30^th July 2012

The government has followed last week’s attack on The Phnom Penh Post commentator Roger Mitton with a uncannily similar defence of its policies and actions at the recent ASEAN Summit against an op-ed piece by Thitinan Pongsudhirak, Director of Chulalongkorn University’s Institute of Security and International Studies in The Bangkok Post over the weekend apparently penned by Madam You Ay, Cambodia’s Ambassador to Thailand.

In a letter of rebuttal, she took exception to four of Dr Thitinan’s points.

In a tone of high dudgeon, Madam You first highlighted the same mistake that Mitton made in his commentary (see here), that it was that grim dash of Socialist Realism, the so-called “Friendship Building”, to which the Chinese apparently contributed $US50 million, not the Prime Minister’s modest office next door (the “Peace Palace”) where the ASEAN ministers met.  The PM himself apparently rejected the Friendship Building as lacking in sufficient gravitas.

Chinese-built but not the “Peace Palace”

All Bought and Paid For: “Peace Palace”

Next, she characterised as “purely insulting” the notion that China had become Cambodia’s patron simply by lavishing $US10 billion in aid and investment on the Kingdom, asking if the good doctor considered China as the patron of other ASEAN states that “have received many more billions of dollars of aid and investment than Cambodia from China?”

Well, frankly, the answer is probably yes. Anyone thinking the Chinese are throwing money at them out of brotherly love has got to be extraordinarily naïve. The trick is to take the money and then try to avoid giving anything too compromising back. Whether Cambodia managed this is moot.

Thirdly, she asked if the allegation that Cambodia ”shared the draft version of the joint statement with the Chinese, who then vetoed it” was part of a deliberate smear campaign against her country with the intention to “defame Cambodia’s credibility.”

We will probably never know for sure but notes on the ASEAN Foreign Ministers’ private meeting apparently leaked to Carlyle Thayer by The Philippine’s FM Albert del Rosario might suggest that many in the meeting, not just the South China Sea’s littoral states, thought so.

Finally, she said that it was her country was fully committed as anyone to achieving the ASEAN (economic) Community by 2015, and that the failure to produce a communiqué at the end of the meeting “only a temporary hiccup” remedied by the eventual issuance of the Six-Point Principles – the very principles that Cambodia had always supported – but which had been sabotaged by Vietnam and The Philippines that “had their own hidden plan to sabotage the AMM and made the JC a hostage of their bilateral disputes.”

Actually, Dr Thitanan had also pointed the finger at The Philippines as bearing some of the responsibility for the original outcome of the Summit, emboldened, he suggests, by the “US rebalancing.”

“As a tentative understanding, ASEAN and China a decade ago came up with a Declaration on Conduct of Parties in the South China Sea (DOC)”, he states. “Under the Cambodian chairmanship, the DOC is supposed to be elevated, finalised and codified into a COC. ASEAN’s debacle in Phnom Penh means the COC remains elusive.”

Moreover, the credit for the final compromise must surely go to Indonesia’s peripatetic Foreign Minister, Marty Natelagawa, who worked tirelessly to get all the ducks lined up in a row.

What does seem to have happened subsequently, however, is that following its victory, China has decided belatedly to support the idea of the COC it was originally party to but later backed away from in favour of “bilateral” negotiations. If so, this is a significant development.

Nevertheless, the first thing everybody needs to acknowledge when discussing any regional issue is that the government here in Phnom Penh is never, ever – ever – motivated by self-interest. Pure as freshly thrashed rice, it is, with a keen sense of its responsibilities to serve as an honest broker as rotating chair of ASEAN for 2012.

Right.

Actually, Penh Pal does not presume to judge the Cambodian government as, frankly, there are plenty of others – especially, it seems coming from ex-colonial powers – that feel they need to continue their “civilising mission” by harping on about the perceived limitations of the current regime (which of course, makes them easy targets).

Sadly, all this seems to do is get the government’s back up and make it even more obstinate.

However, there are important and complex issues that need to be understood, and a discussion of them – especially a contested one – is a good way to help elucidate them.

The key to this debate is the conflict between individual national interests and wider communal interests. The whole point of what ASEAN as a regional forum is for is to help address these and, hopefully, resolve them.

The recent ASEAN Summit has been a useful barometer for gauging these differences and determining just how useful ASEAN can be at defusing regional conflicts of interest that will inevitably arise. It is part of the groupings evolution from anti-communist alliance into a place where these fraught disputes can be discussed and solutions to them sought.

While Cambodia has again demonstrated its willingness to be a regional iconoclast, few commentators will dispute that China has been the real winner, able to show that it is quite capable of protecting its interests in a pact it is not even part of.

At the same time, perceptions of Chinese bullying, no doubt driven by powerful and potentially dangerous nationalist sentiments at home at a particularly delicate time politically, have clearly proved counter-productive.

Has it overplayed its hand? More importantly, from its position of strength, will it now become more conciliatory to avoid scaring some of ASEAN’s larger members further into the American camp and risk splitting the group down the middle with one side defiantly hostile to its role in the region?

28^th July 2012

Reuters reports that a new vaccine has been shown to perform well against three of the four known strains of the Dengue fever virus, an innovation that could have great impact in nations like Cambodia where the tropical fever is a serious public health concern.

Dengue is spread by Aedes aegypti mosquitoes that were mostly found in Africa until around the time of WW11 but then transported by ships all over the world and can now be found in 110 countries. The incidence of dengue has risen 30-fold in the last fifty years. Pesticides and education, the main weapons against Aedes aegypti, have had little success in preventing its spread.

A French pharmaceutical company, Sanofi SA, has reportedly developed the new dengue vaccine that has been shown to be safe in Thailand, and large-scale trials of the vaccine are now under way in Asia and in Latin America, and the US Food and Drug Administration has reportedly granted it “fast-track” status.

According to the Phnom Penh Post, dengue killed 60 people in the first half of 2012. The 15,600 reported cases of the disease in the first half of 2012 reveals a rate that has nearly quadrupled compared to the same period in 2011, when 4,604 cases were reported.

However, Steven Bjorge, team leader for malaria and other vector-borne diseases at the WHO’s Cambodia office, notes that although the epidemic is bad, it’s not the worst in Cambodia’s history. An epidemic in 2007, killed 407 and infected 39,861.

However, while lauding the development of the new vaccine, Bjorje cautioned against undue enthusiasm.

“The current vaccine was successful in protecting against three of the four sero-types. It requires three injections spread out over months, so it is not a simple vaccine to use.” Moreover, “the cost will probably not be small, at least in the beginning,” he said.

“Even if a vaccine is made, and even if it is highly effective, a high cost (as with vaccines for rotavirus and human papilloma virus) will make it inaccessible to the vast majority of those who need it most,” warns Executive Director of Global Vaccines Inc, Robert Johnston.

Meanwhile, A preliminary genetic analysis of enterovirus serotype 71 (EV-71) isolates from Cambodia suggests that the virus is part of ongoing EV-71 outbreaks in Asia and is similar to those in other countries in the region, including Vietnam.

Philippe Buchy, MD, PhD, who heads the virology unit at the Pasteur Institute in Cambodia, writing in a ProMED (the online reporting system of the International Society for Infectious Diseases) Mail post yesterday, that the lab analysed three randomly selected isolates from patients in different parts of Cambodia over four weeks.

Genetic sequencing showed that the viruses aligned with sequences from strains isolated in Vietnam in 2011 and 2012, in Shanghai in 2011 and 2012, and from those in other Asian countries that have been submitted to GenBank, Buchy explained. As further genetic studies continue, it’s useful to know that the strains in Cambodia are part of an ongoing outbreak of hand, foot, and mouth disease (HFMD) across the region, an important consideration given that Cambodia doesn’t have enough data to gauge the true case-fatality rate of its EV-71 outbreak.

In a comment accompanying the post, ProMed moderator Craig Pringle, PhD, a virologist and emeritus professor at the University of Warwick in England, proposed that based on the institute’s phylogenetic findings, some of the sub-genotypes should be reclassified. This would include designating the C4 sub-genotype as a new genotype D. He said scientists await the results of further isolate analysis, especially of genotype C4 and any possible relation to clinical severity.

This latter statement would look to support the position of Dr Beat Richner, MD, founder and head of Kantha Bopha Children’s Hospitals here in Cambodia, who had earlier suggested that the HFMD outbreak here in Cambodia would represent a new version of the disease.

Yesterday, Richner again lashed out against the WHO for statements it made during the outbreak, saying the WHO statements created panic and gave the impression that steroid treatment made some of the children’s conditions worse.

He wrote in a letter posted on his Facebook page that all 72 children treated at Kantha Bopha had encephalitis, which he insisted must be treated with steroids to ease brain swelling. He pointed out that HFMD lesions are a symptom that can be caused by an array of viruses and that the severely ill patients the hospital treated didn’t have the lesions. What caused the patients’ lung destruction in the last 6 hours of their lives still isn’t clear, he said.

During the last week, a total of 533 cases of hand, foot and mouth disease had been reported to the Ministry of Health from across Cambodia. There were nine confirmed cases of severe EV-71 infection, with three fatalities.

26^th July 2012

Battle has been joined by the government’s Foreign Affairs spokesperson, Koy Kuong, and the Phnom Penh Post over Roger Mitton’s latest Monday commentary, ASEAN Struggles for Unity, which Koy characterises as “full of wild and ill conjectures and deliberately insulting to Cambodia.”

Not only did the government spokesman find the contents of Mitton’s piece objectionable, he threatened the paper with a lawsuit for “for inciting insults against Cambodia” if they didn’t print his letter in full – which they duly did.

Amongst his multiple sins, Mitton had referred to Cambodia as a “junior” member of ASEAN, by which he no doubt meant relatively new to the organisation, but Koy took to mean lower in status – a serious loss of face for this prickly nation forever protective of its place in the world.

Mitton also failed to acknowledge that despite a failure to agree on a joint communiqué at the end of the recent ASEAN meeting in Phnom Penh hosted by the government, Indonesian’s Foreign Minister Marty Natalegawa had subsequently retrieved the situation by hammering out a belated six-point agreement on the South China Sea that all parties had signed on to. Koy insists this final statement conformed exactly to what Cambodia had been trying to sell the conference all along but this had been thwarted by “two ASEAN members having bilateral disputes in the South China Sea” with China – which the spokesman suggests was outside the scope of ASEAN.

Moreover, the disputants with China had, Koy insisted, “essentially hijacked the 45th AMM and make the joint communiqué a hostage of their unyielding demand”, contrary to the spirit of the organisation that has traditionally kicked issues where there was no unanimity down the road. It all suggested a conspiracy “to sabotage the 45th AMM”, according to Koy’s letter.

What really stuck in Koy’s craw was Mitton’s assertion that Cambodia had acted in any way other than an honest broker at the conference, especially that the government had been bought and sold to the benefit of their Chinese benefactors. That the Peace Palace was funded by China where the ASEAN ministerial meetings were held was also galling (especially when it was the monstrosity next door that the Chinese actually paid for). Or that they had showed the original draft communiqué to China before rejecting it – a breach of protocol – something this law-abiding government would never contemplate!

Game, set and match.

While the letter published in yesterday’s Post didn’t exactly follow with a retraction, it did conclude with the weasel words: Editor’s note: Roger Mitton is a regional columnist and his views do not necessarily reflect the views of The Phnom Penh Post.

It follows criticisms of Mitton by government supporters in Malaysia in early June, accusing him of being a cheer leader of the “Anwar Ibrahim Fan Club”. Given that Roger lives in Bangkok, we just hope there aren’t any lèse majesté claims on the horizon.

Meanwhile, a review of the documentation from the summit by Carlyle Thayer on the Asia Times online website would seem to contradict Koy’s take on the summit.

24^th July 2012

The Phnom Penh Post reports that the Prime Minister cancelled on July 2^nd,  a 14,981-hectare concession granted to Indochina Gateway Capital Limited for a banana plantation in the forests of the Cardamom Mountains after lobbying from the Wildlife Alliance (WA), or so the conservation group would have us believe.

“We are thrilled that this has happened and we have campaigned for this for 18 months. This is one more sign of the government’s commitment to protect the Cardamoms,” Suwanna Gauntlett, CEO of WA, which runs a conservation programme in the area, told the Post breathlessly on Sunday.

WA had fought the concession over fears of damage it could do to a so-called “elephant corridor” between two areas of forest. It also exceeded a 10,000-hectare restriction on Economic Land Concessions in the 2001 Land Law.

It represented Peter Costello’s first major private sector venture, a $US600m investment fund focusing on “rice, bananas and sugar” since the former Treasurer retired from Australian politics and became managing director and partner at corporate advisory group BKK Partners, apparent parent of Gateway, founded and run by ex-Goldman Sachs and NAB execs and chaired by Alistair Walton, a long-time friend of Costello’s from his days in student politics.

Back in the halcyon days when the project was first announced, Costello, in a video interview with the Post, said he would “bringing in major multinational agro-technology firms and investors in a bid to add value to the Kingdom’s farming sector”, as well as teak and palm oil.

BKK Partners Managing Director John Anderson also explained at the time that the main reason to pursue the project was the “profit motive through the private equity fund” and also cited a “social development angle”, that would “transport western technology and skills” into the country’s fields. Five per cent of the investment would go towards a charitable foundation, so he claimed.

Back in early May, the Prime Minister announced a moratorium on issuing new leases for economic land concessions, following an outcry earlier this year, and saying the government would take back land from any firms that breach their lease by “cutting trees to sell, without developing the economic land concessions… and grabbing villagers’ or community land”.

So far there has been no explanation so what transgression Gateway is guilty of.

Ironically, it was Costello’s post-political role, rather than his status as former Australian Treasurer, that made him a key figure for BKK and Indochina Gateway Capital – such as the fact that he has been a member of the World Bank’s 4-person anti-corruption Independent Advisory Board since 2008.

Having just established that the new Queensland Lib-Nat government is effectively bankrupt, Costello is rumoured to be considering another tilt at the leadership of the Australian Liberal Party. And we thought Abbott and Costello had such a ring to it!

22^nd July 2012

A well-know property expert is predicting that Phnom Penh’s rental market, especially in the inner city, is about to fall through the floor due to a massive increase in the supply of apartments.

This follows a claim last week by Wayne Rookie of Independent Real Estate Brokers (IREB), a local estate agency, that rental prices in the capital were about to spike as the number of new high-rise apartment sprouted across the central city.

“With lots of quality apartments coming on-stream, we are seeing prices for high-end apartments doubling and tripling, with many new blocks fully booked even before they are completed,” he insisted, citing the example of Moonbeam Mansions on Street 51.

However, other professionals in the industry have thrown cold water on the idea that increased supply is somehow leading to increases in rents.

“This defies logic,“ said regional CRBE boss Inigo Jones. “When supply outstrips demand, prices fall. At least, that is what happens when market forces prevail. With the huge increase of apartments coming on to the market, its inevitable prices will start to float downwards. Prices can’t defy gravity forever. I’m picking they’ll come crashing down and the correction is just around the corner.”

“That’s total crap,” replied Ozzie Chancer, Wayne’s boss at IREB. “The Cambodian market is totally insulated from conventional market forces because the people who are behind these new buildings are not financing them through debt. They have strong cash flows from years of hard graft and see their property portfolios as stores of value. They are quite willing to accept negative rates of return for as long as it takes – just like buyers of Western government bonds, really.”

Jones conceded that the local market isn’t necessary subject to normal business logic.

“Yes, I’m afraid they prefer to leave a place empty with the lights on a night rather that rent it out for less that they believe it’s worth. It’s a matter of pride. But all it will take is for one to weaken and the whole market will recalibrate,” Jones explained. “I mean, where are all the new tenants going to come from now that so many NGOs are moving on to the greener pastures in Burma.”

Meanwhile, foreigners are being encouraged to buy real estate in the city to compensate for a fall off in local demand, according to government spokesperson, Chip Butty, just so long as they don’t buy the ground on which the property sits.

“We can’t have them buying up the country but we are perfectly happy for them to buy as much air about the ground floor as they like. After all, there is no shortage of this,” he said in reference to the recent law change that allows expats to purchase apartments above the ground floor.

“They would have to be mad!” Jones responded when this was explained to him. “How are you expected to gain access to your apartment if the ground floor owner denies you egress?” he asked. “Helicopters? The whole things a joke and its time people woke up and smelt the coffee.”

With new coffee shops now appearing on nearly every corner of BKK1 in central Phnom Penh, this shouldn’t be too difficult.

“The Chinese are coming,” says Paul Revere of Golden Luo Guan Properties, a local developer. “Sure the Koreans got badly burned here after 2008 but now the Chinese are arriving by the planeload with suitcases full of money and they are happy to pay anything – they just don’t seem to care. And there are plenty more where they came from,” he concluded with a broad smile.