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“242186”,”12/31/2009 8:33″,”09PHNOMPENH969″,

“Embassy Phnom Penh”,




DE RUEHPF #0969/01 3650833


O 310833Z DEC 09
















E.O. 12958: N/A







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



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



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



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




Written by thaicables

July 22, 2011 at 9:33 am

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