Travel Reference
In-Depth Information
restaurants that have turned the capital of one of Asia's poorest countries into a regional
gastro-hub, with better variety (and better prices) than many larger cities in the region. In
a very real sense, Cambodia's prospects today are brighter than at any other point in its
history.
But while Hunsenomics has promoted growth and openness in the visible sectors of
the economy, its most lucrative activities remain off the topics. Vital sectors like banking,
import-export, agribusiness, and natural resource extraction are still dominated by ves-
ted interests that operate in an economic netherworld beyond the reach of effective reg-
ulation. Companies linked to tycoons and politicians import beer, cigarettes, and gasol-
ine minus the VAT and import duties—a phenomenon that costs the government millions
in lost revenue each year. Millions more drain out of the formal economy via mining,
forestry, and economic land concessions that are handed out with little or no financial
or environmental oversight. Much of the wealth sloshing around in Phnom Penh—from
its skyscrapers and lavish mansions to the sports cars and luxury SUVs that choke the
streets—is mirage money. Officially, it doesn't exist.
The story of Hunsenomics begins in the late 1980s, when the CPP cast off its communist
trappings and began its “transition” to the free market. In reality, it was more of a sudden
lurch, prompted by the abrupt cutoff of aid from the Soviet Union. Economic controls
were abandoned overnight; state enterprises were sold off to politicians and cronies at
a heavy discount. As noted in Chapter 3, liberalization was pursued less for the sake of
economic competition than as a way of thwarting political competition by transferring
the economy into friendly hands. In June 1989 Hun Sen told a visiting Vietnamese del-
egation that privatization of state-owned enterprises was vital, “because if we leave them
with the state, we will face problems when the three [opposition] parties come and spend
of funds; friends would be showered with gold.
Hunsenomics has since evolved in reaction to outside pressures and the demands of
foreign aid donors. With donor governments and global development agencies like the
World Bank and International Monetary Fund pressing Cambodia to improve governance
and fight corruption, Hun Sen's government has learnt the utility of keeping two sets of
topics. On one side of the ledger there are the public statements of Cambodian ministers,
who present their mirage of “good governance” and public financial management reform.
On the other is the submerged economy, made up of patronage strings that bind party,
government, business, and military into tight networks of mutual dependence. The result
has been reform
à la carte
: as Caroline Hughes has argued, this bifurcated system churns
out laws and reforms designed to appease donors while resisting any changes that would
