Thu, Apr 07, 2011 - Page 9 News List

China pumps up the Cambodian economy, but at what cost?

Forced evictions to make way for Chinese development projects are leaving Cambodians homeless and fueling popular anger, with some warning of a backlash

By Prak Chan Thul  /  Reuters, PHNOM PENH

Ly Mom has been driven out of her lifelong home in Cambodia’s fast-growing capital. Like thousands of other Cambodians forcibly evicted by the authorities, she is homeless, jobless and angry.

Her grocery store on the banks of Phnom Penh’s Boeng Kak Lake is being bulldozed to make way for a luxury housing estate to be built by a Chinese developer and a well-connected Cambodian tycoon.

“People living here have nothing apart from their bare hands,” she said. “They have been given no choice.”

Ly Mom’s story is the flipside of a “no strings” Chinese investment boom that Cambodia’s government says will transform its underdeveloped US$10 billion economy and improve living standards for millions of impoverished people.

A total of 2,752 families have already been driven from their homes around Boeng Kak.

Ly Mom’s family is one of 1,500 refusing to budge, protesting each day and rejecting the developer’s compensation of just US$8,500, or relocation to a small apartment on the fringes of the sprawling city. Their latest demand is for 64m2 of lake land to be left for each family.

But no one is listening to them. Similar protests are held every week in Cambodia as families with no title deeds are told to pack their bags.

Experts warn that Cambodia’s government could one day have a rebellion on its hands.

“The long-range economic costs to a country’s development impact ultimately on the welfare of the people,” said Donald Weatherbee, an expert on Southeast Asian politics at the University of South Carolina.

“The political costs? Well, look at Egypt or Libya,” he said.

The luxury housing project is led by China’s Inner Mongolia Erdos Hongjun Investment Corp, which has pledged to spend US$3 billion in Cambodia on real estate, metal processing and power generation.

China is Cambodia’s biggest source of foreign direct investment (FDI). Beijing plans to spend US$8 billion in 360 projects in the first seven months of this year — the same amount it invested in the whole of Southeast Asia in 2008.

China is also Cambodia’s -largest source of foreign aid, providing about US$600 million in 2007 and US$260 million in 2008.

However, as Chinese, Vietnamese, South Korean and local businesses snap up lucrative concessions and real estate, farmers are being evicted and entire villages shifted to make way for mining, agriculture and hydropower projects.

Rights groups and donor countries are concerned and have threatened to withhold much-needed aid to one of Asia’s poorest countries, home to 14 million people and sandwiched between larger neighbors Thailand and Vietnam.

The evictions have risen as Beijing cozies up to its cash-strapped and underdeveloped ally and strengthens a relationship that analysts say has the US concerned about China’s expanding influence in Southeast Asia.

According to Housing Rights Task Force, a Cambodian group monitoring forced evictions, 30,000 people were moved off their land last year, up from 27,000 in 2009. An estimated 150,000 more evictions are expected in the next few years, 70,000 to 80,000 in Phnom Penh alone.

World Bank president Robert Zoellick recently said he was “deeply troubled” by the Boeng Kak evictions and offered financing and expert advice to the government.

Cambodian Prime Minister Hun Sen has not responded. In several speeches he has expressed a clear preference for Chinese investment, because it comes without conditions, unlike Western nations that relentlessly prod his government to carry out democratic reforms and improve its dismal record on human rights and corruption.

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