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With their special administrative zone's three year agreement for semi-autonomy having

expired, Pailin residents and officials say they are ready, albeit reluctantly, to

accept Government control of their affairs.

Already the consequences of the move are being seen. This former Khmer Rouge stronghold

will soon have to start paying taxes to Phnom Penh, and Pailin authorities now appear

to have given up practically all opposition to a future tribunal against former leaders

of the KR regime.

At the same time, Pailin officials are vigorously searching for new sources of development

and income and, say some, hesitantly contemplating cleaning up their act.

In 1996, when Pailin defected to the government, the breakaway KR faction, led by

former KR Foreign Minister Ieng Sary, obtained a deal that reduced Phnom Penh's influence

on town affairs to an absolute minimum.

One key element of the deal, which was never put down on paper, was full economic

independence. While Pailin was not obliged to pay taxes to the government, it was

also not entitled to receive a single dollar from the national coffers. However it

is understood the CPP benefited financially from the arrangement. A senior CPP advisor

said last year that Ieng Sary had made some significant financial contributions to

the party following the semi-autonomy deal.

When it was struck, the deal seemed an attractive arrangement to Pailin, tucked in

between mountains extremely rich in gems, and forests bulging with precious tree

varieties.

Over the years, two industries, gem mining and logging, generated income for the

war against the Government, and more recently for personal wealth as evidenced by

the expensive 4x4 cars driven by the town's more prominent citizens.

Now the financial situation is tightening. Even though money from two foreign-owned

casinos and cross-border trade is still rolling in, revenues from Pailin's two main

sources of income have dwindled drastically.

The government crackdown on illegal logging and international pressure have made

trading in timber a considerably more risky and less profitable business.

Also, the renowned Pailin rubies and sapphires are no longer available in abundant

quantities. The precious stones are now buried deeper underground, which makes it

increasingly difficult and expensive to dig them out. At the town market, one-third

of the gem sellers' stalls remain closed.

Pailin officials openly admit the town is now in dire need of funding from the government,

foreign donors and investors.

"Before, there were maybe 40 Thai companies mining for gems here. We made a

lot of money then, but we spent it all on fighting and war. Now there are only three

mining companies left," said First Deputy Governor Ieng Vuth.

He acknowledged that donor and government money would not flow to Pailin unless the

town abandoned its economic independence.

"I cannot say if I'm satisfied or not in having to pay tax to Phnom Penh. The

important thing is that we have to look at what we can achieve in the future.

"But the people in Pailin are certainly not very happy to pay tax - they never

had to do that before - and I can tell you that there are some officials who don't

like to pay tax at all," said Vuth with a meaningful smile.

Whether they like it or not, Pailin has reluctantly agreed to eventually begin paying

taxes to Phnom Penh. There have even been efforts to make the tax collectors look

less hostile to the general public. At a ceremony on International Children's Day

in June, Pailin officials handed out gifts of snacks and candy, donated by the town's

fledgling taxation office.

"We will begin paying taxes to the government in maybe six months' time. Right

now we need the money to pay for new buildings and roads," said Pailin's Chief

of Cabinet, Mei Meakk.

The same attitude seems to apply to the prospect of a future trial against former

leaders of the KR regime. In the past Pailin has repeatedly ranted against a possible

KR tribunal with veiled threats of violence and war. Now the tune has changed.

"We will support and not go against a trial, because we must respect what the

government wants. The trial should go ahead if that is what is best for national

reconciliation," said Vuth, whose own parents, Ieng Sary and former KR Minister

of Social Affairs Ieng Thirith, may be eligible for prosecution.

"We just came from many years of war and fighting. We don't want to do that

again. We don't want to walk backwards," said Vuth.

However, he still pointed out that people - like Sary - who had received royal pardons

should not be indicted again. And he echoed Prime Minister Hun Sen's recent statement,

that prosecutions should be limited to three or four persons.

"If the number of people prosecuted is increased to for instance 10 or 20, it

could damage national reconciliation," claimed Vuth.

As if to show their sincerity in supporting the tribunal and the process of national

reconciliation, Pailin has agreed to participate in a public forum on National Reconciliation

and the Khmer Rouge.

The event, which has been organized by the Center for Social Development, will take

place in Battambang on January 27. Other participants will include ministry officials,

parliamentarians, local authorities, monks and nuns, NGO workers, court officials,

teachers and students.

"We have not yet decided who will go, but as requested we will send five women

and five men," said Meakk.

Pailin officials denied there had been any talks with the government about who among

the former KR leaders would stand trial. They claimed Phnom Penh barely kept them

informed about the progress towards a tribunal.

Indeed, people on the streets in Pailin seemed rather indifferent to the matter.

At a coffee shop across the road from the Wat Kong Kang, two former long-time KR

soldiers, now working for the municipality, had plenty to say about the scandalous

activities in the pagoda (see story page 11). But when asked about the tribunal,

they answered that they "don't know about that" at all.

One long-time observer of the KR pointed out that Pailin was not in a position to

argue with or resist any of the government's wishes, be it KR tribunal or taxation

arrangements.

"They don't dare to go against Hun Sen. Their skin depends on him and they do

not have enough political power or military force to object to him," said the

observer.

He pointed out that the current leadership of Pailin was of a different kind than

the old KR top leaders, who were shrewd intellectuals who based their policies on

ideology.

"People like Vuth and [governor] Y Chhien have a focus on personal wealth instead.

They participated in the revolution without understanding it. This does not give

them the same political foundation to play power politics with the strongman in Phnom

Penh," said the observer.

A Western diplomat, however, noted there might be other reasons for Pailin's newly-developed

compliance with government politics.

"They are tired of fighting. They are ready for normalization of their ties

to the rest of the country. And they are actually showing considerable goodwill in

order to achieve that, because they are smart enough to know that they need it,"

said the diplomat.

With or without government or foreign economic support, Pailin officials continue

to work on their visions for the town's future. In Vuth's desk drawer lies a complete

master plan for further development of the whole region.

One element is a large area designated for plantations and light industries. According

to Vuth, interested foreign investors were already working on plans for a paper factory,

a sugar palm plantation with a processing factory, a corn plantation with an animal

food factory, and a rubber plantation.

Likewise, international foodstuffs manufacturer Nestle has shown interest in restoring

a coffee plantation that was abandoned in 1992.

Most importantly, efforts to improve access roads to Pailin have already begun. Last

month workers started laying down concrete on the 22-kilometer dirt track from the

Thai border to Pailin. The work is said to be financed by a $800,000 "gift"from

one of the border casinos, originally offered to Y Chhien who turned the offer down

and asked that the money be used for improving the road instead.

According to plans, the next step is to upgrade five kilometers of road in Pailin

and a 17-kilometer stretch of paved road to Battambang. Part of this will be paid

for by imposing a road tax.

But even without a proper road, an entire small town has sprung up at the border

within the past few months, inhabited by some 100 families and sprouting three large

barracks called the Pailin Border Market. Up until now, only a few vendors have set

up shop in the newly-built marketplace.

And on the Phnom Yat mountain above the access road from Battambang, telecommunications

company Samart recently provided Pailin's latest new connection to the rest of the

country - a towering antenna that allows people in the town to switch from their

old Thai mobile phones to a Cambodian service provider.

"So you see, even without the help of the government, Pailin has still developed

a lot these last few years. And we have done it with our own funds," remarked

Vuth.