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* Joanne Knight
* August 15, 2008

The future is bleak for Cambodians and Burmese when corruption is rife.

BURMA and Cambodia occupy significant geopolitical positions in Asia. The West has an interest in controlling this area as a buffer against China’s growing power. As a pawn in global politics, Cambodia is being controlled through international aid at the expense of its people.

Burma is possibly heading in the same direction. As Burma bows to pressure from the West to allow aid into the country after cyclone Nargis, critics argue the aid will come tied to economic liberalisation.

Cambodia and Burma share striking similarities: both are extremely poor and are governed by corrupt elites. But Cambodia is about 10 years ahead in accepting Western aid. Its present does not augur well for Burma’s future.

The outcomes of Cambodia’s development have been mixed: extremely beneficial for economic growth, the ruling elite and crony capitalism, and less advantageous for the poor. The development has been centred on trade liberalisation, with open markets for the country’s timber and textile exports. The World Bank has reported that local corruption has impeded the country’s development, particularly poverty reduction, but the real difficulty may be the porous state of Cambodia’s economy.

Corruption is common in Cambodia. Transparency International’s Corruption Perceptions Index ranks Cambodia at 162 out of 179 countries (Burma ranks at 179, the worst country along with Somalia). Some claim that much aid from the international community has gone to private pockets.

Since the Paris peace agreement of 1991, Cambodia has been subjected to the scrutiny of international donors, including the World Bank, the International Monetary Fund and the Asian Development Bank. Aid constituted more than 10% of gross national income in 2004, far more than the low-income country average of 2.8%. In 2006, the amount of aid reached $US595 million. Cambodia is also a fast-growing economy, with annual economic growth at nearly 11% in 2006. But poverty has fallen at a rate of only 1% a year. Two key features of Cambodia’s National Strategy Development Plan 2006-10, funded by the World Bank, are trade liberalisation and the creation of export-processing zones.

Development projects have done little to limit corruption in Cambodia. The World Bank’s Forest Concession Management and Control Pilot Project (FCMCPP) began in 2000, funded by a $US5 million Learning and Innovation Loan. In June last year, Global Witness published Cambodia’s Family Trees, which detailed the intimate connections between the owners of logging companies and the Cambodian Government. Owners of the largest logging companies — Kingwood Industry, Everbright CIG Wood and Colexim Enterprise — are friends and relatives of Prime Minister Hun Sen. They have been repeatedly involved with extensive logging outside of their plantation areas, terrorising locals and exempted from paying royalties and taxes.

In 2002, under pressure from international donors,

the Cambodian Government imposed a moratorium on harvesting in logging concessions, after the companies failed to submit forest management plans. The moratorium ended in December 2004, on the condition that logging was supervised to ensure no fresh logs entered the supply chain. But no measures were taken to prevent further illegal logging. The FCMCPP has grievously failed Cambodia.

International donors are quick to point to political corruption in Cambodia to explain its lack of progress in decreasing poverty, but such moral judgements ring rather hollow when $US600 million in Asian Development Bank funds are invested in offshore private equity funds, many domiciled in tax havens such as the Cayman Islands.

National institutions are required to divert money back into the country. Development policies focused on economic liberalisation will not foster them. Without the political will to create these institutions, any benefit will continue to be siphoned off into the hands of international business and corrupt local political and business elites. The future for the people of Cambodia and Burma is bleak without policies that focus on their wellbeing.

Joanne Knight worked for seven years as a consumer credit and housing adviser for the Brotherhood of St Laurence and the Victorian Government.

On a crowded night inside a hotel and nightclub in Phnom Penh, young women in traditional Cambodian costumes sit under shimmering lights at the entrance of a hundred karaoke rooms, waiting for visitors.

Among these expectant young women, some are former garment workers, forced from Cambodia’s factories by an increasing cost of living and stagnant wages.

Twenty-three-year-old Sopheak sits nervously among them.

Since she left Kampong Cham province for work in Phnom Penh three years ago, Sopheak has been expected to send most of her wages home to support her family, but by the beginning of 2008, as prices for food and fuel soared in the capital, she found she couldn’t send enough.

She decided to shift jobs, moving to a karaoke nightclub, where she works for wages and tips, but where rights workers say she is in danger of moving toward prostitution.

“I made the decision to work at a karaoke club because I am able to save money for my mother,” Sopheak says, as a romantic Khmer ballad rumbles through the room. “If I work at a factory, the wage is just enough for my stomach.”

At the club she makes a $50 monthly wage, about the same as factory workers earned before a $6 supplement was added to their salaries in April. On top of that, she earns tips, between $2.50 and $7.50 per night.

The downside is that she is groped and kissed by her visitors, many of them rich Cambodian men.

“To think about it, I cry all the time,” she says, and indeed her eyes moisten as she speaks. “To get four or five dollars, they force us to drink, they kiss us and fondle our breasts.”

“To support my mother, I must not think about honor,” she says.

The Garment Manufacturers Association in Cambodia, or GMAC, estimated in 2007 that garment factories employed as many as 350,000 workers in more than 300 factories. Most workers are young Cambodian women who have left behind a life in the countryside where they live under a dollar a day.

They are now facing low wages, hard hours, overtime shortages and a decline in orders from buyers in the US, where the economy is struggling.

The factors have added to the woes of soaring prices, workers say, pushing them for other work.

Chea Mony, president of Cambodia’s Free Trade Union, says more women started shifting to nightclub work in 2008. More than 27,000 workers have left their factory jobs since April, he says, despite the $6 salary increase meant to help against rising costs.

Women who choose to work in the nightclubs can earn three times as much, he says.

GMAC official Kiang Monika agrees that there is a problem with workers leaving the factories, but he says the number is small and hasn’t yet affected the industry.

Increased pressures have forced factory owners to find methods to encourage their workers, he says. Otherwise, their investment will collapse.

The garment industry is Cambodia’s biggest export earner, but the sector has struggled in the face of the weakening global economy, posting only 8 percent growth in 2007, compared to 20 percent growth the year before.

Kek Galabru, president of human rights organization Licadho, says workers who turn to work at nightclubs can easily fall into prostitution.

But Om Mean, undersecretary of state for the Ministry of Labor, says workers have a right to change jobs, and karaoke work is legal.

Legal or not, many women are not proud of the choice.

Srey Phea, 22, who is thin and speaks in a slow, shy voice, says she left her garment factory three months ago, in favor of nightclub work.

A month into her new job, she broke up with her boyfriend, and though the new employment has meant more free time and more money, she sometimes loses out on tips when she refuses to spend the night with visitors.

“My mother will never know that I was caressed and fondled,” Srey Phea says. “I don’t dare tell her.”

CAMBODIA will face big problems for the future development of its fragile economy if it fails to address the issue of unemployment among a growing but poorly educated work force, the International Labour Organisation (ILO) has warned.

Vali Jamal, a labour market and human resources expert for the U.N. agency, said the Cambodian economy faced “terrible problems”due to unemployment while the task was made more complicated as the educational level of the work force was very low.

“The poverty problem here is very serious and the poverty situation could worsen if unemployment is not taken care of.

“This economy is at a very initial stage of development vulnerable to any outside influence. What is needed is training and credit, these are the two most important inputs to enable people to work productively,”Jamal told the Phnom Penh Post.

According to a “Socio-economic Survey” released by ILO last October Cambodia’s work force will by the year 2000 have increased by 1.5 million to six million people while out of some 120,000 new workers estimated to entering the labour market every year about 27,000 will due to migration come to the capital for work.

“The employment situation in Cambodia is thus grave. To the 120,000 jobs that have to be created yearly has to be added the backlog of open unemployment of 90,000 workers and expected retrenchments from government service and the military.

“There are also large numbers of handicapped persons.

Currently every productive worker in Cambodia has to support 1.5 others - a dependency ratio not found elsewhere in the world,”said the report, of which a copy was seen by the Post.

The report also revealed “a weak skills profile of the labour force” while noting that women would have to be “specially targetted”, as women are heading one-fifth of households due to the legacy of war in Cambodia.

“Only 20 percent of the population had education beyond primary level. Illiteracy affected 35 percent of the adult population with the rate approaching 50 percent among women.

“Poverty measured on even a most meager poverty line is estimated at 27 percent in Phnom Penh and 42 percent in rural areas,” said the report.

Most of Cambodia’s workforce is employed in rural activities as this Southeast Asian nation, home to an estimated population of 10.5 million people, is struggling to rebuild after decades of civil war that shattered the local economy.

According to the report “wage employment in the private sector affected less than 10 percent” and private and foreign investments were “even under the most optimistic assumptions” not expected to create more than 10,000 jobs out of the 27,000 urban jobs needed.

Jamal said that to avoid “economic disaster” it was therefore important that informal sectors be developed to create more job options.

“In the short run there are 90,000 unemployed. Just in the urban sector 27,000 new jobs have to be created and wage employment in the government is declining.

“Outside investment will not be sufficient to create the number of jobs needed. They could never possibly create 27,000 jobs and they (migrates) will have to be absorbed into the small scale business in the informal sector,” he said.

Jamal, an economist by training, warned that retrenchment of government jobs and privatisation of social and educational sectors should be done carefully.

“If it happens to fast in a poor country you could have a situation where you can face economic disaster. Privatisation should not be taken to the extreme in the social and educational fields, the health and education (budgetary) situation should not be reduced,” he said.

Daniel Duysens, Director of ILO’s Bangkok Area Office, said ILO since starting employment generation programmes in Cambodia 400 km of roads have been rehabilitated and 1,200 km of roads have been maintained, generating 1.5 million workdays.

“Small business loans amounting to 1.5 million dollars have been disbursed to 8,000 clients, 90 percent of these are women and 3,600 people have received vocational skill training, 50 percent of whom were women.

“Our current programmes deal with generation of employment through road building in rural areas, vocational training and small-business promotion. Within the programmes we are designing… we have found that it’s extremely important to make sure that women have access to training, have access to skills,”said Duysens.

He said that “in order to create your private sector the real small enterprises, skill development will be important” andstressed the importance of development of the informal job sector,while acknowledging it was a difficult task.

In that regard he praised the local non governmental organisation ACLEDA for its rural credit programmes, describing their programmes as the example of how more jobs had been created.

“They (ACLEDA) started from scratch where there was nothing. Today it’s helping in the rural development. It’s a grass-root project which has given mini-scale investments. They (rural people) will remain poor, but less poor.

“The transition to a market economy is not just an economic feature. It requires from the society as a whole to readapt all its structures, its priorities, budget allocation - and it’s extremely difficult,” Duysens said.

Suy Sem, secretary of state for the Ministry of Social Affairs, Labour and Veterans Affairs, said at a recent ILO-seminar held in Phnom Penh that the ministry was committed to “accomplish its assignment according to the objectives and international standard of labour”.

Suy Sem said the ministry had “determined three important objectives” to be focused on generating employment and “to reduce paucity of the people”, human resource development and to strengthen the labour institution.

“Fighting for employment here in Cambodia is fighting against time… what the project has shown here gives the demonstration that something can be done.”

SK was a young girl when a 30-year-old woman convinced her to travel out of her home province to look for work. But, after she’d lost her mother’s jewelry as payment for the trip, SK was sold into Phnom Penh’s sex trade.

SK, who asked that her name not be used, became part of Cambodia’s vibrant sex industry, forced to take drugs and “perform services for guests” of a karaoke parlor.

She would take little pink pills and see up to four men each night and only escaped by jumping out a window and calling her father to come and get her.

Now 15, SK is safe at home in Kampong Speu, but her family is filing suit with provincial authorities to bring her abductors to justice and appealing to the government to do more to stop trafficking.

“I lived at that karaoke place for 26 days,” SK told VOA Khmer recently. “I was miserable, and I was ashamed. I wanted to commit suicide…. I now think my life has no value, and no future. I think it is my bad karma.”

Human trafficking in sex and labor continues to plague Cambodia. SK’s story highlights an industry that new laws have so far been able to eradicate. Young girls from the provinces still fall prey to recruiters, who promise legitimate work to the naive and desperate and have little fear of the law.

“We have to solve the issue legally,” Kek Galabru, founder of the rights group Licadho, told VOA Khmer. “The perpetrators will have to be charged. When the police, the courts arrest them and then free them, claiming lack of evidence, it is wrong. The perpetrators must be punished according to the law.”

Many victims of sex trafficking report similar hopelessness, and they often blame themselves or feel their lives are irreparably damaged. But Kek Galabru said women like SK are victims and must be helped.

“We must not think she did something wrong or has bad karma,” she said. “They did something illegal to her and violated her rights.”

SK said the owner boasted to clients that she was “new,” worth $50 per session.

“I have a request, especially to Prime Minister Hun Sen,” SK’s father said. “Please help us. If we go to the police, the police just take money and don’t work for us. If we go to the court, the court just takes the money and doesn’t work for us. When we ask, they say, ‘tomorrow,’ then ‘the day after tomorrow.’”

This had left him feeling hopeless as well, the father said.

“The perpetrators are walking with their hands dangling, complacent, and not afraid at all,” he said. “I would like justice for my child, who is a victim, to pay for her compensation and have them punished according to existing law.”

SK’s lawyer, Heng Poung, said he phoned Kampong Speu’s deputy prosecutor, Ou Phat, who claimed charges have been filed with the provincial court.

He expected the sex traffickers to be brought before a judge, Heng Poung said.

The law on human trafficking now says that such perpetrators—anyone who coerces, tricks, or cajoles another person into the sex trade of other forced labor—can face up to 15 years in prison.