Asia File: Hope despite Khmer Rouge

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WHAT has gone wrong in Cambodia? A year ago international peace-keeping enjoyed a rare and unexpected success: after the most expensive United Nations operation in history, 90 per cent of Cambodians voted in a free and fair election, ignoring threats from the murderous Khmer Rouge.

Now the Khmer Rouge holds more territory than it did then, and is making its usual outrageous demands before peace talks due to begin today in the North Korean capital, Pyongyang.

The miracle of the election was followed by the restoration of the monarchy and the formation of a coalition government with greater legitimacy than any other in the country's history. A few weeks ago Phnom Penh's forces seized the western town of Pailin, the headquarters of the Khmer Rouge and its main source of income, with gem mines and tropical timber forests. For the first time in more than 50 years Cambodia - and South-east Asia - had the prospect of peace.

That moment of hope was brief, however. The guerrillas withdrew until they could seize Pailin back from the over-extended army. Their advance was halted only nine miles short of Battambang, the country's second city. The government claims to be pushing the insurgents back, but any belief that it can defeat the Khmer Rouge has evaporated.

Cambodia's ever-changeable monarch, King Sihanouk, has expressed despair at the failure to unify the country. Both he and the second Prime Minister, Hun Sen, say the chances of the peace talks getting anywhere are very small. But if the triumph felt after the election was exaggerated, so may be the present mood of depression.

Cambodia continues to be a small country under pressure from its more powerful neighbours, particularly Thailand, whose civilian government is unable to prevent its commanders from doing deals with the Khmer Rouge. The trauma of Pol Pot's genocidal reign will take many more years to fade away.

Royalists won the most votes and seats in the election, but they are still struggling to assert control over a state apparatus dominated by the former Communist incumbents, who in their turn remain obsessed with eliminating their 'brother enemy', the Khmer Rouge. Corruption and banditry are as bad as ever, keeping Cambodia among the poorest countries on earth.

But at least a semblance of normality and international respectability has returned. The World Bank and International Monetary Fund have resumed funding, and the economy has grown by around 7 per cent in each of the past two years, albeit from a very low base. The Khmer Rouge is a lurking nightmare, but nobody seriously believes it can seize power.

Cambodia is moving in the right direction, however slowly, and there is something to show for the dollars 2bn ( pounds 1.3bn) spent on the UN peace mission.

THE editor in absentia of the Sunday Times, Andrew Neil, must be bemused at how closely his movements are being followed by senior figures on the other side of the world. Malaysia is hinting it will soon drop its embargo on British companies bidding for government contracts, imposed after Mr Neil's newspaper reported that a British company had been prepared to offer the Prime Minister, Mahathir Mohamad, a bribe.

Dr Mahathir said this week the British press had become more responsible in its reporting on Malaysia, especially since Mr Neil had been transferred to New York. 'Actually, he has been dismissed,' he said. This may be news to Mr Neil, who expects to return to London after seven months hosting a television programme in the US.