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
FUNCINPEC was given the economic portfolios because if its
ability to lure a number of Western-trained technocrats back home and Rainsy was
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.
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."
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.
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
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
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
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
During the course of the row, the beleaguered Rainsy even
appears to have lost support from his own leader, Prince Ranariddh.
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.
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
The co-premier said:" While we were in China, some were engaging in
"Statesmanship and demagoguery are two different
things. It is impossible for me to be a practical leader and demagogue at the