The Bangkok PostSunday September 14, 2008
Thaksin Shinawatra's reported investment in Koh Kong has led to a land-grabbing frenzy, writes Piyaporn Wongruang and Nareerat Wiriyapong
Embattled former prime minister Thaksin Shinawatra has packed up and moved to London, but Koh Kong residents like Kamnan Tit are hoping he returns and brings economic prosperity to the Cambodian province.
For the past few months, rumours of the ex-prime minister's possible involvement in a mega-tourism project in Koh Kong have fuelled a land grab and sent prices soaring, creating a buzz of activity in the once sleepy area.
''We heard the news that Mr Thaksin would come to invest in Koh Kong, so we even rushed to buy land on nearby Koh Kapi,'' said Kamnan Tit, who recently introduced the principle of sufficiency economy to his village of Peam Krasaob.
THE MEETING
Fueling the excitement was Mr Thaksin's meeting with Cambodian Prime Minister Hun Sen at the Siem Reap golf course in early April this year.
The golf outing came shortly before former foreign minister Noppadon Pattama (also formerly Mr Thaksin's lawyer) showed up at the state opening ceremony for the upgraded Road No 48, which links Thailand's border town of Had Lek, in Trat province, with Koh Kong.
The road, about 150 kilometres long, was financed by the Thai government with a low-interest loan of about 500 million baht, plus another 300 million baht in aid for four connecting bridges.
The aim of the project is to improve access to inner Cambodia and connect Thailand, Cambodia and Vietnam under the economic framework of the Greater Mekong Sub-region (GMS) scheme.
The White Paper produced by Thailand's foreign ministry noted that Mr Noppadon was there to discuss the heritage listing of the disputed Preah Vihear temple.
Speculation from many sources links the two incidents, in the belief that the people involved had compromised Thailand's interests in exchange for Mr Thaksin gaining a personal advantage.
According to several Thai agents, as well as officials working in foreign affairs, Mr Thaksin discussed the possibility of investing in a tourism-related project on Koh Kong with the Cambodian government during that period.
One high-ranking foreign affairs official, who was briefed by a source close to Hun Sen, said that a discussion had taken place, in which they agreed that the investment should go to Koh Kong.
An internal information analysis by one Thai foreign affairs unit noted that the targeted area for Mr Thaksin's investment would be the 10,000-hectare Koh Kong island, the biggest of 23 islands off Koh Kong province's coast.
It further noted that the Cambodian government had already approved the lease of the whole island for the development of hotels, casinos and other businesses to stimulate the tourism industry.
A road and a series of bridges are also planned to link the project to the mainland. Road No 48 will be 10 kilometres long and cut through the plots of some senior Cambodian military officials.
THE CONNECTION
''Khun Phat is among the people taking part in this project, and possibly Mr Thaksin too,'' said another high-ranking foreign affairs source.
''Some Cambodian senior military officials here said the land prices will increase if Mr Thaksin really invests there.''
Khun Phat is the owner of Koh Kong International Resort Club, near the border. A senator for the ruling Cambodian People's Party and widely known as the ''King of Koh Kong'', Khun Phat has been accused by international human rights groups of forcing locals off their land by getting police to use force against them.
Cambodian Defence Minister Tea Banh was quoted as saying during the opening of the road that Khun Phat ''was discussing the prospective investment in Koh Kong with Mr Thaksin''.
The defence minister also stated that Mr Thaksin was one person Hun Sen trusted and wished to invite to be an advisor on the development of Koh Kong, which the Cambodian government wants to turn into a special economic zone.
In a telephone interview, Khun Phat confirmed he is among the investors in the planned project. But he said it will be a joint investment between himself and a few European investors.
According to Khun Phat, these investors were introduced to him by Mr Thaksin. Khun Phat insisted Mr Thaksin will not invest in the project. He said he only introduced the investors.
''[Mr Thaksin] has a lot of friends,'' he said, adding that the project has received an unofficial green light from the Cambodian government.
They only need to discuss in detail what the project will look like, as well as how the benefits will be shared between the investors and the government.
''We are serious about this, but we have to wait for the new government first,'' said Khun Phat, who is known to be a close aide of Hun Sen.
After Mr Thaksin became Thailand's prime minister in 2001, he met Hun Sen at least eight times to discuss opportunities between the two countries.
It was Mr Thaksin who proposed the Economic Cooperation Strategy in early 2003, which later turned into a new regional economic framework known as the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy, or ACMECS, at the end of that year.
Under the framework, 46 common projects plus 224 bilateral projects were lined up for implementation over 10 years following the first declaration. These included Road No 48.
The road project came about after Mr Thaksin met Hun Sen during the GMS meeting on Nov 3, 2005.
According to the foreign ministry's letter to the secretariat of the cabinet, the foreign ministry of Thailand reasoned that Road No 48 would help improve the economy of both countries.
It would also help to elevate Thai-Cambodian relations, and was in line with Thailand's regional transport link strategy under the GMS.
As well as the road upgrade, other development projects, including the development of the linkage between tourism sites in Cambodia and Thailand, were also in the pipeline.
THE DOWNSIDE
Cambodia stands to gain a lot if these investments come true, and especially if Mr Thaksin is involved. However, there may be a downside as a consequence of the land grabs and speculation.
With rumours over Mr Thaksin's involvement buzzing around from Koh Kong to Phnom Penh, many local residents have been quick to buy up land with the hope of hitting the jackpot.
Land prices are indeed increasing, according to the president of Koh Kong Chamber of Commerce, Bun Tun.
He said land changes hands easily, sometimes even within a day, due to high prices offered for further land speculation. The price of a beachfront property, for instance, was once about US$5 per square metre. It has now increased to $150 per sq m, about 30 times the previous price.
Koh Kong, which is one of Cambodia's prime seaside cities, has about 1.2 million hectares of land and contains about 24,000 households.
Ever since the end of the Cambodian war in the late 1970s, the government has been trying to resurrect its economy through various means. The Koh Kong project is the latest of these efforts.
Besides relying on foreign aid for economic development, Cambodia, which had a per capita GDP of about $460 in 2006, relies heavily on foreign investment.
In 1994, Cambodia's new investment law was promulgated. The Council for the Development of Cambodia then approved more than $4.27 billion worth of foreign direct investment, according to the United Nations Economic and Social Commission for Asia and the Pacific 2008 business report.
Available data, last updated in 1999, reveals more than 700 foreign projects were approved, with hotels and tourism being the most popular choices for foreign investors, making up nearly 45 per cent of all foreign investment projects.
To encourage investment, the government allowed all sectors of the economy to be opened to foreign investors. In 1999 a sub-decree placed investment restrictions on certain areas, including the media.
The allocation of land is a crucial part of investment. Although only Khmer legal entities and those of Khmer nationality have the right to own land outright, foreign investors are allowed to lease land for up to 70 years.
The primary concern among social advocates and activists in Cambodia is that the present land allocation system may not support sustainable land utilisation or prevent land conflicts arising as a result of new development projects.
The Asian Development Bank's 2004 environmental report noted that although the new Land Law is a landmark in the formal recognition of the land rights of ethnic minorities in Cambodia, enforcement, property rights definitions and titling remain a challenge.
At present, many locals are being evicted from their land, either forcefully or from the lure of attractive land prices.
A government-approved large-scale entertainment project on Koh Yor, which is also part of Koh Kong province, is already suffering a backlash.
''At present, investors are pouring in and land prices are skyrocketing, but it is the poor people or farmers who are lured to sell the land,'' said Bun Tun. ''They might get a lot of money at first, but they spend it without much thought. If this trend goes on, all the land could be sold out over the next five years, and we will end up with a lot more poor people here.''
What's more, a zoning map acquired by an agent source shows that a Cambodian military facility at the top end of the island will be moved down south to make way for planned development.
The island is now divided into zones, including one at the top end which is believed to be Khun Phat's stake.
OPPOSITION CLAIMS
Sam Rainsy, the leader of Cambodia's opposition Sam Rainsy party, claims there is an official document showing Mr Thaksin and Hun Sen's joint development plan for Koh Kong province. His party is preparing to ask the Cambodian parliament to provide a copy of the document.
Sam Rainsy claims the two met occasionally when Thailand's former prime minister made trips from Europe and Hong Kong to discuss and conclude the deal for the investment in Koh Kong.
Sam Rainsy claimed Mr Thaksin has an ulterior motive in building up his base and facilities in Koh Kong _ his real intention is to continue his political activities in Thailand.
''Cambodia is the base for Mr Thaksin to get in touch with his supporters in Thailand,'' he said.
Mr Thaksin's close aides, including Pongthep Thepkanchana, his personal spokesman, as well as Mr Noppadon, could not be reached for comment.
Meanwhile, the Office of the Auditor General of Thailand has launched an investigation into Thailand's financial assistance for Road No 48. According to a high-level source at the office, the cabinet's approval of the project bypassed certain state auditing procedures.
''The project involved state funds worth millions of baht, but it was not audited by a responsible agency. We want to learn what they based their decisions on,'' said the source.
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