AFTER years of bullish trading and soaring profits, the Khmer Rouge Timber and Gem

Co Ltd has collapsed.

Flippancy aside, one of the reasons for the spectacular implosion of the Khmer Rouge

was Thailand's decision on 27 May 1995 to close its border with Cambodia.

Thailand has been under intensive international pressure - particularly from the

United States - to cut its long-standing links with the rebels in gems and timber.

Trading between Thai villagers and Cambodian villagers is as old as each country's

history. And a Thai military official confirmed to the Post all expert opinion that

rich, illegal deals are still being made between Thai army chiefs and both the Khmer

Rouge and RCAF chiefs, but only a fraction of what had gone before.

Sources say that the cessation of the multi-million dollar trade of days gone by

probably contributed to the increasing alienation of Ieng Sary from other rebel leaders.

The breakaway faction of Y Chean and Ieng Sary occupies the richest forests and gem

fields. "Pailin gets Thai television. People there can see how the world is

moving... and they're still stuck in the jungle, waiting for the dry season and for

the RCAF to lob more shells at them," said one Thai source. "They had plenty

of money but nowhere good to spend it."

Khmer Rouge "citizens" - villagers living within KR-controlled zones -

are "dirt poor", say those who have been in the areas.

The United States had been "making the loudest noises" denouncing the Khmer

Rouge and the countries aiding them, according to one American scholar. The US Government

passed a law in 1994 that allowed for tough sanctions against countries helping the

Khmer Rouge militarily. In 1995 that law was amended to include countries dealing

with the Khmer Rouge commercially: this move, say analysts, targeted the Thais.

The law requires the US President to certify a country proven to have helped the

Khmer Rouge. Given the scale of business that had been done throughout the late 80s

and early 90s, Bangkok would have found it very difficult to continue denying its

commercial links with the KR. Thai Prime Minister Chuan Leekpai had to act decisively.

This was a fairly recent turnabout. After the Paris Peace Accords in 1991 the United

States encouraged as much trade as possible between the KR and Thailand, as the single

best way to undermine them as an organization and lessen their ideological control.

With Pol Pot holding sway, this approach only made for making a bunch of killers

more wealthy, said one Western expert. When Khieu Samphan left Phnom Penh and the

election process, the pressure went back onto the Thais to stop commercial trading.

The timing of the border closure in 1995 coincided with a May 26 exposé by

Global Witness, that the Khmer Rouge was getting rich with the complicity of Thai

and Cambodian military and government. The story played around the world.

Traveling up the Thai border posing as potential business partners, investigators

Patrick Alley and Simon Taylor met and secretly filmed Thai and American businessmen

who admitted paying off Cambodian and Thai soldiers, and the Khmer Rouge.

The border closure was "purely cosmetic", they said. One Thai general said:

"These are not toothpicks," explaining how unlikely it was that Thai officials

could fail to notice truckloads of logs crossing the border. "That's just our

point," said Taylor.

Bangkok, while it had "kept a foot in both doors", recognized that as the

Royal Government became stronger, there was less reason to deal with the KR, "especially

when the same amount of money could [legitimately] be made with Phnom Penh,"

said one expert.

A Western intelligence source told Global Witness late last year: "We are of

the opinion that Thailand is really sincere in wanting to cut its links with the

Khmer Rouge.

"For the Thais, the KR has ceased to be important," he said.

The strangulation of income into the rebels' coffers "seriously hurt the Khmer

Rouge," said one diplomat. In press articles and public statements, senior figures

in both Cambodia and Thailand began claiming that the KR was suffering shortages

of food, medicines, weapons and money. The military logistics of war also became

harder to manage.

Though Bangkok dismissed the Global Witness evidence and the consequent publicity,

orders went out the next day (May 27, 1995) from the Leekpai Government to seal the

border, Alley said.

However, while the KR has been hurting since, so too have the Thai logging companies.

They have been unable to bring out the logs already cut under old deals made with

the Khmer Rouge.

"Last November people on the [Thai] border were saying they'd be getting timber

by the end of the year, mainly from around Pursat and Pailin. We thought something

was going on, and it turned out to be the 'one million meter' deal," Alley said.

Seventeen Thai logging companies - 16 of which were dealing with the Khmer Rouge

- had struck a deal with the Cambodian Prime Ministers to export one million cubic

meters of cut logs.

Prince Norodom Ranariddh argued that the logs would have gone across anyway, and

that the Government should get some of the profit.

The outcry prompted the International Monetary Fund to freeze its funding to Cambodia.

Aid donors put logging concerns at the top of the agenda at the Tokyo aid summit.

Phnom Penh had to back down, and the Khmer Rouge in turn were "cheated"

out of income worth $35 million or more.

The KR split has further complicated the timber trade with Thailand. Hun Sen was

quick to assure KR "moderates" that they could keep their business deals

with the Thais, but till Sary and his followers agree to the terms of their "freedom",

all deals appear to be off.

On August 16, Bangkok newspapers reported the squeals of protest from Thai logging

firms who had long been waiting for their felled timber to be trucked out from Cambodia.

"Everyone's in serious trouble because each company has invested at least 100

million baht," said one Thai executive.

Most significantly, dissident KR commander Sok Pheap told The Nation August 20 that

he wanted Phnom Penh's permission to engage in cross-border trade with Thailand through

Poipet. "We want to do business with the Thais freely and openly, so that our

people can enjoy prosperity and be successful in business like people in Thailand

at present," he said.

Global Witness argues that it was even more important now to preserve a strict moratorium

on cross border trade.

The US Foreign Operations Act was particularly influential in this respect, they

said. Global Witness is still suspicious of the actual deals being done on the border:

"The exact nature and terms of Thailand's cooperation over the export deal should

be made public," they said.

The gem fields of Pailin cover 100 square kilometers, and Battambang gems traders

say talk that the area being mined out is nonsense. Within 10kms of Pailin lie the

ruby fields of Som Loth and Boss Mom, and the sapphire-rich Bor Lang.

Thai gem dealers in Chantaburi say that when the Pailin ruby trade was at its peak,

the trade was worth $27 million a week. One stone in every three was from Pailin,

but they were of a far superior quality and much more expensive.

The timber trade was, at its peak, worth between $10 million and $20 million a month

to the Khmer Rouge, according to Global Witness. At $100 per cubic meter, the Khmer

Rouge, in just one month alone through one Thai port from Koh Kong province, made

$1.2 million. Thai truck drivers carried "official" Khmer Rouge passports.

Photographs were taken of senior KR commanders - including Chean - partying with

Thai military and businessmen.

Cambodia scholar Stephen Heder said the Sary/Mok split would have deepened by the

different attitudes each would have held over the Thai border closure. Sary - the

more moderate, and with an eye to personal wealth - might have argued the need to

deal with the Thais more openly. Mok's view would have been to disregard the Thais

and carry on the fight, he said.

The KR used the money from timber and gems to fund their war and buy respectability

and credence among villagers within its areas of influence. The money also lined

the pockets of the ruling elite, particularly, according to hardline Khmer Rouge

radio, Sary.

The rebels' need for cash has been easily met by its occupation of easily defended

positions among the gem-rich hills of Pailin, and the forests of Banteay Meanchay,

western Pursat and Battambang, Koh Kong and northern Stung Treng, where money literally

grows as trees around them.