My Take | How US ‘debt-trap’ diplomacy backfired in Cambodia
- Both sides could have settled on long-standing loans made to the corrupt regime of Lon Nol in the early 1970s. Instead, US intransigence pushed Phnom Penh further into the embrace of Beijing at a time of intensifying rivalry between the two superpowers
Debt in international relations is diplomacy by other means. Recent breathless reports about China’s “debt- trap” diplomacy often make it sound like Beijing invented it when it is as old as time. In any case, a good deal of the accusations levelled at the Chinese are exaggerated.
But, in light of the ongoing furore over wholly inaccurate claims that the Chinese navy is secretly taking over Cambodia’s Ream naval base, it is worth examining a genuine case of debt-trap diplomacy, only that this one dates back decades and concerns the United States’ egregious repayment claims on the Cambodian people. What’s more is that the debt and its controversy have been tied, directly or indirectly, by one side or the other, to the current row over the naval base.
The debt in question stems from a US$274 million loan made to the regime of the American puppet Lon Nol in the early 1970s. It has since ballooned to about US$700 million from accumulated interest.
Cambodia in the Vietnam war
Without the war, there would have been no secret and illegal bombing of Cambodia (and Laos), a country with which the US was actually not at war. Without the bombing, the traditional monarchy would have endured. But the intense bombing created the conditions, on the one hand, for Lon Nol to stage the US-backed coup which abolished the monarchy and, on the other, the rise of the Khmer Rouge. Dragging Cambodia into the war intensified its unfolding civil war and prepared the country’s direct descent into hell.
As described in The Phnom Penh Post by Suos Yara, a legislator and spokesman for the ruling Cambodian People’s Party, the original US loan was made to the Lon Nol regime to buy American rice, wheat, oil and cotton. This was meant to avoid a humanitarian crisis to save displaced Cambodians “from starvation after they fled to Phnom Penh under the communist [Khmer Rouge] advance as well as US bombings in the countryside”.