U.S. tightens exports to China’s chipmaker SMIC, citing risk of military use
The way in which the Cambodian government has been forced on the back foot by stressing that the purchase of 290 military vehicles from China was from private donations and not from the state purse is intriguing.
Prime Minister Hun Sen explained this week that he ordered the trucks last year, but they failed to arrive in February because of the pandemic. They instead arrived this month.
According to him, they were ordered because the military had struggled with transportation after the 2018 dam collapse in Laos, after which floodwater flowed into Cambodia, and Cambodian soldiers didn’t have the transport capabilities necessary to deal with moving supplies.
All well and good. However, the US$20 million to pay for the vehicles was reportedly drummed up from private donors, and not paid for by the state. “We did not use the state budget, not even a signal cent,” he said this week.
Hun Manet, the prime minister’s eldest son and the de facto military chief, clarified that the trucks weren’t a donation from China. Radio Free Asia reported that, at the ceremony to mark the distribution of the trucks, the vehicles were swathed with signs saying they were donated by Hun Sen and his wife, Bun Rany.
The government isn’t saying where the money came from – and, knowing how untransparent it is, probably won’t. It wouldn’t be unimaginable that Hun Sen and his family – who are thought to have raked in billions of dollars since he became prime minister in 1985 – provided the money themselves.
Schools and hospitals across Cambodia are festooned with Hun Sen’s name, yet were built by state funds. Equally, buildings bear his name but have been built by money raised from tycoons aligned with the ruling party. Maybe the party made another call-around to businesspeople and tycoons – those saboraschon, “meritorious benefactors” – who happily fill the party’s coffers before elections and at times of crisis, and for their merit receive lucrative state contracts or other perks.
Before continuing further, let’s get the lay of the ground. The Cambodian economy this year is expected to contract by somewhere between 1.9% (the government’s estimate) and 5.5% (according to a worst-cast forecast by the Asian Development Bank). Hundreds of thousands of people have been furloughed because the pandemic, unemployment has soared to around 20%, and poverty levels could climb 11 percentage points if income losses last six months, as the ABD recently forecast.
For the government’s coffers, this is a problem. Tax revenue is likely to fall to levels seen at the beginning of the last decade – that is, almost non-existent. Only in the last four years has the government actually committed to properly collecting tax, part of its goal of boosting state spending.
The state budget has grown from $3 billion in 2013 to $6.7 billion last year. At the same time, Cambodian authorities collected less than $900 million in tax in 2013, compared with around $6 billion last year. Yet because of the pandemic and economic crisis, the government has trimmed this year’s $8.2 billion state budget because of the Covid-19 outbreak and has also already announced that next year’s budget will be reduced by as much as half, down to around $4 billion.
Of interest is that the ruling Cambodian People’s Party (CPP) feels the need to stress that investment in the military isn’t coming from the government. Clearly, during these times of austerity, the government doesn’t want to be seen as lavishing money on the military – which is used to crack down on dissent and supporters of the now-dissolved opposition party – when ordinary people are struggling and poverty levels are almost certain to spike.
Yet one thing to note is that the government has already admitted it will put military spending ahead of social spending. When announcing plans for next year’s budget, the authorities let on that they intended to cut expenditure for social affairs by 11.3%, yet the budget for national defense will only be trimmed by 4.3%, the smallest cut to any major department.
Nonetheless, it would appear that Hun Sen knows that he has to be careful with spending, since the majority of state expenditure is now raised from Cambodian taxpayers, not foreign donors.
I argued as early as 2016 (see: Could improved tax collection strengthen democracy in Cambodia?) that as Cambodia began the process of actually becoming a tax-paying country, taxpayer sentiment would profoundly alter politics. If senior government officials skimmed off a few million dollars from aid money from the United States or China, at least they weren’t directly stealing from the pockets of ordinary Cambodians.
The money came into the system but rather than going out, it stayed in officials’ pockets. Not so with taxation.
Indeed, as I’ve argued over the years, greater taxation will make the government more sensitive to accountability, and ordinary Cambodians more interested in where their money goes.
Incidentally, this military-trucks story came at the same time as the ruling CPP opened its new headquarters in Phnom Penh, a gaudy white marble edifice that apparently cost $30 million to build – which also, Hun Sen said, was paid for by private donations. “Some asked where we get the money from. My answer to them is that we get it from all levels of membership of the CPP ranging from workers, farmers and vendors to millionaires and their children,” he commented.
In trying to defend the purchase of these military vehicles, with money raised through private donations, Hun Sen noted: “When a negative event happens, the private sector helps the army. That’s why there is a partnership between the private sector and the military. It is an unbreakable partnership.”
Really? There is a good reason that, in democratic countries, militaries are solely funded by the state – and that is because militaries serve the state, not political parties or private interests. If militaries are funded through the private sector they are no longer militaries – they’re private contractors.
And it stretches credulity to think that the government couldn’t have found $20 million from its defense budget of $2.5 billion this year (25.8% of this year’s budget of $8.2 million was earmarked for defense spending), also considering that the trucks were ordered last year, as Hun Sen says, and there was surely some bureaucratic forecast of the purchase in the budget.
Of course I’m not being so naïve. There is no standing army in Cambodia. The military is the armed wing of the ruling Cambodian People’s Party. Hun Sen’s eldest son, Hun Manet, is now the de-facto military leader, and along with the de jure leader, Vong Pisen, both now sit on the CPP’s elite Permanent Committee, its main decision-making body.
And Hun Manet was this month promoted to lead the ruling party’s youth wing. Moreover, three of the most senior former military leaders, who “resigned” in 2018 to make way for new blood – that is, Hun Sen’s children and their loyalists – were duly elected as CPP parliamentarians and now serve as either Hun Sen’s advisers on national working-groups or committees.
Nonetheless, if the money for these trucks came from Hun Sen himself or from a whip-around among party grandees or members, then what does it mean? Will there be any conflict of interest between the military and those individuals who funded their vehicles? Where’s the kickback? Note that Hun Manet asserted that private donors – or “generous people” – have been funding the military for years. His father’s “appeal to generous people to support the army is nothing new,” he said.
Moreover, when poverty rates are spiking again in Cambodia, after decades of reduction, what spurs that good-hearted philanthropist to donate his money to the Royal Cambodian Armed Forces, instead of, say, a hospital or school or charity?
Speaking this month, Hun Sen said he had educated his eldest son and heir apparent, Hun Manet, to have 90% of his ability. One hopes, though, that was not in recent times.
In the past it was possible to admire Hun Sen for his political cunning – in the Machiavellian sense of the word. Yet today, Hun Sen appears single-minded and base, consumed by imagined threats and his every speech clothed in the most defensive appeals to patriotism.
His claim this week that his ruling CPP will remain in power for another 100 years was a boast that revealed more about his thoughts of weakness than strength. A confident leader doesn’t need to crow: “Who has the capability to replace Hun Sen right now?”
Hun Sen has derided those who even question the funding of the military trucks as “beasts,” commenting last week that “if you are a Cambodian who loves the nation, you should be happy to see transportation vehicles arriving in Cambodia because we no longer lack transportation means.”
OK, but if you are a Cambodian who really loves the nation, surely you would, first, want a military that protects the nation and not one political party or private individuals, and, second, a nation that doesn’t have to go palms open to vested private donors for a paltry $20 million.
David Hutt is a political journalist based between the Czech Republic and Britain. Between 2014 and 2019, he was based in Cambodia, covering Southeast Asian affairs. He is Southeast Asia columnist for The Diplomat and a regular contributor to Asia Times, including the column Free Thoughts. He reports on European political affairs and Europe-Asian relations. Follow him on Twitter @davidhuttjourno.