Democracy Issues

Thanks to LinkedIn, I’ve just discovered The Mirror (which I promptly subscribed to in RSS). The Mirror consists of a couple folks putting together English language summaries of the Khmer language papers (although it seems they are cutting back from a daily post to a semi-regular post due to financial constraints). The Mirror posted a summary of a report from the Cambodian Center for Human Rights. With a little Google action I quickly obtained the full report: “Cambodia Gagged, Democracy at Risk?”

The report basically pointed to several actions of the Royal Cambodian Government over the last year that impinged the general rights of free speech. Major issues included the removal of parliamentary immunity for certain high level opposition leaders, the arrest and prosecution of newspaper editors and lawyers, and myriad other negative behaviors. I’ll let you read either the summary or the full report for details.

My reason for raising this issue is one of economics. First, how much will a report like this effect international perception of Cambodia’s democracy, and second, will any such effect have negative consequences for the investment environment in Cambodia?

I raise these as questions because I don’t really have the answer. I am familiar with Thomas L. Friedman‘s statement that “No two countries that both had McDonald’s had fought a war against each other since each got its McDonald’s.” I understand that democratic countries are generally seen as more conducive to capitalism and investment, but on a practical level, when you deal with a country that is already marginal to begin with, how much impact-short of martial law or civil war-do these kinds of activities have on the economy? It’s an unfortunate reality, but absent blatant human rights abuses, e.g., sweat shops, forced labor, etc., I think most corporations are less concerned about the political rights of a country’s inhabitants than the assurances that their investments are protected.

Case in point, although fictional, is James Clavell’s Whirlwind, which I am currently reading. At the beginning of the book there are major discussions about whether to stay in Iran (in 1979), as a business, in light of the increasing uncertainty over whether the Shah or the Ayatollah would end up in control of that country. Ultimately, the decision hinged on the fact that either way they would make money, particularly as a major competitor had just pulled out of the country. Now this is fiction, but I think the principal is true. Unless an investor or corporation has extreme social responsibility attitudes in its bones, it will be likely to continue to invest short of major catastrophe or bad press. . .so long as the money keeps flowing.

Maybe that makes me a cynic, but that seems to be the reality.