The Khmer Rouge abolished money - now they want ours

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Peter Allport in Pailin, Cambodia where Pol Pot's 'Brother Number Two' has brought order and now wants orders

Ieng Sary was second only to Pol Pot when the Khmer Rouge declared "Year Zero" in Cambodia and slaughtered over a million people. Now he says he wants to do business with you.

If this grandfatherly figure in a grey safari suit turned up anywhere outside Cambodia, he could face trial for crimes against humanity. But in his north-western stronghold of Pailin, whose gem mines and tropical hardwoods have financed the Khmer Rouge since it was driven from power in 1979, he says: "We want the West to come and invest here. I know the Western countries are now looking at the situation in Pailin."

The town itself is a symbol of how far the Khmer Rouge has changed from the austere Maoists who abolished money and murdered anyone who had the remotest connection to capitalism. Young cadres just arrived from the jungle in Chinese-made lime-green fatigues look wonderingly at Pailin's first brothel, which opened two months ago. "There is talk of closing it down already," one soldier said. "But the people who say this need it too."

Pailin's inhabitants enjoy a prosperity well beyond that of most Cambodians. Restaurants serve Dutch beer, American cigarettes and Coca-Cola. The medical centre just off the main street is well-stocked, the pool halls well-patronised. New buildings are under construction, and at the official Pailin guesthouse the rooms are clean and guests are provided with fans at the end of their bed.

Children wearing blue and white uniforms head to school every morning at 6.45am. Soldiers are generally forbidden from carrying weapons within the town itself. In contrast to the capital, Phnom Penh, where gunfire can be heard most nights, Pailin is ordered and safe. But this apparent prosperity and stability disguises a bitter divide within the Khmer Rouge, which has brought fighting within 20 miles of Pailin.

A year ago Ieng Sary broke with the movement, taking thousands of troops out of the fight against the Phnom Penh government, itself an uneasy coalition of royalists and former Khmer Rouge cadres. His creation of a supposedly "moderate" Khmer Rouge was the catalyst for upheavals on both sides: among the rump Khmer Rouge, it made Pol Pot more paranoid than ever. He had his long-serving security chief, Son Sen, killed with his family on suspicion that he too was about to defect. But that provoked the one-legged Ta Mok, a brutal commander known as "the Butcher", to overthrow Pol Pot. After a show trial he was sentenced to house arrest for life.

From his jungle base at Anlong Veng, Ta Mok continues the fight against the government, which was also disrupted by the split in the Khmer Rouge. Suspecting that the defections would bolster the royalists, with whom he had reluctantly shared power since UN-supervised elections in 1993, Prime Minister Hun Sen staged a coup against them. A few remnants of the royalists, never the most powerful military force in Cambodia, have joined Ta Mok, but Hun Sen is now unquestionably the most powerful man in the country.

Ieng Sary acknowledged that last week, when he went to Phnom Penh for the first time in 18 years and described himself and his men as being under government control. In reality he has probably agreed to remain neutral in the conflict, as long as his authority over Pailin is undisturbed.

The close ties between the government and Ieng Sary's breakaway Khmer Rouge can be seen on the streets of Pailin and even in Battambang, 60 miles away, which is under Phnom Penh's control. Although former Khmer Rouge guerillas have been issued with new Royal Cambodian Armed Forces- issue uniforms and boots, such is the power of the movement in the region that many soldiers still wear their old lime-green battledress openly in both towns.

Even this remote corner, however, has been affected by the economic troubles of south-east Asia. Thailand, the Khmer Rouge's traditional business outlet, is in crisis, and Ieng Sary is looking further afield. His administration has established a bank through which it can conduct international transactions. It has a branch in Battambang, with a foreign and gold exchange office on the second floor that is patronised by Thai gem traders. "We want everyone to come here. Americans, Australians, everyone," said one official in Pailin.

Doesn't Ieng Sary have a credibility problem in the West, though, when the Khmer Rouge used to kill anyone "contaminated" by Western ideas? "The DNUM [his movement] wants peace, national reconciliation, and foreign investment," repeats the man once known as Brother Number Two.

There is little prospect, however, of peace with his former "brothers". The split between the "moderate" and the "hardline" Khmer Rouge was bitter, and the two Khmer Rouge strongholds are now enemies, a rivalry that sometimes ignites into warfare. Ta Mok has already ordered hardliners fighting government troops in Samlot, 20 miles from Pailin, to attack his fiefdom, Ieng Sary said.

"We are not going to continue war but in the case of war we will have to resolve the problem," he went on. "We are discussing this with the government. If [they] attack us we will join the government ... we have enough troops to push them back if they attack us."

As Ieng Sary knows, however, any active military alliance between Pailin and Hun Sen would only set the stage for more bloodletting in Cambodia. "I want to avoid being drawn into any such conflict," he says. "I do not want to choose sides."

It's bad for business.