Event

Hun Sen, Asia’s currently longest-serving prime minister, won the largely peaceful general elections end of July. His victory was all but unexpected given the ruling Cambodian People’s Party (CPP)’s campaign machine and recurrent poll fraud allegations within an authoritarian regime. However, the increasing score of the opposition Cambodia National Rescue Party (CNRP) supported by a high voter turnout (over 70%) is a surprise as Hun Sen recorded his narrowest victory in 15 years with 68 seats in Parliament against 55 (i.e. more than the double relatively to the previous election) for the opposition. Opposition leader Sam Rainsy has rejected the election outcome due to many irregularities and called for a UN investigation. Given the CNRP’s sharp progress, this could lead to a certain degree of social unrest as many Cambodians are wary of Hun Sen’s rule and are keen to see change and more rights.

Impact on country risk

In spite of a risk of (small-scale) unrest in the short term, it is likely that political and social stability will remain in place after the elections given the government’s firm grip under Hun Sen and sustained strong economic performances. Since he came to power in 1985, political stability has progressively allowed the Cambodian economy to develop fast and record an impressive 7% average growth in 1990-2012. The key garment sector is the main economic driver as Cambodia is regionally very competitive for low-cost assembly activities. Tourism is booming and still has great growth potential, whereas agriculture remains the number one sector for a still mainly rural population. Thanks to economic progress, rising household consumption by a young population and China’s financial contribution through aid and investment, Hun Sen has managed to keep his legitimacy as ruler. However, social protests have been on the rise the past few years. Although they are quelled by police forces, the opposition’s recent relative electoral success could herald further protests for more political and social rights and labour clashes in the short to medium term. This can increase pressure on Hun Sen’s rule, so he might be compelled to make more concessions.

Analyst: Raphaël Cecchi, r.cecchi@credendogroup.com