Economic, environmental and security concerns about the vanity project will keep controversy alive for years.
Ground will be broken on the Funan Techo Canal on August 5 – strongman Hun Sen’s 72nd birthday. The waterway will be carved through the eastern regions of the country, eventually connecting the capital Phnom Penh to new deep-water ports in Sihanoukville and Kampot, on the Gulf of Thailand.
The Cambodian government believes the $1.7 billion waterway will reduce Cambodia’s dependency on Vietnam, through whose ports much of Cambodia’s imports and exports are transported.
They expect an economic boon for the country, with cheaper transportation making Cambodian goods more competitive, fostering overall economic growth.
But the megaproject has been controversial, to say the least.
Initially, much of the controversy centered on Vietnam’s apparent fear that Cambodia might allow its “ironclad friend” China military access to the canal. The security dimension was played up.
However, there are more significant concerns.
The first is environmental. There are genuine concerns, especially if you’re a Vietnamese resident of the Mekong Delta, about the potential ecological impact. Carving out the canal could lead to further intrusion of salt water into the Mekong’s distributaries and create a massive levee between Cambodia and Vietnam’s floodplains.
As Brian Eyler of the Stimson Center has put it: “the canal will disconnect the floodplain, creating a dry zone to its south and a wetter zone to the north.” Much remains unknown since Phnom Penh hasn’t yet publicly released any environmental impact assessment on the canal.
The second concern is economic, and this is a bit more hazy.
David Brown, an economic analyst, argued recently that “there is no plausible economic argument for digging a canal.” I disagree.
Economic logic
There is some economic logic to the project if it’s done properly. It will make domestic transport of goods cheaper, benefiting consumers and make Cambodian exports more competitive in international markets.
Yes, Cambodia has new expressways and wants to re-do its aged railways, but moving goods by water is many times cheaper than by road or rail.
It will mean more business for Cambodia’s new ports in Sihanoukville and Kampot, boosting these local economies. It should bring some investment to the rural areas where the canal passes through.
And it does make Cambodia more economically self-sufficient—no one can say with 100% certainty that Vietnam won’t in the future deny access to its ports, which would effectively mean an economic blockade for Cambodia.
None of this is to say that Phnom Penh has gone about this the right way. The entire process has lacked transparency.
The government was too hubristic at the beginning, thinking that China would fund everything, and has over-egged the patriotic angle of the canal, choosing not to have a decent dialogue with the public about the complexity of the scheme.
Indeed, Prime Minister Hun Manet, who inherited the premiership from his father Hun Sen last year, has presented it as a nationalistic project.
As Hun Manet put it, the canal will give Cambodia “a nose to breathe through.” Of course, this rhetoric comes slightly unstuck once you recall that the China Road and Bridge Corporation will have a lengthy build-operate-transfer contract on the project, so it will only pass into Cambodian ownership sometime in the second half of this century.
Even so, Phnom Penh’s propaganda machines are in full swing: anyone who criticizes the scheme is unpatriotic or despises Cambodia, and those who support it are the true adherents of national sovereignty.
Legacy building
The inherent problem is that the whole thing is essentially a vanity project.
That doesn’t mean it’s entirely illogical or uneconomical. But you have to remember that this isn’t a normal project. It’s far more symbolic than the Phnom Penh-Sihanoukville Expressway, the country’s first proper motorway, or your bog-standard hydro dam.
It’s a way for Hun Sen, who is still the kingpin despite resigning last year after nearly four decades in power, to give himself a physical legacy. The Hun dynasty is physically cutting an artery through the country, a landmark to the power of the Hun family that they hope will last for centuries.
“Our ancestors built the Angkor Temple and other great monuments, but unfortunately we used to be divided. Now, we are once again united and we are building new achievements,” Hun Manet said earlier this year. Construction will begin on August 5, Hun Sen’s birthday.
Kavi Chongkittavorn, a veteran Thai journalist, has called the Funan Techo Canal a “litmus test for Hun Manet’s leadership.” Another analyst put it: the government has to “complete it by all means, at all costs.”
Indeed, the Hun family has staked its reputation, though not its power, on the project.
When trying to defend the canal during a speech in May, Hun Sen, referring to himself in the third person, tried to reassure Cambodians: “Hun Sen has never made a wrong decision in the past 47 years”. (He has; many.)
For Hun Manet, it offers an opportunity for drums, flags and loyalty-parades. His first year in power has been somewhat dull.
He isn’t as bombastic, as in-your-face, as his father. His speeches aren’t as wild and rambling; his rhetoric is more measured and consensus-based. His focus is policy, often of the boring sort.
The ruling party framed his succession as a technocratic shift, the transition from a generation of rulers who literally fought to save the country from genocide to a generation that will make slow, incremental improvements to the progress they inherited.
No pulling back now
But with the canal, Hun Manet gets to beat the patriotic drum and unfurl the self-aggrandizing banners. He gets to present himself as a visionary, not just a reliable pen-pusher.
The narrative constructed by Hun Manet and his father (and around them) means that Phnom Penh cannot pull back now, nor can it afford to fail. Neither can it back down to critics.
“Cambodia knows how to protect its interests, Vietnam does not need to care,” Hun Sen proclaimed earlier this year. This canal is now in the public imagination far more than any other infrastructure project in recent memory, while the Hun’s are liable for more personal blame than with previous megaprojects.
They will have to carefully manage the messaging when things go awry – which they will.
The environmental warnings will grow louder. Expect this to be an issue that the United States wades into, especially if the Chinese military angle doesn’t fade.
Vietnam’s concerns — which, unusually, leaked out rather quickly — will have to be carefully managed or else Phnom Penh risks upsetting its powerful neighbor.
Deadlines on construction will likely be pushed back and costs will mount. It’s improbable that China will front the extra cash, so Phnom Penh will have to do so.
Cambodia’s national debt is around 33.1 percent of GDP or US$10.7 billion, according to the World Bank. Perhaps another $2 billion will need to be found for the canal.
That will push the national debt upwards of 40% of GDP, which isn’t terrible, yet Hun Manet will have to explain why that extra money went on a megaproject with questionable economic worth and certainly many environmental drawbacks. And why that state money wasn’t invested elsewhere.
Expect the Funan Techo Canal to remain a major political hot-topic for the four or five or six years it takes to build.
The article was originally published by Radio Free Asia.
