Analysis-Economic Woes Mount in Cam

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Subject: Analysis-Economic Woes Mount in Cambodia Impasse 

               Asia:Cambodia

               Analysis-Economic Woes Mount in
               Cambodia Impasse

               Reuters
               25-OCT-98

               PHNOM PENH, Oct 25 (Reuters) - Three months after Cambodia's
general
               election its rival political parties are still unable to
agree on a new government
               and the economic costs of their intransigence are steadily
mounting, analysts
               said. 

               While the rival parties stand firm on their political
demands, rice prices are
               soaring, investment has all but stopped and crucial foreign
aid remains on hold,
               economists say. 

               Premier Hun Sen's ruling party won a slim majority in the
contested July vote but
               failed to get the two-thirds of seats the constitution says
a party must have to
               form a government alone. 

               The opposition, led by Prince Norodom Ranariddh and his
royalist
               FUNCINPEC party, control all remaining seats. So far he has
refused to join
               Hun Sen in a coalition and prospects of compromise appear
bleak, analysts say. 

               "There is a complete lack of trust between the two parties
necessary to have a
               constitutional government," Cambodia political analyst and
writer Raoul Jennar
               told Reuters. "One has to blame both sides...they are not
ready to compromise."

               The international community, including the country's main
aid donors, has said
               the rivals must form a government before Cambodia can regain
its seat at the
               United Nations, gain membership of Southeast Asia's regional
group and start
               getting aid again. 

               "The present situation is almost desperate for the
government when it comes to
               international support," top U.N. human rights official
Thomas Hammarberg said
               on Friday. 

               Cambodia depends on foreign aid for almost half of its
annual budget. Last year
               it received help worth $450 million but the country's main
aid donors are
               awaiting a new government before meeting to discuss future
aid. 

               "Basically they're out of pocket by $400 million," said an
economist who asked
               not to be named. "Last year there was damage control. They
cut expenditure on
               health and education. That's OK in the short run but in the
long term it's not
               sustainable. They can't hold out." 

               Poor harvests have pushed rice prices to their highest
levels in local currency
               terms for five years and hunger is spreading in the
countryside. 

               "Rice prices have increased dramatically and there's no
prospect of them coming
               down until the harvest at the end of the year," said the
economist. "There's no
               investment coming in and inflation is quite high. It's a
very dicey period." 

               Battlefield foes during the 1980s, when Hun Sen led the
Vietnamese-backed
               Phnom Penh government and Ranariddh commanded royalist
forces based on
               the Thai border, the two men formed an uneasy power-sharing
coalition after
               U.N.-sponsored elections in 1993. 

               Plagued by rows over the distribution of power, their
coalition collapsed in
               violence in July last year when Hun Sen ousted Ranariddh in
a bloody takeover. 

               The electoral system and constitutional structure the
international community
               imposed on the country means they again have to form a
coalition, but analysts
               say the minimum level of trust between them simply does not
exist. 

               "Maybe this kind of political system is too sophisticated
for the political class,"
               Jennar said. "We don't see an indication of political will
to create the basic
               climate of trust." 

               An exasperated King Norodom Sihanouk is due to travel to
China for medical
               checks in mid-November. Unless the rivals can agree on a
National Assembly
               president, or speaker, by then, the king's departure will
leave the country without
               an acting head of state. 

               The speaker of parliament doubles as acting head of state
when Sihanouk is
               away. 

               "The king's departure creates a kind of deadline," Jennar
said. "Maybe the fear
               of having a vacuum at the top will push people to start
negotiating." 

               Hun Sen has made it clear he is prepared to go it alone if
he has to, but has also
               offered to create a dual National Assembly presidency, with
both parties
               controlling parliament. 

               Diplomats say the offer might help to break the ice between
the deadlocked
               leaders. 

                            Copyright 1998 Reuters Limited.All rights
reserved. 





                                                   

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