Why Is Sweden Quitting Cambodia?

The Swedish Ministry of Foreign Affairs’ announcement last Thursday 26 November that it will close its embassy in Cambodia in mid-2021 marks the nadir of a relationship that has steadily declined in recent years, sparked by Phnom Penh’s alleged weakening of democratic conditions since 2017. While Sweden will continue to represent its interests in Cambodia via its embassy in Bangkok, this development can only be viewed as a serious downgrade in relations.

The timing of Sweden’s announcement did not appear to be random. That same week, a mass trial began in Phnom Penh that saw members of the now-banned opposition Cambodia National Rescue Party (CNRP) and other activists appear before a judge, accused of a litany of crimes. Moreover, the 11th Meeting of the Cambodia-EU Joint Committee came to an end on the day after Sweden’s announcement. During this committee meeting European Commission diplomats are believed to have strongly argued that there has been no significant improvement in Cambodia’s democratic and human-rights standards since February, when the European Union decided to partially suspend the country’s trade privileges.

Although the Swedish Embassy has stated that relations between the two countries remain “good,” the embassy closure is consistent with Sweden’s decisions in recent years concerning its relationship with Cambodia. Sweden was quick to cut some aid to Cambodia just days after the CNRP’s forced dissolution in November 2017.

In June, the Swedish embassy announced that it would cut bilateral development aid to the government from the middle of 2021. “The democratic space in Cambodia has been severely restricted in recent years,” Peter Eriksson, Sweden’s International Development Cooperation minister, said in a statement at the time. Development assistance in the areas of education, environment, and climate and all areas other than human rights, democracy, and the rule of law are in the process of being phased out.

The current question among analysts in Phnom Penh is whether Sweden is an exceptional case or if it will be the first EU state to speak with its feet?

Stockholm is not among Cambodia’s largest providers of aid. It did allocate roughly US$470.6m between 1997 and 2017, ranking third among EU donors after France and Germany. Via its development arm, the Swedish International Development Agency (SIDA), Sweden has a lengthy track record supporting Cambodia’s growth and development. 

Sweden’s decisions to redirect aid and close the embassy follow on closely from the EU’s removal of Cambodia from the list of countries receiving trade preferences via Brussels’ Everything But Arms (EBA) initiative. EBA is a trade scheme that grants favoured countries zero-tariff trade. The initial imposition of duties on around a fifth of Cambodia’s exports in August came as a serious blow to its vital garment industry, a key contributor to GDP growth and employment in a relatively undiversified economy. The EU bloc has historically been the largest purchaser of Cambodia’s garment exports.

The decision to review Cambodia’s EBA status was led by then-European Commissioner for Trade, Sweden’s Cecilia Malmström. Decision-making in Brussels is consistently opaque and attribution of agency to any particular country or actor is always challenging. However, at least one senior European diplomat in Phnom Penh has privately claimed that EBA-removal was very much a Swedish-led initiative.

As Phnom Penh worked to preserve its EBA status it had hoped that Hungary, the EU’s internal bête noire, would ride to the rescue and be a loyal friend to Cambodia. Whatever, if any, commitments Budapest may have made to prevent EBA removal were, however, clearly ineffective. 

Early last month, Hungarian foreign minister Péter Szijjártó arrived in Phnom Penh to re-open Hungary’s embassy after it had been closed for decades. However, any PR gains quickly turned into what is now termed the “November 3 Incident”. Szijjártó tested positive for Covid-19 the day after visiting Phnom Penh, forcing much of Cambodia’s cabinet, including Prime Minister Hun Sen, into quarantine for several weeks.

The Cambodia-Hungary relationship could be read in two ways. Either Cambodia has found a solid ally within the EU and, although this new friendship got off to an embarrassing start, Budapest could become an effective lobbyist for Phnom Penh. Or (more likely) Phnom Penh has picked up a fairly uninfluential friend in Hungary and just lost a much more pivotal partner in Sweden. There’s even an odd symmetry: Hungary reopened its embassy at the start of November; Sweden announced its embassy’s closure at the end of the month. 

The current question among analysts in Phnom Penh is whether Sweden is an exceptional case or if it will be the first EU state to speak with its feet? What is clear, however, is that Cambodian foreign policy is not succeeding in ways it could. Even after the EBA cut in February, Phnom Penh’s ties in Europe are continuing to fray.

Rather than revivifying relations with states that have taken a hard line on human rights and democracy (like Sweden), Phnom Penh apparently sought to use links with Hungary to work around the EU’s position. Perhaps Cambodia is trying to emulate China’s approach to the EU and make alliances with one of the bloc’s more divisive members. Like China, Cambodia appears to have been unsuccessful in these efforts.

2020/200