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Defecting To A Market Economy In Cambodia(Int'l Edition)


International -- Asian Business: CAMBODIA

DEFECTING TO A MARKET ECONOMY IN CAMBODIA(int'l edition)

The Khmer Rouge split eases life on an embattled trade route

Until recently, communist Khmer Rouge guerrillas at a mountaintop base in Cambodia were firing 85mm shells at the town of Poipet, where rickety, thatch-roofed stalls offer beer, instant noodles, and household goods from across the border in Thailand. Now, with a key group of guerrillas suddenly defecting to the government side, it's a different story. There's a shuttle service to take them into town, where they can buy the goods they once tried to destroy and toast their former enemies with glasses of Singha beer at the Thai-Cambodian Friendship Restaurant.

After 17 years of low-intensity civil war, the defecting guerrillas hope to get rich by casting their lot with the government. Their defection means that, for the first time since the 1960s, the main highway from Bangkok to Phnom Penh, Route 5, is secure from attack and that a trade corridor can open up to connect the two countries. The weakened Khmer Rouge force that remains in Cambodia is now split into two isolated sections in the north and southwest of the country. "Those hard-liners are extremely leftist, and we are more moderate and want a market economy as well as national reconciliation," says Division 519 Commander Ta Su, one of the leaders of the defectors. "They are keeping people poor."

The break came in early August. Until then, the Khmer Rouge leadership--still believed to be under the command of Pol Pot, who was responsible for the deaths of more than 1 million Cambodians during his rule in the 1970s--was allowing guerrillas in the northwest to keep some of their spoils in exchange for their allegiance. The Khmer Rouge has profited mightily over the years, using money from selling rubies, sapphires, and hardwoods such as teak from zones they control to help finance the war. The Khmer Rouge earns an estimated $4 million a month from cross-border trade.

BRISK BUSINESS. But the hard-liners decided the northwesterners were getting too rich and ordered them to give their money, cars, and food to the collective so that it could be shared with less prosperous zones. That's when the northwesterners decided to defect. "They say: `I should spend this money,' but they are in the jungle, so what can they do?" says Secretary of State for Defense Ek Sereywath. "They see the government generals riding around in nice cars, and they are tempted."

Business in Poipet has become very brisk since the mass defection, and it's a sign of things to come. Long lines of trucks carrying cement, iron, steel, clothes, and tropical fruit arrive 24 hours a day at the border crossing on Route 5. Soon, people say, new villas will be built in town as the Khmer Rouge moves down from the mountain for good. "From their point of view, they want trade to continue," says Khmer Rouge expert Stephen Heder at the University of London's School of Oriental and African Studies. And with the blessing of the Thais and of the Phnom Penh government, they are now able to enjoy the spoils, too.By Sheri Prasso in New York, with Reach Sambath in Poipet, Cambodia


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