Archive for July 2011
10PHNOMPENH103 DAS MARCIEL REVIEWS U.S. POLICY WITH GOVERNMENT, OPPOSITION, CIVIL SOCIETY
“248568”,”2/12/2010 10:19″,”10PHNOMPENH103″,
“Embassy Phnom Penh”,”CONFIDENTIAL”,
“09PHNOMPENH960|10PHNOMPENH89″,”VZCZCXRO2311
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0103/01 0431019
ZNY CCCCC ZZH
P 121019Z FEB 10
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC PRIORITY 1661
INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 2605
RHHMUNA/USPACOM HONOLULU HI PRIORITY”,
“C O N F I D E N T I A L SECTION 01 OF 04
PHNOM PENH 000103
SIPDIS
STATE FOR EAP/MLS
E.O. 12958: DECL: 02/10/2020
TAGS: PREL, PGOV, PBTS, MARR, TH, CB
SUBJECT: DAS MARCIEL REVIEWS U.S. POLICY WITH GOVERNMENT,
OPPOSITION, CIVIL SOCIETY
REF: A. PHNOM PENH 89 (ICC)
B. 09 PHNOM PENH 960 (UIGHURS)
Classified By: AMBASSADOR CAROL A. RODLEY FOR REASONS 1.4 (B, D)
1. (SBU) SUMMARY. In a wide range of meetings with Cambodian
officials, opposition party members, NGOs and civil society,
Deputy Assistant Secretary for East Asian and Pacific Affairs
Scot Marciel spotlighted stepped-up engagement by the United
States in Cambodia while highlighting specific issues such as
the Uighur deportation, bilateral debt, Preah Vihear, the
Anti-Corruption Law, and resolution of the Cambodian-Thai
border dispute. Both DPM Sok An and FM Hor Namhong renewed
the Cambodian commitment to settle the dispute with Thailand
peacefully. Sok An detailed Cambodian claims to the Preah
Vihear temple area, and Hor Namhong expressed appreciation
for increased U.S. participation in the region, including the
Lower Mekong Initiative. He also extended an invitation for
the Secretary to visit on the occasion of the 60th
anniversary of diplomatic relations in July. Economic
experts highlighted concerns about sustainable economic
growth and macroeconomic stability, particularly in light of
the expected closure of the IMF office in Cambodia this year.
Opposition parliamentarians were less downbeat about
identified deficiencies in Cambodia\’s tighter political
space, and more deliberate in identifying actions they could
take to improve the situation. In meetings with civil
society, the Uighurs, Sam Rainsy\’s conviction, and a proposed
NGO law figured prominently. DAS Marciel spoke on U.S.
foreign policy in the region to 400 university students, who,
in a spirited exchange, demonstrated that Cambodia\’s youth is
a vibrant reminder of the promise of Cambodia\’s future. END
SUMMARY.
Debt and Impact of Uighur Decision
———————————-
2. (C) Deputy Prime Minister and Minister of Foreign Affairs
Hor Namhong reiterated his request to Secretary Clinton to
reschedule bilateral debt, suggesting now that 70% of the
debt be diverted to development assistance and that 30% would
be repaid. DAS Marciel outlined the legal obstacles to debt
forgiveness, and indicated that the process was complicated
further by Cambodia\’s recent decision to deport 20 Uighur
asylum seekers to China (Ref B). Stating that there was
great concern in the administration and Congress regarding
the decision, DAS Marciel maintained that the question of
debt relief for Cambodia had become much more difficult as a
result, since the deportation raised questions about how
Cambodia will handle future asylum seekers. Hor Namhong
responded by stating that \”many factors\” were considered
prior to returning the Uighurs, but in the end, it was
determined that they were \”not refugees because there is no
war in China.\” Additionally, he claimed that the Uighurs\’
passage from China to Cambodia was orchestrated by an
organization in the U.S. and that if they were allowed to
stay, more would follow, creating a situation that Cambodia
is not equipped to handle.
ASEAN and the UN
—————-
3. (SBU) Stating that the U.S. is committed to building a
strong relationship with ASEAN, DAS Marciel noted that a
Resident Representative of the U.S. Ambassador for ASEAN
Affairs recently arrived in Jakarta to establish a Permanent
Mission. Hor Namhong stated that ASEAN is pleased about the
United State\’s increased interest in the region and declared
that there are only two alternatives for the next ASEAN-U.S.
summit – Vietnam or the United States. Noting that Asia is
moving in the right direction with closer cooperation,
increased trade, and enhanced security, Hor Namhong expressed
frustration that initiatives such as Australia\’s Asia Pacific
Community (APC) result in duplication of existing frameworks
such as that of APEC, ARF, EAS, and ASEAN. Hor Namhong
stated that Cambodia is supportive of U.S. participation in
existing communities, such as EAS, but indicated the timing
of the APC is not right nor is its role in the region clear.
(NOTE: Hor Namhong\’s comments on the APC echo similar public
statements made by Prime Minister Hun Sen in January. END
NOTE.)
4. (SBU) Hor Namhong then appealed to the U.S. for support of
Cambodia\’s 2012 bid to become a non-permanent member of the
UN Security Council in 2013, which has ASEAN\’s support.
Given its history of UN involvement, Cambodia is well placed
to sit on the Council and share knowledge with other members,
he urged. DAS Marciel responded that Cambodia\’s experiences
PHNOM PENH 00000103 002 OF 004
would certainly bring an important perspective to UNSC
deliberations.
Burma Elections in May?
———————–
5. (C) Expressing his appreciation of the new U.S. policy on
Burma, Hor Namhong indicated that Burma is interested in
working with the United States. and would like to join the
Lower Mekong Initiative. He stated that the Burmese FM told
the Cambodian Ambassador recently that elections will be held
in May 2010, and that ten political parties, including Aung
San Suu Kyi\’s, would be allowed to participate.
Additionally, the Burmese government has requested that ASEAN
send election observers. According to Hor Namhong, during a
closed-door meeting at the ASEAN summit, member nations urged
Burmese officials to hold credible and democratic elections.
Agreeing that the election would indeed be an opportunity for
progress, DAS Marciel expressed concern that opposition
leaders are unable to campaign and much work is required
before a truly free and fair election can be held.
Thailand and Image
——————–
6. (C) Given the recent verbal exchanges between Prime
Minister Hun Sen and Thai Prime Minister Abhist Vejjajiva,
DAS Marciel expressed concern that in addition to raising
tensions in the region, such combative public comments are
hurting both countries\’ international images and could
negatively impact tourism and investment. Hor Namhong stated
that Cambodia is committed to normalizing relations with
Thailand, that the \”Thaksin issue\” should be set aside, and
focus should instead be on solving the border dispute. He
further stated that \”Cambodia cannot accept Thailand\’s claim
to Cambodian territory, and Thailand won\’t withdraw the
claim, so the only way to settle is through legal means.\”
(Note: In recent speeches, PM Hun Sen has indicated a desire
to take the issue to the ICJ and the UNSC. End Note.)
Improved Bilateral Relations
—————————–
7. (SBU) The FM expressed appreciation for improved
U.S.-Cambodian relations during the last few years. He
specifically thanked the U.S. for support in the areas of
health, education, demining, economic development, and local
administration reforms. Hor Namhong also discussed the work
of a joint commission which is planning events to commemorate
the 60th anniversary of diplomatic relations between the U.S.
and Cambodia to include bilateral agreements, MOUs and
cultural programs. In that context, he extended an
invitation to Secretary of State Clinton to visit Cambodia in
July, when a series of bilateral agreements could be signed.
DAS Marciel credited the Cambodian government for increased
development of the country, thanked Cambodia for its support
in recent UNGA votes which were appreciated by the United
States, and congratulated the FM on his initiative to
position Cambodia as one of the first countries to associate
itself with the Copenhagen Accord.
Sok An: Up on Preah Vihear, Down on Thai \”Invasion\”
——————————————— ——
8. (SBU) Deputy Prime Minister and Minister of the Council
of Ministers Sok An highlighted recent successes with the
Khmer Rouge Tribunal (septel) and the extension of a Chevron
agreement to exploit oil and gas resources in the offshore
Block A in Cambodian territorial waters. On the
Cambodian-Vietnamese border demarcation process, Sok An noted
that it is possible the border line that is being drawn in
principle according to maps and agreed rules may cut through
the rice fields of both Cambodians and Vietnamese, who then
find themselves theoretically on the wrong side of the
border. \”We are seeking an appropriate solution,\” he stated.
Turning to the Thai border and drawing on a six-inch pile of
maps, documents, and brochures, Sok An gave a blow-by-blow
account of the inviolability of Cambodian claims to Preah
Vihear and the surrounding territory based on the 1962 ICJ
decision, the irreversibility of the 2008 UNESCO inscription
of Preah Vihear as a World Heritage Site, and the
indisputably uncooperative attitudes of the Thai by, among
other acts of arrogance and slights to Cambodia, invading
Cambodian sovereign territory on July 15, 2008.
9. (SBU) Sok An reviewed recent Cambodian achievements with
the Preah Vihear world heritage site development plan, noting
the construction of new access roads and an East-facing
PHNOM PENH 00000103 003 OF 004
staircase up the escarpment to the mountain temple. An
eco-village for 300 families who had been re-located was
already far along and a market at the foot of the temple
entrance re-designed. The RGC had already spent $99 million
in the area of Preah Vihear and around the border, he stated.
As an International Coordinating Committee (ICC) is formed
(Ref A), Cambodia is inviting the United States to join and
perhaps even co-chair the ICC, he said. When asked about the
UNESCO requirement that Thailand be invited to join the Preah
Vihear ICC, Sok An said that he was \”very reluctant\” to
include them. He noted first that this condition had been
imposed in early July, before the \”Thai invasion\” and,
secondly, the Thai behavior at a recent Angkor Wat ICC —
when a delegation packed with Thai MFA members did not want
to join in the technical preservation discussion but wanted
to raise political issues — had shown that the Thai could
not be trusted to make a positive contribution. DAS Marciel
said that the U.S. would look seriously at playing a role in
the Preah Vihear ICC, but urged the RGC to continue to work
together with Thailand to ease bilateral tensions.
Anti-Corruption Law
——————-
10. (SBU) DPM Sok An confirmed that the Council of Ministers
had recently transmitted to the National Assembly the draft
Anti-Corruption Law (ACL) for its consideration. Now that
the four basic laws related to civil and penal codes and
procedures were in place, and given an influx of a younger
cadre of judges capable of understanding these
inter-dependent laws, Sok An was confident that the
government was ready to work on an Anti-Corruption Law. He
said the RGC would build three pillars of support for a new
law: education, law enforcement, and mass support. The RGC
now realized the importance of mass support because, when a
case of corruption is brought against individuals, they \”do
everything to fight\” it, he said. He cited Hong Kong and
Singapore as the best models for Cambodia and noted that the
former RCAF headquarters compound would be transformed into
an Anti-Corruption Institute. Noting continued U.S. support
for an ACL, and remarking that any effort to tackle the
difficult issue of corruption must have the strong support of
the leadership, DAS Marciel noted the United States looked
forward to its passage.
Opposition Politics
——————-
11. (SBU) In a meeting with Sam Rainsy Party parliamentarians
Mu Sochua and Son Chhay and Human Rights Party MP Ou
Chanrith, DAS Marciel emphasized U.S. commitment to stepping
up its engagement with the Cambodian government to support
democracy, good governance, and the rule of law. While
initially predicting a dire future for democracy and a
diminished role for the opposition, the MPs still held out a
vision for their own role to reform institutions in Cambodia.
All three had clear proposals for future activities funded
by U.S. assistance: organize more voter forums at the local
level; assist with reform measures such as implementation of
an impending Anti-Corruption Law; support fair coverage of
the opposition in the mainstream media; and strengthen USG
support for \”alternative media\” such as RFA and VOA, which
give the opposition more balanced radio air time. Son Chhay
urged the USG to use its position of influence not just to
\”sweet talk\” the RGC but to advocate that it take more
seriously its human rights obligations. SRP Mu Sochua urged
the U.S. to review the \”quality of assistance\” in the
maternal health area so that aid dollars resulted in the
desired reduction of maternal mortality. (NOTE: At about 470
per 100,000 live births, Cambodia\’s maternal mortality rate
is among the highest in the region. END NOTE.) DAS Marciel
assured the opposition leaders that, in addition to paying
attention to issues they raised, the U.S. was concerned about
the political space in Cambodia and had bluntly raised those
concerns with the government.
The NGO Perspective
——————-
12. (SBU) Speculation about a proposed NGO Law dominated DAS
Marciel\’s discussion with civil society representatives about
the overall health of civil society in Cambodia. One
representative captured attention with his claim that \”there
is no civil society in Cambodia anymore,\” predicting that
Cambodia will soon become like Vietnam, where he believed the
government allowed NGOs to work on economic and development
issues, but prohibited advocacy. Most agreed that while
there are many NGOs providing services in Cambodia, the other
PHNOM PENH 00000103 004 OF 004
elements of civil society, particularly those that advocate
for government change — such as unions, journalists,
opposition parties, and advocacy organizations — are
operating in an increasingly challenging environment. They
voiced deep concern about a proposed NGO Law, and speculated
that the new law will require all NGOs currently operating in
Cambodia to re-register, presenting an opportunity for the
RGC to disapprove particular organizations it dislikes. The
independence and credibility of the judiciary also came under
attack when DAS Marciel raised the issue of Sam Rainsy\’s
conviction for incitement and property destruction.
Representatives criticized the government for using the
courts to settle its political scores, with once noting that
independent of the politics and legal questions involved, he
believed the court acted \”inappropriately\” in intervening in
the situation, and that courts \”should not be used as a tool
for silencing debate.\”
13. (SBU) Civil society representatives were also sharply
critical of the government\’s decision to deport 20 Uighurs in
December. Christophe Peschoux, the Representative of the UN
Office of the High Commissioner for Human Rights (UNOHCHR),
stated that mid-level officials in the RGC wanted to and were
prepared to adhere to Cambodia\’s commitments under the 1951
Refugee Convention, but were overruled by officials at the
highest level at the last minute. Peschoux noted that the
past system of refugee protection in Cambodia had been
effective, albeit with its \”ups and downs,\” but that the
Uighur deportation \”shattered\” this perception of efficacy
and credibility. He remarked that the Ministry of Interior
will have to take specific corrective actions in order to
regain the confidence of civil society. Other
representatives expressed disappointment in the role played
by the UN High Commission for Refugees (UNHCR), and agreed
that the presence and capability of UNHCR also needed review
and augmentation.
Cambodian Youth Inquisitive of U.S. Policy
——————————————
14. (SBU) DAS Marciel summarized U.S. foreign policy in the
ASEAN region and in Cambodia to a packed auditorium of 400
students at Pannasastra University. His remarks prompted a
slew of questions, with students curious to learn more about
the U.S. government\’s decision to enhance its engagement with
ASEAN and the U.S. role in addressing the challenges of
climate change. Several students sought DAS Marciel\’s candid
assessment of politics and democracy in Cambodia, revealing a
sophisticated understanding of the challenges to
strengthening democratic institutions in Cambodia and a
proactive style in addressing the issues of the day.
Economic Challenges Ahead
————————-
15. (SBU) Economic experts, including country directors from
the World Bank, IMF, and Asia Development Bank, explained
that Cambodia\’s narrowly-based economy contracted by
approximately 2 percent in 2009 as a result of the global
economic crisis, declining significantly from the remarkable
near 10 percent growth of the past decade. They described
Cambodia at a crossroads, with the path leading to
sustainable growth dependent on the leadership\’s ability to
make the right decisions on key policies affecting public
financial management and responsible use of its natural
resources. While acknowledging that investment in
infrastructure development and the agriculture sector is
necessary to diversify the economic base, they expressed
concern about the long-term cost of some development
assistance in these sectors. In particular, the IMF
representative stated that the terms of financing for the USD
1.3 billion in loans provided by China in 2008 and 2009,
primary for infrastructure development, are unclear, raising
significant concerns about Cambodia\’s debt sustainability.
The experts all agreed that the timing of the closure of the
IMF office in Cambodia (expected in April of this year) is
unfortunate, coinciding with significant macroeconomic
challenges facing the country, such as balance of payments
and sustainability of the debt, and urged the U.S. to
encourage the IMF to review its decision.
16. DAS Marciel did not have an opportunity to clear this
cable.
RODLEY
“
10BANGKOK344 “LET THE MAGIC AMULET BREAK YOUR NECK” – THAILAND ABUZZ OVER HUN SEN’S LATEST HARSH RHETORIC
“247938”,”2/9/2010 11:44″,”10BANGKOK344″,
“Embassy Bangkok”,”CONFIDENTIAL”,””,
“VZCZCXRO9657
PP RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHBK #0344/01 0401144
ZNY CCCCC ZZH
P 091144Z FEB 10
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC PRIORITY 9888
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS PRIORITY
RUEHKO/AMEMBASSY TOKYO PRIORITY 2355
RUEHBJ/AMEMBASSY BEIJING PRIORITY 8012
RUEHUL/AMEMBASSY SEOUL PRIORITY 6203
RUEHBY/AMEMBASSY CANBERRA PRIORITY 0427
RUEHCHI/AMCONSUL CHIANG MAI PRIORITY 7627
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RHHMUNA/CDR USPACOM HONOLULU HI PRIORITY
RUEKDIA/DIA WASHDC PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY”,
“C O N F I D E N T I A L SECTION 01 OF 02 BANGKOK 000344
SIPDIS
STATE FOR EAP/MLS, NSC FOR WALTON
E.O. 12958: DECL: 02/09/2020
TAGS: PGOV, PREL, PREF, PHUM, SMIG, TH
SUBJECT: THAILAND: \”LET THE MAGIC AMULET BREAK YOUR NECK\” –
THAILAND ABUZZ OVER HUN SEN\’S LATEST HARSH RHETORIC
BANGKOK 00000344 001.2 OF 002
Classified By: Political Counselor George Kent, reason 1.4 (b,d)
1. (C) Summary. Thai refusal to allow Cambodia\’s Prime
Minister Hun Sen to bring armed soldiers to visit Ta Muen
Thom, border temple ruins long under Thai control, February 8
apparently led to Hun Sen\’s most recent scathing denunciation
of Thai PM Abhisit, with the colorful insults dominating Thai
media headlines February 9. Thai officials sought to avoid
escalating the rhetoric publicly. However, with Thai
attention increasingly on the potential for street unrest in
the lead-up to an expected February 26 Supreme Court decision
on fugitive former PM Thaksin\’s frozen assets, some contacts
told us that they suspected Hun Sen may have picked the
timing of the visit as a favor to Thaksin, whom he has
appointed as adviser to his government, to put additional
pressure on Abhisit. End summary.
Thai scramble in advance of Hun Sen\’s border traverse
——————————————— ——
2. (SBU) Thai officials went into crisis planning mode
starting February 4, in advance of Cambodian Prime Minister
Hun Sen\’s planned toured of hot spots along the Thai-Cambodia
border on February 6-8. PM Abhisit convened a rare night
executive session of the Thai National Security Council to
consider two issues: domestic security arrangements in
advance of expected red-shirt protests, and how to handle Hun
Sen\’s border traverse, in particular his request to visit
contested temple ruins at Ta Muen Thom, long under Thai
control accompanied by up to 20 armed military escorts.
Abhisit and the NSC directed an interagency team of military
commanders, local governors, and MFA officials to meet Hun
Sen February 6 and 7 near Preah Vihear temple and in the
so-called \”Emerald Triangle\” between Thailand, Laos, and
Cambodia. Royal Thai Armed Forces Border Division Commander
LTG Nipat Thonglek told us February 5 that Thailand would
reinforce the expected border visits locations with
additional troops to prevent any potential mischief-making.
3. (C) In the aftermath of the Preah Vihear visit, Si Sa Ket
Governor Rapi Phongbuphakit told us February 8 that he had
talked with Hun Sen for five minutes as a member of the Thai
delegation led by Second Area army Commander LTG Veerawit
Jornsumrit. Rapi said that Hun Sen had expressed his desire
to see the border situation return to normal and that he had
showed no interest in visiting the 4.6 square kilometers of
disputed territory adjacent to the temple. (Note: The
International Court of Justice ruled that Preah Vihear is
located in Cambodian territory in 1962; the decision did not
address the contested area adjacent to the temple, which is
claimed by both countries. End Note.)
Final leg canceled, Hun Sen blasts Abhisit, Thai media
——————————————— ———-
4. (SBU) Thai officials announced publicly that Hun Sen would
be welcome to visit the Ta Muen Thom ruins February 8, but
only as a tourist; he would not be allowed to bring 20 armed
military escorts. Colonel Thanet Wongcha-um, Chief of Staff
for the Suranaree Task Force that oversees the Thai side of
the disputed border, told us February 9 that Thai officials
had also advised Hun Sen not to visit the ruins due to the
presence of approximately 150 protesters from the People\’s
Alliance for Democracy, who were opposing Hun Sen\’s visit.
Hun Sen chose not to visit on those terms, Thai FM Kasit\’s
Secretary Chavanond Intarakomalyasut told the Thai media,
which reported that Hun Sen instead went to a village four
kilometers away to rename it after Ta Muen Thom. (note: Ta
Muen Thom temple is claimed by both nations but, unlike Preah
Vihear, the Thai military has maintained control over the
area around the temple for decades.)
5. (SBU) Thai headlines February 9 focused on Hun Sen\’s
subsequent harsh denunciation of the Abhisit government, with
DPM Suthep, also a target of Hun Sen\’s rhetoric, suggesting
to the Thai media that the outburst came as a result of Hun
Sen\’s aborted attempt to visit the runs. The speech as
reported in the media included a variety of insults and
curses directed towards Abhisit, with Hun Sen calling on
BANGKOK 00000344 002.2 OF 002
Abhisit to tell the truth about Thai troops in the area
around Preah Vihear or risk letting \”magic amulets break your
neck; may you be shot, be hit by a car, may you be shocked by
electricity, or shot by misfired guns.\”
6. (SBU) According to reports, Hun Sen also referred to
Abhisit as a \”power thief,\” \”crazy,\” and without \”family
honor\” for denying the Cambodian accusation that Thai troops
had invaded Cambodian territory in July 2008. Hun Sen also
lashed out at Thailand\’s two English language newspapers
distributed throughout mainland Southeast Asia, the Bangkok
Post and the Nation, for presenting what he claimed was false
information about his visit to the border areas and for
describing his visit as inappropriate.
Thai reaction cautious, with some private suspicions
——————————————— ——-
7. (SBU) RTG officials were quick to respond to Hun Sen\’s
reported statements, though they sought to calm the waters
February 9. FM Secretary Chavanond initially condemned Hun
Sen\’s comments, suggesting they would make it difficult for
Thailand to restore normal diplomatic relations with
Cambodia. However, Chavanond insisted that Thailand would
make every effort to avoid a conflict between the two
nations. Government Acting Spokesman Panitan told the media
February 9 that Thailand would not respond in kind to Hun
Sen\’s rhetoric, and that the international community could
draw its own conclusions. For his part, DPM Suthep said
Thailand would decline to respond to Hun Sen\’s allegation of
a Thai \”invasion\” of Cambodian territory, and told the media
he would not speculate about links between Hun Sen and
red-shirts calling for the downfall of the Abhisit government.
8. (C) Private commentary to us also downplayed the
possibility for an escalation of border tensions, though some
suspicions remained about potential links between Hun Sen,
Thaksin, and the upcoming red-shirt protests. XXXXXXXXXX
XXXXXX, a retired professor at Thammasat University, told
us that he believed that Thailand would not allow the dispute
to lead to a military conflict. Both XXXXXXXXXXX and
Senator Prasong shared their suspicion with us, however, that
former PM Thaksin had pushed Hun Sen to make this border
traverse with the hopes of further instigating the
Thai-Cambodian conflict, open another front in Thaksin\’s
effort to bring down the Abhisit government, and thus open
the door for Thaksin\’s return. DPM Suthep publicly tried to
put a more positive spin on the matter, voicing hope to the
media that Thai-Cambodian relations would improve once
problems related to Thaksin were resolved.
JOHN
“
10PHNOMPENH89 CAMBODIA SEEKS SUPPORT FOR PREAH VIHEAR INTERNATIONAL COORDINATING COMMITTEE, AGREES TO INVITE THAILAND
“247402”,”2/5/2010 9:42″,”10PHNOMPENH89″,
“Embassy Phnom Penh”,”UNCLASSIFIED”,””,”VZCZCXRO7371
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0089/01 0360942
ZNR UUUUU ZZH
P 050942Z FEB 10
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC 1648
INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
RUEHFR/AMEMBASSY PARIS 0735″,
“UNCLAS SECTION 01 OF 02 PHNOM PENH 000089
SIPDIS
DEPT FRO EAP/MLS, IO
PARIS PLEASE PASS TO US MISSION TO UNESCO –
AMBASSADOR KILLION
E.O. 12958: N/A
TAGS: PREL, KTIA, SCUL, UNESCO, DB
SUBJECT: CAMBODIA SEEKS SUPPORT FOR PREAH VIHEAR INTERNATIONAL
COORDINATING COMMITTEE, AGREES TO INVITE THAILAND
1. ACTION REQUEST IN PARA 9.
2. SUMMARY: During a meeting designed to brief Ambassadors from
seven nations on the status of the World Heritage site of Preah
Vihear, Deputy Prime Minister Sok An welcomed their participation in
an International Coordinating Committee (ICC) to help guide the
planning for the restoration and management of the site. The DPM
noted that Thailand would also be invited, as required by UNESCO in
the World Heritage inscription documents. He expects the
discussions to be \”peaceful and friendly\” and said that Cambodia is
\”seeking cooperation.\” END SUMMARY
3. In a meeting that included Ambassadors and representatives from
the United States, India, Australia, France, China, Belgium, Japan,
and UNESCO, Deputy Prime Minister Sok An proposed to convene an ICC
for the recently inscribed World Heritage site of Preah Vihear, and
advised that all countries present plus Thailand would be invited to
participate. The Belgian Ambassador (resident in Bangkok) welcomed
the proposal and stated his desire to see the ICC convened before
the next World Heritage Committee meeting scheduled for July of this
year in Brasilia. The UNESCO representative advised that the UNESCO
SYG is informed on this issue and hoped to attend the first session
of the Preah Vihear ICC.
4. The invitation to participate in an ICC came after an extensive
briefing by Cambodian and UNESCO representatives on developments at
the site since the UNESCO listing by Chuch Poeurn, head of the newly
established Preah Vihear authority and dean of the faculty of
archeology at the Royal University of Fine Arts and Philippe
deLonghe, an archeologist working for UNESCO. DeLonghe\’s briefing
emphasized uniqueness of Preah Vihear as a site that was largely
\”untouched\” at the time of its listing, and touched on the fact that
work done since 2006 at the site had \”completely changed\” the
experts\’ understanding of the site. A professional site management
plan has been developed and submitted to UNESCO, fulfilling a
requirement of the World Heritage listing. The site management plan
was written by Divay Gupta, an Indian specialist in architectural
conservation and heritage management; the team that developed it
included archeologists, engineers and architects from France,
Belgium, and Cambodia, as well as a former US Park Service senior
park planner.
5. The establishment of an ICC was the second UNESCO requirement
after the inscription of the site in July of 2008. The original
text of the document required that the ICC be convened by February
of 2010 and that the committee include no more than seven countries.
UNESCO also specified that Thailand should be invited to
participate. The formation of the ICC has been delayed due to the
ongoing border dispute between Thailand and Cambodia on the area
surrounding the Preah Vihear temple. Another ICC which focuses on
the management of the Angkor Wat temple complex has been highly
successful and Cambodia and UNESCO seek to model the Preah Vihear
version on the Angkor Wat example.
6. After the briefing and informal invitation to join the ICC,
several Ambassadors inquired about security at the site. DPM Sok An
assured the group that any recent violence in the border area has
been in isolated areas far from the site of the temple and that
increasing numbers of tourists are already visiting the site from
the Cambodian side. He advised that he would issue a formal
invitation to form the ICC as soon as possible.
7. DPM Sok An stated that he had approached the seven countries
present at the meeting as they had contributed experts to the team
which made formal recommendations on the site or had long histories
of collaboration with Cambodia through the Angkor Wat ICC. It is
expected that they would provide similar support for a Preah Vihear
ICC.
8. COMMENT: In several previous discussions about the Preah Vihear
ICC with the Ambassdor, DPM Sok An had resisted the idea of inviting
Thailand to participate, citing the 2008 \”incursion\” of Thai troops
along the disputed border and pointing to \”uncooperative\” behavior
on the part of the Thai during their participation in the Angkor Wat
ICC. However, during this briefing he reiterated many times the
government\’s decision to invite Thailand. Several Ambassadors
probed on this point and he appeared resolute. There was
considerable enthusiasm on the part of the attendees for
participation, although all indicated a need to seek formal
instructions once the actual invitations had been issued. END
COMMENT.
9. ACTION REQUEST: Although a formal request has not yet been
prepared, DPM Sok An would like an indication of US willingness to
participate in the Preah Vihear ICC. When DPM Sok An has raised
this in previous discussions, Ambassador has always responded that
the US would probably look favorably on a request to join the Preah
PHNOM PENH 00000089 002 OF 002
Vihear ICC as long as Thailand was also invited to join. Post
requests guidance on responding to Cambodia\’s request for our
participation in the ICC.
RODLEY
“
10BANGKOK298 SCENESETTER FOR THE CSA-HOSTED VISIT OF THAI ARMY COMMANDER GENERAL ANUPONG
“247126”,”2/4/2010 5:35″,”10BANGKOK298″,
“Embassy Bangkok”,”CONFIDENTIAL”,””,
“VZCZCXRO5800
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHBK #0298/01 0350535
ZNY CCCCC ZZH
O 040535Z FEB 10
FM AMEMBASSY BANGKOK
TO RUEADWD/DA WASHINGTON DC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 9825
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RUEHBJ/AMEMBASSY BEIJING IMMEDIATE 7989
RUEHBY/AMEMBASSY CANBERRA IMMEDIATE 0404
RUEHUL/AMEMBASSY SEOUL IMMEDIATE 6185
RUEHKO/AMEMBASSY TOKYO IMMEDIATE 2329
RUEHWL/AMEMBASSY WELLINGTON IMMEDIATE 0310
RUEKJCS/SECDEF WASHINGTON DC IMMEDIATE
RHMFISS/CJCS WASHINGTON DC IMMEDIATE
RUEAIIA/CIA WASHINGTON DC IMMEDIATE
RHEHNSC/NSC WASHINGTON DC IMMEDIATE
RUEKDIA/DIA WASHINGTON DC IMMEDIATE
RHHMUNA/HQ USPACOM HONOLULU HI IMMEDIATE”,”C O N F I D E N T I A L SECTION 01 OF 05 BANGKOK 000298
SIPDIS
E.O. 12958: DECL: 02/04/2020
TAGS: PGOV, PTER, MARR, MOPS, PINS, PHUM, TH
SUBJECT: SCENESETTER FOR THE CSA-HOSTED VISIT OF THAI ARMY
COMMANDER GENERAL ANUPONG
Classified By: Ambassador Eric G. John, reasons 1.4 (b) and (d).
1. (C) General Casey, the upcoming visit of Thai Army
Commander General Anupong Paojinda will be an important
occasion to demonstrate our appreciation for the U.S.-Thai
relationship. Despite ongoing domestic political challenges,
Thailand\’s adherence to democratic values should not go
unrecognized. General Anupong has been invaluable the past
two years as he has resisted pressures from all sides for
military intervention into politics; as a result, a full
range of actors on the Thai political scene are able to
openly and vigorously debate policies and the state of
democracy. This visit is a prime opportunity to demonstrate
clearly to our close ally that we intend to engage fully in
the partnership, at a time when many in Thailand question
U.S. commitment to the region in comparison to a sustained
Chinese charm offensive. As examples of benefits from the
relationship, the U.S.-Thai partnership has yielded a
promising new lead in the drive to develop an HIV vaccination
and the seizure of more than 35 tons of North Korean weapons
in just the last three months alone, two examples that serve
to illustrate the depth and breadth of a relationship.
Furthermore, the Thai Cabinet in December approved a
supplemental budget to facilitate a peacekeeping deployment
to Darfur.
2. (C) General Anupong is the preeminent military leader in
our steadfast ally and has been a strong advocate of not
staging a coup and permitting the democratic process to play
out, although with the Army ensuring security. Indeed, if
you look back at the political turbulence of the past two
years, he has been one of the more admirable figures in
Thailand, and this counterpart visit is one way to express
our appreciation for his actions. Anupong has had to make an
extraordinary series of tough decisions over the past
eighteen months, and his intellect and disposition have been
key ingredients that have enabled him to make the choice to
come down on the side of democracy, even as his troops wage a
counterinsurgency campaign in Thailand\’s troubled
southernmost provinces. We will also want to use this visit
to send a signal to the rest of the Royal Thai Army that the
United States values its relationship with the Thai military
and Thailand. Anupong will likely be interested in pursuing
discussions on regional security challenges, and how the
U.S.-Thai alliance can be focused to assist as Thailand
prepares for changing threats. Anupong will also look to
discuss areas of cooperation, such as bilateral exercises and
training, whereby we can assist the Thai military modernize.
Thai government officials and military leaders have also
expressed strong interest in receiving excess defense
articles by way of Thailand\’s status as a Major Non-NATO
Ally, as Foreign Minister Kasit Piromya raised in 2009 with
Secretary Clinton and other senior USG officials.
POLITICAL ENVIRONMENT
———————
3. (SBU) The past eighteen months were turbulent for
Thailand. Court decisions forced two Prime Ministers from
office in 2008, and twice the normal patterns of political
life took a back seat to disruptive protests in the streets.
The yellow-shirted People\’s Alliance for Democracy (PAD)
occupied Government House from August to December 2008 and
shut down Bangkok\’s airports for eight days, to protest
governments affiliated with ex-Prime Minister Thaksin
Shinawatra. The red-shirted United Front for Democracy
against Dictatorship (UDD), followers of Thaksin, disrupted a
regional Asian Summit and sparked riots in Bangkok in
mid-April 2009 after Thaksin, now a fugitive abroad in the
wake of an abuse of power conviction, called for a revolution
to bring him home.
4. (C) 2010 promises to be contentious as well, with Thaksin
and the red-shirts having vowed to redouble their efforts to
topple the government. In recent weeks, the red-shirts have
steadily increased a campaign to discredit and undermine the
government, with promises of a \”final battle\” in late
February that has many worried that violence could again
return to the streets of Bangkok. Among their activities has
BANGKOK 00000298 002 OF 005
been an operation to spread rumors of an impending coup, a
rumor for which we have seen no basis.
5. (C) Prime Minister Abhisit Vejjajiva is a photogenic,
eloquent 45-year old Oxford graduate who generally has
progressive instincts and says the right things about basic
freedoms, social inequities, policy towards Burma, and how to
address the troubled deep South, afflicted by a grinding
ethno-nationalist Muslim-Malay separatist insurgency.
Delivering results has proved more elusive, though the Thai
economy is growing again, driven by expanding exports.
6. (C) While both yellow and red try to lay exclusive claim
to the mantle of democracy, both have ulterior motives in
doing so. Both movements reflect deep social concerns
stemming from widespread perceptions of a lack of social and
economic justice, but both seek to triumph in competing for
traditional Thai hierarchical power relationships. New
elections would not appear to be a viable solution to
political divide, and political discord could persist for
years. We continue to stress to Thai interlocutors the need
for all parties to avoid violence and respect democratic
norms within the framework of the constitution and rule of
law, as well as our support for long-time friend Thailand to
work through its current difficulties and emerge as a more
participatory democracy.
RECEDING MONARCHY
—————–
7. (C) Underlying the political tension in Bangkok is the
future of the monarchy. On the throne for 62 years,
U.S.-born King Bhumibol is Thailand\’s most prestigious
figure, with influence far beyond his constitutional mandate.
Many actors, including in the military, are jockeying for
position to shape the expected transition period in Thailand
during royal succession after the eventual passing of the
King. Few observers believe that the deep political and
social divides can be bridged until after King Bhumibol
passes and Thailand\’s tectonic plates shift. Crown Prince
Vajiralongkorn neither commands the respect nor displays the
charisma of his beloved father, who has greatly expanded the
prestige and influence of the monarchy during his reign.
Nearly everyone expects the monarchy to shrink and change in
function after succession. How much will change is open to
question, with many institutions, figures, and political
forces positioning for influence, not only over redefining
the institution of monarchy but, equally fundamentally, what
it means to be Thai.
SOUTHERN THAILAND – SEPARATIST INSURGENCY
—————————————–
8. (C) An ethno-nationalist Malay Muslim insurgency in
southern Thailand has claimed an estimated 3,500 lives since
2004. Fundamental issues of justice and ethnic identity
drive the violence as many Malay Muslims feel that they are
second-class citizens in Thailand, and ending the insurgency
will require the government to deal with these issues on a
national level. The insurgents use IEDs, assassinations, and
beheadings to challenge the control of the Thai state in the
deep South; the government has responded through special
security laws that give security forces expanded power to
search and detain people. The Thai military is now deeply
involved in counter-insurgency efforts; in contrast, from the
late 1990s-2004, the military viewed the top national
security threat to be the flow of illegal narcotics from
neighboring Burma.
9. (C) The insurgents direct their anger at the government in
Bangkok, not at the United States. Since a U.S. presence or
perception of U.S. involvement in the South could redirect
that anger towards us and link it to the international
jihadist movement — a link that is currently absent – we
ensure that any offers of assistance or training pass the
\”location and label\” test. Put simply, we keep U.S. military
personnel away from the far South and we make sure that we do
not label any assistance or training as directly linked to
the southern situation. This approach dovetails with the
BANGKOK 00000298 003 OF 005
Thai interest in keeping outside influences and actors away
from the internal conflict.
10. (C) General Anupong has dedicated more of his time to
overseeing RTA counter-insurgency efforts in South than past
Army Commanders, who often were more focused on politics in
Bangkok. Anupong makes almost weekly trips to the South, and
he and his senior staff have engaged the Embassy and USARPAC
in an effort to learn counter-insurgency and counter-IED best
practices.
ENDURING BILATERAL RELATIONSHIP
——————————-
11. (C) Despite the political divide, Thailand\’s unparalleled
strategic importance to the U.S. should not be understated.
The U.S.-Thai military relationship, which began during World
War II when the U.S. trained Thais to covertly conduct
special operations against the Japanese forces occupying
Thailand has evolved into a partnership that provides the
U.S. with unique benefits. Our military engagement affords
us unique training venues, the opportunity to conduct
exercises that are nearly impossible to match elsewhere, a
willing participant in international peacekeeping operations,
essential access to facilities amid vital sea and air lanes
that support contingency and humanitarian missions, and a
partner that is a key ASEAN nation in which we continue to
promote democratic ideals.
12. (C) Thailand\’s willingness to allow the United States to
use Utapao Naval Air Station as the hub for our regional
assistance program was key to making the 2004 tsunami and the
2008 Cyclone Nargis relief operations a success. While those
high-profile relief operations highlighted publicly the value
of access to Utapao, the air base is used regularly for
military flights. A prime example was the critical support
Utapao provided during OEF by providing an air bridge in
support of refueling missions en route to Afghanistan.
Approximately 1,000 flights transit Utapao every year in
support of critical U.S. military operations both regionally
and to strategic areas of the world. Thailand also provides
valued port access with U.S. naval vessels making calls,
primarily at Laem Chabang and Sattahip, over sixty times per
year for exercises and visits.
13. (SBU) Beyond traditional military activities, our
bilateral military relationship provides benefits in other
important areas. One example is the Armed Forces Research
Institute of Medical Sciences\’ (AFRIMS) collaboration with
Thai counterparts on basic research and trial vaccines. The
sophistication of the Thai scientific and public health
community makes collaboration as useful to the USG as it is
to the Thais. A number of important breakthroughs, such as
in the prevention of HIV/AIDS transmission from mothers to
children, were developed here, and the first partially
successful phase III, double blind trial for a potential HIV
vaccine occurred in 2009; a second such trial run by CDC is
currently ongoing.
COBRA GOLD AND THE MILITARY EXERCISE PROGRAM
——————————————–
14. (C) By means of access to good military base
infrastructure and large areas to conduct unrestricted
operations, Thailand gives the U.S. military a platform for
exercises unique in Asia. Thai leaders are far more willing
to host multinational and bilateral exercises than are other
countries in Asia. This has allowed us to use exercises in
Thailand to further key U.S. objectives, such as supporting
Japan\’s growing military role in Asia and engaging the
Indonesian and Singaporean militaries.
15. (C) Cobra Gold, the capstone event of our exercise
program and being held during the visit, is the largest
annual multi-lateral exercise in the Pacific region and for
29 years has served to strengthen our relations with
Thailand, highlight our commitment to Southeast Asia, and
provide exceptional training opportunities for our troops.
The event has evolved over the years and now facilitates
BANGKOK 00000298 004 OF 005
important objectives such as promoting a greater role in the
Asian Pacific region for Japan, Singapore, and South Korea
and re-establishing a partner role with Indonesia. As an
example of the tangible benefits of the exercise, USARPAC is
using this year\’s Cobra Gold to test a deployable command
post for crisis situations such as HA/DR incidents. Cope
Tiger, a leading air exercise with the Thailand and
Singapore, and CARAT, a bilateral naval event, are key
mechanisms for engagement of the Royal Thai Air Force and
Navy. The Thai military continues to highlight to us the
significance of these events for training and for
relationship building.
PEACEKEEPING EFFORTS AND DARFUR DEPLOYMENT
——————————————
16. (C) Thailand has historically been a strong supporter of
UN peacekeeping missions and was an early contributing nation
to operations in Afghanistan and Iraq. In addition, Thai
generals very effectively led UN forces in East Timor, to
which Thailand contributed 1,500 troops, and in Aceh where a
Thai general served as the principal deputy of the Aceh
Monitoring Mission. Thailand is preparing for deploying a
battalion of troops for a difficult UNAMID mission in Darfur
and has asked for USG assistance. State recently identified
$2.4 million to be used to support equipment needed by the
Thai for the deployment, and we have used various funding
sources to increase overall Thai peacekeeping capabilities,
both as a contributing nation and as a trainer of neighboring
nations.
BORDER CONFLICT WITH CAMBODIA
—————————–
17. (C) Bilateral relations with Cambodia remain volatile,
primarily due to a border dispute centered on 4.6 square
kilometers of overlapping territorial claims adjacent to the
11th century Hindu Preah Vihear temple. Minor skirmishes
have erupted four times since mid-2008, leading to the deaths
of seven soldiers. Cambodian Prime Hun Sen\’s November 2009
decision to appoint Thaksin as an economic advisor further
stoked cross-border tensions. Furthermore, there have been
at least six reports of small-scale conflicts resulting from
cross-border illegal logging activities in recent months.
18. (C) The roots of the border dispute lie in the
Siam-France agreements of 1904-8 and a 1962 International
Court of Justice ruling that granted Cambodia the temple but
left the rest of disputed land unresolved. Tensions spiked
in 2008 when the Thai government in power at that time
supported Cambodia\’s application to UNESCO for a joint
listing of the temple as a world heritage site, only to face
opposition in parliament and an adverse court ruling. Thorny
internal political considerations and historical rancor
between Thailand and Cambodia make progress difficult. We
urge both sides to resolve their differences peacefully
through bilateral negotiations, border demarcation, and a
reduction of troops deployed along the border.
ONGOING REFUGEE CONCERNS: HMONG AND BURMA
—————————————–
19. (C) Due to inherent institutional capabilities, the Thai
military plays a prominent role in the management of the many
refugees that enter Thailand from neighboring countries.
Thailand continues to host more than 140,000 Burmese and
facilitate resettlement of more than 14,000 refugees to the
U.S. annually, but the recent forced repatriation of two
groups of Lao Hmong in late December provoked international
outcry. The USG and Congress are also focused on 4,000
ethnic Karen in a Thai army-run camp along the Thai-Burma
border who came into Thailand last June fleeing an offensive
and who may be sent back in the near future. (Note: 140,000
Karen and Karenni have lived in RTG-sanctioned camps along
the border since 1990. End Note.) We underscore to the RTG
our disappointment with the Hmong deportation decision and
our continuing concern over access to the Hmong now that they
have been returned to Laos, as well as our concerns on the
Thai-Burma border.
BANGKOK 00000298 005 OF 005
THE INCREASING ROLE OF CHINA
—————————-
20. (C) As the shape of Southeast Asia, Asia writ large, and
the world has changed, so have Thai attitudes. The Chinese
have been making a major push to upgrade all aspects of
relations, including mil-mil. Thailand is not interested in
making a choice between the U.S. and China (nor do we see
closer Chinese-Thai relations as automatically threatening to
our interests here), but we will need to work harder to
maintain the preferred status we have enjoyed. While Thai
military links with the United States are deeper and far more
apparent than Sino-Thai links, China\’s growing influence in
Thailand is readily evident.
21. (C) The Chinese have made a strong effort to court the
Thai. The Thai military has a range of Chinese weapons
systems in its arsenal; the PLA Navy is interested in closer
links with the Thai navy, and China has worked with Thailand
to improve air defense equipment provided to Thailand in the
late 1980\’s. In 2007 and 2008, Thai and Chinese Special
Forces conducted joint exercises, and other mil-to-mil
exchanges have expanded in recent years, as has the number of
bilateral military VIP visits.
22. (C) During a visit to Thailand by Chinese Minister of
National Defense Liang Guanglie for the King\’s birthday
celebrations in early December 2009, the Thai and Chinese
militaries agreed to expand bilateral exercises to include
the two nations\’ navies, marines, and air forces. The
initial exercise will be conducted early this year, with the
PLA engaging Thai sailors and marines through an amphibious
landing event and a naval rescue and humanitarian relief
exercise. While some entities within the RTG resisted the
expanded engagement, reportedly the MFA and the Marine
Commandant, the Thai tell us that the Chinese pushed hard for
a rapid expansion of bilateral exercises. The Thai Marines
suggested to us that the exercise would be held at the
platoon or company level; it is unclear how many Navy
personnel may participate. While there are those in the Thai
military who have resisted expanding ties with the Chinese,
Foreign Minister Kasit during an early November meeting with
EAP Deputy Assistant Secretary Scot Marciel warned that
Thailand could not continue to say no, and that the U.S.
military needed to more seriously re-engage with their Thai
counterparts.
23. (C) The expansion of joint exercises follows China
providing Thailand with $49 million in military assistance
following the 2006 coup. Beyond exercises and assistance,
the number of exchanges by Thai and Chinese officers studying
at military institutes has increased significantly in recent
years, particularly since the coup. The PLA has also
actively courted Thai military leaders, including Defense
Minister Prawit Wongsuwan, Chief of Defense Forces General
Songkitti Jaggabatra, and General Anupong, through multiple
hosted-visits to China.
JOHN
“
10BANGKOK226 SCENESETTER FOR THE VISIT OF ADMIRAL WILLARD
“245714”,”1/27/2010 10:07″,”10BANGKOK226″,
“Embassy Bangkok”,”CONFIDENTIAL”,””,”VZCZCXRO9110
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHBK #0226/01 0271007
ZNY CCCCC ZZH
O 271007Z JAN 10
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9719
RHHMUNA/HQ USPACOM HONOLULU HI IMMEDIATE
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RUEHBJ/AMEMBASSY BEIJING IMMEDIATE 7934
RUEHBY/AMEMBASSY CANBERRA IMMEDIATE 0359
RUEHUL/AMEMBASSY SEOUL IMMEDIATE 6142
RUEHKO/AMEMBASSY TOKYO IMMEDIATE 2286
RUEHWL/AMEMBASSY WELLINGTON IMMEDIATE 0280
RUEKJCS/SECDEF WASHINGTON DC IMMEDIATE
RHMFISS/CJCS WASHINGTON DC IMMEDIATE
RUEAIIA/CIA WASHINGTON DC IMMEDIATE
RHEHNSC/NSC WASHINGTON DC IMMEDIATE
RUEKDIA/DIA WASHINGTON DC IMMEDIATE”,”C O N F I D E N T I A L SECTION 01 OF 05 BANGKOK 000226
SIPDIS
E.O. 12958: DECL: 01/27/2020
TAGS: PGOV, PTER, MARR, MOPS, PINS, PHUM, TH
SUBJECT: SCENESETTER FOR THE VISIT OF ADMIRAL WILLARD
Classified By: Ambassador Eric G. John, reasons 1.4 (b) and (d).
1. (C) Admiral Willard, Embassy Bangkok welcomes you to
Thailand. Despite ongoing domestic political challenges,
Thailand\’s adherence to democratic values should not go
unrecognized. That a full range of actors in the Thai
political scene can openly and vigorously debate policies and
the state of democracy is indeed evidence that Thailand is a
positive role model for other nations in the region. In
addition, Thailand, while chairing ASEAN last year, was a
leading proponent of democracy and human rights within ASEAN.
As such, now is a prime opportunity to demonstrate clearly
to our close ally that we intend to engage fully in the
partnership. Your visit will provide such an opportunity as
it will signal the United States\’ appreciation for the
long-standing bilateral relationship, which has facilitated
shared benefits in the fields of security, law enforcement,
and intelligence efforts, as well as groundbreaking
health/research collaboration and long-standing refugee
support. In just the last three months alone, the U.S.-Thai
partnership has yielded a promising new lead in the drive to
develop an HIV vaccination and the seizure of more than 35
tons of North Korean weapons, two examples that serve to
illustrate the depth and breadth of a relationship.
Furthermore, the Thai Cabinet in December approved a
supplemental budget to facilitate a peacekeeping deployment
to Darfur.
2. (C) Thai interlocutors will likely be interested in
pursuing discussions on strategic views of regional security
challenges, and how the U.S.-Thai alliance can be focused to
assist as Thailand prepare for threats. The Thai will also
look to discuss areas of cooperation, such as bilateral
exercises and training, whereby we can assist the Thai
military modernize. The Thai have also expressed strong
interest in receiving excess defense articles by way of
Thailand\’s status as a Major Non-NATO Ally, as Foreign
Minister Kasit Piromya raised in 2009 with Secretary Clinton
and other senior USG officials.
POLITICAL ENVIRONMENT
———————
3. (SBU) The past eighteen months were turbulent for
Thailand. Court decisions forced two Prime Ministers from
office, and twice the normal patterns of political life took
a back seat to disruptive protests in the streets. The
yellow-shirted People\’s Alliance for Democracy (PAD) occupied
Government House from August to December 2008 and shut down
Bangkok\’s airports for eight days, to protest governments
affiliated with ex-Prime Minister Thaksin Shinawatra. The
red-shirted United Front for Democracy against Dictatorship
(UDD), followers of Thaksin, disrupted a regional Asian
Summit and sparked riots in Bangkok in mid-April 2009 after
Thaksin, now a fugitive abroad in the wake of an abuse of
power conviction, called for a revolution to bring him home.
This year promises to be contentious as well, with Thaksin
and the red shirts having vowed to redouble their efforts to
topple the government. All sides hopefully learned a
valuable lesson against the use of violence, however, by
seeing their support plummet when such tactics were used.
4. (C) Prime Minister Abhisit Vejjajiva is a photogenic,
eloquent 45-year old Oxford graduate who generally has
progressive instincts and says the right things about basic
freedoms, social inequities, policy towards Burma, and how to
address the troubled deep South, afflicted by a grinding
ethno-nationalist Muslim-Malay separatist insurgency.
5. (C) While both yellow and red try to lay exclusive claim
to the mantle of democracy, both have ulterior motives in
doing so. Both movements reflect deep social concerns
stemming from widespread perceptions of a lack of social and
economic justice, but both seek to triumph in competing for
traditional Thai hierarchical power relationships. New
elections would not appear to be a viable solution to
political divide, and political discord could persist for
years. We continue to stress to Thai interlocutors the need
for all parties to avoid violence and respect democratic
norms within the framework of the constitution and rule of
law, as well as our support for long-time friend Thailand to
BANGKOK 00000226 002 OF 005
work through its current difficulties and emerge as a more
participatory democracy.
RECEDING MONARCHY
—————–
6. (C) Underlying the political tension in Bangkok is the
future of the monarchy. On the throne for 62 years,
U.S.-born King Bhumibol is Thailand\’s most prestigious
figure, with influence far beyond his constitutional mandate.
Many actors are jockeying for position to shape the expected
transition period in Thailand during royal succession after
the eventual passing of the King. Few observers believe that
the deep political and social divides can be bridged until
after King Bhumibol passes and Thailand\’s tectonic plates
shift. Crown Prince Vajiralongkorn neither commands the
respect nor displays the charisma of his beloved father, who
greatly expanded the prestige and influence of the monarchy
during his 62-year reign. Nearly everyone expects the
monarchy to shrink and change in function after succession.
How much will change is open to question, with many
institutions, figures, and political forces positioning for
influence, not only over redefining the institution of
monarchy but, equally fundamentally, what it means to be Thai.
SOUTHERN THAILAND – SEPARATIST INSURGENCY
—————————————–
7. (C) An ethno-nationalist Malay Muslim insurgency in
southern Thailand has claimed an estimated 3,500 lives since
2004. Fundamental issues of justice and ethnic identity
drive the violence as many Malay Muslims feel that they are
second-class citizens in Thailand, and ending the insurgency
will require the government to deal with these issues on a
national level. The insurgents use IEDs, assassinations, and
beheadings to challenge the control of the Thai state in the
deep South; the government has responded through special
security laws that give security forces expanded power to
search and detain people. The Thai military is now deeply
involved in counter-insurgency efforts; in the late
1990s-2004, the military viewed the top national security
threat to be the flow of illegal narcotics from neighboring
Burma.
8. (C) The insurgents direct their anger at the government in
Bangkok, not at the United States. Since a U.S. presence or
perception of U.S. involvement in the South could redirect
that anger towards us and link it to the international
jihadist movement — a link that is currently absent — we
ensure that any offers of assistance or training pass the
\”location and label\” test. Put simply, we keep U.S. military
personnel away from the far South and we make sure that we do
not label any assistance or training as directly linked to
the southern situation.
ENDURING BILATERAL RELATIONSHIP
——————————-
9. (C) Despite the political divide, Thailand\’s unparalleled
strategic importance to the U.S. should not be understated.
The U.S.-Thai military relationship, which began during World
War II when the U.S. trained Thais to covertly conduct
special operations against the Japanese forces occupying
Thailand has evolved into a partnership that provides the
U.S. with unique benefits. Our military engagement affords
us unique training venues, the opportunity to conduct
exercises that are nearly impossible to match elsewhere, a
willing participant in international peacekeeping operations,
essential access to facilities amid vital sea and air lanes
that support contingency and humanitarian missions, and a
partner that is a key ASEAN nation in which we continue to
promote democratic ideals.
10. (C) Thailand\’s willingness to allow the United States to
use Utapao Naval Air Station as the hub for our regional
assistance program was key to making the 2004 tsunami and the
2008 Cyclone Nargis relief operations a success. While those
high-profile relief operations highlighted publicly the value
of access to Utapao, the air base is used regularly for
military flights. A prime example was the critical support
Utapao provided during OEF by providing an air bridge in
BANGKOK 00000226 003 OF 005
support of refueling missions en route to Afghanistan.
Approximately 1,000 flights transit Utapao every year in
support of critical U.S. military operations both regionally
and to strategic areas of the world. Thailand also provides
valued port access with U.S. naval vessels making calls,
primarily at Laem Chabang and Sattahip, over sixty times per
year for exercises and visits.
11. (SBU) Beyond traditional military activities, our
bilateral military relationship provides benefits in other
important areas. One example it the Armed Forces Research
Institute of Medical Sciences\’ (AFRIMS) collaboration with
Thai counterparts on basic research and trial vaccines. The
sophistication of the Thai scientific and public health
community makes collaboration as useful to the USG as it is
to the Thais. A number of important breakthroughs, such as
in the prevention of HIV/AIDS transmission from mothers to
children, were developed here, and the first partially
successful phase III, double blind trial for a potential HIV
vaccine occurred in 2009; a second such trial run by CDC is
currently ongoing.
COBRA GOLD AND THE MILITARY EXERCISE PROGRAM
——————————————–
12 (C) By means of access to good military base
infrastructure and large areas to conduct unrestricted
operations, Thailand gives the U.S. military a platform for
exercises unique in Asia. Thai leaders are far more willing
to host multinational and bilateral exercises than are other
countries in Asia. This has allowed us to use exercises in
Thailand to further key U.S. objectives, such as supporting
Japan\’s growing military role in Asia and engaging the
Indonesian and Singaporean militaries.
13. (C) Cobra Gold, the capstone event of our exercise
program, is the largest annual multi-lateral exercise in the
Pacific region and for 29 years has served to strengthen our
relations with Thailand, highlight our commitment to
Southeast Asia, and provide exceptional training
opportunities for our troops. The event has evolved over the
years and now facilitates important objectives such as
promoting a greater role in the Asian Pacific region for
Japan, Singapore, and South Korea and re-establishing a
partner role with Indonesia. Cope Tiger, a leading air
exercise with the Thailand and Singapore, and CARAT, a
bilateral naval event, are key mechanisms for engagement of
the Thai air force and navy. The Thai military continues to
highlight to us the significance of these events for training
and for relationship building.
PEACEKEEPING EFFORTS AND DARFUR DEPLOYMENT
——————————————
14. (C) Thailand has historically been a strong supporter of
UN peacekeeping missions and was an early contributing nation
to operations in Afghanistan and Iraq. In addition, Thai
generals very effectively led UN forces in East Timor, to
which Thailand contributed 1,500 troops, and in Aceh where a
Thai general served as the principal deputy of the Aceh
Monitoring Mission. Thailand is preparing for deploying a
battalion of troops for a difficult UNAMID mission in Darfur
and has asked for USG assistance. Using various funding
sources, we are working to support the request and to
increase overall Thai peacekeeping capabilities, both as a
contributing nation and as a trainer of neighboring nations.
BORDER CONFLICT WITH CAMBODIA
—————————–
15. (C) Bilateral relations with Cambodia remain volatile,
primarily due to a border dispute centered on 4.6 square
kilometers of overlapping territorial claims adjacent to the
11th century Hindu Preah Vihear temple. Minor skirmishes
have erupted four times since mid-2008, leading to the deaths
of seven soldiers. Furthermore, there have been at least
five reports of Thai rangers firing upon illegal Cambodian
loggers in Thai territory in recent months. Cambodian Prime
Hun Sen\’s November 2009 decision to appoint Thaksin as an
economic advisor further stoked cross-border tensions.
BANGKOK 00000226 004 OF 005
16. (C) The roots of the border dispute lie in the
Siam-France agreements of 1904-8 and a 1962 International
Court of Justice ruling that granted Cambodia the temple but
left the rest of disputed land unresolved. Tensions spiked
in 2008 when the Thai government in power at that time
supported Cambodia\’s application to UNESCO for a joint
listing of the temple as a world heritage site, only to face
opposition in parliament and an adverse court ruling. Thorny
internal political considerations and historical rancor
between Thailand and Cambodia make progress difficult. We
urge both sides to resolve their differences peacefully
through bilateral negotiations, border demarcation, and a
reduction of troops deployed along the border.
ONGOING REFUGEE CONCERNS
————————
17. (C) Due to inherent institutional capabilities, the Thai
military plays a prominent role in the management of the many
refugees that enter Thailand from neighboring countries.
Thailand continues to host more than 140,000 Burmese and
facilitate resettlement of more than 14,000 refugees to the
U.S. annually, but the recent forced repatriation of two
groups of Lao Hmong in late December provoked international
outcry. We underscore to the RTG our disappointment with the
deportation decision and our continuing concern over access
to the Hmong now that they have been returned to Laos. The
Thai have asked privately about possible Congressional
repercussions due to the deportation.
THE INCREASING ROLE OF CHINA
—————————-
18. (C) As the shape of Southeast Asia, Asia writ large, and
the world has changed, so have Thai attitudes. The Chinese
have been making a major push to upgrade all aspects of
relations, including mil-mil. Thailand is not interested in
making a choice between the U.S. and China (nor do we see
closer Chinese-Thai relations as automatically threatening to
our interests here), but we will need to work harder to
maintain the preferred status we have enjoyed. While Thai
military links with the United States are deeper and far more
apparent than Sino-Thai links, China\’s growing influence in
Thailand is readily evident.
19. (C) The Chinese have made a strong effort to court the
Thai. The Thai military has a range of Chinese weapons
systems in its arsenal; the PLA Navy is interested in closer
links with the Thai navy, and China has worked with Thailand
to improve air defense equipment provided to Thailand in the
late 1980\’s. In 2007 and 2008, Thai and Chinese Special
Forces conducted joint exercises, and other mil-to-mil
exchanges have expanded in recent years, as has the number of
bilateral military VIP visits.
20. (C) During a visit to Thailand by Chinese Minister of
National Defense Liang Guanglie for the King\’s birthday
celebrations in early December 2009, the Thai and Chinese
militaries agreed to expand bilateral exercises to include
the two nations\’ navies, marines, and air forces. The
initial exercise will be conducted early this year, with the
PLA engaging Thai sailors and marines through an amphibious
landing event and a naval rescue and humanitarian relief
exercise. While some entities within the RTG resisted the
expanded engagement, reportedly the MFA and the Marine
Commandant, the Thai tell us that the Chinese pushed hard for
a rapid expansion of bilateral exercises. The Thai Marines
suggested to us that the exercise would be held at the
platoon or company level; it is unclear how many Navy
personnel may participate. While there are those in the Thai
military who have resisted expanding ties with the Chinese,
Foreign Minister Kasit during an early November meeting with
EAP Deputy Assistant Secretary Scot Marciel warned that
Thailand could not continue to say no, and that the U.S.
military needed to more seriously re-engage with their Thai
counterparts.
21. (C) The expansion of joint exercises follows China
providing Thailand with $49 million in military assistance
following the 2006 coup. Beyond exercises and assistance,
the number of exchanges by Thai and Chinese officers studying
BANGKOK 00000226 005 OF 005
at military institutes has increased significantly in recent
years, particularly since the coup. The PLA has also
actively courted Thai military leaders, including Defense
Minister Prawit Wongsuwan, Chief of Defense Forces General
Songkitti Jaggabatra, and Army Commander General Anupong
Paojinda, through multiple hosted-visits to China.
JOHN
“
10PHNOMPENH29 2010 INVESTMENT CLIMATE STATEMENT – CAMBODIA
“244036”,”1/19/2010 0:41″,”10PHNOMPENH29″,
“Embassy Phnom Penh”,”UNCLASSIFIED”,
“09STATE124006|10SINGAPORE1|10SINGAPORE199”,
“VZCZCXRO8739
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0029/01 0190041
ZNR UUUUU ZZH
P 190041Z JAN 10
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC PRIORITY 1556
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHBK/AMEMBASSY BANGKOK 2827
RUEHHI/AMEMBASSY HANOI 4118
RUEHHM/AMCONSUL HO CHI MINH 0163
RUCPDOC/USDOC WASHDC
RUCPCIM/CIMS NTDB WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC 0822
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC”,”UNCLAS SECTION 01 OF 17 PHNOM PENH 000029
STATE FOR EAP/MLS, EB/IFD/OIA, EB/TPP/ABT, EEB/TPP/MTA, EEB/TPP/BTA
STATE PASS TO USTR/KLEIN AND WEISEL
STATE PASS TO USTDA/ROSSITER
BANGKOK FOR USAID/CARDUNER, FCS/GRIFFIN
HANOI FOR FAS/BAILEY
HO CHI MINH CITY FOR FAS/ REIDEL
SIPDIS
E.O. 12958:N/A
TAGS: ECON, EFIN, EINV, ELAB, ETRD, KIPR, OPIC, KTDB, USTR, CB
SUBJECT: 2010 INVESTMENT CLIMATE STATEMENT – CAMBODIA
REF: 09 STATE 124006
PHNOM PENH 00000029 001.12 OF 017
1. Cambodia, a developing country, began the transformation from a
command economy to the free market in the late 1980s. It is now
integrating into the regional and world trading framework. In 1999,
Cambodia joined the Association of Southeast Asian Nations (ASEAN)
and in September 2004, became a member of the World Trade
Organization (WTO). On December 15, 2008 the entry into force of
the ASEAN Charter brought Cambodia and other member states into a
new regional legal framework. Cambodia has shown interest in
participating in other international trading arrangements, including
the Asia-Pacific Economic Cooperation forum (APEC).
2. As part of its WTO commitments to strengthen the investment
climate for both foreign and domestic businesses, Cambodia committed
to enact 47 laws or regulations to address areas where existing law
did not meet WTO requirements. Cambodia has been behind schedule in
fulfilling its WTO commitments to pass necessary business
legislation concerning the general business environment, trade in
goods, trade in services, and the protection of intellectual
property rights. However, the country has made progress recently,
passing several significant laws in 2008, including a Law on Plant
Breeder Rights and Law on Civil Aviation, and in 2009, the
government promulgated a Law on Tourism, a Law on Insolvency, and a
sub-decree establishing a national commercial arbitration body. The
government has either completed drafts of most of the remaining
required laws or is waiting for their approval by the legislature.
3. Since the re-establishment of a constitutional monarchy in 1993,
the economy has grown steadily. From 2004 to 2008, the economy grew
at an average of approximately 10 percent per year, driven largely
by an expansion in the garment, construction, agriculture, and
tourism sectors. In 2005, exploitable oil and natural gas deposits
were found beneath Cambodia\’s territorial waters, representing a new
revenue stream for the government if commercial extraction begins.
Mining also is attracting significant investor interest,
particularly in the northern parts of the country. However, the
global economic crisis has adversely affected the economy\’s key
pillars and economic growth was expected to contract in 2009.
4. Inflation decreased from its sharp rise in 2008, which peaked at
25.7 percent in May 2008 driven largely by the global surge in oil
and food prices. Because the economy is heavily dollarized, a
depreciation of the Cambodian riel and the U.S. dollar against
trading partner currencies contributed to imported inflation, while
rising domestic demand contributed to domestically generated
pressures. However, these pressures lessened in 2009 and Cambodia
recorded an average inflation rate of an estimated 4.5 percent and a
7.5 percent year-on-year inflation rate.
5. Foreign Direct Investment (FDI) approved by the Council for the
Development of Cambodia (CDC), Cambodia\’s investment approval body,
has dramatically increased in recent years, with approved proposals
peaking at nearly USD 11 billion in 2008, compared with USD 201
million in 2004. However, figures for the first 10 months of 2009
reveal that investment has slowed significantly to only USD 1.6
billion, an 82 percent decrease compared to total investments in
2008. The CDC does not have a functional mechanism to monitor
implementation of projects, so it is not clear how many proposed
projects are fully implemented. Corruption has been singled out as
one of the most serious deterrents to private investment.
6. Since early 1999, the Cambodian government has intensified its
economic reform program, a process the international financial
institutions and donors encourage, participate in, and monitor
closely. In recent years the government has publicly committed
itself on numerous occasions to fighting corruption, pursuing good
governance, and increasing transparency and predictability. This
strategy is set out in phase II of the government\’s latest public
reform effort called the \”Rectangular Strategy for Growth,
Employment, Equity, and Efficiency.\”
7. The government has initiated specific measures to promote
business, especially small and medium-sized businesses, by reducing
costs and the time required for business registration and by
establishing a number of committees for business promotion and trade
facilitation.
PHNOM PENH 00000029 002.8 OF 017
Openness to Foreign Investment
——————————
8. Cambodia officially welcomes foreign direct investment.
Cambodia\’s 1994 Law on Investment established an open and liberal
foreign investment regime. All sectors of the economy are open to
foreign investment and 100 percent foreign ownership is permitted in
most sectors. Article 44 of the Constitution provides that only
Cambodian citizens and legal entities have the right to own land.
However, a new law allowing foreign ownership of properties located
above the ground floor is expected to be passed in 2010. Aside from
this, there is little or no discrimination against foreign investors
either at the time of initial investment or after investment.
However, some foreign businesses have reported that they are at a
disadvantage vis-a-vis Cambodian or other foreign rivals, who engage
in acts of corruption or tax evasion, or take advantage of
Cambodia\’s poor enforcement of legal regulations.
9. In addition, there are a few sectors open to foreign investors
which are subject to conditions, local equity participation, or
prior authorization from relevant authorities. These sectors
include manufacture of cigarettes, movie production, rice milling,
exploitation of gemstones, publishing and printing, radio and
television, manufacturing wood and stone carvings, and silk weaving.
The government has issued a sub-decree restricting foreign
ownership of hospitals and clinics and forbidding the employment of
non-Cambodian doctors in any specialty in which the Ministry of
Health considers there to be an adequate number of Cambodian
practitioners.
10. Under a sub-decree dated September 2005, Cambodia prohibits
certain investment activities, including investment in production or
processing of psychotropic and narcotic substances, poisonous
chemicals, agricultural pesticides and insecticides, and other goods
that use chemical substances prohibited by international regulations
or the World Health Organization that affect public health and the
environment. Production of electric power by using waste imported
from foreign countries is prohibited, as is forestry exploitation.
11. The privatization of state enterprises and transactions
involving state property has not always been carried out in a
transparent manner. In several instances, the public learned that
enterprises were for sale or swap only after the government
announced a sale or deal to a particular buyer.
12. Investor rights (investment guarantees) provided for in the Law
on Investment include:
— Foreign investors shall not be treated in a discriminatory
manner by reason of being a foreign entity, except in respect to
land ownership as provided for in the Constitution of the Kingdom of
Cambodia.
— The Royal Government of Cambodia shall not undertake a
nationalization policy that adversely affects the private property
of investors.
— The Royal Government of Cambodia shall not fix the price of
products or fees for services.
— The Royal Government of Cambodia, in accordance with relevant
laws and regulations, shall permit investors to purchase foreign
currencies through the banking system and to remit abroad those
currencies as payments for imports, repayments on loans, payments of
royalties and management fees, profit remittances and repatriation
of capital.
13. The following is a summary of Cambodia\’s rankings in
international indexes and the Millennium Challenge Corporation score
card.
Measure Year Index/Ranking
TI Corruption Index 2009 2/158
Heritage Economic Freedom 2009 56.6/106
World Bank Doing Business 2010 145/145
MCC Govnt Effectiveness 2009 0.00/05 percent
MCC Rule of Law 2009 -0.20/33 percent
MCC Control Corruption 2009 -0.30/12
MCC Fiscal Policy 2009 -2.4/35 percent
MCC Trade Policy 2009 63.4/36 percent
MCC Regulatory Quality 2009 0.21/65 percent
PHNOM PENH 00000029 003.8 OF 017
MCC Business Start Up 2009 0.765/16 percent
MCC Land Rights Access 2009 0.769/88 percent
MCC Natural Resource Mgmt 2009 68.75/61 percent
Conversion and Transfer Policies
——————————–
14. There are no restrictions on the conversion of capital for
investors. The Foreign Exchange Law allows the National Bank of
Cambodia (the central bank) to implement exchange controls in the
event of a crisis; the law does not define what would constitute a
crisis. The U.S. Embassy is not aware of any cases in which
investors have encountered obstacles in converting local to foreign
currency or in sending capital out of the country.
15. The U.S. dollar is widely used and circulated in the economy.
The 2009 exchange rate was stable, although slightly depreciated
compared to 2008. As of December 2009, the exchange rate was USD 1
= 4,164 riel. The government is committed to maintaining exchange
rate stability.
Expropriation and Compensation
——————————
16. Article 44 of the Cambodian Constitution, which restricts land
ownership to Cambodian nationals, also states that \”the (state\’s)
right to confiscate properties from any person shall be exercised
only in the public interest as provided for under the law and shall
require fair and just compensation in advance.\” Article 58 states
that \”the control and use of state properties shall be determined by
law.\” The Law on Investment provides that \”the Royal Government of
Cambodia shall not undertake a nationalization policy which
adversely affects the private property of investors.\”
17. In late 2009, the National Assembly approved the Law on
Expropriation which sets broad guidelines on land-taking procedures
for public interest purposes and defines public interest activities
such as construction of infrastructure projects, development of
buildings for national protection and civil security, construction
of facilities for research and exploitation of natural resources,
and construction of oil pipeline and gas networks.
18. In spite of various legal protections, protection of immovable
property rights is complicated by the fact that most property
holders do not have legal documentation of their ownership rights.
Numerous cases have been reported of influential individuals or
groups acquiring property through means not entirely in keeping with
the Constitution or laws. This murky property holding environment
may adversely affect long-term leases and /or corporate social
responsibility goals unless proper due diligence is conducted. Cases
of inhabitants being forced to relocate continued to occur when
officials or businesspersons colluded with local authorities,
although the numbers reported dropped significantly from the
previous year. Human rights NGO ADHOC reported receiving 186 land
related cases during the year. During the same period, another NGO
received 115 land related cases in Phnom Penh and 14 provinces,
affecting a total of 8,806 families. Some of those expelled
successfully contested these actions in court, but the majority of
the cases in the courts were still being processed.
19. To date, there are no known investment disputes involving
government expropriation of property belonging to U.S. citizens. Up
to 17 Thai businesses sustained varying degrees of damage during
anti-Thai rioting in Phnom Penh on January 29, 2003. The Cambodian
government pledged to compensate Thai business owners, and all of
claims have been resolved.
Dispute Settlement
——————
20. Cambodia\’s legal system is a mosaic of pre-1975 statutes
modeled on French law, communist-era legislation dating from
1979-1991, statutes put in place by the UN Transitional Authority in
Cambodia (UNTAC) during the period 1991-93, and legislation passed
by the Royal Government of Cambodia since 1993.
21. Cambodian culture and its legal system have traditionally
favored negotiation and conciliation over adversarial conflict and
PHNOM PENH 00000029 004.10 OF 017
adjudication. Thus, compromise solutions are the norm, even in
cases where the law clearly favors one party in a dispute. In civil
cases, courts will often try conciliation before proceeding with a
trial.
22. Cambodia\’s court system is generally seen as non-transparent
and subject to outside influence. Judges, who have been trained
either for a short period in Cambodia or under other systems of law,
have little access to published Cambodian statutes. Judges can be
inexperienced and courts are often understaffed with little
experience, particularly in adjudicating commercial disputes. The
local and foreign business community reports frequent problems with
inconsistent judicial rulings as well as outright corruption, and
difficulty enforcing judgments. For these reasons, U.S. investors
are reluctant to resort to the courts to resolve commercial
disputes.
23. The Cambodian judiciary system is beginning to undergo reform.
To provide the necessary background knowledge, judges and court
staff from around the country are being trained by the Royal Academy
for Judges and Prosecutors, which was created in 2002. In an effort
to clean up the court system, the Prime Minister has announced ad
hoc anti-corruption measures, including the dismissal, replacement,
and transfer of judges and prosecutors. The Supreme Council of
Magistracy, comprised of a president (the King) and eight other
members, is responsible for the appointment and conduct of judges
and prosecutors.
24. To address the perception of many Cambodian and foreign
business representatives that the court system is unreliable and
susceptible to external political and commercial influence, the
Cambodian government is finalizing draft legislation to create a
Commercial Court. In July 2009, the government passed a sub-decree
creating a commercial arbitration body, the National Arbitration
Center in the Ministry of Commerce. When the National Arbitration
Center is operational, parties involved in a commercial dispute that
have a written arbitration agreement will be able to settle
commercial disputes by means of quasi-judicial methods without
involvement of the Cambodian courts. Parties will be able to select
arbitrators without direct government interference. The Law on
Commercial Arbitration also allows the Cambodia Chamber of Commerce
to establish its own arbitration center for disputes between members
or between members and third parties. The law also mandates
recognition of arbitral awards made outside of Cambodia.
Arbitration awards can be appealed to the Appellate and Supreme
Court of Cambodia based on limited grounds.
25. To handle specific disputes with regard to labor, the Ministry
of Labor and Vocational Training established an Arbitration Council
in May 2003. Basing its decision on the provisions of the Labor
Law, the Council has 30 arbitrators. The Council is an independent
body whose function is to resolve collective labor disputes that the
Ministry is unable to solve by conciliation. The Council\’s
decisions are non-binding but it has been very successful in
reducing the number of industrial actions in the garment sector.
The Council plays a vital role in contributing to the development of
healthy industrial relations in Cambodia. The Council\’s success in
the garment industry has prompted unions in other sectors, e.g., the
hospitality and tourism sectors, to seek the Council\’s arbitration
and mediation services.
26. Cambodia became a party to the Convention for the Settlement of
Investment Disputes between States and Nationals of Other States in
2005. In 2009, the International Center for the Settlement of
Investment Disputes (ICSID) approved a U.S. investor\’s Request for
Arbitration in a case against the Kingdom of Cambodia.
Performance Requirements and Incentives
—————————————
27. The Council for the Development of Cambodia (CDC), Cambodia\’s
foreign investment approval body, administers a package of
investment incentives. The CDC was created as a one-stop shop to
facilitate foreign direct investment.
28. Seeking to increase government revenue, the international
financial institutions recommended that the Cambodian government
scale back its investment incentives. Consequently, the Cambodian
PHNOM PENH 00000029 005.8 OF 017
government amended the Law on Investment in 2003. The law creates
regimes for profit (20 percent), salary (5 to 20 percent),
withholding (4 to 15 percent), value-added (10 percent) and excise
taxes (rates vary). While some incentives have been eliminated, the
law provides a simplified, more transparent, and faster mechanism
for investment approval.
29. Under the amended Law on Investment, the profit tax exemption
is allocated automatically on the basis of activity and minimum
investment amounts as set out in the sub-decree. To maintain the
incentives under the law, qualified investment projects (QIP) are
required to obtain an annual Certificate of Compliance from the CDC
and file this with the annual tax return.
30. The amended Law on Investment includes the following
provisions, which include the exemption, in whole or in part, of
customs duties and taxes, for QIPs:
— An exemption from the tax on profit imposed under the Law on
Taxation for a set period. The tax exemption period is composed of
a trigger period + three years + n years (a number of years
determined according to the Financial Management Law and depending
on the economic sector). The maximum allowable trigger period is to
be the first year of profit or three years after the QIP earns its
first revenue, whichever is sooner.
— 100 percent exemption from import duties for construction
material, production equipment and production input materials for
export QIPs and supporting industry QIPs in accordance with the
provisions of the sub-decree on the Implementation of the Amendment
to the Law on Investment
— Transfer of incentives by merger or acquisition.
— Renewable land leases of up to 99 years on concession land for
agricultural purposes and land ownership permitted to joint ventures
with over 50 percent equity owned by Cambodians.
— No price controls on goods produced or services rendered by
investors.
— No discrimination between foreign and local investors.
— 100 percent exemption from export tax or duty, except for
activities specifically mentioned in the Law on Customs.
— Employment of foreign expatriates where no qualified Cambodians
are available. QIPs are entitled to obtain visas and work permits.
— A QIP that is located in a designated special economic zone
(SEZ) is entitled to the same incentives and privileges as other
QIPs as stipulated in the law.
31. The September 2005 sub-decree on the Implementation of the
Amendment to the Law on Investment also details investment
activities that are excluded from incentives, although investment is
permitted. They include the following sectors: retail, wholesale,
and duty-free stores; entertainment (including restaurants, bars,
nightclubs, massage parlors, and casinos); tourism service
providers; currency and financial services; press and media related
activities; professional services; and production and processing of
tobacco and wood products.
32. Incentives are also excluded in the production of certain
products with an investment of less than USD 500,000 such as food
and beverages; textiles, garments and footwear; and plastic, rubber,
and paper products. Investors are encouraged to refer to the
sub-decree for details of other investment activities that are
excluded from incentives.
33. Investment activities that are eligible for customs duty
exemption, but not eligible for the profit tax exemption, are
telecommunication basic services; exploration of gas and oil,
including supply bases for gas and oil activities; and mining.
34. Cambodia allows foreign lawyers to supply legal services with
regard to foreign law and international law, and allows them to
supply certain legal services with regard to Cambodian law in
\”commercial association\” with Cambodian law firms. Cambodia\’s WTO
General Agreement on Trade in Services (GATS) commitment defines
\”commercial association\” as any type of commercial arrangement,
without any requirement as to corporate form. Thus, there are no
equity limitations on the practice of foreign and international law
by foreign enterprises and there are no equity limitations on the
formation of \”commercial associations\” under which foreigners may
practice certain legal services with regard to Cambodian law.
PHNOM PENH 00000029 006.8 OF 017
35. Investors who wish to take advantage of investment incentives
must submit an application to the Cambodian Investment Board (CIB),
the division of the CDC charged with reviewing investment
applications. Investors not wishing to apply for investment
incentives, or who are ineligible, may establish their company
simply by registering corporate documents with the Department of
Legal Affairs of the Ministry of Commerce. Once an investor\’s
application is submitted, the CDC will issue to the applicant either
a Conditional Registration Certificate or a Letter of Non-Compliance
within three workdays. The Conditional Registration Certificate
will set out the terms, such as approvals, authorization,
clearances, permits or registrations required. If the CDC fails to
issue the Conditional Registration Certificate or Letter of
Non-Compliance within three workdays, then the Conditional
Registration Certificate will be considered approved.
36. The CDC has the responsibility to obtain all of the licenses
from relevant government agencies on behalf of investor applicants.
The relevant government agencies must issue the required documents
no later than 28 workdays from the date of the Conditional
Registration Certificate. At the end of the 28 days, the CDC will
issue a Final Registration Certificate.
37. The Sub-decree on the Implementation of the Amendment of the
Law on Investment adopted on September 27, 2005 does not require
investors to place a deposit guaranteeing their investment except in
cases in which the deposit is required in a concession contract or
real estate development project. Investors who wish to apply are
required to pay an application fee of seven million riel (approx.
USD 1,750) representing the administration fees for securing the
approvals, authorizations, licenses, or registrations from all
relevant ministries and entities including stamp duty.
38. Under a 2008 sub-decree, the CDC is required to submit to the
Council of Ministers for approval investment proposals with an
investment capital of USD 50 million or more; involve politically
sensitive issues; involve the exploration and the exploitation of
mineral or natural resources; may have a negative impact on the
environment; have long-term strategy; or, involve infrastructure
concessions.
Right to Private Ownership and Establishment
——————————————–
39. There are no limits on the rights of foreign and domestic
entities to establish and own business enterprises or to compete
with public enterprises. However, the Constitution provides that
only Cambodian citizens or legal entities have the right to own
land. A legal entity is considered to be Cambodian when at least 51
percent of its shares are owned by Cambodian citizen(s) or by
Cambodian legal entities. A new law allowing foreign ownership of
properties, such as apartments and condominiums is expected to be
passed in 2010. The current draft stipulates that only properties
located above the ground floor can be foreign-owned, and foreigners
would not be able to own property within 30 kilometers of a national
border.
40. Under the 2001 Land Law, foreign investors may secure control
over land through concessions, long-term leases, or renewable
short-term leases. If investors intend to take a long-term lease
interest in land or ownership interest through a 51 percent
Cambodian company, it is essential that caution be exercised to
ensure that clear and unencumbered ownership of the land is
verified.
41. The Land Law establishes a comprehensive legal framework for
long-term leasing. The leaseholder has a contractual interest in
the land, which means the lease can be sold or transferred through
succession and can be pledged as security in order to raise
financing. It is also important to make sure that the land
ownership is clearly and legally established before entering into
any leasing agreement.
42. Qualified investors approved by the Council for the Development
of Cambodia have the right to own buildings built on leased
property. However the law is unclear as to whether buildings from
qualified projects can be transferred between foreign investors or
whether foreign investors can own buildings built through projects
PHNOM PENH 00000029 007.8 OF 017
not approved by the CDC.
Protection of Property Rights
—————————–
43. Cambodia has adopted legislation concerning the protection of
property rights, including the Land Law and the Law on Copyrights
and Law on Patent and Industrial Design. Cambodia is a member of
the World Intellectual Property Organization (WIPO) and the Paris
Convention for the Protection of Industrial Property.
44. Chattel and real property: The 2001 Land Law provides a
framework for real property security and a system for recording
titles and ownership. Land titles issued prior to the end of the
Khmer Rouge regime in 1979 are not recognized due to the severe
dislocations that occurred during the Khmer Rouge period. The
government is making efforts to accelerate the issuance of land
titles, but in practice, the titling system is cumbersome,
expensive, and subject to corruption. The majority of property
owners lack documentation proving ownership. Even where title
records exist, recognition of legal title to land has been a problem
in some court cases where judges have sought additional proof of
ownership. Although foreigners are constitutionally forbidden to
own land, the 2001 law allows long or short-term leases to
foreigners.
45. Intellectual property rights (IPR): Cambodia\’s IPR regime is
in compliance with its WTO member commitments; however,
comprehensive enforcement remains problematic. The 1996
U.S.-Cambodia Trade Agreement contained a broad range of IPR
protections, but given Cambodia\’s very limited experience with IPR,
the WTO agreement granted phase-in periods for the Cambodian
government to fully implement IPR protections. On November 9, 2005,
the WTO granted a deadline extension until 2013 for Cambodia and
other least developed countries to enforce copyright laws and begin
accepting patents.
46. In a significant step toward consolidating IPR policy-making,
enforcement and technical assistance, the Council of Ministers
created the National Committee for Intellectual Property Management
on September 18, 2008 with its secretariat within the Ministry of
Commerce. This committee is responsible for developing national
policy on intellectual property, strengthening interagency
cooperation, preparing and disseminating new laws and regulations,
and acting as a clearinghouse for technical assistance relating to
the intellectual property sector. This new interagency IPR
committee chaired by the Minister of Commerce includes a broad range
of IPR actors including representatives from the Council of
Ministers and the Ministries of Industry Mines and Energy; Culture
and Fine Arts; Interior; Economy and Finance; Posts and
Telecommunications; Health; Agriculture, Forestry and Fisheries;
Environment; Justice; Education; and Tourism.
47. Trademarks: The Cambodian National Assembly approved the Law
Concerning Marks, Trade Names and Acts of Unfair Competition to
comply with Cambodia\’s WTO obligations under the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS).
Signed in February 2002, the law outlines specific penalties for
trademark violations, including jail sentences and fines for
counterfeiting registered marks. It also contains detailed
procedures for registering trademarks, invalidation and removal,
licensing of marks, and infringement and remedies.
48. Since 1991, the Ministry of Commerce has maintained an
effective trademark registration system, registering more than
35,500 trademarks (nearly 6,599 for U.S. companies) under the terms
of a 1991 sub-decree, and has proven cooperative in preventing
unauthorized individuals from registering U.S. trademarks in
Cambodia.
49. Despite lacking clear legal authority to conduct enforcement
activities, the Ministry of Commerce has taken effective action
against trademark infringement in several cases since 1998. The
Ministry has ordered local firms to stop using well-known U.S.
marks, including Pizza Hut, McDonalds, Nike, Scotties, Marlboro,
Seven Eleven, and Pringles. In 2009, the Ministry of Commerce
resolved 12 cases of trademark infringements.
PHNOM PENH 00000029 008.8 OF 017
50. Copyrights: Copyrights are governed by the Law on Copyrights
and Related Rights, which was enacted in January 2003.
Responsibility for copyrights is split between the Ministry of
Culture and Fine Arts, which handles phonograms, CDs, DVDs, and
other recordings, and the Ministry of Information, which deals with
printed materials. Pirated CDs, videos, textbooks, and other
copyrighted materials are widely available in Cambodian markets and
used throughout the country. Before the adoption of the law, there
were no provisions for enforcement of copyrights.
51. To protect and manage their economic rights, authors and
related rights holders are allowed by law to establish a collective
management organization (CMO). The creation of the CMO requires
authorization from either the Ministry of Culture and Fine Arts or
the Ministry of Information, depending on the nature of their work.
The Ministry of Culture and Fine Arts is developing a sub-decree on
collective management. In mid-2007, the Ministry of Culture and
Fine Arts created a Copyright Department which is gradually building
capacity.
52. Patents and industrial designs: Cambodia has a very small
industrial base, and infringement on patents and industrial designs
is not yet commercially significant. With assistance from WIPO, the
Ministry of Industry, Mines, and Energy (MIME) prepared a
comprehensive law on the protection of patents and industrial
designs which went into force in January 2003. The law provides for
the filing, registration, and protection of patents, utility model
certificates and industrial designs. The MIME issued a declaration
in June 2006 on granting patents and registering industrial
designs.
53. Encrypted satellite signals, semiconductor layout designs, and
trade secrets: The Ministry of Commerce is preparing a draft law
for trade secrets while the Ministry of Industry, Mines, and Energy
is drafting a law on integrated circuit protection. Cambodia has
not yet made significant progress toward enacting required
legislation on encrypted satellite signals, although it obtained a
model law on encrypted satellite signals and semiconductor layout
designs from WIPO in March 1999.
54. IPR enforcement: With the exception of the trademark
enforcement, the Cambodian government has taken few significant
actions to enforce its IPR obligations. However, in January 2008,
at the annual conference of the Ministry of Culture and Fine Arts,
the government suggested it would increase prosecutions for
copyright violations on domestically produced products before
expanding prosecutions for foreign products. Cambodian copyright
law allows IPR owners to file a complaint with the authorities to
take action. Law enforcement action taken at the request of owners
is directed against the piracy of domestically produced music or
video products, but not against piracy of foreign optical media.
The owners requesting crackdowns must pay support costs to the
authorities for conducting the operation. Crackdowns on such IPR
violations are not conducted on a consistent basis.
55. Infringement of IPR is pervasive, ranging from software,
compact discs, and music, to photocopied books and the sale of
counterfeit products, including cigarettes, alcohol, and
pharmaceuticals. In 2008, the Business Software Alliance estimated
a 95 percent software piracy rate in Cambodia which cost the
industry USD 47 million in 2007. Although Cambodia is not a major
center for the production and export of pirated CDs, videos, and
other copyrighted materials, local businesses report Cambodia is
becoming an increasingly popular source of pirated material due to
weak enforcement. The Ministry of Commerce has plans to put in
place measures to stop IPR-violating products at borders, as
post-inspection mechanisms are unlikely to be effective. During the
TIFA discussions in November 2007, Cambodia requested technical
assistance for a draft sub-decree on Border Measures detailing
procedures at the borders allowing IPR owners to file an application
with customs to suspend clearance of suspected counterfeit goods.
Transparency of the Regulatory System
————————————-
56. There is no pattern of discrimination against foreign investors
in Cambodia through a regulatory regime. Numerous issues of
transparency in the regulatory regime arise, however, from the lack
PHNOM PENH 00000029 009.8 OF 017
of legislation and the weakness of key institutions. Investors
often complain that the decisions of Cambodian regulatory agencies
are inconsistent, irrational, or corrupt.
57. The Cambodian government is still in the process of drafting
laws and regulations that establish the framework for the market
economy. In addition to existing laws and regulations, in 2009, the
government adopted the Law on Tourism, the Insolvency Law, and a
sub-decree establishing a national commercial arbitration body. A
commercial contract law and other important business-related laws
such as commercial court, e-commerce, telecommunications, and
personal property leasing laws are in draft.
58. Cambodia currently has no anti-monopoly or anti-trust statutes.
On a practical level, Cambodia has indicated a desire to discourage
monopolistic trading arrangements in most sectors.
59. Cambodia is currently working on the establishment of standards
and other technical measures based on international practice,
guidelines, and recommendations. Under the Law on Standards in
Cambodia, passed in 2007, the Institute of Standards in Cambodia
(ISC) was created within the Ministry of Industry, Mines, and Energy
(MIME) as a central authority to develop and certify national
standards for products, commodities, materials, services, and
practices and operations. The ISC serves as the secretariat of the
National Standards Council which consists of representatives from
various government ministries, state-controlled academic/research
institutions, the private sector, and a consumer representative
created to advise as well as approve standards.
60. The ISC has been assigned as the focal point for technical
barriers to trade (TBT) and as the agency responsible for
notifications and publications required by the WTO TBT Agreement.
The Ministry of Health is charged with prescribing standards,
quality control, distribution and labeling requirement for
medicines, but this responsibility may be brought under the ISC in
the future.
61. Quality control of foodstuffs, plant and animal products is
currently under the General Directorate of CamControl of the
Ministry of Commerce. Cambodia is a member of the Codex
Alimentarius Commission. Currently CamControl is the national
contact point for Codex Alimentarius. Its primary responsibility is
the enforcement of quality and safety of products and services
relating to sanitary and phytosanitary (SPS) measures. Cambodia was
provided a transition period until January 2007 to implement its WTO
TBT Agreement commitments and until January 2008 to implement its
SPS Agreement commitments, but has not yet fully implemented these
commitments. The RGC plans to adopt a subdecree on Automatic
Adoption of Codex Norms by the end of 2010.
62. The Cambodian Constitution and the 1997 Labor Code provide for
compliance with internationally recognized core labor standards.
The law authorizes the Ministry of Labor and Vocational Training to
set health, safety and other conditions for the workplace. (The
\”Labor\” Section of this report discusses the labor situation in more
detail.)
63. The National Bank of Cambodia supervises Cambodia\’s banks and
financial institutions while the Ministry of Economy and Finance
regulates the insurance industry. The insurance market in Cambodia
is relatively new, but has recently begun to gain credibility and
expand its scope. Currently, there are a few major insurance
companies operating here such as Asia Insurance, the state-owned
insurance company Caminco, Forte Insurance, Campubank Lonpac
Insurance, and Infinity Insurance. Cambodia Reinsurance Company
(Cambodia Re) is the only reinsurance company in Cambodia
established by the government to carry out reinsurance business
operations for all classes of risk, including general insurance and
life insurance.
64. To help Cambodian businesses stay competitive in the world
market, the government introduced specific measures to facilitate
business, in particular exports, by attempting to reduce informal
costs and streamline bureaucratic hurdles. Measures included: (1)
introduction of a joint inspection by CamControl and the Customs and
Excise Department and issuance of a common inspection report valid
for both agencies and the \”Federal Office\” in order to reduce the
PHNOM PENH 00000029 010.8 OF 017
amount of time spent applying for export goods inspection; (2) based
on this common report, MIME and the Ministry of Commerce will issue
the Certificate of Processing (CP) and the Certificate of Origin
(CO), respectively; (3) reduction of the costs of registration from
USD 615 to USD 177 and of the time limit for Cambodian government
issuance of registration from 30 days to ten and a half working
days; and (4) reduction of time required to acquire documents
related to the CO and exports and for goods inspection.
65. Cambodia has renewed its commitment to creating a favorable
environment for investment and trade and has further committed to
reducing unofficial fees and costs related to imports and exports.
Efficient Capital Markets and Portfolio Investment
——————————————— —–
66. Cambodia is moving to address the need for capital markets. In
November 2006, the National Assembly passed legislation to permit
the government to issue bonds and use the capital to make up budget
deficits. However no bonds have been issued since 2007 and Prime
Minister Hun Sen said in 2008 that the government does not plan to
issue bonds in the near future. In 2007, the government also passed
the Law on the Issuance and Trading of Non-government Securities,
and, in partnership with the Korean Stock Exchange, plans to
establish a stock market by the end of 2010.
67. At the end of November 2009, the Securities and Exchange
Commission of Cambodia (SECC) released a draft administrative order
on equity securities issuance, which is expected to be adopted in
2010. According to the regulation, the issuance of equity
securities in the Cambodia stock market can be private placement or
public offering. Private placement refers to a personal offer that
is made to no more than 30 investors and with an issue size not
exceeding 20 percent of shareholder\’s equity when shareholder\’s
equity is less than USD 4.8 million or with an issue size not
exceeding 15 percent of shareholder\’s equity when shareholder\’s
equity is more than USD 4.8 million during a 12-month period. In
addition, the allotment of equity securities of public offerings are
divided, with a reserve of 20 percent of total public offering for
investors who are Cambodian citizens, and 80 percent of the
remaining public offering amount open to investors who are both
Cambodian and non-Cambodian citizens.
68. The Cambodian government does not use regulation of capital
markets to restrict foreign investment. Domestic financing is
difficult to obtain at competitive interest rates. A new law
addressing secured transactions, which includes a system for
registering such secured interests, was promulgated in May 2007.
Most loans are secured by real property mortgages or deposits of
cash or other liquid assets, as provided for in the existing
contract law and land law.
69. The total assets of Cambodia\’s banking system as of September
2009 were approximately USD 4.9 billion, an increase of nearly 22
percent from 2008. Loans account for about 49 percent of the
banking system\’s assets. The National Bank of Cambodia (NBC)
reported that the non-performing loans (NPLs) ratio of banks has
increased from 3.7 percent in December 2008 to 5.2 percent in May
2009 and that the rate could reach as high as 10 percent by the end
of the year. Credit disbursement has also slowed, from a growth
rate of 50 percent in 2008 to just 1 percent through the middle of
2009. As of September 2009, credit granted by the commercial banks
amounted to USD 2.4 billion. Loans made to services and the
wholesale and retail sectors accounted for over 40 percent of total
loans. The banking sector has shown significant improvement, but
requires continued progress to gain international confidence.
70. Under the amended Law on Banking and Financial Institutions,
all of Cambodia\’s commercial banks had to reapply for licenses from
the NBC and meet new, stricter capital and prudential requirements
by the end of 2001. As a result, there was a significant shakeout
and consolidation within the banking sector with the closure and
liquidation of 12 banks. In September 2008, the National Bank of
Cambodia moved to slow the rapid growth in the number of commercial
banks, which increased by more than 20 percent in the first nine
months of 2008, giving commercial banks without an investment grade
shareholder until the end of 2010 to triple minimum capital from USD
13 million to USD 37 million. In January 2008, Cambodia\’s banks
PHNOM PENH 00000029 011.6 OF 017
were given their first-ever risk assessment from Standard & Poor\’s
of a \’B+/B\’ rating with stable outlook. Their placement was
alongside that of banks in Venezuela, Bolivia, Ukraine, and Jamaica.
Banks have been free to set their own interest rates since 1995 and
average annual interest rate spread has declined from 15.3 percent
in 2004 to 9.6 percent in May 2009 which reflects an increase in the
interest rate for deposits and a decline in the interest rate for
credit.
Competition from State Owned Enterprises
—————————————-
71. Private enterprises are allowed to compete with public
enterprises under the same terms and conditions and in general are
not entitled to special trading rights or privileges. However,
certain laws and regulations reserve special rights for the state to
monopolize various services including the Electricity Law which
provides special privilege for the Electricity of Cambodia (EDC) to
provide power transmission to the distribution companies and bulk
power consumers.
72. Cambodia has several state-owned enterprises and two
joint-venture enterprises with a majority state holding. These
include rubber plantations and an agricultural inputs company,
infrastructure operating companies, the Phnom Penh Water Supply, the
EDC, the Rural Development Bank, and two joint-venture companies –
telecommunication operator Camintel and Cambodia Pharmaceutical
Enterprise. Currently, the country does not have a sovereign wealth
fund.
73. All SOEs are under the supervision of certain line Ministries
or government institutions and are overseen by boards of directors
drawn from among senior government officials. The Law on Audit
established the National Audit Authority and empowers the Auditor
General to conduct audits of state-owned enterprises. The audit
conducted by the Auditor General\’s Office primarily focuses on
compliance with rules governing SOE financial management. Limited
information is publicly available on the financial position and
performance of state-owned enterprises.
74. Cambodia has yet to pass the Law on Competition as part of its
WTO accession obligations. Under the draft law, a National
Committee on Competition will be established. However, the 1993
Constitution of Cambodia provides for the state to take necessary
intervention measures to protect the competitive process of the
marketplace as well as to protect consumer welfare.
Corporate Social Responsibility (CSR)
————————————-
75. CSR is a new concept to Cambodia and is not widely understood
among local producers or consumers. However, certain labor and
social standards have been established in key industries,
particularly in the garment sector. Under the terms of the 1999
U.S.-Cambodia Trade Agreement, the U.S. Government committed to
increase the size of Cambodia\’s garment export quota if the country
could demonstrate improvements in labor standards. This was the
first bilateral trade agreement to positively link market access
with progress in compliance with labor obligations. Currently labor
standard monitoring in the garment sector is being conducted by the
International Labour Office (ILO) in coordination with the
government. The ILO project succeeded in improving compliance with
labor standards, virtually eliminating the worst labor abuses such
as forced labor and child labor within the garment sector. Socially
responsible businesses continue to source garments from Cambodia due
to its well-deserved reputation for high labor standards.
76. Currently, the ILO\’s Better Work and Better Factories Cambodia
program is developing a training package on planning and
implementing the transition of the inspections regime towards
substantial compliance with international labor standard such as the
OECD Guidelines for Multinational Enterprises. In addition, several
multinational enterprises conduct CSR programs in Cambodia which are
viewed favorably by the local community.
Political Violence
——————
PHNOM PENH 00000029 012.8 OF 017
77. Cambodia is relatively peaceful compared to its pre-UNTAC
history. Election-related violence has decreased in each national
election held at five-year intervals since 1993. Cambodia\’s 2007
commune council elections followed by the July 2008 National
Assembly election had little of the pre-election violence or
intimidation that preceded the 2002 and 2003 elections. The 2007
and 2008 polls resulted in clear victories for the Cambodian
People\’s Party, with the Sam Rainsy Party emerging as the main
opposition party.
78. Cambodian political activities have turned violent in the past,
and the possibility for politically motivated violence remains.
During the anti-Thai riots in 2003, the Royal Embassy of Thailand
and Thai-owned commercial establishments were attacked. In November
2006, police arrested six people for allegedly plotting to conduct
bomb attacks in Phnom Penh during the Water Festival.
79. On July 29, 2007, three improvised explosive devices (IEDs)
were planted at the Vietnam-Cambodia Friendship Monument in Phnom
Penh. One of the IEDs partially exploded, but the others failed to
detonate and were recovered by Cambodian authorities. No one was
injured. On January 2, 2009, two undetonated IEDs were found near
the Ministry of National Defense and state-owned TV3. While there
is no indication these incidents were directed at U.S. or other
Western interests, the possibility remains that further attacks
could be carried out.
80. Following the July 2008 UNESCO World Heritage Site listing of
the Preah Vihear Temple, thousands of Thai and Cambodian soldiers
amassed in a few isolated areas along the Thai-Cambodian border,
particularly near the disputed Preah Vihear temple area. Since
then, soldiers have clashed near the temple resulting in deaths on
both sides, but the outbreaks of violence have been rare and lasted
only a few hours. Both the Thai and Cambodian governments have
committed to a peaceful resolution of the dispute.
Corruption
———-
81. Despite increasing investor interest, Cambodia continues to
rank poorly on global surveys of competitiveness and corruption.
According to the World Economic Forum\’s Global Competitiveness
Report 2009-2010, Cambodia\’s competitiveness ranking slipped by one
point to 110 of 133 countries surveyed, a reversal of the one point
climb to 109 in the 2008-2009 report (of 134 countries). The World
Bank also ranked Cambodia in the lower half of the list, 145 of 183,
on business climate. In 2009, Cambodia scored 2.0 on a scale of 0
(highly corrupt) to 10 (highly clean) in Transparency
International\’s Corruption Perceptions Index, ranking 158 out of 180
countries assessed, suggesting widespread and endemic forms of
corruption.
82. Business people, both local and foreign, have identified
corruption, particularly within the judiciary, as the single biggest
deterrent to investment in Cambodia. Corruption was cited by a
plurality of respondents to the World Economic Forum survey as the
most problematic factor for doing business in Cambodia. A 2007
USAID-funded survey of the Phnom Penh Chamber of Commerce also found
that corruption is considered to be the main obstacle for doing
business.
83. Public sector salaries range from USD 25-60 per month for
working level officials, and around USD 2000 per month for
high-ranking officials. Although there is an annual salary increase
of 10-15 percent, these wages are far below the level required to
maintain a suitable quality of life in Cambodia, and as a result,
public employees are susceptible to corruption and conflicts of
interest. Local and foreign businesses report that they must often
pay extra facilitation fees to expedite any business transaction.
Additionally, for those seeking to enter the Cambodian market, the
process for awarding government contracts is not transparent and is
subject to major irregularities.
84. Current Cambodian laws and regulations and their application
are insufficient to address the problem of corruption. Laws dating
from the UNTAC period (1991-93) against embezzlement, extortion, and
bribing public officials exist, but are enforced rarely, often for
political reasons.
PHNOM PENH 00000029 013.8 OF 017
85. Cambodia is not a signatory to the OECD Anti-Bribery
Convention, but has endorsed the ADB/OECD Anti-Corruption Action
Plan for Asia and the Pacific. In 2007, the government signed a
regional anti-corruption pact with eight other ASEAN countries, and
in September of the same year, also signed the UN Convention Against
Corruption. Cambodia is considering joining the Extractive
Industries Transparency Initiative governing the oil sector.
86. Cambodia is under increasing pressure from donors to address
the issue of good governance in general, and corruption in
particular. Cambodia began efforts to draft and enact
anti-corruption legislation in the 1990\’s. In a draft action plan
on good governance presented to donors in May 2000, Cambodia
promised to pass anti-corruption legislation by late 2001. Since
then, donors have become increasingly frustrated with the
government\’s failure to meet a series of benchmarks to enact new
anti-corruption legislation.
87. However, in October, the National Assembly passed a new Penal
Code, which the government has long stated was a prerequisite to the
heavily anticipated anti-corruption law. In December, the Cambodian
government finally approved the draft anti-corruption law which is
expected to be approved by the National Assembly in 2010. Under the
new law, all civil servants would be obliged to declare their
financial assets to the government every two years.
88. The Ministry of National Assembly-Senate Relations and
Inspection (MONASRI) has an anti-corruption mandate, but is largely
inactive. In 2007, however, MONASRI, with technical assistance from
USAID, created a draft Access to Information Policy. The draft has
yet to be forwarded to the Council of Ministers. The government
also created an anti-corruption commission within the cabinet in
late 1999, which has undertaken a few investigations, one of which
resulted in the dismissal of a mid-level official in late 2001.
Also in 2001, the government established a National Audit Authority,
which has been only marginally effective because of its lack of
transparency and independence.
89. Ignoring the existing anti-corruption commission, the
government established the Anti-Corruption Unit (ACU) in August
2006, a temporary body designed to address corruption until the
anti-corruption legislation is passed. The mission of the ACU is to
focus on preventing corruption, strengthening law enforcement, and
obtaining public support for combating corruption. However the ACU
is considered to be ineffective because of its lack of independence
and capacity.
90. In its most comprehensive reform strategy, the Rectangular
Strategy Phase II, adopted as the government platform in 2008 after
phase I in 2004, the Cambodian government once again renewed its
commitment to fight corruption and make good governance the
centerpiece of reform. The strategy acknowledges the importance of
taking action against corruption, but the challenge remains a
daunting and long-term one that will require political will at the
highest levels of the government.
Bilateral Investment Agreements
——————————-
91. Cambodia has signed bilateral investment agreements with
Australia, China, Croatia, Cuba, the Czech Republic, France,
Germany, Indonesia, Kuwait, Japan, Laos, Malaysia, the Netherlands,
North Korea, the Organization of the Petroleum Exporting Countries
(OPEC), Pakistan, the Philippines, Singapore, South Korea,
Switzerland, Thailand, and Vietnam. Future agreements with Algeria,
Bulgaria, Burma, Egypt, Hungary, Libya, Malta, Qatar, Russia, the
United Kingdom, and Ukraine are planned. The agreements provide
reciprocal national treatment to investors, excluding benefits
deriving from membership in future customs unions or free trade
areas and agreements relating to taxation. The agreements preclude
expropriations except those that are undertaken for a lawful or
public purpose, are non-discriminatory, and are accompanied by
prompt, adequate and effective compensation at the fair market value
of the property prior to expropriation. The agreements also
guarantee repatriation of investments and provide for settlement of
investment disputes via arbitration.
PHNOM PENH 00000029 014.12 OF 017
92. In addition, in July 2006, Cambodia signed a Trade and
Investment Framework Agreement (TIFA) with the United States, which
will promote greater trade and investment in both countries and
provide a forum to address bilateral trade and investment issues.
Two very successful meetings were held under the TIFA in 2007 in
which the U.S. and Cambodian governments discussed WTO accession
requirements, trade facilitation and economic development
initiatives, and progress on intellectual property rights. Since
then, several bilateral working level meetings have been held to
advance the TIFA agenda.
OPIC and Other Investment Insurance Programs
——————————————–
93. Cambodia is eligible for the Quick Cover Program under which
the Overseas Private Investment Corporation (OPIC) offers financing
and political risk insurance coverage for projects on an expedited
basis. With most investment contracts written in U.S. dollars,
there is little exchange risk. Even for riel-denominated
transactions, there is only one exchange rate, which is fairly
stable. Cambodia is a member of the Multilateral Investment
Guarantee Agency (MIGA) of the World Bank, which offers
political-risk insurance to foreign investors.
94. The Export-Import Bank of the United States (Ex-Im Bank)
provides financing for purchases of U.S. exports by private-sector
buyers in Cambodia on repayment terms of up to seven years. Ex-Im
Bank support typically will be limited to transactions with a
commercial bank functioning as an obligor or guarantor; however, it
will consider transactions without a bank undertaking on a
case-by-case basis.
Labor
—–
95. The country has an economically active population (defined as
being ten years of age and older) of some 8.8 million people out of
a population of 13.4 million. While government statistics are
somewhat higher, they do not fully capture the problems of
unemployment and underemployment in Cambodia.
96. The economy is not able to generate enough jobs in the formal
sector to handle the large number of entrants to the job market.
This dilemma is likely to become more pronounced over the next
decade. Cambodia suffers from a large demographic imbalance.
According to the 2008 General Population Census of Cambodia,
Cambodia\’s annual population growth rate is 1.54 percent. Persons
20 years of age or younger account for 48.1 percent of the total
population. As a result, over the next decade at least 275,000 new
job seekers will enter the labor market each year.
97. Approximately 65 – 70 percent of the labor force is engaged in
subsistence agriculture. At the end of 2009, about 278,000 people,
the majority of whom are women, were employed in the garment sector,
with 300,000 Cambodians employed in the tourism sector, and a
further 50,000 people in construction.
98. The 2009-2010 Global Competitiveness Report of the World
Economic Forum identified an inadequately educated workforce as one
of the most serious problems in doing business in Cambodia. Given
the severe disruption to the Cambodian education system and loss of
skilled Cambodians during the 1975-79 Khmer Rouge period, workers
with higher education or specialized skills are few and in high
demand. A Cambodia Socio-Economic Survey conducted in 2004 found
that about 12 percent of the labor force has completed at least an
elementary education. Only 1.2 percent of the labor force completed
post-secondary education.
99. Overall literacy, for those aged fifteen and over, is 75.1
percent with male literacy rates considerably higher than those for
females in both urban and rural areas. Many adults and children
enroll in supplementary educational programs, including English and
computer training. Employers report that Cambodian workers are
eager to learn and, when trained, are excellent, hardworking
employees.
100. Cambodia\’s 1997 labor code protects the right of association
and the rights to organize and bargain collectively. The code
PHNOM PENH 00000029 015.12 OF 017
prohibits forced or compulsory labor, establishes 15 as the minimum
allowable age for paid work, and 18 as the minimum age for anyone
engaged in work that is hazardous, unhealthy or unsafe. The statute
also guarantees an eight-hour workday and 48-hour work week, and
provides for time-and-a-half pay for overtime or work on the
employee\’s day off. The law gives the Ministry of Labor and
Vocational Training (MOLVT) a legal mandate to set minimum wages
after consultation with the tripartite Labor Advisory Committee. In
January 2007, the minimum wage for garment and footwear workers was
officially set at USD 50 per month. In April 2008, a USD 6 per
month cost of living allowance was instituted to offset high levels
of inflation. There is no minimum wage for any other industry. To
increase competitiveness of garment manufacturers, the labor code
was amended in 2007 to establish a night shift wage of 130 percent
of day time wages.
101. Acleda Bank, a local commercial bank, is currently managing
Cambodia\’s first National Social Security Fund (NSSF), which
protects workers against occupational risks and workplace accidents.
The fund was established by sub-decree in 2007 and requires
employers to contribute 0.8 percent of each employee\’s salary to the
NSSF. As December 29, 2009, approximately 350,000 workers, most
from the garment sector, contribute to the fund through their
employer. The Cambodian government has responded to the global
economic crisis by temporarily contributing 0.3 percent towards the
NSSF on behalf of employers for two years (2009-2010) which has
resulted in a reduction of employers\’ obligation from 0.8 percent to
0.5 percent of total wages. A second phase of the fund, to be
implemented in 2010, will focus on health care for employees,
followed by pensions in 2012.
102. Enforcement of many aspects of the labor code is poor, albeit
improving. Labor disputes can be problematic and may involve
workers simply demanding conditions to which they are legally
entitled. In labor disputes in which workers complain of poor or
unhealthy conditions, MOLVT and the Ministry of Commerce have
ordered the employer to take corrective measures. The U.S.
Government, the ILO, and others are working closely with Cambodia to
improve enforcement of the labor code and workers\’ rights in
general. The U.S.-Cambodia Bilateral Textile Agreement linked
Cambodian compliance with internationally recognized core labor
standards with the level of textile quota the U.S. granted to
Cambodia. While the quota regime ended on January 1, 2005, a
\”Better Factories\” program continues to build on the labor standards
established.
Foreign Trade Zones
——————-
103. To facilitate the country\’s development, the Cambodian
government has shown great interest in increasing exports via
geographically defined special economic zones (SEZs), with the goal
of attracting much-needed foreign direct investment.
104. The government is preparing a Law on Special Economic Zones
which will define SEZs and establish the rules under which they will
operate. The law may be submitted for approval of the Council of
Ministers in 2010.
105. In late December 2005, the Council of Ministers passed a
sub-decree on Establishment and Management of Special Economic Zones
to speed up the creation of the zones. The sub-decree details
procedures, conditions and incentives for the investors in the
zone.
106. Since issuing the sub-decree, the Cambodia Special Economic
Zones Board (CSEZB) has approved 21 SEZs as of December 2009, of
which 4 are in operation, located near the borders of Thailand and
Vietnam, and in Phnom Penh, Kampot, and Sihanoukville.
Foreign Investment Statistics
—————————–
107. Foreign Direct Investment (FDI) proposals approved by the
Council for the Development of Cambodia (CDC) have dramatically
increased in recent years, with approved FDI reaching USD 10.9
billion in 2008, compared with USD 201 million in 2004. However, FDI
inflows declined dramatically to only USD 1.6 billion as of October
PHNOM PENH 00000029 016.10 OF 017
2009 due to the impact of the global economic crisis. FDI registered
capital however, has been modest since 1995, with an average inflow
of USD 304 million in the period 1995-2008. The FDI registered
capital figures probably understate actual investment, since they
report only registered capital and not fixed assets. CDC statistics
for fixed assets, however, are based on projections, and the CDC has
no effective monitoring mechanism to determine the veracity of the
numbers. The FDI registered capital flow into Cambodia is uneven
and gradually declined from USD 135 million in 1999 to USD 30
million in 2003, but rose to USD 105 million in 2009.
108. Total FDI registered capital flows into Cambodia for the years
1998-2009 are presented in the table below, in USD million.
(Source: CDC) (Note: statistics from the National Bank of Cambodia
differ significantly from CDC\’s figures.)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
320 135 74 81 50 30 45 383 209 473 260 105
109. Figures from the CDC for registered capital of approved
projects, including domestic investment, and broken down by country
of origin and economic sector, are provided below. The FDI
registered capital figures below may overstate investment because
they include projects that have not yet been, or may never be, fully
implemented and retention of dormant or defunct projects from
earlier years makes the investment figures appear higher.
110. Total cumulative registered investment projects approved, by
country of origin, August 1994 to October 2009 (source: CDC)
Country USD millions Pct.
Malaysia 1,736 32.17
Cambodia 1,526 28.28
China 603 11.17
Taiwan 405 7.50
Thailand 221 4.09
Singapore 199 3.68
South Korea 170 3.15
U.K. 132 2.44
USA 71 1.31
Vietnam 69 1.27
Indonesia 55 1.01
Australia 55 1.01
France 42 0.77
Japan 24 0.44
Other 88 1.63
Total 5,396 100
111. Total cumulative registered investment capital by sector, from
January 1998 to October 2009 (source CDC)
Sector USUSD millions Number of Projects
Industry 1,538.7 748
– Food Processing 93.5 13
– Garments 469.4 421
– Petroleum 212.2 9
– Wood Processing 100.3 17
– Footwear 33.8 27
Agriculture 209.6 90
Services 342.8 81
– Construction 64.6 15
– Telecommunications 94.5 16
Tourism 446.4 98
Total 2537.5
112. New investment projects in USD million, by country of origin,
2004-2009(source: CDC)
Country 2004 2005 2006 2007 2008 2009
Malaysia 7.81 0.6 2.5 19.8 1 na
Cambodia 15 78.5 116.8 264.3 99.8 17.6
U.S. 2.1 2.2 4.3 6.5 12.3 1
Taiwan 4.6 4.1 16.4 14 9.5 5
Singapore 1.6 5.3 3.8 1 12 5.5
China 24 38 28.3 40.4 37.9 34.5
South Korea 4.1 16 4.5 22 19.5 5.2
Hong Kong na 0.3 1.5 0.6 na 1
France 0.6 0.4 na 0.3 2.3 1.6
PHNOM PENH 00000029 017.10 OF 017
Thailand 2 15 10 13.8 30.6 15.5
U.K. 1.5 1 1 1.5 1 2
Canada 1.7 0.6 1.5 na 4.8 1
Indonesia na na na na na 1
Australia na 7 na 3.5 1 na
Japan 0.7 na 1 7.5 4.6 1
Other na na 8.1 78.5 4.1 11
Total 65.71 169 199.7 473.7 240.4 102.9
113. New investment projects in USD million, by sector, 2004-2009
(source: CDC)
Sector 2004 2005 2006 2007 2008 2009
Industry 53.5 325 173.4 269.9 90 56.7
– Food Processing 1 na 22 24 4 2
– Garments 19 54 41.9 45.1 49 20
– Petroleum 1 200 na na na 9.2
– Wood Processing 1 na na 2 na 2
– Mining na 30 1 149 4 7
Agriculture 2 4 2 50.1 26 32.5
Services 5 32 16.3 127.2 43 4
– Construct 3 31 6 5 1 na
– Telecom na na na 42.2 2 2
– Infrastructure na na na 65 na 1
Tourism 5.5 18 18 33.5 101 12
Total 66 379 209.7 480.7 260 105.2
114. The CDC has registered approximately USD 71 million in U.S.
investment since August 1994. Caltex has a chain of service
stations and a petroleum holding facility in Sihanoukville; Crown
Beverage Cans Cambodia Limited, a part of Crown Holdings Inc.,
produces aluminum cans; and Chevron is actively exploring offshore
petroleum deposits. W2E Siang Phong Co., Ltd., a joint venture
between U.S.- Dutch investors, invested in biogas power generation.
There are also U.S. investors in a number of Cambodia\’s garment
factories.
115. In 2008, several Cambodia-focused private equity funds emerged
seeking to raise between USD 100 and USD 500 million each for
investments in infrastructure, agriculture, tourism, and real estate
development, among other sectors. However it appears the global
economic slowdown is limiting fund-raising abilities, and widespread
investments by these funds have not yet materialized.
116. Major non-U.S. foreign investors include Asia Pacific
Breweries (Singapore), Asia Insurance (Hong Kong), ANZ Bank
(Australia), BHP Billiton (Australia), Oxiana (Australia), Infinity
Financial Solutions (Malaysia), Total (France), Cambodia Airport
Management Services (CAMS) (France), Samart Mobil Phone (Malaysia),
Shinawatra Mobile Phone (Singapore), Thakral Cambodia Industries
(Singapore), Petronas Cambodia (Malaysia), Charoeun Pokphand
(Thailand), Siam Cement (Thailand), and Cambrew (Malaysia).
117. Since 2007, several well-known U.S. companies opened or
upgraded their presence in Cambodia. General Electric and DuPont
have established representative offices. Otis Elevators, a division
of United Technologies, also upgraded to a branch office, and
Microsoft initiated a presence through its Market Development
Program.
118. Some major local companies and their sectors are: Sokimex
(petroleum, tourism, garment), Royal Group of Companies (mobile
phone, telecommunication, banking, insurance), AZ Distribution
(construction, telecommunication), Mong Rethy Groups (construction,
agro-industry, rubber and oil palm plantation), KT Pacific Group
(airport project, construction, tobacco, food and electronics
distribution), Hero King (cigarettes, casinos and power), Anco
Brothers (cigarettes, casinos and power), Canadia Bank (banking and
real estate), Acleda Bank (microfinance), and Men Sarun Import and
Export (agro-industry, rice and rubber export).
119. In 2009 Acleda Bank opened its first bank branch outside of
Cambodia in Laos, and has announced plans for further expansion into
Vietnam and China. Statistics on Cambodian investment overseas are
not available, but such investments are likely minimal.
RODLEY
“
10BANGKOK45 SCENESETTER FOR ASSISTANT SECRETARY SHAPIRO
“242728”,”1/7/2010 10:42″,”10BANGKOK45″,”Embassy Bangkok”,”CONFIDENTIAL”,”10BANGKOK3116″,”VZCZCXRO2954
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHBK #0045/01 0071042
ZNY CCCCC ZZH
O 071042Z JAN 10
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9499
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RUEKJCS/SECDEF WASHINGTON DC IMMEDIATE
RHMFISS/CJCS WASHINGTON DC IMMEDIATE
RHHMUNA/HQ USPACOM HONOLULU HI IMMEDIATE
RUEAIIA/CIA WASHINGTON DC IMMEDIATE
RHEHNSC/NSC WASHINGTON DC IMMEDIATE
RUEKDIA/DIA WASHINGTON DC IMMEDIATE”,”C O N F I D E N T I A L SECTION 01 OF 04 BANGKOK 000045
SIPDIS
E.O. 12958: DECL: 01/07/2020
TAGS: PGOV, PREL, MARR, MOPS, PINS, PHUM, TH
SUBJECT: SCENESETTER FOR ASSISTANT SECRETARY SHAPIRO
REF: BANGKOK 3116
Classified By: Ambassador Eric G. John, reasons 1.4 (b) and (d).
1. (C) Assistant Secretary Shapiro, Embassy Bangkok welcomes
you to Thailand. Despite ongoing domestic discord and
current inward focus, Thailand\’s strategic importance to the
U.S. cannot be overstated. Your visit provides an
opportunity to signal the United States\’ appreciation for the
long-standing bilateral relationship, which has facilitated
shared benefits in the fields of security, law enforcement,
and intelligence efforts, as well as groundbreaking
health/research collaboration and long-standing refugee
support. In just the last three months alone, the U.S.-Thai
partnership has yielded a promising new lead in the drive to
develop an HIV vaccination and the seizure of more than 35
tons of North Korean weapons, two examples which serve to
illustrate the depth and breadth of a relationship. In late
December, the Thai Cabinet approved a supplemental budget to
facilitate the delayed peacekeeping deployment to Darfur.
2. (C) As your visit will take place in the run up to the
expected U.S.-Thai Strategic Dialogue, Thai interlocutors
will likely be interested in pursuing discussions on
strategic views of regional security challenges and how the
U.S.-Thai alliance can be focused to assist as Thailand
prepare for threats. The Thai will look to discuss U.S.
assistance through bilateral exercises and training, and
helping the Thai military modernize either by means of
procuring U.S. defense articles or via the hoped for receipt
of excess defense articles by way of Thailand\’s status as a
Major Non-NATO Ally, as Foreign Minister Kasit Piromya raised
in 2009 with Secretary Clinton and other senior USG
officials. In addition, with the Royal Thai Armed Forces
Headquarters (RTARF) preparing for a difficult deployment to
UNAMID in Darfur, the Thai military will look to explore ways
whereby the U.S. can assist.
POLITICAL ENVIRONMENT
———————
3. (SBU) The last eighteen months were turbulent for
Thailand. Court decisions forced two Prime Ministers from
office, and twice the normal patterns of political life took
a back seat to disruptive protests in the streets. The
yellow-shirted People\’s Alliance for Democracy (PAD) occupied
Government House from August to December 2008, shutting down
Bangkok\’s airports for eight days, to protest governments
affiliated with ex-Prime Minister Thaksin Shinawatra. The
red-shirted United Front for Democracy against Dictatorship
(UDD), followers of Thaksin, disrupted a regional Asian
Summit and sparked riots in Bangkok in mid-April 2009 after
Thaksin, now a fugitive abroad in the wake of an abuse of
power conviction, called for a revolution to bring him home.
2010 promises to be contentious as well, with Thaksin and the
red shirts having vowed to redouble their efforts to topple
the government.
4. (C) Prime Minister Abhisit Vejjajiva is a photogenic,
eloquent 44-year old Oxford graduate who generally has
progressive instincts and says the right things about basic
freedoms, social inequities, policy towards Burma, and how to
address the troubled deep south, afflicted by a grinding
ethno-nationalist Muslim-Malay separatist insurgency.
Delivering is another matter, and Abhisit has disappointed us
recently on the repatriation of the Lao Hmong and his
handling of several foreign investment-related issues.
Despite recent higher approval ratings, Abhisit remains
beset by a fractious coalition, vigorous parliamentary
opposition in the form of a large block of politicians under
the Puea Thai Party banner, and street protests from the
red-shirts.
5. (C) While both yellow and red try to lay exclusive claim
to the mantle of democracy, neither side of this split is as
democratic as it claims to be. Both movements reflect deep
social concerns stemming from widespread perceptions of a
lack of social and economic justice, but both seek to triumph
in competing for traditional Thai hierarchical power
relationships. New elections would not appear to be a viable
solution to political divide, and political discord could
persist for years. We continue to stress to Thai
interlocutors the need for all parties to avoid violence and
respect democratic norms within the framework of the
constitution and rule of law, as well as our support for
long-time friend Thailand to work through its current
BANGKOK 00000045 002 OF 004
difficulties and emerge as a more participatory democracy.
RECEDING MONARCHY
—————–
6. (C) Underlying the political tension in Bangkok is the
future of the monarchy. On the throne for 62 years,
U.S.-born King Bhumibol is Thailand\’s most prestigious
figure, with influence far beyond his constitutional mandate.
Many actors are jockeying for position to shape the expected
transition period Thailand during royal succession after the
eventual passing of the King, who is currently in poor
health. Few observers believe that the deep political and
social divides can be bridged until after King Bhumibol
passes and Thailand\’s tectonic plates shift. Crown Prince
Vajiralongkorn neither commands the respect nor displays the
charisma of his beloved father, who greatly expanded the
prestige and influence of the monarchy during his 62-year
reign. Nearly everyone expects the monarchy to shrink and
change in function after succession. How much will change is
open to question, with many institutions, figures, and
political forces positioning for influence, not only over
redefining the institution of monarchy but, equally
fundamentally, what it means to be Thai.
SOUTHERN THAILAND – SEPARATIST INSURGENCY
—————————————–
7. (C) An ethno-nationalist Malay Muslim insurgency in
southern Thailand has claimed an estimated 3,500 lives since
2004. The fundamental issues of justice and ethnic identity
drive the violence as many Malay Muslims feel that they are
second-class citizens in Thailand, and ending the insurgency
will require the government to deal with these issues on a
national level. The insurgents use IEDs, assassinations, and
beheadings to challenge the control of the Thai state in the
deep South; the government has responded through special
security laws which give security forces expanded power to
search and detain people. The Thai military is now deeply
involved in counter-insurgency efforts; in the late
1990s-2004, the military viewed the top national security
threat to be the flow of illegal narcotics from neighboring
Burma.
8. (C) The insurgents direct their anger at the government in
Bangkok, not at the United States. Since a U.S. presence or
perception of U.S. involvement in the South could redirect
that anger towards us and link it to the international
jihadist movement — a link that is currently absent — we
ensure that any offers of assistance or training pass the
\”location and label\” test. Put simply, we keep U.S. military
personnel away from the far South and we make sure that we do
not label any assistance or training as directly linked to
the southern situation. Likewise, we work to avoid feeding
rampant, outlandish speculation that we are somehow fomenting
the violence in the South in order to justify building
permanent bases — a very sensitive issue in Thailand. We do
not want to jeopardize our access to key military facilities
in Thailand like Utapao Naval Air Station.
ENDURING BILATERAL RELATIONSHIP
——————————-
9. (C) Despite the political divide, Thailand\’s strategic
importance to the U.S. should not be understated. The
U.S.-Thai military relationship, which began during World War
II when the U.S. trained Thais to covertly conduct special
operations against the Japanese forces occupying Thailand has
evolved into a partnership that provides the U.S. with unique
benefits. Thailand remains crucial to U.S. interests in the
Asia-Pacific region and beyond. Our military engagement
affords us unique training venues, the opportunity to conduct
exercises that are nearly impossible to match elsewhere, a
willing participant in international peacekeeping operations,
essential access to facilities amid vital sea and air lanes
that support contingency and humanitarian missions, and a
partner that is a key ASEAN nation in which we continue to
promote democratic ideals.
10. (C) Thailand\’s willingness to allow the United States to
use Utapao Naval Air Station as the hub for our regional
assistance program was key to making the 2004 tsunami and the
2008 Cyclone Nargis relief operations a success. While those
high-profile relief operations highlighted publicly the value
of access to Utapao, the air base is used regularly for
military flights. A prime example was the critical support
BANGKOK 00000045 003 OF 004
Utapao provided during OEF by providing an air bridge in
support of refueling missions en route to Afghanistan.
Approximately 1,000 flights transit Utapao every year in
support of critical U.S. military operations both regionally
and to strategic areas of the world. Thailand also provides
valued port access with U.S. naval vessels making calls,
primarily at Laem Chabang and Sattahip, over sixty times per
year for exercises and visits.
11. (SBU) Beyond traditional military activities, our
bilateral military relationship provides benefits in other
important areas. One example it the Armed Forces Research
Institute of Medical Sciences\’ (AFRIMS) collaboration with
Thai counterparts on basic research and trial vaccines. The
sophistication of the Thai scientific and public health
community makes collaboration as useful to the USG as it is
to the Thais. A number of important breakthroughs, such as
in the prevention of HIV/AIDS transmission from mothers to
children, were developed here, and the first partially
successful phase III, double blind trial for a potential HIV
vaccine occurred in 2009; a second such trial run by CDC is
currently ongoing.
COBRA GOLD AND THE MILITARY EXERCISE PROGRAM
——————————————–
12 (C) By means of access to good military base
infrastructure and large areas to conduct unrestricted
operations, Thailand gives the U.S. military a platform for
exercises unique in Asia. Thai leaders are far more willing
to host multinational and bilateral exercises than are other
countries in Asia. This has allowed us to use exercises in
Thailand to further key U.S. objectives, such as supporting
Japan\’s growing military role in Asia and engaging the
Indonesian and Singaporean militaries.
13. (C) Cobra Gold, the capstone event of our exercise
program, is PACOM\’s largest annual multi-lateral exercise and
for 29 years has served to strengthen our relations with
Thailand, highlight our commitment to Southeast Asia, and
provide exceptional training opportunities for our troops.
The event has evolved over the years and now facilitates
important objectives such as promoting a greater role in the
Asian Pacific region for Japan, Singapore, and South Korea
and re-establishing a partner role with Indonesia. Cope
Tiger, a leading air exercise with the Thailand and
Singapore, and CARAT, a bilateral naval event, are key
mechanisms for engagement of the Thai navy and air force.
The Thai military continues to highlight to us the
significance of these events for training and for
relationship building.
PEACEKEEPING EFFORTS AND DARFUR DEPLOYMENT
——————————————
14. (C) Thailand has historically been a strong supporter of
UN peacekeeping missions and was an early contributing nation
to operations in Afghanistan and Iraq. In addition, Thai
generals very effectively led UN forces in East Timor, to
which Thailand contributed 1,500 troops, and in Aceh where a
Thai general served as the principal deputy of the Aceh
Monitoring Mission. Thailand is preparing for deploying a
battalion of troops for a difficult UNAMID mission in Darfur
and has asked for USG assistance (Ref A). During your visit,
the Thai will be very interested in discussing ways ahead on
the deployment. Using GPOI funding, we are working with the
military to increase its peacekeeping capabilities, both as a
contributing nation and as a trainer of neighboring nations.
BORDER CONFLICT WITH CAMBODIA
—————————–
15. (C) Bilateral relations with Cambodia remain volatile,
primarily due to a border dispute centered on 4.6 square
kilometers of overlapping territorial claims adjacent to the
11th century Hindu Preah Vihear temple. Minor skirmishes
have erupted three times since mid-2008, leading to the
deaths of seven soldiers. Cambodian Prime Hun Sen\’s November
2009 decision to appoint Thaksin as an economic advisor
further stoked cross-border tensions.
16. (C) The roots of the border dispute lie in the
Siam-France agreements of 1904-8 and a 1962 International
Court of Justice ruling that granted Cambodia the temple but
left the rest of disputed land unresolved. Tensions spiked
in 2008 when the Thai government in power at that time
BANGKOK 00000045 004 OF 004
supported Cambodia\’s application to UNESCO for a joint
listing of the temple as a world heritage site, only to face
opposition in parliament and an adverse court ruling. Thorny
internal political considerations and historical rancor
between Thailand and Cambodia make progress difficult. We
urge both sides to resolve their differences peacefully
through bilateral negotiations, border demarcation, and a
reduction of troops deployed along the border.
REFUGEE CONCERNS
—————-
17. (C) Due to inherent institutional capabilities, the Thai
military plays a prominent role in the management of the many
refugees that enter Thailand from neighboring countries.
Thailand continues to host more than 140,000 Burmese and
facilitate resettlement of more than 14,000 refugees to the
U.S. annually, but the recent forced repatriation of two
groups of Lao Hmong in late December provoked international
outcry. We underscore to the RTG our disappointment with the
deportation decision and our continuing concern over access
to the Hmong now that they have been returned to Laos. The
Thai have asked us privately about possible repercussions due
to the deportation.
THE INCREASING ROLE OF CHINA
—————————-
18. (C) As the shape of Southeast Asia, Asia writ large, and
the world has changed, so have Thai attitudes. The Chinese
have been making a major push to upgrade all aspects of
relations, including mil-mil. Thailand is not interested in
making a choice between the U.S. and China (nor do we see
closer Chinese-Thai relations as automatically threatening to
our interests here), but we will need to work harder to
maintain the preferred status we have enjoyed. While Thai
military links with the United States are deeper and far more
apparent than Sino-Thai links, China\’s growing influence in
Thailand is readily evident.
19. (C) The Chinese have made a strong effort to court the
Thai military. The Thai military has a range of Chinese
weapons systems in its arsenal; the PLA Navy is interested in
closer links with the Thai navy, and China has worked with
Thailand to improve air defense equipment provided to
Thailand in the late 1980\’s. In 2007 and 2008, Thai and
Chinese Special Forces conducted joint exercises, and other
mil-to-mil exchanges have expanded in recent years, as has
the number of bilateral military VIP visits.
20. (C) During a visit to Thailand by Chinese Minister of
National Defense Liang Guanglie for the King\’s birthday
celebrations in early December 2009, the Thai and Chinese
militaries agreed to expand bilateral exercises to include
the two nations\’ navies, marines, and air forces. The
initial exercise will be conducted early this year, with the
PLA engaging Thai sailors and marines through an amphibious
landing event and a naval rescue and humanitarian relief
exercise. While some entities within the RTG resisted the
expanded engagement, reportedly the MFA and the Marine
Commandant, the Thai tell us that the Chinese pushed hard for
a rapid expansion of bilateral exercises. The Thai Marines
suggested to us that the exercise will be held at the platoon
or company level; it is unclear how many Navy personnel may
participate.
21. (C) The expansion of joint exercises follows China
providing Thailand with $49 million in military assistance
following the 2006 coup. Beyond exercises and assistance,
the number of exchanges by Thai and Chinese officers studying
at military institutes has increased significantly in recent
years, particularly since the coup. The PLA has also
actively courted Thai military leaders, including Defense
Minister Prawit Wongsuwan and Army Commander General Anupong
Paojinda, through multiple hosted-visits to China.
JOHN
“
09PHNOMPENH969 SCENESETTER FOR THE VISIT OF CODEL FALEOMAVAEGA TO CAMBODIA
“242186”,”12/31/2009 8:33″,”09PHNOMPENH969″,
“Embassy Phnom Penh”,
“UNCLASSIFIED//FOR OFFICIAL USE ONLY”,””,
“VZCZCXRO8817
OO RUEHHM
DE RUEHPF #0969/01 3650833
ZNR UUUUU ZZH
O 310833Z DEC 09
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1515
INFO RUEHHI/AMEMBASSY HANOI PRIORITY 4112
RUEHKO/AMEMBASSY TOKYO PRIORITY 3325
RUEHVN/AMEMBASSY VIENTIANE PRIORITY 2892
RUEHHM/AMCONSUL HO CHI MINH PRIORITY 0158
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2420
RUEHGV/USMISSION GENEVA PRIORITY 1723”,
“UNCLAS SECTION 01 OF 05 PHNOM PENH 000969
SIPDIS
SENSITIVE
STATE FOR EAP/MLS, H
E.O. 12958: N/A
TAGS: PREL, PGOV, KJUS, ECON, MARR, CB
SUBJECT: SCENESETTER FOR THE VISIT OF CODEL FALEOMAVAEGA TO
CAMBODIA
SENSITIVE BUT UNCLASSIFIED
1. (SBU) Embassy Phnom Penh warmly welcomes CODEL
Faleomavaega\’s visit to Cambodia. Yours is the first
Congressional visit since Senator Jim Webb\’s in mid-August,
and you will find a Cambodia seeking to take full advantage
of its first real period of stability in more than a
generation. Although the tempo has quickened in the conduct
of U.S.-Cambodian bilateral relations, exemplifying a broader
and growing USG interest in Cambodia and the region, the pace
is likely to slow somewhat since Cambodia deported 20 Uighur
asylum-seekers on December 19 under strong Chinese pressure
and in contravention of its international obligations and
long-standing cooperation with the UN High Commissioner for
Refugees (UNHCR). Nonetheless, there have been positive
developments in several areas: peaceful national elections
in July 2008; active Cambodian participation in the Global
Peace Operations Initiative (GPOI); and continued cooperation
to combat trafficking in persons. Cambodia remains a solid
partner on counterterrorism and POW/MIA matters. Thirty
years after the Khmer Rouge atrocities, a mixed
international-domestic tribunal just concluded the trial of
the first of several cases to wide acclaim both in Cambodia
and internationally for the justice that has long been denied
the victims of those atrocities. Our military-to-military
relationship continues to strengthen: ship visits and medical
readiness and engineering exercises are being utilized to
improve cooperation in civil-military operations. Our
bilateral trade relationship continues to grow with a rapidly
expanding U.S. commercial presence, including Microsoft,
DuPont, GE, and others, though bilateral debt remains a
continuing sticking point in economic relations. While our
development work still faces significant challenges, we are
seeing a new level of engagement on the part of the Royal
Government of Cambodia (RGC) in health (HIV/AIDS and avian
influenza), education, and environmental issues. Even so,
problems remain: Cambodia is one of the world\’s poorest
countries, and economic growth decreased considerably in 2009
as Cambodia lost over 12 % of its U.S. garments market share;
weak rule of law, corruption, and weak institutions continue
to hamper Cambodia\’s development; incidents of land disputes
and forced evictions, sometimes accompanied by violence,
continue to be a high-profile concern; and a spate of
defamation and disinformation lawsuits are constricting
political space.
2. (SBU) Potential topics for discussion during your visit
are strong cooperation in counterterrorism, counternarcotics,
and anti-trafficking in persons which are also reflected in
renewed U.S.-ASEAN efforts such as the Lower Mekong
Initiative. In the regional context, you may wish to discuss
the need for harmonious Cambodian-Thai relations and the
peaceful settlement of the Preah Vihear border dispute. Your
visit may afford the opportunity to raise concerns
highlighted in Washington about the recent deportation of the
Uighurs and the constriction of political space. The U.S.
will soon consider providing future assistance to the Khmer
Rouge Tribunal with the recent resolution by the UN and RGC
of an anti-corruption mechanism for the court; the CODEL will
hear Cambodian reactions to the KRT as it visits sites
commemorating the Khmer Rouge genocide. Your visit is also
an opportunity to evaluate the issue of the bilateral debt
and to hear Cambodian perspectives on the proposed TRADE Act
in Congress, which provides duty free access for garments to
those qualifying nations with good labor practices.
Domestic Political Stability
—————————-
3. (SBU) The domestic political situation remains stable.
According to an International Republican Institute public
opinion poll in August, 79 percent of the population believes
that the country is headed in the right direction, compared
to 77 percent in early 2008. The improving infrastructure —
roads, bridges, schools, clinics — is the main reason for
this outlook. Corruption, high prices, and poverty top
concerns cited by those worried about the country\’s direction
and other poll data show a desire for more security from
crime and improved transportation and health care systems.
Cambodia\’s 2008 national elections were peaceful and allowed
the Cambodian people to express their preferences in an open
and fair manner. Despite these improvements, the elections
fell short of international standards on several counts,
PHNOM PENH 00000969 002 OF 005
including equitable access to media. U.S. foreign assistance
aims to encourage expanded political participation by youth
and women in elections and political processes and also to
emphasize greater transparency and accountability by the
government.
Expanding Military Relations
—————————-
4. (SBU) As demonstrated by the September meeting between
Secretary Gates and Minister of Defense Tea Banh and the
annual Bilateral Defense Dialogue, U.S.-Cambodian security
cooperation is expanding at a sustained rate. As our
military-to-military relationship matures beyond the
traditional and still-active areas of MIA recovery and
demining, we are looking to focus on areas such as defense
reform and professionalization, regional cooperation and
international peacekeeping, border and maritime security,
counterterrorism, and civil-military operations. Ship
visits, medical readiness exercises and engineering
capabilities exercises are all being utilized to improve
cooperation in civil-military operations within Cambodia, and
we expect the USNS Mercy to arrive in June for a ten-day
visit. Through security cooperation we are helping to
develop centralized logistics and transportation functions
within the Armed Forces, a central coordinating authority for
maritime security and building capacity to secure Cambodia\’s
maritime domain, a credible peacekeeping and counterterrorism
capacity, and greater regional and multilateral cooperation.
Members of the PACOM Augmentation Team provide counsel and
training to the Royal Cambodian Armed Forces in its continued
effort to build a credible counterterrorism unit.
Cambodia as an International Actor:
Global Deployments and the Khmer Rouge Tribunal
——————————————— —
5. (SBU) With renewed confidence borne of stability,
Cambodia has begun looking outward and seeks a more visible
role in international and regional affairs consistent with
the country\’s limited resources and capacity. Cambodia is an
active participant in the Global Peace Operations Initiative
(GPOI) and participated in its second Capstone exercise in
Indonesia in June. The GPOI program has assisted Cambodia in
increasing peacekeeping operations (PKO) capacity to support
continued UN PKO rotations to Sudan, where Cambodia has
deployed demining companies since 2006. Cambodia will host
the GPOI Capstone exercise in 2010 — an extraordinary
undertaking for such a nascent peacekeeping force — and is
preparing to expand its PKO deployments to Chad and the
Central African Republic early in the new year.
6. (SBU) Cambodia has engaged the international community in
its pursuit of justice for the Khmer Rouge genocide.
Although the establishment of the Extraordinary Chambers in
the Courts of Cambodia (ECCC) took seven years to negotiate
with the UN, the Khmer Rouge Tribunal (KRT) has since
arrested and detained five Khmer Rouge leaders and charged
them with some 25 separate crimes, including crimes against
humanity, war crimes and genocide. The just-completed
hearing for Kaing Guek Eav, known as Duch, former head of the
Tuol Sleng torture center, is the most tangible step to date
in the hybrid tribunal\’s efforts to try those individuals
most responsible for the 1.7 million people killed under the
brutal Khmer Rouge regime. Successful trials in the KRT have
the potential to strengthen rule of law and judicial
independence in Cambodia and address questions of impunity
and accountability for the crimes of the Khmer Rouge regime.
Past allegations of mismanagement and corruption within the
Cambodian court administration had threatened its integrity,
but the appointment of an Independent Counselor function in
August was deemed by donors as a key step toward a credible
watchdog and preventative mechanism; no additional
allegations have surfaced for nearly two years. In addition,
judicial proceedings are going well and there are no
allegations linking corruption to any of the judges. The
court will require more financial support; the Secretary has
concurred that the KRT is capable of providing justice at an
international standard, and we believe that implementation of
an Independent Counselor function provides the KRT with a
credible anti-corruption mechanism, paving the way for
additional USG contributions in FY2010 and beyond.
PHNOM PENH 00000969 003 OF 005
Cambodian Economy Hard Hit by the Global Economic Crisis
——————————————— ———–
7. (SBU) Cambodia\’s heady days of double digit economic
growth are over. The adverse impacts of the global economic
crisis have brought Cambodia\’s growth to a screeching halt,
from 10.2 percent in 2007 to low single digits, if not the
World Bank\’s estimated negative 1 percent in 2009. Nearly
all of the pillars of Cambodia\’s economy – garments, tourism,
and construction – have been adversely affected; only the
agriculture sector has thus far been unaffected. The
economic crisis poses significant challenges to sustaining
the country\’s progress toward its development goals and
meeting the needs of the country\’s most vulnerable affected
by the crisis. To date the government\’s efforts to mitigate
the adverse impacts have failed to address the fundamental
challenges of sustaining economic growth and a more
comprehensive, coordinated response is urgently needed to
prevent greater numbers of the population from falling into
poverty. The garment industry represents roughly 30 percent
of the country\’s overall GDP. The U.S. market for Cambodian
textile exports is still a crucial part of Cambodia\’s
economy, representing over 70 percent of the country\’s
exports in this key sector and the U.S. is Cambodia\’s chief
trading partner. However, Cambodia\’s garment market share in
the U.S. reportedly dropped from 3.2 percent to 2.8 percent
in the past year, more than a 12 percent decline. The
Cambodian government, garment industry, and unions are strong
supporters of proposed legislation by Senator Feinstein that
would allow duty-free access for garments from Cambodia and
other less developed countries. Chevron is involved in
Cambodia\’s offshore oil/gas exploration efforts, with 2012
foreseen as the earliest possible date for exploitation of
these resources. While American investors have been slower
than their Asian counterparts to seize Cambodia\’s business
opportunities, the U.S. commercial presence is rapidly
expanding with a multi-million dollar investment by U.S.
manufacturer Crown Holdings and the establishment of
representative offices by GE, DuPont, Microsoft, and Otis
Elevators.
Bilateral Debt
————–
8. (SBU) Cambodia\’s bilateral debt to the U.S. totals USD162
million, but with arrears factored in could reach over USD360
million. The debt stems from shipments of agricultural
commodities, such as rice and wheat flour, financed with
low-interest-rate loans by the U.S. Department of Agriculture
to the Lon Nol regime in the early 1970s. Interest
accumulated over three decades, following the country\’s fall
to the Khmer Rouge. In 1995, Cambodia and Paris Club
creditors (including the U.S.) agreed to a debt restructuring
package, and Cambodia signed bilateral agreements with and
began repaying most creditors. Bilateral negotiations with
the U.S. stalled over the amount of debt owed, until 2006
when an agreement in principle was reached on the exact
amount of principal owed.
9. (SBU) Since then, the RGC has been reluctant to sign a
bilateral repayment agreement. This is partly due to the
fact that, while the RGC accepts responsibility for debts
incurred by former governments, there are domestic political
obstacles to the debt of a regime that deposed King Sihanouk.
The RGC is seeking concessions beyond the terms of the 1995
Paris Club accords and wants to link repayment directly to a
debt-swap program similar to debt-for-assistance measures
enacted for Vietnam to make a repayment agreement more
palatable to Cambodians and the members of the National
Assembly. In 2007 key Senate Foreign Relations Committee and
House Foreign Relations Committee staffers expressed interest
in a debt-for-aid mechanism to support education or other
programs. Other staffers have suggested eliminating the debt
entirely. Cambodia has been given the final best offer on
debt rescheduling that the USG is able to make under the
Paris Club principles and existing legal and budgetary rules,
and Cambodia\’s economic and financial situation does not
merit debt reduction. The USG continues to urge the RGC to
accept the already concessional interest rate of 3 percent
and sign the repayment agreement first, arguing that Congress
might view more favorably a debt-swap or other agreement if
Cambodia is already making payments and in good financial
standing with the U.S. However, the RGC still seeks to link
PHNOM PENH 00000969 004 OF 005
directly the signing of a repayment agreement with a
guarantee of a debt recycling program.
Human Rights: Political Space, Treatment of Asylum Seekers
——————————————— ————–
10. (SBU) The RGC allowed significantly greater freedom to
the political opposition during the 2008 election than in
previous elections, and had shown some willingness to engage
on civil liberties and human rights issues. However,
Cambodia\’s overall human rights record remains poor. Prime
Minister Hun Sen and the Cambodian People\’s Party continue to
dominate all three branches of the government as well as
other national institutions. Cambodia\’s leaders recently
revived a tactic last seen in 2005 to use Cambodia\’s weak and
easily-influenced judiciary to pursue legal cases against
critics and the political opposition. Defamation,
disinformation, and incitement cases against members of the
political opposition, journalists, and private citizens
brought through the mid-year was a worrying trend, and one
that eroded some of the recent gains for political space in
Cambodia. Land disputes and forced evictions, sometimes
accompanied by violence, continue to be a high-profile
problem. When an opposition publicity stunt spotlighted
non-transparent border demarcation with Vietnam —
potentially disenfranchising farmers of tens of thousands of
hectares of farm land — the courts were again employed and
some human rights observers are concerned charges will be
exaggerated to punish the opposition for a minor infraction
that challenged the ruling party\’s credibility. U.S. foreign
assistance aims to reduce corruption, improve political
rights and selected civil liberties, and improve the justice
system in support of these aims by supporting reform-minded
institutions and individuals; engaging civil society as a
voice for reform; and building capacity of public and private
institutions.
11. (SBU) Perhaps the most significant event on Cambodia\’s
political stage since the 2008 election was the Prime
Minister\’s decision to deport 20 Uighur asylum seekers back
to China on December 19, just a day before the arrival of the
Chinese Vice President and the signing of $1.2 billion in
bilateral assistance and loan agreements. All 20 had \”Person
of Concern\” letters jointly administered by the UNHCR and a
recently-established RGC Refugee Office. In the days leading
up to the deportation on immigration grounds, all Cambodian
interlocutors signaled that the RGC would honor its
international commitments as a party to the 1951 UN
Convention on Refugees and the 1967 protocol, and vet the
asylum seekers through a credible process for refugee
determination, which had indeed been its practice in previous
sensitive refugee matters, such as the Vietnamese
Montagnards. But at the eleventh hour, the RGC abruptly
changed course amid persistent pressure by China in advance
of its high-level visit. The UNHCR and many in the
international community branded the deportation a \”serious
breach of international refugee law.\” When high-level
telephone representations opposing the deportation went
unheeded, the U.S. expressed its displeasure with the
involuntary return of these asylum seekers and, in a
statement issued on December 21, noted that the incident
would affect Cambodia\’s relationship with the United States
and its international standing.
Progress on Trafficking in Persons Hits a Snag
——————————————— –
12. (SBU) In past years, Cambodia made significant progress
in combating trafficking in persons as reflected in their
movement from Tier 3 in 2005 to Tier 2 in 2008. A new law on
Suppression of Human Trafficking and Commercial Sexual
Exploitation came into effect in February 2008 and the RGC
launched a nationwide campaign to persuade Cambodians to take
action against human trafficking. Despite this progress,
Cambodia was downgraded to Tier Two Watch List in 2009.
Cambodia\’s anti-trafficking efforts remain hampered by
corruption at all levels of government and an ineffectual
judicial system. An initial increase in police crackdowns on
brothels, credited by some to the passage of the new law, may
have resulted in many prostitutes selling sex on the streets,
increasing their vulnerability to violence and HIV infection.
New guidelines implemented by DPM Sar Kheng and increased
training for police officers have improved this situation,
PHNOM PENH 00000969 005 OF 005
though police in some areas continue to target prostitutes
for arrest. As a result of the confusion over the law, there
was a decrease in arrests (approximately 30-40%) and
convictions of traffickers during last year\’s TIP Report
rating period (April 2008-March 2009). Some of this is
attributable to a lack of training. Although its commitment
is significant, Cambodia is far from solving its own TIP
problems, including overcoming widespread corruption and
challenges arising in implementing the 2008 anti-TIP law.
Observers are hopeful that a new National Committee to combat
TIP launched in November and stronger central review of
ongoing prosecutions, will turn the tide in the battle
against trafficking.
Corruption Remains Endemic
————————–
13. (SBU) The RGC has failed to finalize and pass
much-needed anti-corruption legislation, though that appears
likely to change soon. While a solid Anti-Terrorism Law,
Money Laundering Law, and Criminal Procedures Code moved at a
brisk pace to passage, other key pieces of legislation have
only recently made headway. The massive, revised Penal Code
just passed the Senate and a third of the law has been
promulgated. The remainder of the Penal Code will be enacted
by the end of 2010. Hun Sen lived up to his public promise
that a December 11 Council of Ministers would approve the
Anti-Corruption Law. The draft law is now with the National
Assembly and may well be passed in the first part of 2010.
In 2008, Transparency International ranked Cambodia 166 out
of 180 countries in its corruption perceptions index; Burma
was the only country in Asia ranked lower than Cambodia.
There has been continued and widespread land-grabbing by
government officials and the politically well-connected.
Uprooted communities from outside Phnom Penh seek government
redress by traveling to the city to draw media and public
attention to their plight. Cambodia\’s competitiveness
ranking (109 out of 134 in 2008) is also one of the lowest in
the world, again due largely to perceived systemic
corruption. Rather than embrace the reforms that would
garner increased investment and the new jobs that would be
created, the RGC appears to be banking on the future income
from its as-yet-untapped oil and gas reserves, which should
come on stream by 2012 at the earliest. The current corrupt
political environment flows into the top-heavy and
anachronistic military as well, providing another challenge
to developing our mil-to-mil relationship.
14. (SBU) Given where Cambodia was a decade ago, it has come
a long way. Given where Cambodia needs to be, it still has
much to do to establish transparency, accountability, and
general good governance. The United States is perceived as a
trusted partner in these efforts but, at the same time, our
efforts are not always successful and the allure and largesse
of China continues to increase. Although Cambodia\’s tragic
history should be no excuse for not resolving its current
problems, that history does largely set the parameters for
how far and how fast Cambodia can evolve into the kind of
nation and society we all hope it will someday become.
Continual U.S. engagement at all levels and in all fields
will remain crucial for effecting these needed changes. Your
visit is a welcome addition to the range of our engagement
efforts and the Embassy stands ready to help make the visit a
success.
ALLEGRA
“
09BANGKOK3188 THAI-CAMBODIAN SPAT: THAKSIN RETURNS TO CAMBODIA TO TAKE CREDIT FOR PARDON OF THAI, LATEST ILLEGAL LOGGING INCIDENT
“240310”,”12/17/2009 9:54″,”09BANGKOK3188″,
“Embassy Bangkok”,”CONFIDENTIAL”,””,
“VZCZCXRO8828
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHBK #3188/01 3510954
ZNY CCCCC ZZH
O 170954Z DEC 09
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9340
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RUEHKO/AMEMBASSY TOKYO IMMEDIATE 2181
RUEHBJ/AMEMBASSY BEIJING IMMEDIATE 7800
RUEHUL/AMEMBASSY SEOUL IMMEDIATE 6052
RUEHBY/AMEMBASSY CANBERRA IMMEDIATE 0256
RHMFISS/CJCS WASHINGTON DC IMMEDIATE
RUEKJCS/SECDEF WASHINGTON DC IMMEDIATE
RHHMUNA/CDR USPACOM HONOLULU HI IMMEDIATE
RUEKDIA/DIA WASHINGTON DC IMMEDIATE
RUEAIIA/CIA WASHINGTON DC IMMEDIATE
RHEHNSC/NSC WASHINGTON DC IMMEDIATE”,”C O N F I D E N T I A L SECTION 01 OF 03 BANGKOK 003188
SIPDIS
E.O. 12958: DECL: 12/17/2019
TAGS: PREL, PGOV, PBTS, TH, CB
SUBJECT: THAI-CAMBODIAN SPAT: THAKSIN RETURNS TO CAMBODIA
TO TAKE CREDIT FOR PARDON OF THAI, LATEST ILLEGAL LOGGING
INCIDENT
Classified By: Acting Deputy Chief of Mission Robert D. Griffiths, reas
ons 1.4 (b) and (d).
1. (C) Summary: Former Thai Prime Minister Thaksin Shinawatra
December 13 returned to Phnom Penh to take credit for the
by-all-accounts orchestrated release of Siwarak Chutipong, a
Thai engineer who had been imprisoned for reportedly sharing
flight details for Thaksin\’s November visit to Cambodia with
the Thai Embassy. Major General (ret.) Sornchai Montriwat, a
close associate of opposition party leader Chavalit
Yongchaiyudh, confirmed to us that public speculation was
correct that the pardon of Siwarak was a continuation of the
closely managed effort by Cambodian Prime Minister Hun Sen
and Thaksin to pressure the government of Prime Minister
Abhisit Vejjajiva. Contacts have recently indicated to us
that the Thai-Cambodian relationship is not as strained as it
appears publicly, yet a December 16 public statement by
government spokesperson Panitan Wattanayakorn clearly
illustrates that much will need be done before relations
return to normal. Panitan called on Cambodia to cease
interference in the Thai judicial system and in Thai politics
and to annul Thaksin\’s appointment as economic advisor to
Phnom Penh. While the two governments continue to quarrel,
the latest of three armed clashes involving Cambodians
illegally logging in Thailand took place, leaving one dead.
End Summary.
2. (C) Comment: Nearly all Thai officials and pundits we have
talked to recently say that Thaksin\’s Cambodia gambit is an
extension of Thai domestic politics. Though Thaksin\’s image
within Thailand likely risks being tarnished if his visits
leave him appearing too closely aligned with Cambodia, the
former Prime Minister\’s visits serve his apparent goal of
socializing Thai audiences to the idea of his presence in a
neighboring country. In addition, the visits also appear to
be part of a strategy to pressure Prime Minister Abhisit at a
time when the Thai Supreme Court for Political Office Holders
is expected to rule soon on the fate of 76 billion baht of
assets seized from Thaksin by the Assets Examination
Committee due to accusations that Thaksin illegally enriched
himself while Prime Minister. End comment.
THAKSIN RETURNS TO CAMBODIA AS PART OF A MANAGED DRAMA
——————————————— ———
3. (U) Fugitive former Prime Minister Thaksin Shinawatra
returned December 13 to Cambodia to visit Siwarak Chutipong,
a Thai national who had been sentenced to seven years in
prison following his November 12 arrest for reportedly
leaking information about Thaksin\’s flight schedule during a
November visit to Cambodia, and to resume duties as an
economic advisor to Cambodian Prime Minister Hun Sen.
Siwarak had been sentenced December 8 to seven years in
prison by Phnom Penh Municipal Court but received a royal
pardon December 11. Siwarak had been working as engineer for
the Cambodian Air Traffic Services prior to his arrest.
SIWARAK A VICTIM OF POLITICS, NOT INTERNATIONAL ESPIONAGE
——————————————— ————
4. (C) Siwarak\’s case has been widely viewed by the Thai
media and our contacts as a continuation of the Thai
political divide that pits Thaksin and his red-shirt
supporters against the Democrat-led government. Siwarak
worked for a company controlled by Thai businessman Samart, a
long-time competitor to Thaksin\’s A.I.S. and currently one of
the key financial backers of Phumjai Thai defacto leader
Newin Chidchob, who defected from the pro-Thaksin camp in
December 2008.
5. (C) MGEN Sornchai Montriwat, a Puea Thai MP and close
advisor to Puea Thai Party leader General Chavalit
Yongchaiyudh, told us during a December 9 meeting that he had
not slept the night before due to the case. A bleary-eyed
Sornchai said he had fielded calls from Hun Sen, Cambodian
Defense Minister Tea Banh, and Siwarak\’s mother as
discussions proceeded on how to script the pardon. According
to Sornchai, Hun Sen and Tea Banh wanted Chavalit to file the
pardon request immediately after the Cambodian court had
sentenced the Thai defendant. Sornchai reluctantly woke
BANGKOK 00003188 002 OF 003
Chavalit up in the middle of the night, after telling Hun Sen
and Tea Banh that he could not make commitments himself.
Sornchai, who had been negotiating as the point man between
Hun Sen and Chavalit, told us that Chavalit had not wanted
his name at the top of the pardon petition signature list.
In the end, Hun Sen credited Thaksin for the pardon;
according to December 14 press reports.
6. (C) Sornchai told us December 16 that he had led the Puea
Thai team of MPs to Phnom Penh December 14 to bring Siwarak
back to Thailand and that the group had met with Hun Sen for
one hour. Regarding the incident which led to accusations of
spying by Siwarak, a conviction, and then a pardon, Sornchai
told us Hun Sen had said that the event had been a
coincidence and the Thai air traffic controller was unlucky.
Sornchai\’s account of Hun Sen\’s assessment that the Siwarak
incident was ancillary to Thai-Cambodian relations was backed
up publicly December 14 by Thani Thongphakdi, the Thai MFA\’s
Deputy Spokesperson, who said that the RTG welcomed the
release of Siwarak, but that this act would not necessarily
lead to a restoration of full diplomatic ties.
RELATIONS REMAIN OFF TRACK
————————–
7. (U) Despite the recent worsening of bilateral relations,
signs point to halting attempts to improve relations. Thai
Government Spokesperson Panitan Wattanayakorn said publicly
December 16 that the Cambodian government had expressed its
intention to repair bilateral relations via the return of
Ambassadors to the two capitals. Panitan cautioned that the
first steps to restoring normal diplomatic relations must be
taken by Cambodia, as Phnom Penh would need to stop
interfering with the Thai judicial system, cease meddling in
Thai domestic politics, and revoke the appointment of Thaksin
as an economic advisor to the Cambodian government. Panitan
did suggest that the two sides may return the First
Secretaries of their respective Embassies, who had been
expelled after the Siwarak arrest, as a first step in
normalizing relations. In contrast to the Thai government\’s
strident reaction to Thaksin\’s November visit to Cambodia,
Panitan December 13 downplayed the effect of Thaksin\’s second
visit. Panitan said the RTG considered the trip a matter
between Thaksin and Cambodia.
8. (U) Later December 16, Hun Sen was quoted publicly as
saying that frayed relations with Thailand could not be
normalized while the Abhisit government was in power, and he
blamed the troubled relations on the conflict over disputed
territory near the Preah Vihear temple. Hun Sen reportedly
said that a new government in Thailand was necessary before
the Thais would be willing to send an Ambassador back to
Phnom Penh.
9. (C) While relations between Thailand and Cambodia are
strained; contacts have suggested to us recently that the
state of affairs is not as serious as described in the media.
Thai National Intelligence Agency XXXXXXXXXXXXXXXXXX
XXXXX told us in late November that it was his personal
view that the ongoing Thai-Cambodian confrontation was all
about Thai domestic politics. Hun Sen had placed a bet on
one side in the ongoing Thai domestic political conflict,
XXXXX said, but Hun Sen would eventually make a deal with
whoever was in power in Bangkok in order to protect his own
interests. XXXXX predicted that Hun Sen would ultimately
lose his bet because Thaksin would not be coming back.
LATEST LOGGING CLASH LEAVES ONE DEAD
————————————
10. (C) An unpublicized December 6 incident that involved
rangers (taharn praan), police, and forestry officials on the
Thai side, and Cambodian loggers and possibly some
moonlighting Cambodian police or soldiers on the Cambodian
side, resulted in the death of one Cambodian on the way to
the hospital. XXXXXXXXXXXXXXXXXXX passed us an
after-incident report, complete with pictures of Thai
security officials\’ confrontation with Cambodians conducting
illegal logging along the border in the vicinity of the
Kantharalak District of Sri Sa Ket Province. XXXXX told us
BANGKOK 00003188 003 OF 003
that Cambodian soldiers were protecting the loggers when
shots were exchanged between the two sides, resulting in the
death of one of the loggers, who suffered from shotgun and
grenade wounds. Patches confiscated from the Cambodians
involved suggested involvement by security personnel, who
were presumably moonlighting in this other role. A saw
machine, 14 processed logs, and carts were also seized. The
logger\’s body was repatriated December 7.
11. (C) This armed conflict involving illegal logging inside
Thailand by Cambodians was the third such incident which has
come to our attention in recent months. A September 11 clash
between Thai security officials and Cambodian loggers on the
Thai side of the border resulted in the death of one
Cambodian. Some Cambodian NGOs and media alleged that that
the logger had been burned alive by Thai forces, but the
initial reports had the location of the incident in the wrong
province, and we could not find any corroborating evidence to
substantiate Cambodian allegations. XXXXXXXX told us that
he had been able to confirm that the Cambodian had been shot
to death during a confrontation with Thai taharn praan, but
not burned alive.
12. (C) We were able to confirm XXXXX account separately
with XXXXX, the XXXXXX of the XXXXXXXXXXXXXXXX
XXXXXX, who is likely the province\’s XXXXXX human rights
advocate. XXXX had taken three trips to the border to
inquire about this case, and a clear picture had emerged that
no one had been burned. According to XXXXX, both Thai and
Cambodian contacts reported that an illegal logger had been
killed on the Thai side of the border, and Cambodian contacts
were sure the perpetrators had been dressed in the black
outfits of the Thai rangers.
13. (C) XXXXX stressed to us that while Thai police and
military sources admitted the killing took place, they
adamantly denied anyone was burned either before or after the
fact. Such an act would trigger retaliation and no one
wanted to see that. Killing illegal loggers was one thing,
XXXXX suggested, but burning someone would constitute an
unimaginable act of barbarism. Separately, the regional
Internal Security Operations Command reluctantly confirmed to
us that a Cambodian had been killed, but stressed that there
had been no burning involved in the incident.
JOHN
“
09BANGKOK3006 SCENESETTER FOR THE VISIT OF GENERAL NORTH AND BRIGADIER GENERAL CROWE
“236618”,”11/25/2009 9:46″,”09BANGKOK3006″,
“Embassy Bangkok”,”CONFIDENTIAL”,””,
“VZCZCXRO8200
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHBK #3006/01 3290946
ZNY CCCCC ZZH
O 250946Z NOV 09
FM AMEMBASSY BANGKOK
TO RHMFISS/HQ PACAF HICKAM AFB HI IMMEDIATE
RUEKJCS/SECDEF WASHINGTON DC IMMEDIATE
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RHMFISS/CJCS WASHINGTON DC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 9102
RHHMUNA/HQ USPACOM HONOLULU HI IMMEDIATE
RUEAIIA/CIA WASHINGTON DC IMMEDIATE
RHEHNSC/NSC WASHINGTON DC IMMEDIATE
RUEKDIA/DIA WASHINGTON DC IMMEDIATE”,
“C O N F I D E N T I A L SECTION 01 OF 04
BANGKOK 003006
SIPDIS
E.O. 12958: DECL: 11/25/2019
TAGS: PGOV, PREL, MARR, MOPS, PINS, PHUM, TH
SUBJECT: SCENESETTER FOR THE VISIT OF GENERAL NORTH AND
BRIGADIER GENERAL CROWE
Classified By: Deputy Chief of Mission James F. Entwistle,
reasons 1.4
(b) and (d)
1. (C) General North and Brigadier General Crowe, Embassy
Bangkok welcomes your visit to Thailand during the
celebration of King Bhumibol Adulyadej\’s 82nd birthday. Your
visit signals the United States\’ appreciation for the
long-standing bilateral relationship, which has facilitated
shared benefits in the fields of security, law enforcement,
and intelligence efforts, as well as groundbreaking
health/research collaboration and long-standing refugee
support. Your visit affords the opportunity to affirm our
support for our important mil-mil relationship, after a
stretch of time in which it has appeared to many Thai that
the U.S. places decreasing importance on that relationship
and engaging top Thai military leaders, even as China\’s
romance effort expands.
POLITICAL ENVIRONMENT
———————
2. (C) After the December 2008 installation of the
Democrat-led coalition government of Prime Minister Abhisit
Vejajjiva, Thailand has experienced a period of relative
political stability. That said, Thailand remains deeply
divided, politically and socially, and struggles to break
free of an inward focus. The traditional elite, urban middle
class and the mid-south are on largely one side (Democrat in
parliament, \”yellow\” in the street) and the political allies
of fugitive former PM Thaksin, with largely rural supporters
in the North and Northeast on the other (opposition Puea Thai
in parliament, \”red\” in the street). Abhisit generally has
progressive instincts about basic freedoms, social
inequities, foreign policy, and how to address the troubled
deep South. The Prime Minister\’s approval ratings have
benefited, at least temporarily, from a problematic period
for Thaksin subsequent to his badly chosen comments to the
\”The Times\” of London on royal succession and an ill-advised
visit to Cambodia following his appointment as economic
advisor to Cambodian Prime Minister Hun Sen.
3. (C) Despite relatively higher approval ratings, Abhisit
remains beset by a fractious coalition, vigorous
parliamentary opposition in the form of a large block of
politicians under the Puea Thai Party banner, and street
protests from \”red-shirts.\” The most dramatic political
development of the past year was the mid-April United Front
of Democracy for Dictatorship (UDD), or \”reds\”, riots in
Bangkok and Pattaya, which led to the postponement of a
regional Asian Summit and burned busses in Bangkok. UDD have
been planning a return to the streets, possibly with a \”final
showdown\” rally that would begin November 28, but the rally
was called off November 25 out of respect for the King\’s
birthday celebrations. Thaksin himself has suggested to
supporters that he did not know how long he could \”ask the
red shirts to be tolerant.\”
4. (C) While both yellow and red try to lay exclusive claim
to the mantle of democracy, neither side of this split is as
democratic as it claims to be. Both movements reflect deep
social concerns stemming from widespread perceptions of a
lack of social and economic justice, but both seek to triumph
in competing for traditional Thai hierarchical power
relationships. New elections would not appear to be a viable
solution to the political divide, and political discord could
persist for years. We continue to stress to Thai
interlocutors the need for all parties to avoid violence and
respect democratic norms within the framework of the
constitution and rule of law, as well as our support for
long-time friend Thailand to work through its current
difficulties and emerge as a more participatory democracy.
RECEDING MONARCHY
——————-
5. (C) Underlying the political tension in Bangkok is the
future of the monarchy. On the throne for 62 years, the
U.S.-born King Bhumibol is Thailand\’s most prestigious
figure, with influence far beyond his constitutional mandate.
Many actors are jockeying for position to shape the expected
transition period Thailand during royal succession after the
eventual passing of the King, who is currently in poor health
and rarely seen in public anymore. Few observers believe
that the deep political and social divides can be bridged
until after King Bhumibol passes and Thailand\’s tectonic
BANGKOK 00003006 002 OF 004
plates shift. Crown Prince Vajiralongkorn neither commands
the respect nor displays the charisma of his beloved father,
who greatly expanded the prestige and influence of the
monarchy during his 62-year reign. Nearly everyone expects
the monarchy to shrink and change in function after
succession. How much will change is open to question, with
many institutions, figures, and political forces positioning
for influence, not only over redefining the institution of
monarchy but, equally fundamentally, what it means to be
Thai.
ENDURING BILATERAL RELATIONSHIP
——————————-
6. (C) Despite the domestic political divide, Thailand\’s
strategic importance to the U.S. should not be understated.
Our military engagement affords us unique training venues in
Asia, training exercises that are nearly impossible to match
elsewhere in Asia, a willing participant in international
peacekeeping operations, essential access to facilities amid
vital sea and air lanes that support contingency and
humanitarian missions, and a partner that is a key ASEAN
nation in which we continue to promote democratic ideals.
7. (C) The U.S.-Thai military relationship began during World
War II when the U.S. trained hundreds of Thais as part of the
\”Free Thai Movement\” that covertly conducted special
operations against the Japanese forces occupying Thailand and
drew closer during the Korean War era when Thailand provided
troops for the UN effort. Thai soldiers, sailors, and airmen
also fought side-by-side with U.S. counterparts in the
Vietnam War and, more recently, Thailand sent contingents to
Afghanistan and Iraq.
8. (C) The relationship has evolved into a partnership that
provides the U.S. with unique benefits. As one of five U.S.
treaty allies in Asia and straddling a major force projection
air/sea corridor, Thailand remains crucial to U.S. interests
in the Asia-Pacific region and beyond. Underpinning our
strong bilateral relations is the U.S.-Thai security
relationship, which is based on over fifty years of close
cooperation. The relationship has advanced USG interests
while developing Thai military, intelligence, and law
enforcement capabilities.
IMPORTANT MILITARY ENGAGEMENT PROGRAM
————————————-
9. (C) Thailand\’s willingness to allow the United States to
use Utapao Naval Air Station as the hub for our regional
assistance program was key to making the 2004 tsunami and the
2008 Cyclone Nargis relief operations a success. While those
high-profile relief operations highlighted publicly the value
of access to Utapao, the air base is used regularly for
military flights. A prime example was the critical support
Utapao provided during OEF by providing an air bridge in
support of refueling missions en route to Afghanistan.
Approximately 1,000 flights transit Utapao every year in
support of critical U.S. military operations both regionally
and to strategic areas of the world. Thailand also provides
valued port access with U.S. naval vessels making calls,
primarily at Laem Chabang, Sattahip and Phuket, over sixty
times per year for exercises and visits.
COBRA GOLD AND THE MILITARY EXERCISE PROGRAM
——————————————–
10. (C) By means of access to good military base
infrastructure and large areas to conduct unrestricted
operations, Thailand gives the U.S. military a platform for
exercises unique in Asia. Thai leaders are far more willing
to host multinational exercises than are other countries in
Asia. Unlike Japan, which only hosts annual bilateral
exercises due to legal prohibitions over collective security,
or the Philippines, where planning for multinational
exercises has been difficult, or Australia, which refuses to
multilateralize Tandem Thrust, the Thai government encourages
multinational exercises as a way to show regional leadership.
This has allowed us to use exercises in Thailand to further
key U.S. objectives, such as supporting Japan\’s growing
military role in Asia and engaging the Indonesian and
Singaporean militaries.
11. (C) Cobra Gold, the capstone event of our exercise
BANGKOK 00003006 003 OF 004
program, is PACOM\’s largest annual multi-lateral exercise and
for 28 years has served to strengthen our relations with
Thailand, highlight our commitment to Southeast Asia, and
provide exceptional training opportunities for our troops.
The event has evolved over the years and now facilitates
important objectives such as promoting a greater role in the
Asian Pacific region for Japan, Singapore, and South Korea
and re-establishing a partner role with Indonesia. Along
with Cobra Gold, Cope Tiger and CARAT are also key to our
engagement of the Thai military.
BORDER CONFLICT WITH CAMBODIA
—————————–
12. (C) Bilateral relations with Cambodia continue to be
volatile, primarily due to a border dispute centered on 4.6
square kilometers of overlapping territorial claims adjacent
to the 11th century Hindu Preah Vihear temple. Minor
skirmishes have erupted three times since mid-2008, leading
to the deaths of seven soldiers.
13. (C) The roots of the dispute lie in the Siam-France
agreements of 1904-8 and a 1962 International Court of
Justice ruling that granted Cambodia the temple but left the
rest of disputed land unresolved. Tensions spiked in when in
2008 the Thai government in power at that time supported
Cambodia\’s application to UNESCO for a joint listing of the
temple as a world heritage site, only to face opposition in
parliament and an adverse court ruling.
14. (C) Thorny internal political considerations and
historical rancor between Thailand and Cambodia make progress
difficult; the countries withdrew their Ambassadors in the
wake of Thaksin\’s recent appointment as an economic adviser
to Cambodian leader Hun Sen. We urge both sides to resolve
their differences peacefully through bilateral negotiations,
border demarcation, and a reduction of troops deployed along
the border.
PEACEKEEPING EFFORTS
——————–
15. (C) Thailand has historically been a strong supporter of
UN peacekeeping missions and was an early contributing nation
to operations in Afghanistan and Iraq. In addition, Thai
generals very effectively led UN forces in East Timor, to
which Thailand contributed 1,500 troops, and in Aceh where a
Thai general served as the principal deputy of the Aceh
Monitoring Mission, Thailand\’s success in peacekeeping has
led the RTG and the military to seek a more prominent role in
international stabilization and peacekeeping missions. For
instance, Thailand is currently preparing for a deployment of
a battalion of troops for a difficult UNAMID mission in
Darfur. Using GPOI funding, we are working with the military
to increase its peacekeeping capabilities, both as a
contributing nation and as a trainer of neighboring nations.
ONGOING REFUGEE CONCERNS
————————
16. (C) Due to inherent institutional capabilities, the Thai
military plays a prominent role in the management of the many
refugees that enter Thailand from neighboring countries. The
Thai government conducted a screening process in January 2008
for a large group of Lao Hmong in an army run camp,
reportedly to identify those who might have a legitimate fear
of return to Laos, but has not released the results or
informed the Hmong themselves. We believe some have a
legitimate claim to refugee status, and seek resettlement in
the U.S. and several other countries. Detained in an
RTARF-run camp for over two years, some are former fighters
(or their descendants) allied with the U.S. against the
communist Pathet Lao during the IndoChina War. We want to
take every opportunity to underscore to the military that the
any individuals found by the RTG to have protection concerns
should not be returned forcibly to Laos.
SOUTHERN THAILAND
—————–
17. (C) Linked to the political uncertainty in Bangkok is the
RTG\’s inability to resolve an ethno-nationalist Malay
Muslim insurgency in southern Thailand which has claimed an
estimated 3,500 lives since 2004. The fundamental issues of
BANGKOK 00003006 004 OF 004
justice and ethnic identity driving the violence are not
unique to southern Thailand. More specifically, many Malay
Muslims feel that they are second-class citizens in Thailand,
and ending the insurgency will require the government to deal
with these issues on a national level – which the on-going
political instability in Bangkok has, to this point,
prevented. In the mean time, the insurgents use IEDs,
assassinations, and beheadings to challenge the control of
the Thai state in the deep South. The government has
responded through special security laws which give security
forces expanded power to search and detain people.
18. (C) Southern separatists direct their anger at the
government in Bangkok, not at the United States. Since a
U.S. presence or perception of U.S. involvement in the South
could redirect that anger towards us and link it to the
international jihadist movement — a link that is currently
absent — we ensure that any offers of assistance or training
pass the \”location and label\” test. Put simply, we keep U.S.
military personnel away from the far South and we make sure
that we do not label any assistance or training as directly
linked to the southern situation. Likewise, we work to avoid
feeding rampant, outlandish speculation that we are somehow
fomenting the violence in the South in order to justify
building permanent bases — a very sensitive issue in
Thailand. We do not want to jeopardize our access to key
military facilities in Thailand like Utapao Naval Air Station.
19. (C) The Embassy maintains a three-pronged focus to
improve our military cooperation in order to address the
violence in the South:
1) Using our exercise and training program to improve the
professional and operational skills of the Royal Thai Armed
Forces, especially the Thai Army;
2) Helping the Thai break down stovepipes between the Thai
military, police forces, and civilian agencies;
3) Doing everything we can to ensure the Thai respect
international human rights norms as they counter the violence.
THE INCREASING ROLE OF CHINA
—————————-
20. (C) Thai leaders continue to develop closer relations
with China while simultaneously emphasizing the vital role of
the U.S. in the region. While Thai military links with the
United States are deeper and far more apparent than Sino-Thai
links, China\’s growing influence in Thailand and Southeast
Asia is evident in business, the arts, the media, and the
military.
21. (C) The Chinese through hosting visits have made a strong
effort to court the Thai military. The Thai military has a
range of Chinese weapons systems in its arsenal; the PLA Navy
is interested in closer links with the Thai navy, and China
has worked with Thailand to improve air defense equipment
provided to Thailand in the late 1980\’s. In 2007 and 2008,
Thai and Chinese Special Forces conducted joint exercises,
and other mil-to-mil exchanges have expanded in recent years,
as has the number of bilateral military VIP visits. A yet to
be finalized bilateral Marine Corps exercise between China
and Thailand near the eastern seaboard port of Sattahip next
year highlights the continuing push by China to expand their
mil-to-mil relations with Thailand\’s military.
22. (C) As the shape of Southeast Asia, Asia writ large, and
the world has changed, so have Thai attitudes. The Chinese
have been making a major push to upgrade all aspects of
relations, including mil-mil. Thailand is not interested in
making a choice between the U.S. and China (nor do we see
closer Chinese-Thai relations as automatically threatening to
our interests here), but we will need to work harder to
maintain the preferred status we have enjoyed.
JOHN
“