SISOPHON - Phnom Malai may be officially made a district of Banteay Meanchey province,

and Pailin a city in its own right, according to the province's Funcinpec governor.

"Malai is an economic region. It will become a major, active town," said

Doung Khem, adding that he hoped KR contracts with Thai businesspeople would be revoked

and possibly taken over by the government.

Malai and Pailin, rich in timber and gems, have for years been the biggest money-spinning

areas for the KR. Khem and other officials are adamant that the KR breakaway people

living there cannot maintain the areas as virtually autonomous zones.

Khem said he had heard "a little" about the government's plans: Malai,

which falls within Banteay Meanchey's boundaries, would likely be made a district

of his province; Pailin, theoretically within Battambang province's jurisdiction,

would be made a city.

"As both Prime Ministers already stated, there is no need to move all the people

from Pailin and Malai. We leave them there to continue their lives," Khem said

from the Banteay Meanchey capital of Sisophon.

"[But] we must still put these zones under the central command of the government

according to the Constitution," which does not permit any official partitioning

of Cambodia.

Khem, who said he wanted to send provincial staff to Malai as soon as the government

military secured the area, stressed that the breakaway KR and their families would

be given a say in the local administration.

He suggested that, in Malai, the local people could pick their commune chiefs, while

the government would appoint the district chief.

The details would have to be negotiated by Funcinpec and CPP, he said, but "we

will allow those in Malai and Pailin to take part in the leadership as well...we

will not leave them out."

Asked what development he would seek in Malai, he said road-building and mine-clearing

- to expand the area's trade possibilities - were important.

As for logging or gem-mining deals between Thais and the KR, Khem said that the government

had yet to finalize its position.

"But in my opinion, all contracts with the KR should be annulled and if the

Thai businesspeople want to continue the contracts, they should approach the Royal

government - the Khmer Rouge never was a legitimate government and never will be."

Khem said provincial officials, as well as military ones, had been involved with

the negotiations with the breakaway KR leaders, and he was convinced of their sincerity.

"In our hearts and minds, I think that we have already reconciled to live together...

I have met many times the Khmer Rouge commanders and they are committed to doing

whatever possible to unify the country for peace and stability."

Asked what he believed had provoked the KR split, Khem cited several reasons, including

internal friction, a realization that the war was futile and - most importantly -

"money".

"People who lived among the Khmer Rouge were unhappy with Pol Pot and Ta Mok's

destructive policy in Pailin and Malai, selling all the gems and logs to the Thais

and using the money for their own purposes...the rank-and-file didn't receive any

benefit from it."

Asked if, therefore, the breakaway KR in the area were likely to want to get control

of such lucrative business ventures now - rather than hand them over to the government

- he said: "I really don't know."