Cambodia’s political environment has been deteriorating due to simmering tensions between the government and opposition, which poses a very real chance of escalating into heightened instability or unrest. Access Asia views political instability as the greatest security risk to the country and a key factor that will influence investment decisions by foreign investors over the near and medium term.
Political risk to remain high through 2018
Political risk will remain high through the next general elections scheduled for January 2018, which many analysts expect will be won by the opposition Cambodia National Rescue Party (CNRP) and unseat the ruling Cambodian People’s Party (CPP) and Prime Minister Hun Sen who has ruled over Cambodia for three decades. While known for his hyped-up rhetoric, Hun Sen has repeatedly warned that an election victory by the opposition in 2018 could lead to a resumption of civil war. While Access Asia views a resumption of civil war a highly unlikely scenario, a power transition would prove a messy process and almost certainly be fraught with political violence. Moreover, should the opposition come to power in 2018, a host of governance issues would arise pertaining to the lack of governing experience of the CNRP.
In the mean time, the risk of small-scale political violence is high as seen in October when two opposition lawmakers were attacked outside of Parliament, while any protests risk being broken up by force by the security forces. A sub-decree was signed by Hun Sen in February to recruit over 4,500 new police officers in order to “keep public order” and for “society’s security”. An unspecified amount will be used to bolster the Kingdom’s riot police.
Although Cambodia’s police have a poor record in adequately dealing with protests due to lack of training and equipment, one of our security contacts has revealed that both police and army units responsible for controlling protests have recently been re-equipped with upgraded gear ranging from new shields and batons to tear gas grenades to personal protection gear. “This was brought on after the marches and protests in 2013 and 2014 as the government realized that they were poorly organized and fitted out [to tackle such protests],” the source said, adding that units have also been trained in non-lethal ways to control crowds. Although a more professional crowd control force appears to be emerging, how it will respond to future protests and how effective command and control procedures will be remain uncertain.
Garment sector poses consistent source of political and social risk
As political tensions simmer, a key sector to watch is Cambodia’s garment sector, in which labour discontent frequently materializes into demonstrations and gains traction by the opposition as labour rights is one of its key policy platforms (the CNRP has been accused by critics of creating unrest in the garment industry for political gain). The garment sector is vital to the country’s economy contributing some 18 percent of GDP and generating about 80 percent of export revenue. The sector also employs about a third of all industrial employment in the country. As such, the vital balancing act between wages and global market competitiveness in the sector combined with the sector’s vulnerability to international economic forces poses a consistent source of political, social and economic risk.
External conflict risks
Cambodia is still embroiled in a long-standing border dispute with Thailand, with the epicenter being disputed territory surrounding the ancient Khmer temple of Preah Viehar on the Thai-Cambodian border. The dispute has resulted in numerous border skirmishes between Thai and Cambodian armed forces since 2008, yet has seen a distinct de-escalation in recent years. However, the dispute remains unresolved and both countries keep military forces in near proximity of each other. In the past, the dispute has flared into military confrontation mainly as a result of domestic political issues in both Thailand and Cambodia; the issue has presented both governments with an opportunity to galvanize nationalist sentiment at home and gain popular support by rallying their citizens against an external threat. As a result, this unresolved border dispute can easily flare into military confrontation between the two states when political instability in either country is heightened. As such, this risk will be heightened in the run-up and aftermath of Cambodia’s general elections in 2018 and in the next political transition in Thailand.
Government ties between Cambodia and Vietnam remain good, but Cambodian opposition forces are feverishly anti-Vietnamese and an opposition victory in 2018 would not be welcomed by Hanoi. An opposition victory could easily fuel confrontation between the two states, particularly if Vietnamese residing in Cambodia are targeted for expulsion or in violent attacks. An unlikely, yet possible scenario would be Vietnamese military intervention. Although the likelihood of this is slim, an opposition victory in 2018 would almost certainly see a souring in ties between the two states that would heighten political and security risk in Cambodia.
Islamist terrorism threat
Access Asia views the threat of a significant terrorist attack in Cambodia as extremely low, particularly when compared to other states in Southeast Asia or the Indian sub-continent. However, the country’s porous borders allow easy travel and some members of Cambodia’s Cham Muslim minority were suspected in the past of joining separatist Malay-Muslim insurgents in Southern Thailand and the regional terrorist network Jemaah Islamiya (JI). Moreover, JI members in the early 2000s were known to use Cambodia as a transit and shelter point while a handful of arrests were made of suspected JI members in the country. However, no plots to target sites in Cambodia have ever been discovered and Access Asia does not see any significant reason for this to change. Furthermore, with no declared jihadist groups operating in Cambodia there are, by extension, no obvious poles of attraction towards which transnational terrorist organizations such as Islamic State (IS) or Al-Qaeda in the Indian Sub-continent (AQIS) might be drawn.
Crime threat
The greatest security threat for foreign businesspersons and travelers in Cambodia is crime. There is a high crime threat in Cambodia, including both street crime and violent crime, with armed robbery, burglaries and assault occurring regularly and foreigners have been among those targeted (although violent crime against foreigners is rare). Pick-pocketing, petty theft and muggings also occur regularly against foreigners, mainly in the cities of Phnom Penh, Siem Reap and Sihanoukville. Bag-snatching is also prevalent when traveling on local transport such as tuk-tuks or motos; awareness and caution should be taken when using these modes of transport. Cambodia’s horrific past during the Khmer Rouge period and civil war that both preceded and followed the period has left Cambodia with a political culture of violence that can be ignited at any time.
Key security challenges for businesses
For businesses, key security challenges include securing resources during land transport, internal theft and land conflict issues. The latter particularly pertains to the extractive industries sector and large-scale agricultural developments such as rubber and sugar plantations. As such, it is important for any foreign firm involved in these sectors to actively engage the local community and have an active corporate social responsibility program in which the local community benefits. Access Asia believes the local community can play a vital part in securing and protecting assets, interests and business operations, and overall security is enhanced when the local community becomes stakeholders and/or beneficiaries of the project. Moreover, land ownership verification and extensive enquiries with the local community should be conducted prior to any new investment to asses community concerns before they become security concerns.
