Cambodia: Navigating Conflict, Transition, and Geopolitics in Southeast Asia

Cambodia: Navigating Conflict, Transition, and Geopolitics in Southeast Asia

Summary:

This comprehensive country profile analyzes Cambodia's dynamic trajectory, marked by a recent leadership transition and ongoing efforts to solidify its political stability while addressing long-standing border disputes. It explores the nation's increasing economic and political alignment with China and the resultant implications for its strategic autonomy and its relationships with other major powers. The study also delves into Cambodia's role within ASEAN, its economic development strategies, and the persistent social challenges it faces, ultimately offering insights into its positioning within the evolving regional order and policy recommendations for sustainable development.

Cambodia's contemporary narrative is one of intricate balancing acts. Having emerged from decades of conflict, the nation is now navigating a complex interplay of internal political evolution, unresolved territorial questions, and the powerful currents of regional and global geopolitics.¹ This profile examines how Cambodia is managing these multifaceted challenges and opportunities.

Key Areas of Focus:

Domestic Political Landscape

• Leadership Transition Dynamics and Institutional Evolution: The peaceful transition of power from long-serving Prime Minister Hun Sen to his son, Hun Manet, in August 2023, marked a significant generational shift. While the Cambodian People's Party (CPP) maintains a firm grip on power and the succession was carefully orchestrated, Hun Manet, with his Western education, faces the challenge of maintaining stability while potentially seeking to modernize governance.² The institutional framework remains largely centralized under the CPP, with limited checks and balances.

• Opposition Politics and Civil Society Space: The political opposition in Cambodia has been severely constrained.³ The main opposition party, the Candlelight Party, was barred from participating in the 2023 general election, leading to a de facto one-party parliament.⁴ Civil society space is rated as "repressed" by CIVICUS Monitor, with NGOs, independent media (like Voice of Democracy, shut down in 2023), and activists facing legal restrictions, harassment, and criminalization.⁵ This has significantly narrowed avenues for dissenting voices and democratic participation.

• Ethnic Minority Rights and Integration Challenges: While Cambodia's constitution nominally protects all citizens regardless of race, ethnic minorities (such as Cham Muslims, Vietnamese, and various indigenous "Khmer Loeu" groups) continue to face challenges. These include issues related to land rights (particularly vulnerable to land grabbing), access to education and healthcare, and discrimination. The government's recognition of indigenous communal land titles has been slow, and the protection of ancestral lands remains a critical concern.

• Corruption and Governance Quality Assessments: Corruption remains a significant impediment to development and good governance in Cambodia.⁶ Transparency International's National Integrity System assessment highlights a weak integrity system despite some legal frameworks being in place. While the government has initiated reforms, concerns persist about the political will to fully eradicate corruption, which often impacts land rights, rule of law, and fair economic competition.⁷

Border and Territorial Issues

• Thailand Border Dispute Management and Resolution: The long-standing border dispute with Thailand, particularly around the Preah Vihear Temple, has seen periods of military confrontation but is now largely managed through bilateral mechanisms. The 2013 ICJ clarification on Preah Vihear provided some legal clarity. While Joint Boundary Commissions exist, full demarcation of the 817 km land border remains a slow process due to differing interpretations of historical maps and nationalist sensitivities. Recent, smaller-scale skirmishes (like the one in May 2025) indicate the enduring sensitivity of undemarcated areas.⁸

• Maritime Boundary Negotiations with Vietnam: Cambodia and Vietnam share a complex historical relationship, and negotiations over their maritime boundary in the Gulf of Thailand are ongoing.⁹ While some progress has been made on land demarcation, the maritime boundary remains largely undefined, which has implications for resource exploitation and security.¹⁰

• Cross-border Crime and Security Challenges: The extensive land and maritime borders present challenges related to cross-border crime, including human trafficking, drug smuggling, illegal logging, and wildlife trade.¹¹ Both governments engage in bilateral cooperation to address these issues, but enforcement remains difficult due to porous borders and, at times, complicity. The rise of online scam operations, often involving foreign nationals, near border areas has become a significant concern.¹²

• Border Community Development and Integration: Developing and integrating border communities is crucial for stability. This includes providing access to social services, promoting economic opportunities through cross-border trade, and addressing the impact of territorial disputes on local livelihoods. Infrastructure projects like the Stung Bot-Ban Nong Ian bridge with Thailand aim to facilitate this.¹³

Regional Integration and ASEAN Role

• ASEAN Membership Benefits and Obligations: Cambodia's membership in ASEAN has provided benefits such as increased trade and investment, diplomatic platforms, and a framework for regional stability. As an ASEAN member, Cambodia is obligated to adhere to the principle of non-interference and to contribute to regional peace and cooperation.

• Mekong River Cooperation Initiatives: Cambodia is a key riparian state in the Mekong River Basin.¹⁴ It participates in various Mekong cooperation initiatives, such as the Mekong River Commission (MRC), to manage water resources, promote sustainable development, and address the impacts of upstream dam construction.¹⁵ The proposed Funan Techo Canal has become a new point of discussion within Mekong cooperation due to its potential impact on downstream water flows in Vietnam.¹⁶

• Regional Economic Integration Participation: Cambodia actively participates in ASEAN's economic integration efforts, including the ASEAN Free Trade Area (AFTA) and broader regional trade agreements like the Regional Comprehensive Economic Partnership (RCEP).¹⁷ These agreements aim to boost trade, attract foreign investment, and integrate Cambodia more deeply into regional supply chains.¹⁸

• Conflict Resolution Mechanism Utilization: Within ASEAN, Cambodia generally favors bilateral approaches to conflict resolution but has utilized international legal frameworks (like the ICJ for Preah Vihear). Its role in ASEAN's conflict resolution mechanisms, particularly regarding the South China Sea, has been influenced by its close ties with China, often leading to challenges in achieving unified ASEAN positions.

Great Power Competition Navigation

• China Relationship Management and Strategic Autonomy: Cambodia has a "ironclad" relationship with China, its largest investor, trading partner, and military aid provider.¹⁹ While this relationship is crucial for Cambodia's economic development, it raises concerns about potential debt dependency, political autonomy, and strategic alignment, particularly regarding issues like the Ream Naval Base.²⁰ Under Hun Manet, Cambodia is seeking to diversify its partnerships while maintaining strong ties with Beijing.²¹

• US Engagement and Development Cooperation: The US continues to be a significant development partner for Cambodia, providing assistance in areas like health, education, and democracy promotion. However, US-Cambodia relations have been strained by concerns over human rights, democratic space, and Cambodia's deepening ties with China, particularly the Ream Naval Base issue.²² Hun Manet has made efforts to engage with Washington, signalling a desire to avoid over-reliance on any single power.²³

• Japanese Investment and Development Assistance: Japan is a long-standing and significant development partner, providing extensive ODA (Official Development Assistance) for infrastructure (e.g., bridges, ports) and human resource development.²⁴ Japanese investment focuses on quality infrastructure and supports a diversified economic base in Cambodia, generally viewed as less conditional than Western aid and less politically tied than Chinese investment.

• European Union Partnership and Values Diplomacy: The EU is a major trading partner, particularly for Cambodia's garment sector, through its "Everything But Arms" (EBA) trade scheme. However, the EU has partially withdrawn EBA preferences due to concerns over human rights and democratic backsliding.²⁵ The EU continues to engage through values diplomacy, promoting democracy, human rights, and good governance, which often creates friction with the Cambodian government.²⁶

Economic Development Strategy

• Diversification Efforts Beyond Garments and Tourism: Cambodia's economy has historically relied heavily on garments, footwear, and tourism.²⁷ The government is actively pursuing diversification strategies, focusing on agro-processing, light manufacturing (e.g., electronics), and emerging digital sectors.²⁸ Special Economic Zones (SEZs) and improved logistics are central to attracting new investment.²⁹

• Infrastructure Development and Connectivity Projects: Significant investments in infrastructure, largely propelled by Chinese BRI projects, are ongoing.³⁰ This includes expressways (Phnom Penh-Sihanoukville Expressway), airports (Siem Reap Angkor International Airport, Techo International Airport), and port upgrades.³¹ These projects aim to improve domestic and regional connectivity, supporting trade and tourism.³²

• Human Capital Development and Education Investment: Recognizing the need for a skilled workforce to move up the value chain, Cambodia is investing in human capital development.³³ This includes efforts to improve education quality, expand access (especially to higher and vocational education), and align curricula with industry needs. However, significant disparities in educational quality and access persist, particularly between urban and rural areas.³⁴

• Environmental Sustainability and Climate Adaptation: Cambodia is highly vulnerable to climate change impacts, including floods, droughts, and sea-level rise.³⁵ The government is increasingly focused on environmental sustainability, promoting renewable energy, and implementing climate adaptation strategies.³⁶ Challenges include illegal logging, rapid urbanization, and managing the environmental impacts of large-scale development projects (e.g., the Funan Techo Canal's potential impact on the Mekong Delta).³⁷

Social Development Challenges

• Poverty Reduction and Inequality Management: While Cambodia has made significant strides in poverty reduction, particularly in the last two decades, inequality remains a challenge, particularly between urban and rural areas, and among different ethnic groups.³⁸ Targeted social protection programs are in place, but more comprehensive measures are needed to ensure inclusive prosperity.

• Healthcare System Development and Pandemic Preparedness: Cambodia has improved its healthcare infrastructure, but challenges remain in access to quality healthcare, particularly in rural areas, and the prevalence of non-communicable diseases.³⁹ Lessons from the COVID-19 pandemic have highlighted the importance of strengthening public health systems and pandemic preparedness.⁴⁰

• Education Quality Improvement and Access Expansion: Despite efforts to increase school enrollment, challenges persist in the quality of education, particularly at the primary and secondary levels. Investing in teacher training, curriculum development, and addressing disparities in access (especially for remote communities and marginalized groups) is crucial.⁴¹

• Gender Equality and Women's Empowerment Initiatives: Cambodia has made progress in gender equality, with increasing female participation in education and the workforce.⁴² However, challenges remain in political representation, leadership roles, and addressing issues like gender-based violence and economic disparities.⁴³ Initiatives aim to empower women and promote their full participation in society.⁴⁴

Synthesis and Forward Outlook:

Cambodia is strategically positioning itself in an evolving regional order, seeking to maximize benefits from its relationships with major powers while navigating the inherent complexities.⁴⁵ Its strong ties with China provide significant economic impetus but test its strategic autonomy and influence within ASEAN.⁴⁶

• Cambodia's Positioning in Evolving Regional Order: Cambodia aims to maintain a pragmatic foreign policy that benefits its national development.⁴⁷ While deeply aligned with China, it is making efforts to diversify its external relationships, including with the US, Japan, and other Western countries, to mitigate risks and secure broader support for its development agenda.⁴⁸ This "hedging" strategy is crucial for a small state caught between competing geopolitical interests.

• Challenges and Opportunities in the Next Decade: The next decade will be critical for Cambodia. Challenges include ensuring sustainable economic growth beyond traditional sectors, managing the impacts of climate change, strengthening governance and combating corruption, and carefully balancing its relationship with China against the need for broader international engagement. Opportunities lie in leveraging its strategic location for trade and investment, developing a more skilled workforce, and further integrating into regional value chains.

• Lessons for Other Transitional Southeast Asian States: Cambodia's experience offers valuable lessons for other transitional states in Southeast Asia. It highlights the potential for rapid economic transformation driven by foreign investment, but also the challenges of maintaining political autonomy and addressing governance concerns amidst strong external influence. The balance between economic growth and democratic development remains a key tension.

• Policy Recommendations for Sustainable Development:

  • Diversify Economic Partnerships: Actively pursue investment and trade with a wider range of countries to reduce over-reliance on any single partner.⁴⁹

  • Strengthen Governance and Rule of Law: Implement robust anti-corruption measures, enhance judicial independence, and improve regulatory quality to create a more transparent and predictable business environment.

  • Invest in Human Capital: Significantly increase investment in quality education, vocational training, and healthcare to build a skilled and healthy workforce capable of driving higher-value economic activities.

  • Promote Inclusive Development: Implement targeted policies to reduce inequality, protect vulnerable populations, and ensure that the benefits of economic growth are widely shared, especially with ethnic minorities and rural communities.

  • Prioritize Environmental Sustainability: Integrate environmental protection and climate adaptation into all development planning, with robust impact assessments and enforcement mechanisms for large-scale projects.⁵⁰

  • Foster Dialogue and Engagement: Maintain open channels of communication with all major powers while actively contributing to ASEAN's collective efforts to promote regional peace and stability.

  • Expand Civil Society Space: Re-evaluate restrictive laws and practices to allow greater freedom for civil society organizations and independent media, as their contributions are vital for good governance and sustainable development.

Cambodia's journey is a microcosm of the broader challenges and opportunities facing Southeast Asia. Its success in navigating these complex currents will not only shape its own future but also influence the dynamics of the wider region.