Action on ‘ghost’ pay uncertain

The Phnom Penh Post
Chhay Channyda and James O’toole
Thursday, 20 May 2010 15:03

GOVERNMENT officials say they are unsure whether individuals profiting from payments to “ghost” civil servants will be prosecuted under the Kingdom’s new Anticorruption Law, sparking questions about how the long-awaited legislation will be implemented.

Ngo Hongly, the secretary general of the Council for Administrative Reform at the Council of Ministers, said this week that a census of civil servants begun last month had uncovered around 2,000 ghost civil servants – workers who are still on the government payroll despite having left their jobs – after having probed 21 of the 26 government ministries. He declined to comment on whether individuals profiting from salaries for ghost civil servants would be prosecuted under the Anticorruption Law, though he said the ghost names discovered thus far were costing the government an estimated US$2 million each year.

Cambodian People’s Party parliamentarian Cheam Yeap said Wednesday that the Anticorruption Law “mentions this issue”. If individuals are discovered pocketing the salaries of ghost civil servants, he noted: “The law says prosecutors may file a complaint to punish those people.”

Cheam Yeap, added, however, that he did not think it would be prudent to immediately punish government officials and others caught committing graft violations, saying they may not realise they are breaking the law.

“For our enforcement, we must first only warn those individuals who are getting money from ghost names,” he said. “We must proceed step by step.”

Ngo Hongly said Wednesday that no officials currently working in the government have yet been discovered pocketing ghost civil servant money.

A two-day census of the Ministry of Education is to begin today, Ngo Hongly said, and the Ministries of Interior, Health, Tourism and Agriculture are to be surveyed by the end of the month. After the census of the ministries, he said, government officials will survey offices at the provincial level, with the work to be completed “around October or November”.

The Anticorruption Law is to go into effect in November.

Yeng Virak, executive director of the Community Legal Education Centre, said that in principle, those who are caught siphoning the salaries of ghost servants “should be prosecuted”. For the anticorruption effort to succeed in the long-term, however, he said targeted enforcement would likely be more effective than arresting every single offender.

“You need to address the higher level, not the junior guys that somehow need to make a living,” Yeng Virak said. “If you are talking about prosecutions, you need to talk about those who are most responsible.”

Cheam Yeap said the government “sees many kinds of ghost names”, and offered the following taxonomy:

“First, there are dead officials’ names, but living officials take their salary, like in the police and military forces and in other offices. Second, there are people who work at private companies but still come to take their salary from the government. Third, there are people who don’t come to work, and their bosses take their money. Finally, there are ghost civil servants whose salaries go to the budget of the ministry or office where they work.”

According to an unofficial translation of the Anticorruption Law from the development NGO Pact Cambodia, suspects may be prosecuted for embezzlement, a punishment under the Kingdom’s penal code, as well as for “illicit enrichment”.

“Petty” corruption offences, defined as acts committed “for daily survival” that are “not harmful to society”, carry jail terms of anywhere between seven days and five years, whereas “abuse of power” offences by elected officials can fetch up to 10 years in prison.

Along with a mandate to investigate these and other offences, the law gives the new Anticorruption Unit at the Council of Ministers the power to “conduct mass education and awareness with regard to the negative impact of corruption and encourage public participation in preventing and combating corruption”.

SRP spokesman Yim Sovann said Tuesday that this approach could be the best way of addressing many of the Kingdom’s graft issues.

Particularly if offences of higher-ranking officials are ignored, Yim Sovann said, prosecutions at the grassroots level could do more harm than good.

“For the low-ranking officials, education should be done first, and then train them again, again, to make them aware of the law,” he said. “The corrupt officials must be prosecuted starting from the top. Sometimes they just prosecute the small, the petty corruption.”

Civil service recruits slashed 39%

Saturday, May 22, 2010

Kyodo News

The government said Friday it will reduce the hiring of national civil servants by 39 percent in fiscal 2011 from fiscal 2009, which ended in March.

The reduction still represents a setback for the government of Prime Minister Yukio Hatoyama, who instructed his ministers last month to halve new hiring in the public service in the next fiscal year starting on April 1, 2011.

As the hiring of prison, coast guard and immigration officers will be exempted from the cut, the rate of reduction for other types of civil servants would stand at 50.7 percent.

Internal Affairs and Communications Minister Kazuhiro Haraguchi told reporters the government exempted public safety and security sectors from the cut, saying the hiring for other sectors would be halved.

By organization, the Health, Labor and Welfare Ministry topped the list with a 50 percent cut, followed by the Finance Ministry at 45 percent.

Haraguchi said the government will try its hardest to hold down personnel costs, as it has long been under severe financial conditions.

The government plans to terminate "amakudari" practices by early retirees and allow civil servants to work until the age limit, Haraguchi said.

Amakudari is the practice of retiring government officials taking highly paid posts at government-affiliated organizations or private-sector firms.

http://search.japantimes.co.jp/cgi-bin/nn20100522a6.html

Reach for the sky

A street of new housing in Phnom Penh

The city’s Canadia Tower


May 21 2010
By Elaine Moore
Financial Times (UK)

Above the tumultuous streets of northern Phnom Penh, the new Canadia Tower reaches 30 storeys into the sky, dwarfing the palaces and temples that grace the rest of the city’s skyline. The glass-fronted tower is now the highest building in Cambodia and marks the start of an ambitious plan to attract increased foreign investment to this small Asian market.

Known as the “pearl of Asia” in the early 20th century, Phnom Penh has suffered years of civil war and a repressive communist regime, but its architecture of golden-tipped temples, red-roofed houses and French colonial mansions is still distinctive. The Canadia Tower, also known as the OCIC Tower, is instead designed to imitate and rival the sort of modern office space available in bigger neighbouring countries such as Vietnam and Thailand.

The soaring structure will soon be joined by other high-rises across the city, offering homes as well as offices. Some are being funded locally, others by foreign investors (mostly Korean) but all the financial backers hope they will attract wealthy foreigners and persuade locals to forgo their traditional two-storey Khmer villas for an apartment (or an office) with a view.

A new law permitting foreigners to buy condominiums in these skyscrapers will for the first time, the government hopes, encourage a wave of overseas interest.

But the new style of living might take some adjustment, according to local property experts. “Living in a condo is a new concept for Cambodian people,” says Bun Phearith, sales agent at Bonna Realty Group, one of the largest estate agencies in Cambodia. “But it’s an idea that is gaining popularity. Among our younger clients the first properties they ask about are apartments in multi-storey buildings.”

The Canadia Tower stands on Monivong Boulevard, down which Khmer Rouge soldiers marched in April 1975 when they took over Phnom Penh and began to systematically destroy all traces of urban modernity in Cambodia. In just three years, eight months and 20 days, the terrifying success of their vision caused the deaths of millions. By the time the Khmer Rouge were driven out, Phnom Penh was a ghost town.

Senaka Fernando, chairman of the British Business Association in Cambodia, arrived in the capital in 1994 as peace was finally taking hold. “Back then, when planes landed in Phnom Penh at night there was nothing to see – no lights, no large buildings,” he recalls. “The changes that have taken place here over the past 16 years are remarkable.”

Between 2000 and 2009 economic growth in Cambodia averaged 8 per cent. To reflect its success, gleaming high-rises were planned at the height of Cambodia’s property boom. The real estate sector was suddenly awash with money, and prices rose accordingly. Between 2005 and 2008 the cost of property in some areas of Phnom Penh rose from $550 per square metre to $5,000 (Cambodia’s property prices are routinely quoted in US dollars).

Developers planned a series of huge towers and a ring of satellite towns on the outskirts of Phnom Penh. Speculators bought up land for better roads, more shopping malls and larger office blocks. The tallest building planned was the International Finance Centre (IFC). This $1bn complex, backed by South Korean company GS E&C, was to have housed a shopping mall, 1,064 apartments, 275 serviced apartments and a school within its 52 storeys.

Then the bubble burst. As the global recession hit south-east Asia, building works ground to a halt and land cleared for work remained empty. Investors took their money away and, according to the International Monetary Fund, the Cambodian economy contracted by 2.5 per cent in 2009. Buildings such as the IFC tower were put on hold or scaled back and property prices in the city centre fell by up to a third.

Not even the Canadia Tower has escaped the downturn. Overseas Cambodian Investment Corporation (OCIC), owner of Canadia Bank, had hoped to persuade the country’s biggest organisations to set up shop inside. But much of the building remains empty and prospective tenants are now being offered a 50 per cent discount if they agree to lease space for a year or more.

Yet there are signs that the Phnom Penh property market is finding its feet again. Those who held on to properties as investments are now looking to sell, real estate agents say. Acleda Bank, a Cambodian commercial bank, has also reported an increase in the number of mortgages issued for residential property at the end of 2009.

Although the number of property transactions is nowhere near the heady levels of 2008, there is a feeling that the market is settling down. Thomas Sterling, country director of Cambodian property managers Sterling Project Management, believes the price crash was in some ways a good thing. “There was so much speculation that it became questionable whether there was any real market for property in Phnom Penh,” he says. “The recession has acted as a natural correction to cap prices.”

Properties in the most desirable areas, such as the riverfront, now fetch around $2,500 per sq metre, according to Bonna Realty. In the north of the city, along the wide streets of what used to be the French quarter, buyers can expect to pay around $1,250 per sq metre.

Rather than new and large-scale projects, the renewed interest is in select projects that are already under way, such as Gold Tower 42. Twenty storeys of the $300m South Korean project, financed by DaeHan Real Estate Investment and built by Yon Woo, are already up and the tower should be complete by late 2011. All of the office space, and half of the residential space has already been sold.

Across town, developers of the Diamond Island project are hoping to finish ahead of schedule. About half of the 168 homes built in the first phase of the project, on sale for $200,000-$1m, have been sold according to managers for developers OCIC. The rest was slated for completion in 2016 but the developers hope to bring this forward by two years. Other satellite towns include the Grand Phnom Penh International City, which will contain 4,000 residential units, and the $2bn Camko City project.

Interested overseas buyers have been given a helping hand by new government regulations. Previously, foreigners who wanted a stake in land had to establish a joint venture with a Cambodian national. But Cambodia still has a way to go before it attracts large numbers of overseas investors. Electricity prices are high and blackouts are not uncommon; phone networks can be unreliable and corruption is still a problem.

Foreign investors might also have qualms about buying into developments that have had a negative impact on the country’s poorest people. The losers in the evolution of Phnom Penh from backwater to international city are the citizens evicted from property that was sold to developers with minimal compensation.

But with the IMF now predicting growth of 4.8 per cent in 2010 and Cambodia’s links to the rest of the region strengthening, investors who choose carefully could find themselves first into a country attracting more international attention each year.

Elaine Moore is a personal finance reporter for the FT

KRT rules on legal doctrine

JUDGES at the Khmer Rouge tribunal on Thursday partially granted an appeal by defence teams against the use of Joint Criminal Enterprise (JCE), a controversial kind of criminal liability that could aid the prosecution at trial.

In a decision dated Thursday, the court’s Pre-Trial Chamber ruled on the use of the three forms of JCE in Case 002, upholding the use of types I and II but rejecting the third and most far-reaching.

Though Pre-Trial Chamber decisions cannot be appealed, the issue may be raised again before the Trial Chamber. Case 002 is expected to go before the Trial Chamber in early 2011.

Anne Heindel, a legal adviser at the Documentation Centre of Cambodia, said that even though the Trial Chamber is not bound by the 69-page decision, it may nonetheless “find it very persuasive”.

Michael Karnavas, the international co-lawyer for Ieng Sary, called the ruling a “wise and courageous decision” in an email on Thursday.

The court’s Co-Investigating Judges ruled in December that JCE, under which suspects can be held responsible for crimes committed as part of a common plan, could be applicable for international criminal charges at the tribunal.

The first form of JCE may apply when participants share intent to commit a crime, the second when a criminal plan is implemented in “a common concerted system of ill-treatment”, and the third when crimes occur as a “natural and foreseeable” consequence of a common plan.

Friday, 21 May 2010 15:03
The Phnom Penh Post
James O'Toole

Under the third form, for example, four people who plan to rob a bank together could all be charged with murder if one of them shoots a security guard, even if this shooting was not part of the original plan.

The Pre-Trial Chamber said Thursday that this third form was not “part of customary international law at the time relevant to Case 002”, and thus should not be applied.

Heindel said the third form of JCE could play a crucial role in the prosecution’s Case 002 argument if its use is permitted.

“The whole reason you have JCE III is so that you can make that link between senior leaders and lower-level perpetrators,” she said. “If this is the final ruling, it will make it much harder for the prosecution to tell the full story of all the crimes that happened in Cambodia and to link what happened at the lower level to the centre.”

The Beijing consensus is to keep quiet

The Economist
May 6th 2010

The China model

In the West people worry that developing countries want to copy “the China model”. Such talk makes people in China uncomfortable



CHINESE officials said the opening of the World Expo in Shanghai on April 30th would be simple and frugal. It wasn’t. The display of fireworks, laser beams, fountains and dancers rivalled the extravagance of Beijing’s Olympic ceremonies in 2008. The government’s urge to show off Chinese dynamism proved irresistible. For many, the razzmatazz lit up the China model for all the world to admire.


The multi-billion-dollar expo embodies this supposed model, which has won China many admirers in developing countries and beyond. A survey by the Pew Research Centre, an American polling organisation, found that 85% of Nigerians viewed China favourably last year (compared with 79% in 2008), as did 50% of Americans (up from 39% in 2008) and 26% of Japanese (up from 14%, see chart). China’s ability to organise the largest ever World Expo, including a massive upgrade to Shanghai’s infrastructure, with an apparent minimum of the bickering that plagues democracies, is part of what dazzles.

Scholars and officials in China itself, however, are divided over whether there is a China model (or “Beijing consensus” as it was dubbed in 2004 by Joshua Cooper Ramo, an American consultant, playing on the idea of a declining “Washington consensus”), and if so what the model is and whether it is wise to talk about it. The Communist Party is diffident about laying claim to any development model that other countries might copy. Official websites widely noted a report by a pro-Party newspaper in Hong Kong, Ta Kung Pao, calling the expo “a display platform for the China model”. But Chinese leaders avoid using the term and in public describe the expo in less China-centred language.

Not so China’s publishing industry, which in recent months has been cashing in on an upsurge of debate in China about the notion of a China model (one-party rule, an eclectic approach to free markets and a big role for state enterprise being among its commonly identified ingredients). In November a prominent Party-run publisher produced a 630-page tome titled “China Model: A New Development Model from the Sixty Years of the People’s Republic”. In January came the more modest “China Model: Experiences and Difficulties”. Another China-model book was launched in April and debated at an expo-related forum in Shanghai. Its enthusiastic authors include Zhao Qizheng, a former top Party propaganda official, and John Naisbitt, an American futurologist.

Western publishers have been no less enthused by China’s continued rapid growth. The most recent entry in the field is “The Beijing Consensus, How China’s Authoritarian Model Will Dominate the Twenty-First Century” by Stefan Halper, an American academic. Mr Halper, who has served as an official in various Republican administrations, argues that “just as globalisation is shrinking the world, China is shrinking the West” by quietly limiting the projection of its values.

But despite China’s status as “the world’s largest billboard advertisement for the new alternative” of going capitalist and staying autocratic, Party leaders are, as Mr Halper describes it, gripped by a fear of losing control and of China descending into chaos. It is this fear, he says, that is a driving force behind China’s worrying external behaviour. Party rule, the argument runs, depends on economic growth, which in turn depends on resources supplied by unsavoury countries. Politicians in Africa in fact rarely talk about following a “Beijing consensus”. But they love the flow of aid from China that comes without Western lectures about governance and human rights.

The same fear makes Chinese leaders reluctant to wax lyrical about a China model. They are acutely aware of American sensitivity to any talk suggesting the emergence of a rival power and ideology—and conflict with America could wreck China’s economic growth.

In 2003 Chinese officials began talking of the country’s “peaceful rise”, only to drop the term a few months later amid worries that even the word “rise” would upset the flighty Americans. Zhao Qizheng, the former propaganda official, writes that he prefers “China case” to “China model”. Li Junru, a senior Party theorist, said in December that talk of a China model was “very dangerous” because complacency might set in that would sap enthusiasm for further reforms.

Some Chinese lament that this is already happening. Political reform, which the late architect of China’s developmental model, Deng Xiaoping, once argued was essential for economic liberalisation, has barely progressed since he crushed the Tiananmen Square protests in 1989. Liu Yawei of the Carter Centre, an American human-rights group wrote last month that efforts by Chinese scholars to promote the idea of a China model have become “so intense and effective” that political reform has been “swept aside”.

Chinese leaders’ fear of chaos suggests they themselves are not convinced that they have found the right path. Talk of a model is made all the harder by the stability-threatening problems that breakneck growth engenders, from environmental destruction to rampant corruption and a growing gap between rich and poor. One of China’s more outspoken media organisations, Caixin, this week published an article by Joseph Nye, an American academic. In it Mr Nye writes of the risks posed by China’s uncertain political trajectory. “Generations change, power often creates hubris and appetites sometimes grow with eating,” he says.

One Western diplomat, using the term made famous by Mr Nye, describes the expo as a “competition between soft powers”. But if China’s soft power is in the ascendant and America’s declining—as many Chinese commentators write—the event, which is due to end on October 31st, hardly shows it. True, China succeeded in persuading a record number of countries to take part. But visitor turnout has been far lower than organisers had anticipated. And queues outside America’s dour pavilion have been among the longest.