggling to reinvent itself -- and, in the meantime, it is giving the opposition a clear opening.

If China and Vietnam think that the CPP is giving one-party states a bad name, they are also hesitant to accept Cambodia's evolution into a genuine multiparty democracy. China, however, might be willing to tolerate greater freedoms in Cambodia if the opposition backs China's territorial claims in the South China Sea over Vietnam's.

The combination of CPP inertia, newfound energy within the opposition, and a division between Cambodia's traditional hegemons might yet produce a genuine multiparty democracy. Such an outcome is most likely only as the result of many more years of patient political development, but the Hun Sen-Sam Rainsy deal has now created a crucial precondition for this evolution by putting the opposition firmly in the game. And this is undoubtedly where the Cambodian population wants it to be.

Omar Havana/Getty Images


Keeping Putin's Hands Off Argentina's Oil

The White House shouldn't allow Argentina's debt problems to impede U.S. energy security.

Just prior to the downing of Malaysia Airlines Flight 17, Russian President Vladimir Putin was wrapping up a six-day tour of Latin America, including a bilateral meeting with Argentine President Cristina Fernández de Kirchner on July 12.

Kirchner's meeting with Putin, in conjunction with a July 18 meeting between Kirchner and Chinese President Xi Jinping, could have significant strategic repercussions for the United States if Argentina follows through on its threats to default on its sovereign debt on July 30.

An Argentine default would be the nadir of a rancorous 12-year-long dispute between Argentina and some of its creditors, who refused to take losses of over 70 percent following the country's historic default on over $80 billion in 2001.

After years of legal battles, the U.S. Supreme Court issued the definitive ruling against Argentina on June 16 of this year. The Supreme Court declined to hear Argentina's appeal of a lower-court ruling ordering it to pay creditors who did not participate in the restructuring at the same time it pays those who agreed to losses.

The lower-court judge has now ordered Argentina to negotiate with its holdout creditors, but it has so far refused. If Argentina does not find a way to settle with its holdout creditors by July 30, the country will default for the second time in 13 years. But according to news reports, Argentine leaders have still not met with creditors to negotiate a resolution, even though it has been over a month since the Supreme Court's ruling.

This is where Putin's recent visit becomes important: A focus of discussion between Kirchner and Putin was reported to be Russia's role in helping develop Argentina's vast unconventional oil reserves, the Vaca Muerta. Kirchner announced that members of the Russian delegation would visit the field in Patagonia.

According to the International Energy Agency, the 20,000-square-mile, 3,000-foot-deep Vaca Muerta shale field -- estimated to be the largest oil field in the Western Hemisphere and one of the top two or three in the world -- likely contains more than 20 billion barrels of oil equivalent.

The U.S. Energy Information Administration ranks Argentina second and fourth worldwide in deposits of recoverable shale gas and oil, respectively. If exploited, these reserves could make Argentina a net energy exporter, a capacity it lost in 2012 as a result of mismanagement, ideologically driven economic policies, and a failure to abide by international law. Argentina is currently importing energy at a cost of nearly $10 billion annually, something Kirchner would be happy to reverse. And to make this happen, the Argentines are looking for partners.

According to Argentine estimates, the full development of the Vaca Muerta unconventional reserves will cost upwards of $250 billion and, just as essential, will require foreign engineering expertise. Since re-nationalizing its national oil company, YPF, from Spain's Repsol in May 2012, Argentina has aggressively sought global investors and partnerships, among them Russian state oil company Gazprom (whose financing arm was hit by the latest round of U.S. sanctions) and Chinese state oil company Sinopec.

Several U.S. companies, including Exxon Mobil, have been active in the Vaca Muerta, and others are looking to get involved. This year, Chevron signed an investment agreement with YPF under which it will invest $1.6 billion in 170 wells with future investments of up to $15 billion. But this agreement was brokered prior to the current crisis. If Argentina's leadership takes the country into default, the deal with Chevron could be a casualty. Furthermore, opportunities for other U.S. companies would likely diminish or evaporate, as none would be able to afford the heightened country risk that another default would create.

Argentina can ill afford a second default in 13 years. Its economy is in recession, inflation is at double-digit levels, and its trade deficit is widening. Furthermore, a second default would close the door to international capital markets, which the country desperately needs and has had only limited access to since 2001.

But another Argentine default wouldn't only be a problem for Argentina. It would also be a strategic loss for the United States. A default would almost certainly forestall U.S. energy companies' investment in Argentina's energy industry -- the sector that offers the most promising growth potential. Lead investor Chevron is likely to have second thoughts about its commitment to Argentina if the country appears, once again, to be an untrustworthy business partner. Others are likely to pull back or demand more favorable terms to offset risk.

If Argentina's government does choose to default, and if it remains locked out of U.S. and European capital markets, then partnership with Russia's Gazprom and China's Sinopec will likely provide a much-needed alternative to U.S. investment, putting U.S. energy companies at a significant disadvantage.

Kirchner's courtship of Russia has intensified visibly in recent months, most notably in her defense of Russia's seizure of Crimea, which she compared to Argentina's fight with Britain over the Falkland Islands. Similarly, in its rapprochement with China, Argentina has brokered new agreements with Sinopec to partner on energy development. Significantly, Argentina announced new investment pacts with China totaling $7.5 billion immediately following Xi's meeting with Kirchner on July 18.

Argentina can take another path -- one in which it respects the rule of international law, settles its debts, regains full access to the global financial markets, and consequently continues to attract energy investment from U.S.-based global companies that have the engineering experience and know-how to develop an unconventional oil field.

Energy security in the Western Hemisphere is of vital strategic importance to the United States. And thus helping to avert Argentina's self-destructive path to default must be a top priority for Barack Obama's administration as it signals to Argentina in the critical days ahead.

Administration officials can help by engaging with their counterparts in the Argentine government and explaining that a settlement with Argentina's private creditors would finally clear the way for Argentina to regain access to numerous sources of external capital after more than a decade of relative economic isolation.

For one thing, a full economic normalization would open the way to a resumption of World Bank lending to Argentina, which the U.S. government has opposed since 2011 due to Argentina's failure to pay its debts. But more importantly, the administration can and should make the case that U.S. energy companies are uniquely capable of helping Argentina fully develop and benefit from one of its most promising natural resources.

Above all, the administration needs to make sure that it does not through inattention allow Argentina to slip away. As we have seen in recent weeks, the United States' geopolitical rivals stand ready to take advantage of such a strategic mistake.

Photo by Maxi Failla/AFP/Getty Images