Thursday, February 26, 2009

On the Brink - By Celia Shortt

Cambodia sits at the brink of a significant financial gain that could revitalize their country and economy. Unfortunately, many hurdles in the government must be overcome before any revitalization will be possible.

In 2005, Chevron announced that they had struck oil in four of their test wells off the coast of Sihanoukville. The estimates on the amount of oil in those wells have fluctuated in recent years. With large dividends from this investment, speculations about profits and their impact on the economy are rampant. The Cambodian government has promised to manage the revenue responsibly.

“The government is committed to effectively managing the revenues from the exploitation of the minerals, oil, and gas,” said Cambodian Prime Minister Hun Sen in December of last year. Some people are still wary of this promise due to Cambodia’s reputation for corruption within the government. One Cambodian, only identified as Khmerization, created a blog to expose the mismanagement and misrule which the present Cambodian government forces on citizens. The blogger does not believe in the assurances made by the Prime Minister Hun Sen.

The international community and the Cambodian educated class . . . are skeptic[al] about the PM’s promises, because he ha[s] promised many things in the past and they were all broken,” Khmerization said.

Cassie Baumgarner, a U.S. citizen who lives and works in Cambodia, doubts that the revenue will reach the poor people in the country due to corruption in the country, but still has hope about how it could be used. “If the financial increase would trickle down to the lower classes, it would allow them to have improved living conditions and possible job opportunities.” Oil industry experts have called upon the Cambodian government to curb corruption or risk losing their potential gas and oil revenues.

In addition to corruption, Cambodians are still recovering from terror incidents of Khmer Rouge and a civil war. Another U.S. citizen, Rachael Brugger, who resides in Cambodia, said, “There are obviously people still alive who lived through the Pol Pot Era and witness[ed] the terror of Khmer Rouge. The country is still feeling the after effects of civil war.” If revenue is brought in through this project, Rachael hopes that it will be directed into the country’s educational system.

Another concern with this oil well project is the fear of the “oil curse.” This “oil curse” is a misfortune that frequently hits underdeveloped nations that are rich in resources. The African country, Nigeria, fell victim when billions of dollars of oil revenue just disappeared. “Cambodia could be susceptible to it [the oil curse] if oil extraction does happen on a large scale,” said Brenden Brady a Phnom Pen Post reporter.

To combat corruption, local and international development groups have attempted to have the government create revenue-intake mechanisms in order to guarantee that money goes to economic or social developments. Cambodia could be developed with the oil revenue if corruption in government does not stand in the way of economic progress.

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