Economic dependence

The foreigners are engaging in kidnapping and money laundering. Communities are complaining that the foreigners are engaging even in low-skilled work, taking jobs away from locals. 

Often rowdy, the foreigners are currently creating an economic boom in the host city. But locals warn that if current trends continue, the foreigners will soon patronize their own restaurants and related establishments, whose supplies come from their own groceries, which import their merchandise from their homeland.

Demand for housing by the foreigners has driven up real estate prices by nearly tenfold, crowding out locals who cannot keep up with the rental surges.

No, these are not POGOs, or Philippine offshore gaming operators. These are Chinese who are now heavily engaged in gambling operations in Cambodia, particularly in a southern coastal city called Sihanoukville that has gained the moniker “Little Macau.”

See, our problems with POGOs are not unique.

*      *      *

Some quarters call Cambodia a virtual vassal state of China. The Hun Sen government will likely see that as unfair. But Chinese are the biggest foreign investors in Cambodia, and they operate 48 of the 62 registered casinos in Sihanoukville.

I read a long article about Sihanoukville in the Bangkok Post during my weekend visit to Thailand. Titled “Casino Colony,” the story of Sihanoukville is strikingly similar to the POGOs, although Chinese gaming is far more extensive in Cambodia, with casinos and related enterprises.

Amid concerns raised by his compatriots, Cambodian Prime Minister Hun Sen has ordered a stop to online gaming in his country, saying it was being used by foreign criminals for extortion. But the casinos continue, and soon, according to an article in July in The Wall Street Journal, the Chinese will have access to a Cambodian naval base near Sihanoukville. Hun Sen has called this story “fake news.”

It’s unclear if the message from the Chinese foreign ministry, directed at Manila, has reached Phnom Penh – that the gambling “tumor” in all its forms including online and overseas is illegal in China and should be stopped.

I attended an Asian forum in Bangkok, and several of the foreign participants expressed concern about the Chinese being granted access to bases – or even building them – in countries whose economies have become heavily dependent on China.

In the Philippines under China’s bosom buddy Rodrigo Duterte, Beijing doesn’t need access to bases. It already has military facilities all over the South China Sea, including Panganiban or Mischief Reef off Palawan. The reef, now an artificial island, is one of the areas over which the Philippines was specifically awarded sovereign rights by the Permanent Court of Arbitration in The Hague.

The multistory structure flying the Chinese flag that now sits on Panganiban started out as a deception – a set of huts on stilts that Beijing insisted were merely shelters for fishermen. Those huts, built shortly after the shutdown of the US bases in the Philippines, heralded the start of a creeping Chinese occupation of the South China Sea.

Now Beijing is brazen enough to send its warships unannounced, with their Automatic Identification Systems switched off in violation of international maritime protocols, into Philippine territorial waters in Tawi-Tawi.

With friends like these… As one Philippine official commented, before he joined the Cabinet: What’s worse than being a lackey of the United States? Being a lackey of China!

*      *      *

Some of the forum participants noted that in Europe and elsewhere, there is increasing discussion not about gambling operations or the South China Sea, but on whether they should rely on Chinese 5G technology, considering that President Xi Jinping has made no secret of his hope of seeing his country become a cyberpower.

The debate is unfortunate, one participant pointed out, because 5G technology is in fact superb.

Apparently sensitive to criticism that it is putting countries in a debt trap, Beijing has also agreed to renegotiate several of its loans to developing economies.

While Chinese tourists are visiting the casinos of Sihanoukville in droves, the Bangkok Post reports that there are locals who are concerned that the city will become “a victim of Chinese economic colonization.”

As Cambodia is starting to find out, the Chinese influx is not altogether a boon to the Sihanoukville economy. If the Chinese restaurants in Sihanoukville are like the ones that have sprouted along the Alabang-Zapote road, where Chinese don’t even sit down to eat at a table but simply pick up the food in styro packs to take home, they may be importing even frozen dim sum from the mainland.

*      *      *

The world’s second largest economy has not hesitated to wield its economic and geopolitical clout when it feels slighted. It froze ties with Norway for six years, and may block the United Kingdom’s participation in the East Asia Summit.

You remember how China froze its importation of Philippine bananas, ostensibly because of some fruit infestation, when the country went to the arbitration court. Under Duterte, Philippine bananas have miraculously recovered in the eyes of Beijing.

Maybe the infestation will return and Philippine bananas will look less than perfect once Duterte makes good on his promise to raise the arbitration ruling with Xi when they meet in China in a few days.

The prudent thing to do is not to put all our bananas in one basket. And to avoid becoming overly dependent on any economic benefits that might be derived from close engagement with the Chinese.

Dependence is tantamount to an addiction. President Duterte surely understands the wages of addiction, and the importance of avoiding it.