Cambodia: Political Capitalism and the Prebendal State

Abstract

This chapter focuses on the least-developed form of political capitalism in the Mekong region, a form specific to extremely underdeveloped countries such as Cambodia. The term political capitalism is used to describe the economic situation in countries dominated by authoritarian, if not dictatorial, political groups that are customers of the zone’s big bosses,¹ who exert a significant influence over a narrow range of economic sectors, without, however, having an adequate number of SOEs to allow for initial development (such as the import substitution industrialization that occurred in North and Southeast Asia). This lack of SOEs—Cambodia is deemed to have less than 20 SOEs—forced Khmer authorities to open their economy as much as possible.² This is why, to ensure increased levels of development, extremely underdeveloped countries such as Cambodia tend to implement far-reaching deregulation policies that include the creation of special economic zones. Regional membership in ASEAN³ is essential for these countries to achieve their development objectives. Membership not only allows them to benefit from the organization’s protection, which essentially guarantees impunity in an environment of essentially nonexistent labor regulations, but also to benefit from aid and member-state investment.