Cambodia may have oil and mineral windfall

NY Times:

Still clawing its way out of the ruins of its brutal past, Cambodia has come face to face with an extraordinary new future: It seems to have struck oil.

Exploratory drilling began two years ago, and the oil giant Chevron says it has found potentially huge deposits off the southern shore. The company has not made the results known, but together with other likely deposits nearby and with mineral finds being explored onshore, experts say, Cambodia could be a resource-rich nation.

Top officials, including Prime Minister Hun Sen, have been feeding the excitement this year, offering extravagantly optimistic estimates that the oil money could start to flow within two to three years.

But all of this is not necessarily good news.

For many struggling countries, like Nigeria and Chad, oil has been a poisoned bonanza, paradoxically dragging them into deeper poverty and corruption in what some call the oil curse.

“This will be a watershed event for this country one way or another,” said the American ambassador, Joseph A. Mussomeli. “Everyone knows that it will be either a tremendous blessing or a terrific curse. They are unlikely to come out unscathed.”

Indeed, this is a land that already suffers many of the symptoms of the oil curse, even before a drop of oil has been pumped.

With its tiny economy, weak government institutions, widespread poverty and crippling corruption, Cambodia seems as ill-suited as any country to absorb the oil wealth widely expected come its way.

Its people remain traumatized by the mass killings by the Khmer Rouge from 1975 to 1979, when 1.7 million people died, and by the decades of civil war, brutality and poverty that have followed. Now, 28 years after the ouster of the Khmer Rouge, Cambodia is fitfully approaching the start of a trial of a handful of surviving leaders that could bring some belated healing.

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Corruption is not a curse but a reflection of the character of the people in government. Corrupt people are the curse. One of the reasons colonialism was so successful for so long is that it replaced corruption with honesty and efficiency. It is why tiny Britain was able to "conquer" India with its vast population. The British culture was superior to the Indian culture of the time and Indians flocked to the British control area because they found that contracts would be honored and laws would be enforced for everyone.

If the Cambodian culture is corrupt, then its people will not see much benefit from oil wealth. But, it is the culture and not the oil that is the curse. The people would actually see more benefit if the oil companies rather than the government controlled the use of the money. One thing that Cambodia could do to limit corruption is hire an outside trustee to manage the income and see that it is spent wisely.