VZCZCXRO0411
OO RUEHCHI
DE RUEHPF #0742/01 1111009
ZNR UUUUU ZZH
O 211009Z APR 06
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6505
INFO RUEHBK/AMEMBASSY BANGKOK PRIORITY 1463
RUEHVN/AMEMBASSY VIENTIANE PRIORITY 2812
RUEHCHI/AMCONSUL CHIANG MAI PRIORITY 0035
RHHMUNA/HQ USPACOM  PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 1408

UNCLAS SECTION 01 OF 02 PHNOM PENH 000742 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP DAS ERIC JOHN FROM CHARGE MARK STORELLA, 
STATE ALSO FOR EAP/MLS; GENEVA FOR RMA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL KDEM CB
SUBJECT: SCENESETTER FOR DAS ERIC JOHN'S APRIL 30-MAY 2 
VISIT TO CAMBODIA 
 
 
¶1.  (SBU)  Your visit will come at a time when things are 
looking better for Cambodia than they have in a long time and 
at a time when Prime Minister Hun Sen and his party are 
feeling comfortable about their performance.  The political 
environment has turned around dramatically, the economy is up 
and our bilateral relationship is on the strongest upswing in 
a decade.  The Cambodians clearly want to see bilateral 
relations improve further and will see your visit as an 
opportunity to support the positive trend begun during A/S 
Hill's January visit.  You will be able to reinforce our 
strong areas of cooperation and press for further progress on 
democratic institution building. 
 
¶2.  (SBU)  Your meeting with PM Hun Sen will be the 
centerpiece of the visit.  Uppermost in his mind will be the 
prospect of an eventual official visit to Washington and the 
legitimacy such a visit would confer.  He will also have in 
mind the need for the U.S. to balance China and Vietnam, both 
of whose premiers visited Cambodia in the last month. 
Foreign Ministry interlocutors will likely push Cambodia's 
APEC bid, even though we have reminded them of the moratorium 
until 2007.  Opposition leader Sam Rainsy will brief on his 
reconciliation with Hun Sen and future plans.  Human rights 
advocates, including Kem Sokha, deeply appreciate our 
support, but remain cautious after the setbacks of 2005.  The 
press will seek your assessment of political developments and 
ask about reports that the U.S. has requested Cambodian 
participation in Iraqi reconstruction.  In all your meetings, 
you will have the opportunity to stress the need to 
institutionalize democratic and good governance reforms, 
including anti-corruption legislation, further support for 
the role of the opposition, and possible legislation on use 
of future oil/gas revenues for poverty reduction. 
 
¶3.  (SBU)  The Cambodian government (RGC) has delivered on 
everything promised A/S Hill and more.  The RGC released all 
political prisoners; Sam Rainsy has returned, been pardoned 
and resumed his role in the National Assembly; opposition 
members have joined all National Assembly Commissions and 
been awarded two chairmanships; the PM and Sam Rainsy have 
launched a land authority to review land disputes; the 
Council of Ministers approved decriminalization of defamation 
April 21; and the PM has agreed to revise the National 
Electoral Commission to include the opposition.  Cambodia 
continues to provides us excellent cooperation on health 
(avian influenza and HIV/AIDS), POW/MIA, CT, law enforcement, 
deportees, counternarcotics, and criminal cases under the 
Protect Act.  We expect the RGC's 2006 anti-trafficking in 
persons record to result in an upgrade from Tier 3 to the 
Tier 2 Watchlist.  Cambodians enjoy unfettered religious 
freedom and a relatively open press.  The RGC recently 
accepted our final offer on Cambodia's Vietnam War era 
bilateral to debt to us, although repayment terms have yet to 
be worked out.  Nevertheless, Cambodia's democratic 
infrastructure remains weak and reforms continue to depend on 
PM Hun Sen personally. 
 
¶4.  (U)  Cambodia's economy is on a roll, with 10% growth in 
2005 and signs of strong growth in 2006.  The garment sector 
is the engine of the economy, providing over 270,000 jobs, 
and has survived in the post-Multi-Fiber Agreement era thanks 
to Cambodia's reputation for respect for labor standards and 
rights.  The U.S. is Cambodia's leading trading partner, 
buying roughly 60% of all exports.  (The GAP alone buys about 
8% of Cambodia's entire GDP.)  Tourism, centered on Angkor 
Wat, is up.  Western donors and Japan pledged roughly $600 
million in aid for 2006.  (The Chinese premier responded by 
announcing China's own flashy, if mathematically dubious, 
$600 million pledge.)  A recent World Bank study showed a 
steady decline in poverty over the past decade, and health 
indices for the country are positive.  Chevron has struck oil 
in Cambodian territorial waters and commercial production is 
expected to come on line in 2009.  All agree that the twin 
roadblocks to greater foreign investment and diversification 
of Cambodia's economy are corruption and lack of a competent, 
independent judiciary. 
 
¶5.  (SBU)  We have responded to the government's positive 
steps by reinforcing and expanding the bilateral relationship 
in small increments:  the proposed opening of a Legatt 
office; the announcement of a Peace Corps Mission; USD 
200,000 to the Ministry of Justice for anti-trafficking 
training; and an increase in AI assistance through USAID and 
CDC.  We are in the process of putting into place additional 
 
PHNOM PENH 00000742  002 OF 002 
 
 
CT assistance, a new INL counternarcotics program for 2008, 
and renewed TIFA talks with the RGC.  The RGC may announce 
judges for the Khmer Rouge Tribunal (KRT) before your visit; 
we should express our strong desire that the Tribunal's 
operations meet international standards of justice.  A 
possible deliverable for your visit might be announcement 
that we would agree for U.S. funds in an old UN trust fund to 
be used by the KRT as proposed by the UN -- if Washington 
could disgorge a decision by the time of your trip.  The U.S. 
bureaucracy has been chewing on this for over a month. 
 
¶6.  (SBU)  You will have an opportunity to engage the MFA on 
the recent ASEAN Foreign Ministers meeting in Bali, and how 
ASEAN intends to proceed on Burma.  We believe the RGC would 
like to be helpful in so far as ASEAN consensus will allow. 
The National Assembly may be prepared to pass a resolution on 
Burma, which would break new ground for the legislative body. 
 The new chairman of the Foreign Affairs Commission, Son 
Chhay, is an SRP MP and would support a resolution, but 
recognizes the need for agreement from the ruling Cambodian 
People's Party.  We believe such a step is doable. 
 
¶7.  (SBU)  You may also discuss the next steps the USG is 
prepared to take to assist Cambodia:  assuming TIP sanctions 
are removed, an expanded military-to-military relationship 
with restored IMET and FMF funding; further CT training; a 
possible ship visit to symbolize expanded military 
cooperation; debt initiatives including support for a new 
Paris Club deal and USG willingness to consider rechanneling 
debt payments into education initiatives and the environment; 
and prospects for high-level contacts. 
 
¶8.  (SBU)  In sum, while we do not expect any dramatic 
breakthroughs, your visit can reinforce a positive trend both 
in terms of democratization and improved bilateral 
cooperation.  And we look forward to taking you for a tour of 
EAP's newest embassy building.  It remains the talk of the 
town. 
STORELLA