By: Our Correspondent

As the Cambodian government prepares to finalize its draft Law on Associations and Non-Government Organizations (NGOs), which has faced severe criticisms from international rights groups, Cambodia’s civil society – one of Asia’s most vibrant – risks taking a giant leap backwards.

The draft NGO law, if passed, might also signal that Cambodia is falling further into China’s orbit, as a growing reliance on Beijing for aid and investment may have rendered Prime Minister Hun Sen more defiant toward US and international calls for better governance.

The draft law is believed to heavily regulate which NGOs can operate in Cambodia and the activities they can conduct. Cambodia has been extremely dependent on Western aid since the end of the Cambodian conflict in the early 1990s. That aid has often come with conditions for further democratization and human rights progress. But in recent years, China has since emerged as Cambodia’s biggest investor and a major aid donor, reducing the country’s reliance on traditional donors. China has invested over US$9.1 billion in Cambodia since 1994. This helps explain why the Cambodian government has felt free to rebuke international critics of the draft NGO law, including U.S. ambassador William Todd.

The government has refused to release the draft law for public comment. But Maina Kiai, the UN special rapporteur on the rights of freedom of peaceful assembly and of association, told the Phnom Penh Post on June 17 that the law would require all NGOs to register with the government and remain “politically neutral.”

The draft law also contains a vaguely worded phrase that would allow the government to refuse to register groups that “jeopardize peace, stability, and public order or harm the national security, national unity, culture, and traditions of Cambodian society,” which is strangely similar to a phrase in China’s pending draft NGO law that warns foreign organizations against endangering China’s national unity, customs, and public interests. That clause gives the Cambodian government significant leeway to shut down any activities within civil society that it may deem anti-establishment.

The United States, along with the opposition Cambodia National Rescue Party and the international community, has been sharply critical of the draft NGO law. Ambassador Todd said in an op-ed that it would hurt Cambodia’s international image, and called on the government to release a copy of the law and have a meaningful conversation about the legislation with civil society. Foreign Minister Hor Namhong, however, rebuked Todd’s comments as “extremely insolent.”

Human rights concerns and the government’s attempts to curb democratic participation remain the biggest obstacles in advancing bilateral US-Cambodia ties. US investments in Cambodia have been largely funneled through garment suppliers, and the two countries have very limited military exchanges. While the US government does provide some direct aid to Cambodia, it flows mainly to NGOs. Passage of the NGO law could potentially limit receipt of US aid and would signal a further decline of U.S. influence in Cambodia.

Meanwhile, China-Cambodia relations will likely continue to flourish. Hun Sen, who once called China “the root of everything that is evil” because of its support for the genocidal Khmer Rouge, has changed his tone. This is primarily because China provides almost a quarter of foreign investment in Cambodia, or about US$322 million in 2013, and funds a military institute that trains about half of Cambodia’s officers. Chinese aid and investments, which are not conditional on progress in human rights, have allowed Hun Sen to continue restricting civil rights and have encouraged the Cambodian government to adopt China’s development model and governance standards.

The US and other like-minded governments have invested significant resources in building a democratic society in Cambodia. Should Washington decide to reduce its aid to Cambodia in response to the country’s deteriorating political conditions, it will only send Cambodia further into China’s embrace. Striking a balance in US engagement with Cambodia is vital both to counter China’s growing footprint and help keep Cambodia on the path to greater democracy.

John Juenemann is a researcher with the Sumitro Chair for Southeast Asia Studies at the Center for Strategic and International Studies. This article appeared originally in the CSIS blog cogitASIA.