Mekong Memo Cambodia 20230911
Mekong Memo Cambodia Weekly, September 11, 2023: Business, politics, finance, trade & legal news.
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Here is your Mekong Memo Cambodia for the week of September 11, 2023.
New Leadership and the Uncertain Path to Competitive Elections
Hun Manet, son of former Cambodian strongman Hun Sen, has taken over as the country's leader, aiming to legitimize his rule through economic development. The transition comes amid declining support for the ruling Cambodian People’s Party (CPP) and the absence of competitive elections. The new government's success in achieving upper-middle-income status for Cambodia by 2030 could pave the way for the return of competitive elections. However, the role of Western democracies and the demands of Cambodia's growing youth population will be crucial factors in this political evolution.
Read more: East Asia Forum
Democracy in South-East Asia Faces Decline Amid Power Consolidation
Democracy is deteriorating in key South-East Asian countries—Indonesia, Thailand, and Cambodia—due to common themes of power consolidation and weakening political institutions. Indonesia's President Jokowi has eroded civil liberties, while Thailand's monarcho-military elite undermines electoral outcomes. Cambodia has transitioned into a hereditary dictatorship. These countries exhibit a trend of personalized or dynastic power structures, compromising political parties' roles as platforms for change. Despite civil society's resistance, the decline continues, raising concerns for the region's democratic future.
Read more: The Economist
Rising NPLs Lead to Forced Land Sales and Child Labor
Cambodia's microfinance sector is facing a crisis as non-performing loans (NPLs) rise, signaling severe consequences like forced land sales and child labor. The microloan portfolio has ballooned to $16 billion, nearly half of the country's GDP. Economists predict an increase in NPLs due to economic slowdown, with data showing loans "at risk" have surged up to 300% since 2021. Over 92% of borrowers used land titles as collateral, and child labor has been reported as a direct result of excessive debt. The situation raises serious human rights concerns.
Read more: The Diplomat
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