Blog | March 28, 2014

The UK government’s promotion of trade and investment in Cambodia is misguided

As a rule, the UK government doesn’t say much about Cambodia. I for one would like to see them say much more about the human and environmental disaster that is unfolding in the country, but they generally choose to stay quiet.

Which is why recent statements from the UK Trade Envoy to Cambodia, Laos Vietnam and Myanmar, Lord Puttnam have left those fighting for rule of law, human rights and responsible investment in Cambodia so dumbfounded. They demonstrate a total lack of understanding of what the country and its government are really like, and what is actually needed to help its people.

Lord Puttnam’s March visit to Cambodia first hit the headlines when he singled out one of the most kleptocratic governments in the world for its efforts to ‘tackle corruption’. He then went on to lecture local and foreign journalists to decide whether their role was “to inflame or to inform”, denouncing the media “as just another arm of the opposition.

Unsurprisingly, a roomful of astonished journalists chose to report this widely, with one of Cambodia’s main newspapers leading with ‘A Little Knowledge Is a Dangerous Thing, Lord Puttnam’. But what got less attention was Lord Puttnam’s announcement earlier that week that the UK was aiming to boost its bilateral trade volume with Cambodia by five times by 2020 (from $1 billion to $5 billion).

This is a bad idea for lots of simple reasons. Cambodia ranks 160th out of 177 countries in terms of levels of corruption and is estimated to lose $1.7 billion every year to graft. Prime Minister Hun Sen and his government have been widely criticised for their human rights abuses, land grabs and destruction of Cambodia’s once pristine forests. The country’s political situation remains extremely volatile as the opposition party continues to boycott their seats in parliament, following claims of widespread vote rigging by the government during last July’s controversial general election. All this has created an unstable social situation which has seen anti-government protestors, particularly garment workers – one of the key industries for UK investors – gunned down in the streets by the authorities in recent months.

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Against this backdrop, the UK government’s announcement to increase trade-based investment is highly irresponsible. It amounts to tacit support for the regime behind the current social and political turmoil, which is responsible for endemic human rights violations. It also contradicts the UK government’s own plan for ‘Implementing the UN Guiding Principles on Business and Human Rights’ which asserts that ‘the promotion of business and respect for human rights must go hand in hand’.

There is no doubt that Cambodia badly needs investment. Nearly 70 percent of the population subsists on less than US$2 a day and one in three children under five are underweight. But it needs the right investment – blindly supporting a model in which a corrupt elite does secretive, exploitative deal with unscrupulous companies for its people’s land and forests will not help those people – it will make their situation worse. Cambodia needs responsible investments from companies wanting to operate within the law, with respect for human rights, the environment and labour rights, and who want to share the benefits of business with ordinary Cambodians. That’s what the UK should be promoting.

This question shoots right to the heart of our relationship with resource-rich developing countries. In a blog post on the Lib Dem website a few weeks ago, another member of the UK government, Baroness Alison Suttie, boldly declared ‘Cambodia is a success story for international aid’. This is simply not true. International aid has propped up basic services in Cambodia for over 15 years and currently provides the equivalent of half the government budget.  Aid money allows the government to create the impression of progress, but the majority of Cambodians grind on in dire poverty while government cronies pocket the resource wealth that should be building the schools and hospitals and raising income levels.

Like Cambodia, Laos and Myanmar (for which Lord Puttnam is also trade envoy) are also suffering the consequences of irresponsible business. Governments like the UK must stick to their commitments on business and human rights and not buy into the myth their trade partners feed them. They must stop promoting overseas investments into countries without the regulations in place to ensure they don’t fuel corruption, destroy the environment, abuse human rights and push people deeper into poverty. To do otherwise is a huge disservice to the people of these countries. It is also throwing UK investors into a volatile, high-risk environment without warning them of the dangers.