Speech

Phnom Penh Hotel, Cambodia
September 28, 2006

It is a delight to be here today with all of you, and an honor to have this opportunity to speak on issues central to the future of this country.  I have entitled my talk, “Two Freedoms: Freedom from Corruption and Freedom to Own Land” -- issues that rank as the most important challenges facing Cambodia.  I believe that these two issues – especially where they converge and intersect in modern Cambodia -- will foreordain Cambodia’s future.  Fix these problems, and the people of Cambodia can look forward to a bright, hopeful future.  Fail to address these problems and the Cambodian people can expect the same bleak existence that they have endured for too many decades already.  These problems are not easily fixed, but they are not impossible to resolve.  If loyalty to -- and concern for -- the Cambodian people transcends loyalty to family, to friends, to political parties, and to one’s own narrow self-interests, these seemingly intractable problems of corruption and poor governance can be resolved.  

Let me begin by saying what we all know, but which sometimes gets lost in these discussions.  Corruption is found in all countries, including the United States.  No country is immune.  The methods of corruption may vary from region to region and country to country, and the degree of corruption and its impact on each country is certainly different.  The critical issue is not the reality of corruption in Cambodia or even its pervasiveness.  What is critical, what will prove crucial, what will determine Cambodia’s future, is how Cambodia’s leaders address corruption.

Let’s look at America.  Every year the U.S. Department of Justice obtains literally hundreds of convictions of government officials.  The money involved ranges from just a few hundred dollars to enormous amounts.  In an odd sort of way we Americans feel a certain pride whenever a powerful politician or businessman is convicted and goes to jail.  I don’t think this is because Americans are particularly anarchic or vengeful.  Rather, I think it is because it proves that even the most powerful are not as powerful as the law.  It is, in a real sense, re-assuring to us when one of our leaders falls.  Each time someone with real power, with real connections, is put in jail, we know that the system works, that we do not have to worry that our government of laws is turning into a government of men.

So we do not get angry when someone is accused of corruption, we do not file defamation suits, we do not attack the accusers, we do not become defensive, and we do not make it seem as if it is the whistle-blower who is the criminal.  Instead, while safeguarding the presumption of innocence of each accused, we carefully investigate the accusation, we appoint independent prosecutors if necessary, we pursue the investigation no matter where it might lead, no matter who might be guilty.  It doesn’t matter who they are related to, what family they are from, or whose friend or political ally they might be.  This is the only effective approach to fighting corruption: to accept its reality and to carefully investigate all credible allegations. An independent judiciary makes this possible.  No country should feel shame that there is corruption because corruption is inevitable.  And every country should feel pride when it is willing to punish anyone who is corrupt.  

A few months ago I read the comments of a Cambodian leader who made all the right observations about corruption.  The speech noted how corruption was destroying Cambodian culture, how it was bleeding the poor, how it had infected the entire government bureaucracy, how it undermined private enterprise, and how it was crucial to Cambodia’s future for corruption to be eradicated.  But the most significant thing about what I read was not what was said, but when it was said.  While I only read the speech a few months ago, the speech itself was from 1962.  So we must ask ourselves, has anything really changed since those words were spoken nearly half a century ago?

Let me say right off that I believe the Cambodian who said those things about corruption in 1962 was being sincere.  He was being honest.  He was not just saying what he thought people wanted to hear.  There was a genuine desire to fight corruption and stamp it out.  But there is a fundamental difference between political desire and political will.  If I may use a very mundane example: I may be concerned that I am gaining weight, I may be genuinely interested in losing weight, and I may have a very strong desire to go on a diet and exercise to lose that weight.  But none of this means that I have the will to lose weight.  None of the serious concern for my health, for my future, for how I look, will ever change my behavior.

Similarly, the political desire to fight corruption in Cambodia is very real and genuine.  The leadership is very sincere in confronting this monster.  But it is still not certain that there is any political will to combat corruption.  Genuine political will to deal with corruption would require a great deal.  Frankly political will will demand more than most leaders can stomach.  They must be prepared to break old friendships, ruin old alliances, even risk disharmony in the family, in order to ensure lasting stability and provide a legacy of peace and prosperity for future generations.  These are not things that anyone anywhere can easily accept, and an ancient culture based on strong family loyalties and personal alliances, will find it even harder to make the choices necessary to improve the lives of the Cambodian people.

What is required, to put it simply, is that the leaders must make certain that, regardless of who you are, regardless of whom you know, you will pay if you are corrupt. Recent research suggests that by making even a few high-profile arrests and prosecutions, a society can go from rampant corruption to rampant honesty quite quickly.  If you would have asked anybody 20 years ago about Hong Kong or 40 years ago about Singapore, they would have said it was hopeless.

The more I think about it, the more I wonder if people really know what the term “corruption” means. It is one of those hazy concepts that every one is against and no one is guilty of.  The term “corruption” reminds me of the wry observation once made by George Bernard Shaw, about conjugating the verb “to be firm”:  I am firm. You are stubborn. They are pigheaded fools.

That is pretty much how we all think of corruption.  It is never a word we use in the first person. It is rarely thought of even in the second person.  Instead, it is always used in the third person plural. Never “I am corrupt.” Nor, “My friends are corrupt.” Or even, “You are corrupt.” But always: “They are corrupt.”  But we just can never seem to figure out who “they” are….

The Roman statesman Cicero once said: “We are slaves to the law in order that we may be free.” That quote succinctly underscores the need for the rule of law, and the need for the government to advocate for a loyalty to law and society that transcends the strong bonds of family, friendship, and political alliance that pervade this country. 

Corruption in Cambodia has been well documented. As many of you know, Transparency International ranked Cambodia 2.3 on its 2005 corruption perceptions index (CPI), with 10 being highly honest and 0 equating to highly corrupt.  Cambodia was ranked 130 out of 158 countries surveyed, while Vietnam was ranked 107, Laos 77, and Thailand 59. 

What are the real consequences of corruption?  First, political legitimacy and stability are threatened.  His Excellency, the Prime Minister has acknowledged this important point.  He astutely warned: “The effect of corruption that we should not overlook is the loss of public confidence in the government which is a cause to weaken national unity and impede economic development.”   People naturally are angered and alienated by corrupt behavior when it directly affects their lives, especially with the rising tide of forced land evictions sometimes flowing from corrupt, non-transparent deal-making. 

Another ill effect of corruption even more obvious is the monetary cost.  On the positive side, the recently published Economic Institute of Cambodia report found that unofficial fees paid by enterprises for public services had actually dropped in percentage terms from a 2004 World Bank report.  Nonetheless, the amount of money lost to corruption is still very high in dollar terms.  NGOs and the Government no doubt will continue to argue over the exact amount of public revenue that is lost to unofficial fees, but no one seriously denies that the informal system of patronage is negatively affecting the economy.  These millions of dollars of illicit ‘facilitation’ payments by businesses and individuals are diverting needed resources from flowing to legitimate government administration, like raising the salaries of civil servants or improving health and education services.

A third ill effect is that corruption leads to even greater inequities in wealth.  I can think of no better example of this then some of the land disputes and evictions that are proliferating throughout Cambodia.  In many of these cases, the poor are being evicted from illegally appropriated land controlled by powerful persons and organizations.  This trend, if unchecked, will result in a sharp rise in inequality in the control of land with a small elite coming to control an ever larger percentage of Cambodia’s land, alienating the landless poor, and posing a threat to stability.  This is an old story.  It is amazing that we humans never learn.  Earlier I mentioned the Roman politician Cicero.  No single factor was more to blame for the destruction of the Roman Republic than corruption and the ever-expanding land grabbing by a few wealthy, politically well-connected businessmen.

A final ill effect of corruption particularly relevant to Cambodia is how it scares away investment.  Corruption is like placing a chain around the necks of the very people on whom we most depend to carry this country out of poverty.  For example, the agro-business sector offers huge growth potential if not inhibited by informal payments.  Similarly, larger businesses, such as manufacturing, are often required to pay the highest informal fees. This means Cambodia is not only chaining its economic engine, but is also placing extra chains around the necks of its few large companies that could help Cambodia compete and grow. 

The focus must now be on reforms to combat corruption.  These reforms must address the causes of corruption: especially the lack of accountability among the political and business elites.

Last March, on behalf of the entire donor community, I underscored that a first good step toward showing real political will—and not just political desire—would be passage of an anti-corruption law that truly met international standards.  At a minimum, we urged that this law contain:

• An independent Anti-Corruption Body (ACB) that has its own budget;
  
• Operational control by the Secretary General of ACB over its investigators;
  
• Asset declaration submissions by all government officials and their immediate family members; and
  
• Harmonization of criminal offences with UNTAC and the draft penal and criminal codes
  

But even the passage of good laws is not enough.  As we have seen in the case of land rights, the existing Land Law of 2001 is a good law, but the letter of the law is often not enforced by an independent adjudication process, particularly when powerful vested interests are involved.  Even the recent creation of a ‘special body’ set up to specifically address theses land disputes, the National Land Dispute Authority, has had no appreciable effect yet on land disputes.  To date, judicial power seems unable to block the rising tide of evictions brought on by illegal land grabbing.  This is worrisome, because the land issue more than any other will determine the future stability and prosperity of this nation.  As the English philosopher John Locke warned, “in order to preserve the public good (and ensure stability), the central function of government must be the protection of private property.  

The May and June eviction of Village 14, in the Bassac community, highlights a seeming preference for protecting the interests of well-connected companies over those of common citizens.  Any conflict over this private land dispute properly belonged in the courts, but somehow City Hall became involved, creating a non-transparent process that was confused at best.  The whole matter ended with police arriving under the cover of darkness to truck the people to an undisclosed location.  That location turned out to be a barren field more than 20 km outside the city, completely lacking in sanitary facilities, clean water or basic health services.  Someone is profiting handsomely from this deal – the Village 14 land is estimated at more than $600/square meter.  Questions remain: Who has valid title to the land?  Is there a transparent site development plan?

Residents of nearby Group 78 also in the Bassac area have also recently been handed several eviction notices.  Many of these families have lived on the site since the 1980s.  Some may have strong and clear legal claims to their land according to the 1992 and 2001 Land Laws.  Yet these residents are often viewed as squatters, with no legal claim.  Fair and just compensation prior to eviction is not taking place, as required by the Constitution and Article 5 of the 2001 Land Law.  And let’s be serious, with land values at Group 78 appraised at $550/square meter, is the state’s current offer fair and just compensation?

Even on Koh Pich, where the evicted residents were finally offered an improved  compensation package, it was not until the residents had endured a series of lies, threats, and intimidation.  The court action in the Koh Pich case also offers an illustration of lack of judicial processes.  The Court repeatedly demonstrated that it would not independently consider the merits of the case; preferring instead to blindly accept the City’s interpretation of the Land Law, an interpretation that would make every single resident of an island in Cambodia an illegal squatter!     

The situation is worse in the provinces.  85% of the population lives in rural areas and depends upon access to natural resources for subsistence and livelihoods, yet land grabs and economic land concessions continue unabated.  Large swathes of land have been conceded to a handful of well-connected private companies and individuals.  Look at Mondulkiri.  There are serious allegations that a foreign company was awarded 10,000 hectares of land but is reported to have already cleared and is planting 16,000 to 20,000 hectares of land.  The award documents apparently states the “intention to grant up to 199,999 hectares of land” -- nearly twenty times the allowable limit in the Land Law.” Are these allegations correct?  I don’t know, but if they are then the solution is obvious: cancel the illegal concession. 

Of course, this is not just the government’s battle.  Corruption is everyone’s problem and everyone’s responsibility.  Civil society can take the role of watchdog to pressure government for greater accountability.  Ordinary citizens can do their part by only paying official fees for which receipts are issued and refusing to pay non-official fees for which receipts are not issued.  The simple act of requesting a receipt for an official payment such as a birth certificate or vehicle registration may seem banal, but it is the first step towards demanding transparency.  In truth, if you pay a bribe, you are part of the problem.   And think of the children of this country.  They go to school and what is the first lesson they learn? -- that they need to pay their teachers a little extra to get taught.  That is quite an educational experience for those young, impressionable minds.  Indeed, sadly, this lesson teaches them very well how they will have to act as they get older if they are to survive. 

Land disputes everywhere are troublesome and confusing.  There are many good, honest Cambodian officials from the Prime Minister on down who are trying hard to resolve this problem.  But sorting out the mess of land titles in Cambodia would be a challenge to any government, no matter how noble their intentions.

In the short term, however, greater transparency and strict enforcement the Land Law of 2001 would go far toward restoring public trust in the authorities as well as the credibility of the National Land Dispute Authority (NLDA).  Although some information is available, to promote transparency, master plans for land development projects should be made publicly available as a matter of routine practice.  It is also important that when evictions are unavoidable, the persons being moved are given fair compensation and a place to live that enables them to pursue a viable livelihood.  The land development plans of corporations must factor in the real cost of abiding by the law and treating citizens humanely.  It is a sound approach that will ensure stability and economic growth for Cambodia.

The donor community can and is playing an important role. With the likely lifting of U.S. legislative restrictions on foreign aid to Cambodia , direct bilateral assistance to Cambodia could increase in the future.  For example, Cambodia could take steps to qualify under the Millennium Challenge Corporation (MCC), in which U.S. development assistance is provided to those countries that rule justly.  MCC looks at 16 indicators to measure country performance for MCC qualification, and control of corruption is one key indicator.  Recent MCC compacts have been substantial.  For example, in August 2006, Ghana and the MCC signed a $547 Million Grant to Combat Poverty . In July 2006 the Philippines and MCC signed a $21 Million Threshold Program to Fight Corruption in the Philippines.  

CONCLUSION

Simply put, Cambodia cannot afford the luxury of corruption.  It is too far behind its neighbors due to the tragedies of its recent past, and it must set itself apart and above if it is to take its rightful historical place in this region and in the world.

Indeed, Cambodia is at a crucial crossroads in its modern history.  The path Cambodia embraces to address corruption will determine its place in the international community, as well as determine what kind of country Cambodia will be.  Decisions made today will determine how the country and its leaders are regarded for generations to come.   And the clearest truth and the most painful reality is admitting that all we do is so secondary to what Cambodia’s leaders and people choose to do.  We can train hundreds of officials, we can send them to seminars on good governance, we can spend literally hundreds of millions of dollars to develop institutions and inculcate good practices, but in the end all our efforts will be for naught if there is no genuine political will.  The government itself can make good speeches, enact all the laws it wants on corruption and transparency, and draft tough, clear regulations for implementing them, but if the political will is still lacking, all this effort, all these laws and rules, will come to nothing.