T

he high-visibility dispute between Royal Government leaders has underscored the

difficulties of bringing structural changes to the country's archaic political

and economic institutions and threatens hundreds of millions of dollars in

desperately-needed international economic aid.

Minister of Economics and

Finance Sam Rainsy's efforts at rooting out massive official corruption and

centralizing budget and the fractured system of revenue collection has stirred

up a storm of protest from powerful officials and entrenched business interests.

Though the dispute has temporarily gone on the back burner many

political observers believe that Rainsy's political life span is limited, and

that the influential enemies he has created will eventually succeed in getting

rid of him.

The reason Rainsy has won a stay of execution, many believe,

is the International Conference on the Reconstruction of Cambodia scheduled for

next month.

FUNCINPEC was given the economic portfolios because if its

ability to lure a number of Western-trained technocrats back home and Rainsy was

among them.

This group, and Rainsy in particular, have the support of the

international community and lending institutions.

Forty-eight percent of

the budget is already comprised of international assistance and that figure

could rise still further if the government are able to persuade ICORC donors to

release more of the $1 billion they have pledged.

"The financial

community thinks it's a pretty darn good [government economics] team, and we all

would begin to take another look if that team didn't exist," said the ambassador

of one of the big aid donor countries.

Another diplomat in Phnom Penh

said that if Rainsy were to be fired before the Tokyo conference, "donors would

have to reassess if and how they would give much of the aid."

The row

blew up last month when Rainsy's reform efforts resulted in public attacks

against him by government officials, businessmen. The verbal brickbats triggered

thousands of students, street vendors and small business people to mount a

series of demonstrations in support of the embattled minister.

Rainsy

made the headlines by branding some foreign investors "cowboys" and "Mafia"

stealing from the nation, he has been shot at while chasing smugglers in a

speedboat and addressed public demonstrations against corrupt senior politicians

in his own government.

Typical of Rainsy's supporters is Seng Y-Gek who

spoke as she lit incense in front of the Royal palace during one of the

demonstrations.

She said: "I am going to pray for the good health of Sam

Rainsy so he will remain a defender of justice for the Khmer people. He is a

real patriot."

Rainsy has made some very powerful enemies in the course

of his reform drive.

One of them is Theng Boon Ma, the Sino-Khmer who

travels on a Thai passport and is regarded as the country's most influential

businessman. He is the tycoon who also locked horns with Rainsy in the Olympic

market row.

Theng Boon Ma is known to be close to senior CPP officials

and to finance many corrupt elements within the government.

He made his

position known with a letter in Ramseay Kampuchea addressed to "the Minister in

Charge of Destroying Finance and Economy," in which he berated Rainsy and called

for his ouster.

The pressure built up to the extent that co-premiers HRH

Prince Norodom Ranariddh and Samdech Hun Sen asked His Majesty King Norodom

Sihanouk to sanction Rainsy's sacking when they made an official visit to

Beijing last month.

The request was rejected by Sihanouk, who instead

issued a very public statement praising Rainsy that effectively saved the

minister from being forced out of office.

Since assuming his position

last fall, Rainsy has launched a series of operations, backed by an elite group

of military police, to enforce regulations in an attempt to centralize the

country's economy and collect taxes for the treasury.

Rainsy was largely

responsible for new finance laws and the budget enacted on Jan 1 which were

hailed by international lending agencies and analysts. In them he outlawed the

previous govern-ment's system which allowed individual ministries and provinces

to levy and keep taxes.

The system had been widely abused, with powerful

fiefdoms being created across the country. Phnom Penh had little control over

the collection of taxes and consequently there was only a slow trickle of cash

into central coffers.

Those most threatened by Rainsy are in the CPP.

While the party technically came second to FUNCINPEC in the elections last May

it has remained the most powerful force in the new government, many observers

believe. It has also retained de facto control of much of the country outside

Phnom Penh.

During the course of the row, the beleaguered Rainsy even

appears to have lost support from his own leader, Prince Ranariddh.

Some

argue that Rainsy's reform efforts and oratory have won him such popular support

that the co-premier feels his own popularity is threatened. The power struggle

is undermining the unity of the already fragile coalition government.

The

series of public demonstrations opposing corruption and supporting Rainsy made

authorities nervous and Prince Ranariddh banned state-run television and radio

from airing the protests.

Ranariddh issued a not-so-thinly-veiled warning

to his finance minister to back off during a television appearance on Jan

23.

The co-premier said:" While we were in China, some were engaging in

demagoguery here.

"Statesmanship and demagoguery are two different

things. It is impossible for me to be a practical leader and demagogue at the

same time."