Hun Sen's coup had a chilling effect on the domestic scene and threatened the entire framework of the 1993 peace agreement. As a result of the July 1998 elections and the power-sharing agreement worked out in November, Hun Sen is now in a stronger position. However, his legitimacy remains significantly lower than it had been during his previous coalition government. Citizens expressed their disapproval of Hun Sen by rioting and protesting after the 1998 elections. Further violence appeared during campaigns for local elections, the first held since independence from France. More than 20 candidates and activists (mostly from the opposition) were killed prior to the February 2002 district voting. The local elections did result in an end to the CPP's complete control of district seats. National elections scheduled for July 2003 were delayed for a month by Hun Sen's command, reportedly so that they would fall on a date equaling his lucky number, 9. Political killings continued into 2003. In January, Sok Chan, an opposition activist, was shot dead; her politician husband and daughter had been murdered in August 2002.
Hun Sen's desire to play kingmaker in the succession of ailing King Sihanouk, in opposition to the choice of Prince Ranariddh, remained controversial. "I don't want to be king, but I have the right to establish the king, to select the king, and to protect the king," Hun Sen asserted. In May 2002, FUNCINPEC, the royalist opposition party led by Prince Ranariddh, was split by the decision of his brother, Prince Norodom Charkapong, to start his own Khmer Soul Party for the 2003 national elections. The Khmer Soul Party would possibly form an alliance with the opposition Sam Rainsy Party (led by reform activist Sam Rainsy).
The Cambodian economy was badly damaged as foreign investment and aid ceased due to political uncertainty following the coup. An aggravating factor was the Asian economic crisis, which lowered demand for Cambodian primary products in neighboring countries. Still dependent on foreign aid for much of its annual budget, Cambodia requested a three-year infusion of us$1.4 billion at the annual donors' conference in June 2002. The international funding bodies demanded conditions for such aid, including judicial reforms, human rights improvements, and action against corruption.
Since 1999, the need to hold the surviving Khmer Rouge leaders accountable for the 1975–79 genocide, in which an estimated two million Cambodians died, dominated news of Cambodia. As the whole Khmer Rouge top echelon, minus Pol Pot who died in 1998, was taken into custody in 1999, international pressure increased for their trial and punishment. The UN called for an international genocide tribunal, with the support of four members of the Security Council. The fifth, China, supported Hun Sen's wishes for a Cambodian trial. Hun Sen was willing to compromise to the extent of allowing foreign judges and prosecutors to participate but would not allow UN control of the tribunal. Suspicions were widespread that without UN supervision, local courts would hold mere show trials weakened by the threat of renewed warfare with remaining Khmer Rouge troops, pressure from China, and the possible implication of members of Hun Sen's own party. After five years of negotiations, in February 2002, the UN, unable to reach a compromise with Hun Sen's government, backed out of the process. Later in the year, a General Assembly vote favored reviving negotiations with Hun Sen.