The end of an NGO era in Cambodia
By Craig Guthrie

PHNOM PENH - With an overwhelming electoral mandate, robust economy and a potential bounty of oil and gas revenues, Cambodian Prime Minister Hun Sen feels in a strong enough position to move against the non-governmental organizations (NGOs) which have been a perennial thorn in the strongman's side since he took power more than two decades ago.

In late September he called for the revival of a controversial law which would require the country's more than 2,000 associations and NGOs to complete a complex registration process and submit to stringent financial reporting requirements. The draft law is expected to be passed by Hun Sen’s Cambodia People's Party (CPP)-dominated National Assembly in the coming months.

"Cambodia has been heaven for NGOs for too long," he said in a

speech broadcast on national radio on September 26, adding that he had given up hope of reading any positive reports written by international or local NGOs. "The NGOs are out of control ... they insult the government just to ensure their financial survival."

By enacting the law, Hun Sen could recalibrate the government's terms of engagement with the Western-led aid community, on which his government has heavily relied for decades to finance its budget. The move comes as private-led foreign investment has fueled the country's economic rise, led in the main by China and South Korea.

"Many of the services provided by NGOs today will one day either be privatized or the revenues of the government will grow to such an extent that the functions currently being done by NGOs will be taken over by the government," said Brett Sciaroni, chairman of Cambodia's International Business Association.

The NGO law's enactment would be a symbolic power shift between Hun Sen's CPP-led government, further emboldened by its landslide victory in this year's general election, and the Western-backed NGOs which have long chastised it over human-rights abuses and corruption allegations.

International aid agencies have for decades held the purse strings on the aid which has sustained the national economy since it emerged from the horrors of the Khmer Rouge, the ultra-Maoist regime which systematically attempted to transform Cambodia into an agricultural utopia between 1975 and 1979, and a subsequent decade-plus of civil war.

Some contend it was the Khmer Rouge's economic failures, including a devastating countrywide famine that killed many and stalked the regime's traumatized survivors, which set the stage for Cambodia's now decades-long dependence on foreign aid.

The British aid agency Oxfam began programs soon after the Khmer Rouge's 1979 ouster, despite incurring the wrath of the United States and the United Kingdom governments for helping the Hanoi-sponsored regime put in place by the invading Vietnamese.

Jacques Beaumont from the United Nations Children's Fund, and Francois Bugnion from the International Red Cross (IRC), who both arrived in Phnom Penh in 1979, were pivotal players in that humanitarian effort. They finally persuaded the IRC, which was fearful of being seen as compromising its political neutrality, into launching what turned into its most significant relief operation since World War II.

But the comprehensive aid experiment did not begin in earnest until after the signing of the 1991 Paris Peace Accords, which by and large ended the country's debilitating civil war. Since then myriad NGOs have come to Cambodia to work on everything from demining to microfinance, orphanages to agri-business, public health issues to snaring globe-trotting pedophiles.

The demining NGOs in particular made great progress, clearing an estimated 25,000 hectares of mined territory between 1992-2003. Cambodia has also been hailed as a global success story in fighting HIV/AIDs transmission, led by NGO-organized education programs and health aid. Prevalence rates have fallen by nearly half, from 3% in 1997 to 1.6% in 2006.

Fractious relations
But Hun Sen's government's relationship with NGOs and international aid agencies has often been fractious, epitomized by its tumultuous interactions with the environmental watchdog Global Witness over its consistent accusations of high-level government links to illegal logging, and with the UK-based rights lobby Amnesty International for its criticism of state-sponsored forced evictions across the country.

The World Bank also suspended US$11.9 million in funds in 2006 for seven sanitation projects when it found evidence of rampant extortion, bribe-taking, bid-rigging and procurement manipulation, leading Hun Sen to claim the multilateral lender was trying to tarnish his government's credibility. The bank only agreed to unfreeze the projects' funding in 2007 after the government promised to strengthen anti-corruption measures.

Despite Cambodia's recent economic boom, including a skyrocketing average 11% gross domestic product (GDP) growth over the past three years, a sizable portion of the nation's real income still derives directly from donor nations in amounts wrangled out each year at annual Consultative Group meetings.

The meetings were for years characterized by vague promises from the Cambodian government in response to weak demands by donors for reform, including the long-delayed adoption of an anti-corruption law. But in the past two years these demands have become less relevant with the surge in aid from China, which typically has less good governance or transparency conditions attached.

While Chinese aid is generally funneled through vast infrastructure projects - including hydropower and road projects - usually contracted to Chinese companies, Western nations' share of the average US$600 million in annual aid arrives through international aid agencies and NGOs. The process has been widely cast as a corrupt, inefficient gravy train, giving some traction to Hun Sen's complaints.

"In the 1980s, there was a popular T-shirt satirizing US Army recruitment commercials with the slogan, 'Join the army. Travel to exotic, distant lands. Meet exciting, unusual people. And kill them'," Brad Adams, executive director for Human Rights Watch's Asia Program, was quoted saying to Action Aid in 2005. "In the new millennium, it could be rephrased, 'Join the aid community. Travel to exotic, distant lands. Meet exciting, unusual people. And make a killing'."

This is still the case in Cambodia, Adams told Asia Times Online. "You can start with all the foreign consultants making more than $10,000 per month, almost always tax free. This is a huge drain on the aid budget for Cambodia and in many cases the consultants produce nothing of value for the country."

Many analysts and expatriates agree that NGOs and their workers suffer from an image crisis among the Cambodian public, partly due to their comparatively high salaries and lifestyles, which are far adrift from the 35% of the population which lives on less than $0.50 a day.

Country directors for prominent international aid agencies typically receive a $250,000 annual package, which includes a spacious villa in the capital's upmarket "NGO-ville" area, a four-wheel-drive vehicle - usually emblazoned with the logo of their donor agency or charity - and fees paid for the capital's better international schools.

The aid watchdog Action Aid estimated in 2005 that the 700 or so international consultants working for NGOs in the country earned more than Cambodia's 160,000 civil servants put together. "In 1993, yes, 99% of foreign consultants were justified; now, 5% are justifiable. The others are embedding and enabling the mentality of dependency," Center of Social Development director Theary Seng said in June.

Arne Sahlen, a founding member of the Cambodia Support Group, a 25-year-old volunteer organization, echoes Hun Sen's comments that fundraising has overtaken the focus on the actual progress of several NGO projects. According to Sahlen, "vast" resources are being swallowed up on pursuing donors that could be invested on direct project needs. "The need to please donors has warped the focus to not necessarily what is best for the project but what may look best on an application," said Sahlen.

Others contend that several NGOs are actually impeding the development of a self-sustaining private sector, mainly through the alleged abuse of their not-for-profit status to pursue business opportunities. That status helps them avoid taxes and other unofficial costs that private businesses pay, giving non-profit an unfair competitive advantage in the market, they say.

Cambodians now understand the word NGO, especially in the local context, to be a for-profit enterprise, said Sophal Ear, the author of The Political Economy of Cambodia, Aid and Governance. "It's all a business and this is just another way to avoid taxes," he said. "When not covered by donors, capital costs for NGOs have largely been privatized, through an extensive network of 'donations' to the ruling party by Oknhas [politically connected tycoons] politicians, and civil servants."

Discretionary powers
The NGO law, known formally as the Law on Organizations, was first written over a decade ago and aims to address such complaints. It would require NGOs to submit for government approval documents detailing their structure, goals, funding resources, properties and even logos. It also entails fines and imprisonment for any NGO which fails to submit annual reports to the Ministry of Economy and Finance.

Many fear the discretionary powers the law will give the government in monitoring and sanctioning NGOs - rather than vice versa. Hun Sen no doubt had his one good eye on the anticipated bounty of future oil and gas revenues when calling for the controversial law's revival. Chevron, the US energy giant, discovered oil off Cambodia southwestern coast in 2005 and analysts have predicted the find could generate anywhere between $200 million and $2 billion in annual revenues for the government when full-scale production begins in 2010.

The government is still awaiting a key assessment from Chevron of the supposed find, and both sides have more recently played down expectations. Nonetheless, NGOS are already warning of a possible "resource curse" similar to places like Nigeria, where corrupt governments pilfered and wasted earnings derived from energy exports.

"NGOs are trying to tell us how to use the oil money, but this is of no interest to us. What is important is how to make our resources profitable," Hun Sen said in a recent radio broadcast speech.

Despite his criticisms, there are reasons for concern. A new NGO coalition has begun work to oversee the transparency of the management of future oil funds. Led by the NGO Forum, it has given little information on its structure, but has said it plans to ensure the potential financial benefits from the windfall are managed in a socially responsible manner, and that benefits filter down to the impoverished grassroots.

The World Bank, which also aims to monitor the government's oil revenue management, noted in May that international aid is often poorly managed in key sectors, with the problem of "fragmented" assistance especially acute in health and education.

In the health sector, 22 donors are currently working with over 100 NGOs to deliver $110 million in Official Development Assistance (ODA) per year through 109 projects - yet use of the national system remains at just between 13% to 18%, said the bank. The vast majority of rural Cambodians are forced to use an expensive yet rudimentary private healthcare system which is more reminiscent of poorer African than neighboring Asian nations.

The education system is also beset by severe underfunding, with thousands of graduates churned out from poorly regulated "international" universities with degrees that often leave them ill-prepared to enter the job market. Until now, the only paying option for many graduates was to work in donor agencies and international NGOs. But if Chinese and South Korean private investment flows hold up and the country's hoped-for energy bonanza is realized, that may all soon change if Hun Sen has his NGO-curbing way.

Craig Guthrie is a former reporter for the Mekong Times newspaper in Phnom Penh. He has covered Cambodian affairs since 2004.

I met such guy who said he is from Australia on the plane from Tai Pei to PP. When asked what he was doing there in Cambodia he said he is "an AIDS consultant". But when asked what is the cause of an AIDS epidemic and for the grass root soution, he became angry and won't talk to me till landed in PP.

An eye opening assessment, which I have personally found, expose and share extensively in here. It is sick and twisted of their "feel good organization" or what I called "Nothing Good Organization" and they have taken to the new level of hypocracy and exploitation in Cambodia. It is disgusting.

I used to be a staunch anti Hun Sen group who could only see through the Nothing Good Organization prizm of self serving, self employment abroad. and I got hit by it like running into a brick wall, when I was there, the second time.

This is why I asked KSaron, about his war thing, to think about all these NGO staffs who would have otherwise forced to come back to their home bases and would sorely miss the opportunity in Cambodia, all the salary, the women, the prestiges, the fames, you name it. You can't even find it in Bangkock, Thailand.

Somdach Decho Hun Sen has just scored another one for Khmer and Cambodia, AGAIN.

As stated by my blogs etc.. I have wanted to work for a NGO for several years. Absolutly none of them have offered anything near the salaries mentioned here. I would still love to do, just for the experience, and I may be jaded... but I truly think I could help people.

i'm not opposed to a fair filtering of some of the ngo's that operate in cambodia.  but before we advocate a full on war on ngo's fueled by generalized disinformation, and what seems to be a power grab by the prime minister.  we have to remember that there are a lot of good groups doing good work for and on behalf of the people.  assessement and judgement should be on a case by case basis.  organization by organization.

before we donate.  before we work for or work with any organization that deals with cambodia... we should just do our research about its operations, motivations and visions.  this is true of any non for profit organization that one wants to become involved with.  i say give, but give to the right organizations for the right reasons. 

I agree and the first one should go is the one that fund the KRT.  That is the biggest waste when all they are doing is trialing the wrong people. 

I agree. However, this report is probaly just the tip of the iceburg, that has been floating in Cambodia for quite sometimes. You can say may be HS want to grab more power, but at the same time he might just want to hold some of these rouge "NGOS" accountable for what they are doing over there. Or perhaps he just has seen enough, of what I had seen just about a month there.

Just b/c they hold other country citizenship and speak some english and employed by these organization, they act like they are god sent. The amount of hypocracy is just turn me off big time. B/c I fit right into the locals, they did not know that I am also holding other country citizenship,...they were just a bunch of fools at Mlop Sbov Restaurant.

I just and

Thank you KSaron,

I could not agree with you more. That was what I told your friend John.

This is exactly how I feel. And perhaps worst than what it is said here. To put it mildly, they have been creating a dependent mechanism to serve their own interests or to create their own employment over sea. Where they could only dream in their home base country.

PLease do, but choose wisely.

Family Run Country again? IWe thought only the Khmer rouge Pol Pot did that?

"Hor Namhong's son Hor Nambora is currently serving as Cambodia's ambassador to the United Kingdom, making Hor Moniroath's appointment the second top diplomatic posting in the minister's family. "

Guthrie's article is bang-on.  I've always questioned the ability of a government and its administrative arm(s) to efficiently and effectively operate a public-interest enterprise.  

His article beautifully articulates why NGO's are ineffective in affecting change on people.  The bureaucracy is heavy, the grass-roots experts are ill-funded--These are the hallmarks of your classic "Paper Tiger".

I'll even go as far as to say that an NGO's true and most productive purpose is to employ post-graduate students who have no real hope of getting employed in a real occupation which requires skill and is sought after.

Good on Hun Sen for moving to get these over-paid, self-entitled-receding-forehead-quasi-academics removed from the country.  At least then, they'll rid the streets of PP of a few gas-guzzling SUVs and tear down a few NGO villa-offices to make way for things which actually produce value and contribute to the prosperity of the country itself. 

In my opinion, 5% is still too optimistic. Again, exactly what I feel(in bold). Thus, it is not matter of mistake, but rather responsibility, and accountability that these organization must be held to standard where they are set out to do. 

And that is what Somdach Hun Sen is trying to do with these 95%, to safe guard Khmer from being exploited by these rouge NGOs.

I think the gas guzzling SUVs are owned by the Oaknha and not NGOs.  Also, without NGOs Cambodia could become another 1975. 

Are you saying that Craig Guthrie is a liar? For once, I think, somebody is telling the truth about these rouge and hypocrite organization. If unsure, just look at Somalia. Which NGO want to be in Somalia?

When did the first NGOs go to Cambodia, after 1975?

And do they have a plan to leave Cambodia, if so, when?

You've got it completely wrong Saron.  NGOs set the precedent for the 'Oaknhas' as they are the biggest ones there.  They were the first ones to drive the SUVs in 1993, and they were the first ones to set up in decadent villas and create demand for higher-end hospitality for ex-pats in PP. 

Don't pull the 1975 card with me. 

They are internationally funded and equipped, and operate in the country with little impunity in regards to local accountability--matter of fact, which person within the political apparatus are they ultimately accountable to?  Don't kid yourself with the Law on Organizations serving as a proper check for them.  They've already violated it by colluding to interfere with the government's planned off-shore oil fields in partnership with Chevron.  What does that indicate? The slice of the pie wasn't big nor good enough for them.  Of all the things they could fight, they instead chose to bitch and gripe over how the money should seep down to the "grassroots".  Last I remembered, the ones responsible for aiding the grassroots was them.  They were not brought in to be whistleblowers; they were brought in to train locals on how to build society with a particular skill they possess.  And clearly, they haven't been doing that. 

On the subject of pre-1975, if memory serves us correct, it was the decadence of the French and their phony-crony-King 'Siha-jrouk' who set the precedent for 1975.  He and NGOs are alike in many ways.  They are both excessive and redundant--and they both produce very little material and intrinsic benefit for the country in the end.  Sihajrouk made movies while Vietnam violated Cambodian territory; NGOs recklessly dug wells without any consideration for arsenic and other intoxicants poisoning the local people.  Obviously, more examples can be gleaned from the failures of NGOs in Cambodia, as they are numerous, however my point is that a greater push for their presence will consequently lead to another year zero.  If you look at all well-developed countries, you will notice that they never had the presence of an NGO to "aid" their perpetual 'development'.  They had strong leaders who had a broad-spanning vision to re-appropriate and remodel a country through mutli-faceted means--without having to indenture themselves to 'donor' organizations.  

America was not built on the backs of NGOs. 

Great Britain was not born on the backs of NGOs. 

Germany was not born on the backs of NGOs. 

And finally, the Asian Tigers were not built upon the backs of NGOs. 

NGOs, like Peace Corps, are examples of passive-aggressive tools of social-political foreign diplomacy.  They go into countries under the premise to provide aid. However the most amusing thing is that they never have an exit plan.  They seem to just stick around and continue to do their work.  If anything, they're akin to missionaries without the theological, but rather political agenda. 

I fully support Hun Sen in his aims to make Cambodia a more inclusive country to the right resources--like investors and businesses.  Furthermore, I support his rationale that NGOs are essentially enablers of poverty; kudos to him for aiming to rid the country of this unecessary and incursive scourge on the sovereingty of Khmer society. 

This is an astute observation of what goes on everyday there.