Q+A-Will Cambodia's economic woes affect stability?

BANGKOK, Aug 20 (Reuters) - Cambodian Prime Minister Hun Sen is facing pressure from rights groups and foreign donors while he battles to minimise the damage to the country's fragile economy from the global financial crisis.

Foreign governments, rights groups, non-governmental organisations and political rivals continue to hound the former Khmer Rouge soldier over his authoritarian leadership style and his attempts to muzzle critics.

However, analysts say neither the criticism of Hun Sen's government nor the effects of the slowing economy are likely create instability in the near future.

HOW DOES HUN SEN RESPOND TO CRITICS?

Hun Sen's government has filed a series of lawsuits against journalists and opposition lawmakers for defamation or "disinformation", which rights groups and foreign diplomats say are attempts to silence critics and strengthen his grip on power.

Two opposition MPs critical of Hun Sen and his party were recently stripped of parliamentary immunity, effectively unseating them from the national assembly. Other cases have included a young political activist jailed for painting anti-government slogans on his house and an advocate of cultural preservation who criticised lighting plans for the ancient Angkor Wat temple.

"Hun Sen does not know how to respond to criticism and the fear is he will respond with an iron fist through more suppression, which would undermine Cambodia's democratic progress," said Ou Vireak, president of the U.S-funded Cambodian Centre for Human Rights.

WHAT ABOUT FORCED EVICTIONS, CORRUPTION?

Tens of thousands of people have been evicted by force from prime land in the capital, Phnom Penh. Rights groups say as many as 250,000 people have been affected nationwide. The government says the dwellers are land-grabbers who refuse to accept their offers of compensation.

The World Bank and other donors say the evictions are hampering efforts to tackle poverty in a country where 35 percent of the population live on less than $1 a day. The ruling party's control over the police, military and the courts means those made homeless have limited power to fight the evictions.

The government has also come under fire for failing to deal with rampant corruption, which the United States says costs the country $500 million a year. Cambodia, which anti-graft watchdogs rank as one of the world's most corrupt countries, has dismissed the claims as foreign interference. An anti-corruption bill drafted in the 1990s is also yet to be approved.

Analysts say the failure to tackle graft will restrict the amount of foreign investment in the country.

IS ALL THIS ANY THREAT TO HUN SEN?

Hun Sen's Cambodian People's Party (CPP) enjoyed a landslide election victory in 2008 on the back of four years of double-digit growth driven by pro-investment policies, which helped create jobs and improve infrastructure and public services.

Analysts say that after decades of war and political strife, Cambodians are better off under Hun Sen. Although he is criticised for his authoritarian style, people are largely supportive of his nationalist and conservative approach to running the country.

"He has a desire to maintain Khmer traditions and morals and that maintains some strong fabric on which to base policy decisions. That's good for political stability," said Ian Bryson, a specialist on Cambodia at Control Risks in Singapore.

COULD A SLOWING ECONOMY AFFECT CAMBODIA'S STABILITY?

A boom in the garment manufacturing industry in the 1990s helped lift many rural people out of poverty, but the global financial crisis has hurt tourism and slashed demand for Cambodian-made clothes in countries like the United States.

Analysts believe victims of lay-offs are unlikely to blame the government or protest against factory closures. They say stability rests on the government's future handling of inflation, diversifying its economy and improving its investment climate.

"The government should invest more in agriculture and other industries and reduce its reliance on garments and tourism," said Pou Sothirak, a senior research fellow at Singapore's Institute of South East Asian Studies (ISEAS). (Compiled by Martin Petty and Ek Madra in Phnom Penh; Editing by Alan Raybould and Bill Tarrant)