Why is Phnom Penh now willing to give the United States what it has been demanding for years?
At a meeting on Feb. 24 with Ronald Clark, commanding general of the the U.S. Army Pacific, Cambodia’s military chief Vong Pisen made the most explicit call to date for restarting the bilateral “Angkor Sentinel” military drills that Phnom Penh had suspended in 2017.
Washington has been encouraging the resumption of the exercises since at least 2020, yet Phnom Penh had strung the U.S. along with offers of counterterrorism cooperation, a much lower-level form of engagement.
Cambodia suspended Angkor Sentinel in early 2017 on the premise that its troops were needed to guard that year’s local elections.
A few months later, however, Cambodia’s military started its first joint “Golden Dragon” drills with China. A few months after that, Cambodia’s ruling party dissolved its only political opponent on charges of plotting a U.S.-backed coup.
The same year, Phnom Penh banned several U.S. Congress-funded organizations, sparking a deterioration in U.S.-Cambodia relations.
In 2018, Washington started alleging that Phnom Penh had agreed to a secret deal to allow China exclusive use of its Ream Naval Base. U.S. policymakers came to see Cambodia as a “lost” Chinese client state.
Some observers suggest that Phnom Penh’s offer to restart the Angkor Sentinel drills is a result of Cambodia’s leadership succession in 2023.
That year, long-ruling prime minister Hun Sen, who typically has taken a dim view of the U.S., handed over power to his eldest son Hun Manet, a West Point-educated general considered by some to be reformist and Western-looking.
This is almost certainly not the reason.
China dependency
Hun Manet might be the prime minister, but Hun Sen still calls the shots, especially over foreign policy. Hun Sen’s trusted ally, Prak Sokhonn, was brought back as foreign minister last November to further solidify his control over foreign relations.
Another claim is that Phnom Penh is trying to appease U.S. President Donald Trump to avoid tariffs and wants to win over Secretary of State Marco Rubio, who as senator had long called for U.S. sanctions on Cambodia over its democratic backsliding and human rights violations.
In fact, it was the Biden administration that began a slow, gradual process of reengaging Cambodia, and talks about Angkor Sentinel began at least in October.
The foundations were probably laid long before that, possibly when then-CIA Director Bill Burns visited Phnom Penh last June to meet with Hun Sen. It was the Biden administration that arranged for an U.S. warship to make a port call in Cambodia in December, the first to do so since 2016.
The actual motivation for Phnom Penh to reopen the war games is that it has now accepted that it must reduce its dependency on China.
This explains why Cambodia has spent considerable energy in improving relations with Japan, Canada, Australia and Saudi Arabia in recent months -- while also trying to silence exiled dissidents in those countries.
Cambodia’s economy grew by around 5 percent last year, but it’s far from healthy.
Aside from domestic factors like private debt and bad loans, a lack of Chinese investment since the COVID-19 pandemic has weakened the construction and real estate sectors, while tourism is still reeling from the lack of Chinese visitors.
The U.S., by contrast, has steadily accounted for around two-fifths of all Cambodia’s exports for almost a decade.
More importantly, Beijing will no longer throw armfuls of cash at every infrastructure project Phnom Penh thinks it needs.
This became clear last year when Beijing refused to put up substantial funds for the Funan Techo Canal, a vanity megaproject for the Hun family. Last year, China did not approve any new loans to Cambodia.
Scam center crackdown
As well as being more picky, the Chinese government has demanded that Southeast Asian governments tackle their vast cyber scam industries, which are defrauding ordinary Chinese out of tens of billions of dollars each year
The scam centers have put a strain on China’s already weakened economy and the heavy role of Chinese crime groups in the sector is increasingly a source of national embarrassment for the Chinese Communist Party.
Beijing launched a massive public information campaign about its scam-busting efforts in December, before public anger rose in January over news that Chinese actor Wang Xing had been kidnapped in Thailand and forced to work in a scam compound in Myanmar.
He was rescued, but the Chinese public is demanding their government take more action to rescue their relatives.
Talk among Cambodia watchers is that Beijing is irate about Phnom Penh’s lackluster efforts at cracking down on the scam sector.
China has found a willing partner in Thailand—which launched major raids on scam compounds on its border with Myanmar last month. Beijing has also cooperated with Laos’ communist government and some parties in Myanmar’s raging civil war.
Cambodia, though, is allegedly dragging its feet, much to everyone’s frustration, not just China’s.
Some analysts reckon that “pig-butchering” scammers are finding a safe haven in Cambodia as compounds are shut down elsewhere in the region.
Bangkok has just revealed that it is debating whether to build a wall along parts of its border with Cambodia.
Pressing Phnom Penh
If the United States Institute for Peace (USIP) is correct, Cambodia’s scam industry is worth $12.5 billion annually, the equivalent of a third of the formal economy.
According to some experts, Cambodia is also somewhat unique in that a large percentage of the proceeds are laundered through the local economy.
If the authorities were to launch a major crackdown, most Cambodian oligarchs and senior ruling party politicians would allegedly lose access to billions of dollars in tithes and dodgy contracts.
“The level of co-option of state actors in countries like Cambodia exceeds what we saw in narco-states of the 1990s in Latin America,” Jacob Sims, an expert on organized crime in Southeast Asia, recently told The Economist.
Worse, it might destabilize the economy. Who knows how much money from the scammers is propping up construction or property or any other sector?
We now have the ironic situation in which the U.S. and China are aligned over what they want from the Cambodian government: a substantial and meaningful crackdown on the scammers.
Indeed, Washington, like Beijing, is also increasingly concerned that Cambodia-based scammers are defrauding its nationals.
Last September, the U.S. embassy in Phnom Penh estimated that Americans had lost at least $100 million to scams originating in Cambodia.
The same month, Ly Yong Phat, a Cambodian senator and the oligarch arguably closest to the Hun family, was hit by U.S. sanctions because of his association with the illegal industry.
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Beijing’s growing frustration with Phnom Penh might soon come to a head.
There is talk that Chinese President Xi Jinping is set to visit Phnom Penh, possibly next month. It’s unlikely that he would arrive -- or depart -- without a major concession from the Hun family on the scam industry.
Phnom Penh possibly wants to use the resumption of the Angkor Sentinel drills with the U.S. as a way of signaling to Beijing that it is not as beholden as it once was to Chinese pressure.
Whether China would go “soft” so as not to lose influence to the U.S. is another matter.
According to informed sources in Phnom Penh and Washington, most U.S. policymakers don’t view the resumption of Angkor Sentinel as a major sea change after eight years of fraught U.S.-Cambodia relations.
While welcoming an important step towards healthier relations, Washington will be looking for Cambodia to make a more drastic break from Beijing, they say.
David Hutt is a research fellow at the Central European Institute of Asian Studies (CEIAS) and the Southeast Asia Columnist at the Diplomat. The views expressed here are his own and do not reflect the position of RFA.