Cambodia seeks to tap into world rubber market
Kompong Cham, Cambodia
Trickling rivulets of milky sap, tapped by helix etchings around a silvery-barked trunk, are oozing from more and more rubber trees in Cambodia. To the hard-pressed regime in the country's capital, the flowing latex is like liquid gold.
Exports of natural rubber, double what they were just five years ago, have become crucial in helping the communist-led government pay for a smoldering guerrilla war, as well as for consumer goods that help it win support from peasants.
Exploitation of former French-owned rubber plantations - pockmarked by American bombs in the early 1970s and later mismanaged by the Khmer Rouge - has expanded rapidly in Cambodia (Kampuchea).
Rubber has become the top export earner for the Vietnam-backed People's Republic of Kampuchea. The PRK, led by Khmer Rouge defectors, was set up after Vietnam's 1979 invasion, and, as a result, is isolated from most trade with noncommunist nations. Rubber has become its lifeline to the world economy.
Rubber exports have also bonded the PRK with its chief buyer, the Soviet Union. Moscow and its East European allies have a tight grip on Cambodia's rubber exports, taking about 80 percent. Moscow hopes to lock into another decade of exploiting the rubber plantations French colonists set up more than 60 years ago on Cambodia's rich red soils.
``We are now looking at prospects for another 10-year agreement on rubber,'' a Soviet diplomat in Phnom Penh says.
Even though Moscow is pressing for a political solution to the complex Cambodia stalemate, upsetting its rubber imports by a change in Phnom Penh's government would not appear to be in its interest.
Last year, Moscow and its allies purchased more than $20 million in rubber from the PRK. In return, the PRK was allowed to purchase the same amount in Soviet-bloc goods. This arrangement, part of a 1983 rubber agreement, includes Soviet investment in two rubber-processing plants and restoration of about 100,000 acres of plantations.
Since 1980, the Soviet Union has invested about 55 million rubles ($35 million) in Cambodian rubber, say PRK officials, mainly at the country's two prime plantations, Chup and Krek, in Kompong Cham Province.
Until now, Soviet-bloc goods, such as textiles and tractors, have been important for the PRK in showing the largely rural population that it alone can provide a better life than the three anti-Vietnamese guerrilla factions, especially the one led by former ruler Prince Norodom Sihanouk.
But lately, PRK officials have privately complained of being too restricted by the Soviet rubber pact, not quite saying that the country has become a ``rubber republic,'' but nonetheless looking to diversify its customers.
``The Soviets are not paying market value for the rubber,'' says an informed Australian diplomat.
The Soviets take 40 percent of Cambodia's rubber. Another 40 percent goes to Bulgaria, Czechoslovakia, Hungary, East Germany, Poland, Cuba, and Laos.
At present, world rubber production is dominated by Malaysia and Indonesia, both of whom sell to the Soviet Union. Last year, Cambodia provided less than 10 percent of the Soviets' total rubber imports.
``But if we are successful,'' says a Soviet diplomat in Phnom Penh, ``our rubber trade with Cambodia will increase three or four times.''
Soviet designs on Khmer rubber are just a part of its rubber strategy in Southeast Asia. In 1985, Moscow and Hanoi agreed to greatly expand rubber planting by more than 750,000 acres before the end of the century. Diplomats in Hanoi say the Soviets want to make Cambodia and Vietnam their main sources of tropical products, decreasing dependence on noncommunist nations.
Eager to buy higher-quality goods from noncommunist nations, the PRK decided this year to increase its rubber sales to noncommunist nations. Major buyers are companies based in Singapore, Hong Kong, and Japan, says Suk Bun, director of the Kampuchean Import-Export Corporation. Such sales, begun in 1983 and making up 20 percent of rubber exports, are planned to reach 30-35 percent of exports by next year.
``We need capital and spare parts,'' says Suk Bun. ``And we're not satisfied with what we can buy with the credit from the Soviets.''
World-market prices for rubber have recently risen, due to a high demand for medical rubber gloves and other rubber prophylactics used for protection from AIDS. This has made the Soviet rubber deal look less attractive, and has raised the issue of how to improve the PRK's second-rate rubber quality in order to appeal to world markets.
In ``Sihanouk's time [1960s], Cambodian rubber was the best in the world,'' says the Soviet diplomat.
In 1985, the PRK's communist leaders set a goal of achieving the same level of productivity as during Sihanouk's time, aiming to reach 80,000 tons a year by 1993. Last year's production was 14,068 tons.
Such a massive leap would take new incentives to workers. Safe from being fired for idleness, fewer than 80 percent actually perform the daily tasks of tapping trees, prefering to earn money from private food lots, says Chrem Myser, an official at Chup. Up to now, lectures on socialism and appeals of nationalism were thought to be proper motivators.
But this year, bonuses were raised five-fold under new profit-and-loss procedures. ``We pay more attention to rubber workers because they are now the main production force of the economy,'' says Kompong Cham Governor Press Samoeur.
As a result, production has doubled almost instantly, Mr. Myser says. ``We tried to get them to love the trees and serve the nation,'' he says, ``but we found out they don't really work for ideology.''