Not a complete stitch-up [ for the fortunes of the long-serving prime minister, Hun Sen]

The economy grows, but so does the opposition 

Sep 29th 2012 |

The Economist

PHNOM PENH

UNDER dazzling white strip-lights a production line of young Cambodians stitch, iron and fold their way to the day’s target of 820 two-piece children’s pyjamas. These garments are destined for the shelves of Los Angeles, shop price $9.97. The workers, mostly women, start at 7.30am and could knock off at 4pm, but almost all stay for two hours’ overtime. There are about 1,300 workers at the Gawon Apparel factory on the outskirts of the Cambodian capital and they can produce up to 20,000 items of clothing a day—or 7.3m a year.

The factory is South Korean-owned and is one of about 375 across the country with an export permit. Garment-making is the country’s most important and dynamic industry. Together with 45 footwear companies and hundreds of subcontractors, the industry employs almost 500,000 workers, out of a population of barely 14m people. The shirts, blouses and trainers churned out by these factories account for 80% of the country’s exports and earn $4 billion of foreign exchange in a country with a GDP of just $13 billion. The success of the garment industry is an encouraging sign of new-found economic vitality in a country that emerged only 20 years ago from decades of Khmer Rouge terror, foreign invasion and civil war.

Mercedes Cha, the gregarious South Korean owner of Gawon Apparel, is a devout Presbyterian. She says she was told by God to move her three factories to Cambodia. Other employers come to Phnom Penh for more worldly reasons: the low wages and no-quota access into the European and American markets. Cambodia has become the country of the moment for low-cost assembly work in the region, undercutting not only China but also Vietnam, Indonesia and others.

All this has done wonders for the country’s balance-sheet and also for the fortunes of the long-serving prime minister, Hun Sen, and his ruling Cambodian People’s Party (CPP). A former guerrilla fighter who helped to sweep out the Khmer Rouge in 1979 with the help of the Vietnamese, Mr Hun Sen has long been criticised by Western governments and many foreign aid groups. They may grumble about the country’s human-rights record and the lack of democracy but they put up with Mr Hun Sen for overseeing growth. His main backer is China.

Lately, however, the rules of the game have been changing, as economically empowered citizens have begun to push for more social and political rights. Many garment factories have this year been hit by strikes and protests about working conditions and pay. Another sensitive issue is land rights. Over the past ten years about 300,000 people have been forcibly displaced from their homes and villages as the government has sold land concessions, often to Chinese developers. The clearance of homes around a lake in the middle of the capital to make way for blocks of flats and shopping malls was particularly controversial, provoking a string of protests.

For a long time Mr Hun Sen was able to ignore (or suppress) such protests, because the economy was growing. But now even he has started to make concessions. In May the government suspended the allocation of all new land concessions. In September it ordered employers to pay out an extra $10 a month in allowances to every worker. And, to appease foreign aid groups, Mr Hun Sen’s government has quietly shelved a bill that would have restricted their activities in the country.

The concessions may be linked to a general election due next year. The CPP, with deep pockets, control of the media and strong grassroots organisation does not normally have to worry about election results. Now, however, it is facing a united opposition for the first time in several years. The Human Rights Party, with three of the 123 seats in the national assembly, and the Sam Rainsy Party (SRP), with 26 seats, have joined to form the Cambodian National Rescue Party. The two parties also hold thousands of local council seats.

Son Chhay, a prominent SRP member of parliament, argues that the new combination of parties will give the government “a real scare this time”, and could get up to 50 seats. That may be optimistic but at least the election will be worth watching.