THE impasse that has prevented the formation of a new coalition government and undermined

Cambodia's international credibility for the last eight months may soon be over.

Prince Ranariddh can break the deadlock, while a subdued Sam Rainsy waits in the wings.

The leaders of the two major parties - the Cambodian People's Party and the Funcinpec

Party - made a tentative agreement, copies of which have been leaked to the press.

This was reached during a visit by Prime Minister Hun Sen to Funcinpec leader Prince

Norodom Ranariddh's house on March 15.

On March 28 their respective senior working groups are expected to meet to thrash

out the sharing of ministries and major policy issues.

The CPP won a comfortable majority in the 2003 elections with 73 seats in the National

Assembly compared to Funcinpec's tally of 26 seats, and has made significant concessions

towards a working coalition. The Sam Rainsy Party has 24 seats and it remains unclear

at press time whether they will participate in a new government.

The constitutional requirement for a two-thirds majority to govern has paralysed

the process, prevented formation of a coalition and resulted in a logjam of laws

and financial instruments waiting for ratification and sign-offs.

Hun Sen and Ranariddh committed their respective parties to set up a new government

based on a "two and a half coalition," leaving the door open for the Sam

Rainsy Party to enter the government at the invitation of the royalists - if they

want him.

Observers consider that the two-and-a-half formula is an ingenious way of bridging

the gap between CPP's insistence on a two-party coalition, and the demand of the

Alliance of Democrats (Funcinpec-SRP) that it must be nothing less than a three-party

coalition.

The CPP views a three-party coalition as unwieldy and unworkable, but has accepted

SRP participation in the coalition through the 'backdoor of Funcinpec'.

This means Funcinpec may offer SRP a portion of the 11 ministries promised to them

under a power-sharing agreement.

It is clear that all three parties have become more conciliatory in the past week.

There is every indication that after eight wasted months when Cambodia could have

been focused on attracting much-needed foreign investment, a belated sense of a common

national interest is coming to the surface to end the absurdly prolonged deadlock.

CPP has made important concessions to many opposition concerns over border problems,

immigration, and corruption by addressing these issues in its draft memorandum, which

precipitated the March 15 deal with Prince Ranariddh (see separate box).

One of the CPP's biggest concessions is acceptance of the creation of a separate

Ministry of Immigration. On another key controversy over Cambodia's disputed borders

with Thailand and Vietnam, a CPP memo proposes the creation of a National Council

on Border Issues, including representatives from all parties and the palace.

But mistrust resurfaced after the CPP working party received a draft from the Funcinpec

side that instead of responding to the CPP memo, launched into an entirely new framework

demanding a 50:50 coalition, with the three most important ministries - Finance,

Interior and Foreign Affairs - being handed over to Funcinpec.

A CPP senior source commented: " This draft leads me to question the sincerity

of Prince Ranariddh and others in Funcinpec. This is 120 percent different to the

existing framework of the March 15 agreement. Now we can no longer be sure about

the success of the working party meeting."

But Kassie Nou, speaking for Funcinpec, denied all knowledge about this draft.

While conceding that some Funcinpec individuals may have passed on such a draft,

he stressed it had no official status.

Why has it taken so long to even get to this stage? Soon after CPP was proclaimed

the election winner, Funcinpec and the SRP closed ranks to set up an "Alliance

of Democrats", protested against the results, and declared neither would work

in a coalition headed by CPP's choice of Prime Minister, Hun Sen.

In all systems of parliamentary democracy the rule is that the leader of the winning

party gets to be PM and is not normally selected according to the preferences of

the opposition. But the conundrum faced by the CPP was that no new government could

be formed without a coalition and without the cooperation of at least one other party.

PM Hun Sen may finally have a deal after an eight-month impasse.

The deep divisions in the ranks of the royalists also weighed in favour of alliance-building

rather than coalition-making. Prince Norodom Sirivudh (Ranariddh's uncle) led the

so-called hardliners against any more two-party deals with the CPP. This soon translated

into a unified opposition call for a three-party coalition or nothing at all.

Once again the two-thirds majority required by the constitution for the approval

of a new cabinet was the insurmountable hurdle paralyzing Cambodian democracy.

The two-thirds majority clause in the constitution forced the formation of coalition

governments after elections in 1993 and 1998.

Dr Lao Mong Hay has called the two-thirds principle "The Gordian Knot of Cambodian

politics" which condemns the CPP and Funcinpec to repeat the same post-election

games after each election. An appeal by the King to amend the constitution some months

ago did not produce any initiative from the parties to cut the knot.

If the next election in 2008 produces an SRP victory and CPP comes second, commentators

can foresee that the shoe will be on the other foot, which could be the reason the

CPP has not proposed any changes.

Rong Chhun, president of the Cambodian Independent Teachers' Association, told the

Post on March 24 that the Democrats will decrease their popularity in the 2008 elections

if they go into government without a commitment to bring reform to satisfy their

supporters.

"If the Democrats consider their supporters who died for democracy such as Chea

Vichea, those politicians must be strongly committed to a clean government rather

than to stay with the current government," Chhun said.

An SRP source said: "I think about 50 percent of our supporters have indicated

they don't want to join the coalition government in which Funcinpec is always No

2. If Funcinpec does not change its position and includes seats for selected SRP

politicians in a dirty coalition government then party support will be lost and it

will be difficult to build popularity for the 2008 elections."

Events now appear to be on course to deliver not only a new coalition but a new style

of coalition.

In the last coalition, 1998-2003, Funcinpec complained that while they had more than

40 percent of the ministries, CPP dominated in policy and actual power. This time

Funcinpec is insisting on policy-sharing as well as position sharing.

The issues raised by the alliance include: unfair border treaties, more effective

immigration control, judicial reform, anti-corruption law, and more government transparency

and accountability.

Lao Mong Hay says that "the circumstances are more favourable than before. The

CPP cannot bulldoze all the time as in the past". Another political analyst

sees that "there are pressures on all parties to reform and change including

the CPP."

A member of the CPP Central Committee said Prince Ranariddh "is the key to the

settlement. Everything depends on him. A new coalition depends on him. The future

of the alliance also depends on him."