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Sihanoukville and the Curse of Cambodia’s Corruption

By Daragh McMahon

Not far from the South China Sea, where the global spotlight is often captured by momentary flashpoints of geopolitical tension, are the relatively calm waters of the Kingdom of Cambodia’s southeastern coast. Far from the drawn-out territorial disputes and the building of artificial islands in neighbouring waters, amidst lush Cardamom rainforests and the coral-filled Gulf of Thailand, we find an ever-expanding playground for unchecked foreign investment that is centred around a single Cambodian port city, Sihanoukville.

Here, the brazen combativeness and turbulence of the South China Sea is replaced with the possibility of bilateral cooperation between Cambodia and its neighbours. Military bases are replaced by hotels and ‘Special Economic Zones’ are preferred over no-fly zones. Perhaps, in Sihanoukville, we can find a model for how a country like Cambodia, considered a ‘Least Developed Country’, can develop under the influence of economic powerhouses like China and Vietnam. Yet behind Sihanoukvilles’s budding guided tour companies, newly constructed high-rises, resorts, and impressive casinos there is a fatally neglectful and corrupt government, enabled by the fact that Cambodia has increasingly been utilised by competing powers in South East Asia as a proxy for their soft-power campaigns.

In Sihanoukville, the delicate balance between economic development and general well-being is tipped against the vast majority of Cambodians

When Cambodia first emerged as an independent country in 1954, Sihanoukville was just an inaccessible jungle peninsula in the coastal province of Kompong Som. The town’s founding in the 1960s was part of the young nation’s attempt to gradually transition its economy into the post-colonial world. The installation of deep-sea ports would allow Cambodia to tap into global trade routes coursing between Singapore and Hong Kong. The construction of the Independence Hotel in 1964 further demonstrated the nascent optimism of Cambodia following its departure from French colonial rule. Guests at the Independence Hotel included French actor Catherine Deneuve and First Lady Jacqueline Kennedy. Amidst the tension of the Cold War, its construction pointed to what seemed to be a bright future. Sihanoukville represented an independent Cambodia’s aspirations for modernity, self-governance, and stability. In the canopies of its southern coastline, Cambodia saw a springboard for development through trade and tourism.

However, the communist take-over of 1975 threw much of recent Cambodian history into a saga of tragedy, bringing the Sihanoukville project to a halt as civil war, genocide, foreign invasions, and regime change would destroy the country and its efforts to modernise. Since then, with the relative political stability present over the past three decades, Sihanoukville has changed from a war-ravaged, irrelevant, and landmine-infested coastal town to a representation of the Cambodian government’s newest strategy for economic development: crony capitalism. Prime Minister Hun Sen’s decades-long premiership has ushered in an era of rapid economic growth that enriches a select few at the expense of the majority of Cambodians. All the while, sustainable development and human rights are ignored and the country’s fragile democratic institutions are undermined. While the violence of the Khmer Rouge era has finally subsided, another far-reaching problem has consolidated itself in the Kingdom in recent years: corruption and inequality.

In his never-ending gamble for power and riches, Hun Sen has created an oligarchic political landscape based on patronage and corruption. Cambodia’s contemporary political system resembles a neo-feudal state in which Hun Sen hands out Oknha (nobleman) titles to anyone who donates more than $500,000 to his government. For Sihanoukville, like the rest of the country, corruption manifests itself in widespread land grabbing, deforestation, poorly-maintained infrastructure, and disastrously inadequate social services. With barely any semblance of a functioning judiciary and impartial law enforcement to combat these problems, Cambodia’s drive for rapid growth is stunted by the very corruption it breeds. This leaves the majority of its population disillusioned and helpless, at the mercy of Hun Sen’s ‘nobility’.

Amidst the widespread corruption that has gripped the country for decades, Sihanoukville has become Cambodia’s most representative site for unchecked Chinese investment. Within the past three years, the city has changed considerably with the establishment of the Sihanoukville Special Economic Zone (SSEZ), where Chinese investors have capitalised on tax-free land leases, where government embezzlement is rampant, and where business licensing and permit fees end up in the pockets of Oknha. Under the auspices of the SSEZ, colossal neon-lit casinos and hotels have been constructed for tens of thousands of Chinese visitors who are banned from gambling in the People’s Republic of China. In late 2020, it was estimated that 90 percent of the businesses in Sihanoukville were Chinese-owned and most of the seventy newly-built casinos were constructed using substandard materials and techniques by labour brought in from China’s southern provinces.

In late 2020, it was estimated that 90 percent of the businesses in Sihanoukville were Chinese-owned

The rapid changes to this once sleepy town have not been welcomed by regular Cambodians. Monthly rents for the local wage workers of the many textile factories that dot the city have more than quadrupled, pushing many Cambodian residents further away from the city centre. The massive construction projects have vastly outgrown the existing under-developed infrastructure and city services, leaving huge potholes along major roads, garbage piling the streets, and pollution seeping into the nearby beaches. With construction regulation nonexistent and building inspectors easily bribed, many of these real estate projects are death traps for Cambodian and Chinese workers alike. In June 2019, a Chinese-owned building collapsed during construction, killing 28 Cambodian workers. Poor law enforcement has seen a sharp rise in unregistered gun-ownership, violent crimes, and activity in organised crime gravitating around the casinos.

Siamese Rosewood trees in the surrounding jungles have invited mass deforestation and ecological destruction.

Just outside the city, the ecological damage caused by the intense foreign demand for Cambodia’s valuable natural resources and the associated corruption has been catastrophic. Siamese Rosewood trees in the surrounding jungles have invited mass deforestation and ecological destruction. According to satellite imagery, the once vast and pristine rainforests that covered a large portion of the country and were home to endemic flora and fauna such as Indochinese tigers and Siamese elephants, have been reduced to only 3 percent of what they once were. In Sihanoukville, it is common to see trucks filled with illegally-cut hardwood logs bound for Chinese luxury furniture firms being escorted by bribed Cambodian military personnel.

From the profits of the ecologically-disastrous clearcutting, millions of dollars are funnelled into shell companies run by Oknha through deals between Hun Sen’s government and large Vietnamese companies. Resultantly, companies like Hoang Anh Gia Lai and the state-owned Vietnam Rubber Group run rubber plantations on millions of hectares of illegally-acquired and illegally-logged land. The rise of the aptly-named ‘Rubber Barons’ is the result of the abject neglect by Hun Sen’s government and the exploitation of Cambodia’s laissez-faire policies towards natural resource extraction by foreign actors.

In Sihanoukville, the delicate balance between economic development and general well-being is tipped against the vast majority of Cambodians. A dangerous dynamic between widespread corruption and unchecked foreign investment propagates a system that is ill-equipped to sustain Cambodia’s developing economy, let alone provide basic services for its fifteen million inhabitants. On top of that, the ancient canopy of Sihanoukville’s surrounding jungles has been rapidly replaced by endless rows of freight trucks barrelling down dirt roads to deliver logs and rubber to shadowy foreign clients.

Sihanoukville is a cautionary tale of the cycle between neglect and exploitation. It beckons the question many hardworking Cambodians ask themselves: when will it end? Transparency, of course, is the obvious answer, but as many watchdog groups, NGOs, and sustainable development groups know, this is a solution that is not acquired so easily. The corruption is systemic, heavily entrenched into the national psyche, and foreign firms are there to stay. However, the sheer volume of negative change in Sihanoukville has sparked tangible political will calling for an end to corruption and the restoration of economic sovereignty, which is far more powerful than any detailed report or international condemnation could achieve.


Originally published 12.4.21 in Vol. 4 No. 2.

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