US to review trade with Cambodia, sanctions military officials

US state department warns businesses about corruption in the Kingdom, while promising to review trade agreements and sanction Cambodian military figures

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November 13, 2021
US to review trade with Cambodia, sanctions military officials

Hello readers! 

Someone at the US state department must have had an extra pumpkin latte this week, my editor quipped, because they have certainly been busy issuing a flurry of condemnations against Cambodia and sanctions for two military officials. 

The state department made several major announcements, warning American businesses operating in the Kingdom to be wary of the “systemic corruption, transnational organised crime, and human rights abuses, threaten[ing] both US national security interests and the fundamental freedoms of people in Cambodia”. Despite ongoing US concerns about the status quo, the state department noted “no meaningful changes” have occurred. 

Another point of contention focused on alleged “corrupt acts” related to the Ream Naval Base in Sihanoukville, long a sore spot in US-Cambodia relations given American fears that China secretly secured exclusive access to a portion of the base. The US embassy believes the construction benefits the Chinese military, which Cambodia denies. Among the ongoing geo-political tensions, the US leveled sanctions against navy commander Tea Vinh and Chau Phirun, the director-general of the defense ministry’s material and technical services department, accusing them of using the Ream construction for personal enrichment. The sanctions freeze any US assets they have, but also effectively serves as “a financial death sentence” by preventing sanctioned officials from engaging with US financial institutions and from using US funds for wires, checks and credit, the Globe previously reported.

The US also plans to review its reauthorisation of Cambodia’s eligibility for the Generalised System of Preferences (GSP), which offers reduced export duties to promote economic growth in developing countries. The World Bank reported the US is the Kingdom’s largest export market. Cambodia lost partial access to trade preferences for exports to the European Union through the Everything But Arms programme last year over human rights concerns, though this likely had more impact on Cambodians employed in garment factories than elites triggering corruption and human rights allegations. 

Cambodia’s human rights issues and penchant for corruption are hardly news, but the US decision to increase the stakes by calling out suspect practices and applying significant consequences to those involved with the Ream naval base could signal another indirect shot at China.

The diplomatic announcements were among several engaging international stories this week. As the UN’s COP26 climate conference wraps up, our lead feature examines Thailand’s hydropower deals with Laos, receiving far more than appears necessary. Check out the story and our other feature articles and opinion essays this week.

Hydropower dams in Laos have become key sources of low-cost electricity for Thailand, which is now the largest sponsor of Laos hydropower development. But all the cheap energy has led to a Thai energy surplus, reports Wanpen Pajai, as the consequences of Thai policy decisions force the country to continue paying for unused energy. These costs are passed on to consumers, while the environmental and social impacts of Thai-funded dam construction in Laos persist.

While renowned climate activist Greta Thunberg has rightfully drawn attention to the threats posed by climate change, her relentless message about compromised leadership at COP26 risks ceding the floor to companies and governments all too willing to employ opportunistic ‘greenwashing’ in place of meaningful action, writes Brian P. D. Hannon. Companies should not be allowed to side-step climate reforms through convenient PR. 

Collective land titles offer Cambodia’s indigenous communities the chance to have communal ownership of their traditional lands, protecting them from losses to land grabbers and companies. And yet in some communities, families are withdrawing from collective titles to take individual ownership of the land, the better to access bank and microfinance loans, Borin Sopheavuthtey and myself report. 

The financial technology, or FinTech, sector has exploded across Southeast Asia despite the pandemic by filling gaps for consumers and small businesses lacking access to banks and credit cards, Amanda Oon reports from Singapore. Companies such as Boku, an international mobile payments platform, are providing flourishing alternatives to traditional financial institutions for Southeast Asians.

As Cambodia assumes the ASEAN chairmanship for 2022, Southeast Asia’s governments must develop a stronger consensus on engagement with Myanmar, argues contributor Michael Vatikiotis. Excluding Myanmar from ASEAN is not a long-term solution, but the regional diplomatic organisation should seek quiet, persuasive diplomacy and cooperate with the UN to offer more humanitarian aid.

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