Saturday, December 26, 2009

Success Stories

Quite a few Westerners live in Cambodia. I am always amazed that comparatively many foreigners chose to come to Cambodia and work here. Of course, a good number works for NGOs, embassies, and the few large multi-national corporations operating in Cambodia. Another surprising feature is the number of bars owned and operated by foreigners in Phnom Penh; unfortunately, many of them cater to the prowling sex visitor. Normally one finds those bars in resort towns, so Sihanoukville and Siem Reap are no exception there, but then Phnom Penh is the capital where all foreigners usually arrive first. English being the language of choice these days in Cambodia, like everywhere else, English-language teachers also abound here.

However, there is a small group of foreigners in the small-business sector that discovered a niche in the hospitality business and worked their ideas into a huge success. I am talking about the group that owns and operates three boutique hotels in Phnom Penh. As it happens, they are in business with my Khmer friend and business partner. The whole thing started with one Frenchman, let’s call him Jean, opening the Mekong River Cruise company in Phnom Penh in 2002. First, he had worked for a Cambodian tour operator together with my Khmer friend. Then a French tour operator approached him with the idea of operating the first Mekong Cruise ship. So he left to work for the tour operator and started the Compagnie Fluviale du Mekong. Since it’s always hard for a Westerner to do business in Cambodia without any Khmer help he asked my friend to come and work with him.

They converted a traditional Khmer riverboat into a luxury vessel with five air-conditioned cabins, replete with bar and restaurant, that was to sail from Tonle Sap to Saigon. At the time I was skeptical. As it turned out my skepticism was well justified, as then the huge tsunami hitting Thailand brought an abrupt halt to tourism to the region. My friend left the company to seek work elsewhere; Jean stuck it out but didn’t receive pay from the mother company. He got shares instead. Before coming to Cambodia Jean had spent most of his time in Russia due to his father’s job. From that time he knew a couple of other expats there who were looking to go someplace else. Jean sort of liked it in Cambodia and described it as an easy place to live for French people. In short order two other French guys, Claude and Pierre (all names changed), followed from Russia to see for themselves.

They putzed around for a while looking for a worthwhile business. In the meantime, the Mekong cruise became successful after the effects of the tsunami had worn off. Additionally, people booking such a tour are different from the usual package tourists in Thailand. So they thought prospects for a small hotel were not too bad. They just didn’t have enough money for it.

Claude had bought some land in Kep hoping to use it for farming. But just at that time, the real estate boom was taking shape, and he decided to sell the land. He made a nice profit, which he now used to open his first boutique hotel, the Pavilion. The business model is practically very simple. He rented a French-colonial villa, which was somewhat in disrepair. He contracted with the owner for a ten-year lease. He would renovate it into a small guesthouse with originally 10 rooms (which was eventually extended to 14 rooms through the addition of another nearby villa), a lush tropical garden with swimming pool and small bar/restaurant. He would pay rent but keep all the proceeds from the hotel. (Pictures of the property can be viewed at their website at http://www.thepavilion.asia/). Another boutique hotel followed quickly, the Kabiki. While the Pavilion caters to Western couples in their twenties to forties, the Kabiki is geared towards families. They are both similarly furnished, a mixed modern Khmer/Western style. What’s most appealing to guests from all over the world is their well-landscaped tropical garden right in the middle of Phnom Penh – like a serene island. Another big plus for them was their location. They are a stone’s throw from the Royal Palace and the riverfront. These two hotels became such a smashing success, that they decided to open one more, the Blue Lime (http://www.bluelime.asia/). First I wondered at the name Why ‘Blue Lime’? The ‘blue’ only serves to set it apart and catch people’s attention who might otherwise not notice the name. This way it certainly stands out. They followed the same business model. Renting, long-term lease, renovating, premium location, tropical garden, swimming pool. All three have free wi-fi internet access. The special feature of the Blue Lime, however, is their concrete furniture, which to some might seem ultra-modern and too cool, but it also became an instant success.

Many tried to imitate and replicate their style, but no one with as much success as these three guys. Additionally, the driving force among the three, Claude, opened a very popular restaurant, the ‘Elsewhere’. And just recently, he added another restaurant in front of the port, the Chinese House, which is mostly used for functions and special events. They recently hosted a Cambodian film festival there. When visiting Phnom Penh, try not to miss this. It is worth seeing for its traditional Chinese style alone.

This enterprising relatively young man, he is in his early forties, is also planning an eco-resort on Koh Rong island, and an eco-swimming hotel in Phnom Penh. The pavilion website has links to all these. Overall, their endeavors, efforts, and entrepreneurship are amazing and admirable. They came here with little money, parleyed it into a little more, but rather than take it back home, they re-invested it in Cambodia, creating jobs for about 150 people (and they pay well above average wages, which makes all their employees very happy), and helped re-build a beautiful part of Phnom Penh.

Now what became of Jean, the first Frenchman who lured the other two to Cambodia? He left the Mekong Cruise company once it was up and running, starting to make money. He cashed out his shares with the French tour operator and opened a boutique hotel or guesthouse in Battambang. This hotel was just as successful as the Phnom Penh properties (http://www.lavilla-battambang.com/). The only problem Jean had with it was that he felt kind of lonely out in the provinces, missing his friends and the busy life in Phnom Penh. He finally sold it about 15 months ago to another Frenchman. But what did he do with the proceeds? He is opening another small hotel in the province – this time in Stung Treng; also an old French colonial building, again following this very successful business model.

Now there are many boutique hotels in Phnom Penh, but none can beat the three owned by this group. Mostly they are more expensive (Le Quay, the Bourgainvillier), or they don’t have the same standard. The French group’s hotels charge anywhere from $40 to $75 a room, which keeps the riff-raff out but still attracts normal, mostly European, guests who really have been getting a bargain with their strong Euro. During the slump in tourist arrivals, theirs were the only hotels in Phnom Penh that still ran at an average occupancy rate of 90%. Try to book a room and you will find out how popular those hotels are.

All three posted a sign, ‘Sex Tourists Not Welcome’, which elevates them from almost all other similar-priced hotels and certainly raises them above the level of all those cheap flophouses. They do not allow their guests to have female company stay in their room. Some people complained that they discriminate against Khmer women, which is, of course, complete nonsense. If a guest makes a reservation for two people, and the female companion is Khmer or of another Asian background and they have an ID-card or passport, they can stay at their hotels without any problem. What they don’t want is those single male travelers who come to Cambodia for just one purpose.

They once opened their properties (swimming pools) to the local expat community. Soon they were overwhelmed with pool visitors, which brought in a good dollar at the bar, but the guests started complaining. Now they started charging $5; the guests are among themselves again.

There is a similar success story in the hotel business – this time one of the few overseas Khmer who returned and turned his efforts into an admirable enterprise – Loo Meng who opened the Amanjaya, the Almond, and the Anise hotels, and one of the best restaurants in Phnom Penh, the Malis (or Melis, which is Khmer for Jasmine).

Monday, December 21, 2009

To Grant or Not to Grant Asylum

That is the question (to paraphrase Shakespeare). On the surface it would appear that Cambodia again tarnished its international image and standing by sending back the 20 or so Uighurs. Of course, all human rights organizations, the UN, the U. S. administration, and whoever else felt sufficiently outraged, protested vehemently against the repatriation of the Uighur refugees. It is also clear that this step by the Cambodian government is not so hard to understand in the face of China’s Vice Premier Xi’s visit to Cambodia. After all, China is the single most significant donor for Cambodia. In comparison both Japan’s and Korea’s aid pales.

Nevertheless, one could argue that the return of the refugees could at least have been postponed until after a first hearing on the merits of their status, and personally, I do believe that would have been the right way to follow. However, realpolitik doesn’t follow human rights principles, as can be seen throughout the world, not only in developing countries but especially in the industrialized world, which is still struggling to come out of a deep recession. Economic interests have traditionally defeated human rights interests.

President Obama’s visit to China did not touch on the sensitive subject of human rights in China at all. With China being the largest U. S. T-bill holder, such an argument would be hard to make, now wouldn’t it? Therefore, it is hardly surprising that small Cambodia could not withstand China’s pressure either; and it got slammed for it from all sides. The spokesman for the U. S. State Department even said this would affect their future aid and their relationship with Cambodia. Whom is he trying to kid? We all know this is for public consumption. Nothing will change.

There are some bloggers who even say why blast Cambodia and not China? Here is an interesting post I found on the subject.

Quote
Anonymous said...
I am a US citizen, I live in the US, but I disagree with the US government on this point. These people enter Cambodia illegally, and thus it is lawfully to return them back to the country of origin. Even the US return thousands of Mexican who illegally enter the US.

Another question is, why are these people came all the way from China and stay in Cambodia. Why don't they stop in Vietnam, Lao, Thailand or even go to Muslim country like Malaysia or Indonesia, why stop in Cambodia!
So now Cambodia is to blame for this. This is unfair.

Why don't the US protest with China, why blame Cambodia. May be the US dare not challenge China because they are borrowing billions from China!!

As for refugee treaty, what treaty!?

When Thai dump Cambodian refugee into mine field at Phnom Dangrek, where are the International, where the UN, and the Human right group?!

Thousands of Cambodian refugees were massacred, machine gun by Thai soliders, thousands more died in mine field, and thousand more die of starvation in Phnom Dangrek. So one come to help us, none.

Later UN estimate 30,000 Cambodian refugee died at Phnom Dangrek alone, and that not counting Thai Shelling Cambodian refugee camps a long the border, Thai rape and murder thousands more who try to enter Khao I Dang camp.
Unquote

The question posed by this poster has some validity. It is not only he who is wondering why those Uighurs came to Cambodia; a country that must be known even in their remote province for not having the most stellar human rights record. What comes to mind in terms of an explanation is that there used to be and probably still are a good number of illegal Chinese immigrants in Cambodia. Word might have reached Xinjiang province that Cambodia is an easy country to get into and to stay. The mistake they probably made is to contact the UNHCR office and ask them to prepare their application for asylum. Maybe they should have followed the example of their fellow countrymen and just tried to blend in with the pretty large Chinese community, or maybe they should have tried to get to Thailand. I wonder how that country would have dealt with them. But, of course, as Muslims they would probably have stood out and raised questions from the local authorities. Any way you look at it, this was an ill-conceived adventure.

The Chinese government branded them criminals. They were refugees from the ethnic riots in that province. A riot is an offense in any country, regardless of who provoked it. Frankly, I have no idea whether this would put them under the protection of the Convention.

The Convention states:

Article 1

DEFINITION OF THE TERM "REFUGEE"
A. For the purposes of the present Convention, the term "refugee" shall apply
to any person who :

(1) Has been considered a refugee under the Arrangements of 12 May 1926 ! and 30 June 1928 or under the Conventions of 28 October 1933 and 10 February 1938, the Protocol of 14 September 1939 or the Constitution of the Internationa] Refugee Organization ;

Decisions of non-eligibility taken by the International Refugee Organ ization during the period of its activities shall not prevent the status of refugee being accorded to persons who fulfil the conditions of paragraph 2 of this section ;

(2) As a result of events occurring before 1 January 1951 and owing to well-founded fear of being persecuted for reasons of race, religion, nation ality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country ; or who, not having a nationality and being outside the country of his former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling to return to it……………………

AND

F. The provisions of this Convention shall not apply to any person with respect
to whom there are serious reasons for considering that :
(a) he has committed a crime against peace, a war crime, or a crime against
humanity, as defined in the international instruments drawn up to
make provision in respect of such crimes ;
(b) he has committed a serious non-political crime outside the country of
refuge prior to his admission to that country as a refugee ;
(c) he has been guilty of acts contrary to the purposes and principles of the
United Nations



The foregoing is probably the reason the U. S. stated that Cambodia ‘appears’ to have violated its obligations under the Convention. Well, those people might have committed crimes against peace as the article states. Yes, I know, surely not the babies, but their parents must have felt a need to flee from the Chinese authorities, and yes, I also know the Uighurs are a persecuted minority.

Nobody rushing to judgment on this knows the exact background of this whole story. I would also like to remind people in this context that 6 Uighurs were kept in Guantanamo for over 7 years although they were cleared of all charges. They were finally released this year and now reside in Palau. How is that for adherence to the principles of human rights? Who was that talking about the Convention, Janus?

When I first read about this, it was clear right away in my mind that the Uighurs would be returned. This is unfortunate, and we all would have wished for a different handling of the matter, and the Cambodian government could have for once basked in the applause from its harshest critics. However, the consequence would have been a serious disruption in their relationship with China. Therefore, the decision was a foregone conclusion. No matter how many people cry foul, this is what our world is like – materialism reigns. Sad but true.

Friday, December 18, 2009

‘Tender Signs of Recovery?’

At the end of October I reported on the situation of the the real estate market as I personally see it. This year we saw a longer than normal rainy season, which aggravated the sales of properties even more. Traditionally, as we all know, sales start to pick up with the beginning of the dry season.

Although I am personally involved in Phnom Penh Thmey, as readers have probably guessed by now, I am also familiar with the situation in a number of provinces, e. g. Rattanakiri, Kratie, Kompong Cham, Kandal, Sihanouk, due my business activities or property ownership there.

Just last week I took a trip up to Rattanakiri province where I and two Khmer friends of mine started another rubber plantation last year. I was really surprised to find out that prices for prime agricultural land have risen already by about 10%. There is a lot of activity there starting new plantations. One hectare goes for around $2,200 - $2,400.


This is the ideal soil for rubber trees

All those are privately owned. Plantation owners from Kompong Cham province now expand into Rarranakiri province for lack of suitable land in Kg. Cham. But not only is there activity in the agricultural sector but also in the private housing sector. I saw quite a few new houses, villas mostly, in Ban Long being started. The airport is being rebuilt so flights can resume around the middle of next year. Recently one friend of mine sold land along road no. 78 on the outskirts of Ban Long for around $43,000/ha. How’s that for recession pricing?

The Chinese are busy building the new road no. 78 to Ban Long from the junction of road no. 7 to Stung Treng. They will use only part of the old road and follow a different way as the current bridge over the Srepok river will be converted into a dam for irrigation purposes, not for a hydroelectric power plant. That new road will be finished in 2012. I think that’s pretty good for 120 km of road. Unfortunately, I saw only Chinese engineers and truck and bulldozer drivers. The reason for that is that the previous Khmer contractor who built road no. 7 from Katie to the junction did such a shoddy job that the Chinese elected to bring in their own staff. But nevertheless, overall, this is very good for Rattanakiri province which was sort of cut off from more rapid development due to its remoteness. Hopefully, all those nature lovers won’t have to worry about the abundance of wildlife and untouched forests there and will still be able to visit pristine land for years to come.

In Kratie province, which of course is famous for its Irrawaddy dolphins near the village of Sombok, I could also find new construction of houses all over the place. Most encouraging of all is the rebuilding of road no. 308 from Chloung to Kratie town. Only 17 km of dirt road is left to be paved, and this is expected to be done by April. Using that route will cut about 80 km off your trip from Kompong Cham to Kratie.

The most amazing and in my eyes ugliest construction I have seen in a long time is being completed in Chrouy Chanvar, Kandal Province. This is supposedly for a private university. I wasn’t able to find out who is building it. That is one ugly eyesore.


Here it is from the Japanese bridge


In all its splendor


Up close

Other than that, if you saw this region 5 years ago and now, you wouldn’t recognize it. What once were fields and forests is now full of houses; I would call it semi-developed. Gone are the nice villages in the middle of the forest, gone is for the most part free access to the Mekong riverbank. But I guess that is the price of development. We have seen this everywhere, not only in Cambodia.





Some of the more unsightly sides of Chrouy Chanvar

Before I turn to Phnom Penh a brief look at Sihanoukville. There too it is mostly private housing going up. I couldn’t spot one larger project in the works. Those still seem to be on hold. Even the new private port in Stung Hao is not showing any progress. But the new oil/gasoline depot there near Phum One was completed in no time. I think it took no more than 6 months to build a jetty complete with pipeline and tanks – really amazing. Of course, here too, some beautiful piece of coastline was destroyed. I had once planned to buy one hectare of beach land across the bay. Ke Kim Yan beat me to it, while I was still trying to line up investors for an idyllic hotel resort. Needless to say, I am now glad that those plans fell through. Who wants to look at a gasoline depot in the sunset. This is also the problem with beautiful Hun Sen Beach. Those damn Sokimex and Tela depots spoil that beach and only people with a wish for certain failure would build a resort there.

Now Phnom Penh is also showing signs of renascent activity, but also mostly in the private sector, as far as I can see. People are busy building or renovating their houses, but no larger project has been begun or even continued. Famous Camko City is on hold. From what I heard the majority of the villas have been sold, but work on the towers remains idle. My Korean source tells me that Camko Engineering Ltd., or whatever their company name is, have internal problems, not only financial but on how to proceed. Grand Phnom Penh International stopped further construction altogether for lack of buyers. Although they are now landscaping the development, it still looks somewhat unfinished. That grandiose gate was a bad omen. Sometimes high-flying dreams come crashing down overnight. Maybe they should take down those horses as a first step towards a newfound modesty. Rumor has it that Hun Sen’s daughter bought into the Sky42 Golden Tower. Work there is continuing, albeit at a slower pace.


The Canadia Tower as seen from Chrouy Changvar


The first New World development was built in Toul Sanke near Camko City. I am looking for a townhouse for my kids and sort of stumbled upon that development. It is a very nice community complete with small shops; it’s gated and perhaps half the houses are inhabited. I saw a lot of for sale signs, though, which erroneously led me to believe they might come down with their prices. No dice. They are still asking from $90,000 to $125,000 for an Eo/E1 with a terrace on top. Mind you, these are town houses. In the other two New World developments, you can get a duplex for that kind of money. Well, some people are still dreaming.


Gate to a development in Toul Sanke. It's all a question of personal preference, isn't it?

That the market is finally finding its right level is, in my mind, demonstrated by a recent experience, also in the search for a home for my kids. The latest New World development is next to the Wat Samrong Andaet in Phnom Penh Themy. I was interested in a duplex there and had negotiated the price down to $90,000. The owner had two for sale; I also saw a couple of others on the same street. I was holding off, hoping to get the price down to somewhere near $80,000. So I waited a month. Now I had to find out that all these units have been sold. Originally, they all wanted somewhere in the vicinity of $110,000. I knew the developer pre-sold them for $85,000 two years ago. To me this is a sign that the market found its right level.

Another example is the development I am passively involved in. Prices for a townhouse there were $45,000 for an Eo before the recession. We went to $40,000, then to 38,000, to $35,000, 34,900, etc. There was never a lack of inquiries throughout the last year, but no sales. Now we are selling for $32,000 and we’re in business again. All our buyers are private people who buy it for their own use. There are even some overseas Khmer among them who retire and come back to Cambodia to live here.

Comparing this to the vast number of townhouse near the airport and in Chom Chao, which typically sell for $28,000, we can see that a purely residential area like Phnom Penh Thmey has a slight edge over those mass developments.

I am also showing pictures of lots that were untouched only as recently as October but now work has begun there. As can be seen, most of the land is now dry and what a difference that makes. Additionally, Hanoi Road is once more being repaved and widened; this all helps the market, or in other words, the government is in effect doing something to help the economy get out of the recession.




Click on the picture to enlarge. This is development with terms. Email me for the phone number. I am not involved in this.









If you check back to my October post you can see this lot completely under water

So is all this a tender sign of recovery? I believe it is. Private people have money to build homes for themselves; contractors have work again, laborers have work; the cycle has been re-started. It sure is not humming along yet, but it is slowly cranking up.But then I am that eternal optimist, and I wouldn’t be surprised if that 1.5% drop in GDP in 2010 as predicted by the ADB, will turn out to be a modest increase in the range of 2 – 3%. Tourism is up again in October, November, and most certainly in December. So the worst is over in my mind, but just as elsewhere the dire times for the majority of people are far from over.

Thursday, December 17, 2009

Now They Got Me Too

Maintaining two residences usually involves a bit of traveling and the use of credit cards. Much has been written about identity theft, but who would think this would one day affect yourself, especially since I am super-careful with my online transactions. But it finally caught up with me too. Somebody stole my credit card number and made purchases with or sold it to somebody who did.

Thank goodness, my credit card company found one transaction suspicious and called me to ask about it. Somebody was charging $600 at some retail shop in Germany. I was in the U. S. at the time. Checking my credit card account I found another transaction that wasn’t made by me. This was an online purchase of clothes for about $500. The charge in Germany was denied, and the online charge was returned to the store, as is possible under the terms and conditions between the bank and the merchant. So I got lucky and suffered no losses because the bank’s monitoring system picked it up quickly. I have a pretty high credit limit and I wonder what would have happened if we hadn’t caught on to it so quickly.

The question arising from this now is how did somebody else get ahold of my number, plus expiration date, plus CCV? I normally don’t use my credit card except for travel expenses, e. g. airline tickets, hotels, etc., and I have only one credit card. So I was wondering where could it have happened. I traced my charges and could only find two transactions where somebody could have gotten the number. One was a hotel in Phnom Penh, where I paid the bill for a (trustworthy) friend of mine, and one was at the Taipeh airport where I made a telephone call.

So my suspicion is that somebody at the hotel sold the number to people who are in that kind of business, or somebody monitored the public phones at the Taipeh airport to glean the number that way. You have to type it in. So it’s very easy to see this with a pair of binoculars, or since those are too conspicuous, with a camera zoomed to the phone.

Now I don’t want to sound racist but everybody heard of the Nigerian scam spread by emails, which involves a letter from some high official or his/her relative who overcharged a contract and needs to get this money out of Nigeria or some other West African country. This usually is in the millions of dollars and they promise a cut of anywhere from 10 to 25%. It seems Nigerians are very crafty in all kinds of scams. I have noticed a sharp increase of Africans, and these are mostly West Africans, in Phnom Penh. So is there a connection between those Africans and the scams perpetrated from Cambodia? I heard from other people they do everything from pushing drugs to phone scams. That Swedish guy who got murdered and left by the roadside is another case in point. He met a Khmer lady online who turned out to be African. She and her boyfriend managed to relieve the Swede of his savings of about $50,000, which the fool carried with him in cash, or so the reports go, and subsequently killed him. At the beginning of December an African gang was arrested and 21,000 credit card data were found on their computer, probably mine among them. My fraudulent transactions occurred on Nov. 21 and Dec. 02. So how do those guys get the data? Do they hack into computers and monitor the credit authorizations, or do they simply bribe underpaid staff at hotels, restaurants, etc. to copy the data. I heard they pay about $5 - $10 per card. I am wondering whether all those Africans are involved in some kind of criminal activity; or what are they doing in Cambodia to begin with? I know there is the odd soccer player around and you have a number of embassy staff. But a couple of years ago you didn’t see this many African people on the streets here.

Whatever the case may be, you can’t be too careful.

Sunday, December 13, 2009

A Khmer Voice

Although this article is also somewhat dated it describes very aptly the reality on the ground, which still applies today. I take the liberty of re-publishing it here for my audience.

Read the whole post at timothychhim.blogspot.com

While Madame Mu SocHua is coming to the U.S. to seek support and sympathy from Cambodians overseas and the international community, the Cambodian court wants her in Phnom Penh for questioning.

While Mme. Mu SocHua is telling the court that she is coming to the U.S. for medical reasons, SRP supporters are busily scheduling her to many different places for political meetings.

Will all of this help build her case in Cambodian court? Many Cambodians are scratching their heads and wondering how many Cambodians can fly to the U.S. for medical treatments if they are wanted by the “bias” court?

Mme. Mu SocHua’s activities, although legitimate, are not in SRP’s favor through the eyes of the Cambodian court. She is giving the CPP more leverage, which it will use to highlight her confrontational actions to justify its case. The CPP has been criticizing all Cambodian politicians overseas as seasonable politicians—politicians who have little interest in serving Cambodians at the grassroots.

While a few hundred SRP members who came to support Mme. Mu SocHua during her trial are subject to direct intimidation, Mme. Mu SocHua has left Cambodia for her own well-being. This is the real issue facing overseas Khmer politicians (anekachun) who are increasingly viewed by many Cambodian voters as the “Paing- Proch” politicians.

While some overseas Cambodians are exciting about Mme. Mu Sochua’s drastic actions against Premier Hun Sen, the reality is different. The majority of Cambodians in Cambodia see it in their own way. Many people, including SRP members, are palling around normally with CPP’s leaders at all levels. The ones with more money earn more respects. The ones who control the media draw more supports. The ones with the political power draw business and political attentions from business and political leaders of the world.

Human Rights Groups and NGOs have been good thus far to voice their opinion to support Mme. Mu SocHua. However, without concrete actions by the world’s most powerful nations to reprimand Hun Sen’s administration, Hun Sen will continue to do what he usually does until the end of his time. Hun Sen’s government continues to represent Cambodia legitimately accompanied by SRP as the main opposition. Business entities continue to invest in Cambodia. Ho Nam Hong gets to see world’s leaders including Hillary Clinton.

This may drive all of Hun Sen’s opponents crazy, but it is the reality. What one should recognize, too, is that when all of this commotion is over, politicians will continue to be politicians. Although they may make you think and feel that they care more about the Cambodian people, most of them, in fact, only care more about themselves.

And one more


In Cambodia, when personal cases become publicized and politicized, no lawyer will come forward to take the case including lawyers in the SRP.

Omnipotent power of Premier Hun Sen is enough for most (if not all) lawyers to retreat. Social and political pressures are enormous for both individuals—Mme Mu and Premier Hun. Even if Premier Hun Sen is sincere and tell the court to be fair, the court itself will not have the guts to rule against the Prime Minister. It is not going to happen easily anywhere in Asiatic society, especially in Cambodia where fear and respect go together for the head of the government.

The best thing to deal with every critical issue is for SRP to clearly think collectively in advance what kind of course of actions it should take in order to get better results for Cambodians and for Cambodia. Is a lawsuit against the Premier the best way to solve Cambodian social issues or will it trigger him to react?

The case of Madame Mu has produced great excitement for SRP’s supporters as well as for some NGOs and international organizations; however after the excitement is over, no concrete change will really take place. The CPP have been quietly watching the strength of its opponents and take good notes.

As we expected, the international community will continue to support the government of Cambodia via many programs requested by the Hun Sen’s regime. The support for the opposition, on the other hand, will be under pressure and weakening. Although some diehard opposition members would like to stick to their confrontational approaches to stir up Cambodian’s emotions to support their cause, more and more Cambodians are tired of that.

It is unfortunate that the majority of Cambodian people do not mind (some do not even think about) how Premier Hun Sen act, speak or run the government for they are too busy to make a living. Such a nonchalant manner is probably resulting from the way they are looking down on most Cambodian politicians.
In their mind Cambodian politicians are “all the same.”

Monday, December 7, 2009

How is That for Compassion?

This post is especially dedicated to my many detractors in a certain segment of the overseas Khmer community.

This is a story about staunch SRP-followers who, as it happens, are also part of Sam Rainsy’s in-law family. It appears that Sam Rainsy’s wife and Mu Sochua are cousins, of whatever degree. According to another relative of the family, they also have another cousin living in the U. S. The latter and her husband were firm supporters of Sam Rainsy and his party. This sort of would go without saying, wouldn’t it? Eventually, the husband, however, found that Sam Rainsy does not serve the purpose of unseating the Hun Sen government very well and stopped giving donations. He thought it was money wasted. Why? Well, we don’t know but listening to SR’s unconstructive pronouncements, we can only surmise.

The wife having her own business continued supporting her cousin’s party. Nothing wrong with that really. Now apparently the relationship between the wife and her husband became a little strained. It is not known whether the disagreement about their brother-in-law and his politics is the reason or because the husband wanted to help his poor relative and actually gave her money to buy a Cambodian flat (town house). We are talking about roughly $45,000. He also wanted to buy his relative’s daughter a motorbike and new clothes, and possibly set her up in her own apartment. It smacks a bit of ‘srey tha tha’, right? Now the wife became suspicious as the writing on the wall cried out, ‘Infidelity’. After all, it is not completely unheard of that some older men are smitten with younger women, whether she is a grandniece or not. On one of her visits to Cambodia the wife confronted the relative and asked that she sell the house and return the money, which the relative at first refused. It was a gift from the husband, her uncle (blood-relative), what is she – the wife - thinking? How dare she ask the money back, the relative thought. They give plenty of money to the party, but when it comes to helping poor relatives with five children back in Cambodia, all of a sudden their generosity abruptly ends, she said. In the end she did sell her house, though. Normal people are just scared of people with money or with good connections. You never know what they might come up with next. So she paid back the money. She made a small profit on the sale and borrowed money from someone else to get a new place for herself and her children.

Nice folks – and pretty normal too, right? Yeah, but for those people who stand for helping the poor, it would appear a wee bit odd, now wouldn’t it?

Disclaimer: As recounted by my source.

An Analysis Right On Point

I am quoting, and nothing needs to be added. This is the reality. But does it reach the relevant people?

Friday, 04 December 2009
Sebastian Strangio
The Phnom Penh Post

After a tumultuous year, the Sam Rainsy Party finds itself at a crossroads, but observers are divided on its future prospects in a shifting political climate.

STRIPPED of his parliamentary immunity for the second time this year, opposition leader Sam Rainsy has, once again, found himself at the centre of the debate over Cambodia’s democratic reform. But the lifting of his parliamentary immunity and the actions that led to it – the uprooting of several wooden border markers in a rice field at the Vietnamese border – have raised questions of another kind, about the relevance of Sam Rainsy and his eponymous party in a shifting political landscape.

Though the Sam Rainsy Party (SRP) remains the Kingdom’s biggest proponent of Western-style democracy, some observers fear that the party, and its president, have reached the outer limits of their influence and have turned away from the grassroots campaigning that marked the SRP’s heyday in favour of politically charged but somewhat hollow political gestures.

This has been a tumultuous year for the SRP. Sam Rainsy and SRP lawmakers Mu Sochua and Ho Vann have each lost parliamentary immunity at one point or another in tense legal tussles with senior government officials.

Despite the international media coverage of its recent theatrics, and attention in the chambers of the US congress and the European parliament in Brussels, it is unclear whether the opposition’s strategies have maximised its chances of leveraging demographic changes into long-term political gains.

Some observers say the party has declined since its peak in the mid-2000s, a trend illustrated by its failure to capture the tens of thousands of Funcinpec voters who withdrew their support from the party after the royalist split in 2006.

“All those votes should have gone to the SRP, and they didn’t,” said Ou Virak, president of the Cambodian Centre for Human Rights. He said the SRP’s lack of a concrete policy platform causes its political spats with the government to become quickly personalised and drags the party into unwinnable battles with the ruling Cambodian People’s Party (CPP). “There’s no proper analysis or real policy,” he added. “If you’re going to oppose something, are you in a position to offer anything that’s different?”
"If it was a one-man show, the show would have stopped a long time ago, given all the problems we've been facing."
Another observer, who declined to be named, said that despite having won the SRP international attention, the recent strategy of waging legal battles with government officials had “steered the party way off message”.

“They talk about party leaders being persecuted on the basis of esoteric rights that many Cambodian people have very little ownership of. They’ve adapted to appeal to outside constituencies rather than Cambodian voters,” he said, describing the loss of the Funcinpec vote as a “huge missed opportunity”.

Sorpong Peou, a professor of political science at Sophia University in Tokyo, said that as the country’s main opposition leader, Sam Rainsy must maintain a degree of assertiveness, but that appeals to distant international organisations have achieved little for the party.

“At the end of the day, the opposition is at the mercy of the CPP, which is willing to allow a degree of opposition in order to legitimise its domination and uses this type of legitimacy to gain international support,” she said. “In this sense, the opposition’s appeals have little real impact on domestic politics.”

Sunday, November 29, 2009

Cambodian Property Ownership for Foreigners

Let me add my two cents to this subject. Many others commented on this already and my opinion won’t differ much. As opposed to journalists, writing about this I am involved to a certain extent in the real estate business in Cambodia so my experience is not as an observer but as a minor player.

The proposed law would make a difference if Cambodia allowed foreigners to buy and own land outright. As an example, the U. S. is one country allowing unlimited land ownership for foreigners. This had even reached such extremes in the 1980 that the Japanese owned huge tracts in New York City, Rockefeller Center among them, and elsewhere that some called for legal restrictions. But these liberal ownership laws are still a very positive aspect of the real estate industry there. Many foreigners own property in states like Florida, California, and along the Eastern seaboard. I personally know a few that even bought real estate in such states as Idaho and Montana. Citizens of a EU country usually don’t have much of a problem buying real property in another EU country; it’s a different story for non-EU citizens.

The Cambodian law now being proposed is for psychological purposes only; to signal to foreign investors that Cambodia is becoming more liberal and, to put it bluntly, is definitely very much interested in their money. But how many condos are there in Cambodia? Camko City, the Golden Tower, the DeCastle projects, and various others account for most of them. A rough estimate puts them around 2,000 to 2,500 units. That is a gross market value of around $500 million. Most of it is foreign capital to begin with, which will be repatriated and most likely not used for further investment in Cambodia. So the impact on the economy will be virtually nil. The benefit for the construction sector was reaped in the past and won’t do much good for or in the future.

The average Cambodian buyer doesn’t have enough money to fork over about $100,000 for a one-bedroom apartment, or $500,000 for a four-bedroom apartment, not to mention that they don’t even like to live in a high-rise and around 70% live in rural areas to begin with. The traditional Cambodian players who speculated in the past and made some money shy away from further speculation under the motto, ‘Once burned….” So where does that leave the market? Exactly where it is now. Dead. I have no doubt that the developers will be able to sell their units eventually, some with deep discounts, but overall it won’t lead to a major recovery of the real estate market. The new law may be one factor contributing to restoring some confidence, but it is just too small a step to influence the economy. A law that would allow foreign ownership of land, however, would certainly change the landscape considerably. This could be done in a controlled way, e. g. putting a limit on the lot size for villas or houses, or the permitted use of the land, like for agriculture only, etc., etc. I am sure many mid-market investors could be lured to come to Cambodia and start something here. As one expert said, ‘People like to own the land free and clear, a long leasehold is nothing compared to that.’ Back in the early 1980s the Dominican Republic in the Caribbean was discovered by the European tourism industry. In the wake of the tourism development, other developers followed and the country saw a considerable influx of European farmers. I am not saying that this is a sure-fire formula for Cambodia, but in order to accelerate the development of the country this could be one tool in the box. Katherine the Great of Russia used it to great success. She invited German farmers to cultivate the Volga region in the 18th century.

Another option for foreign private would-be owners of land in Cambodia is, of course, marriage to a Cambodian national. Since I am one of those I can only advise those men (that’s what they mostly are, aren’t they?) that if you only do it for the purpose of acquiring land, think twice of the potential future consequences. After all, the marriage might not last. So you better stay away from buying if you are not sure. But if you are sure about your relationship and you have been married for a few years already, then there may be no problems in buying property and titling it in your wife’s name. Although you have no right to the land itself, you are still a 50% owner under the community property laws in Cambodia. Married couples own all assets jointly and in case of divorce the property is distributed on a 50/50 basis, in other words, the foreigner would be entitled to half the value of the land they bought together and would have to be cashed out, if the property can be sold, and that’s a big if, at least at the present time. You would still lose 50% if you came up with the entire purchase price, but this is no different in the West then, is it? You also might want to conclude a marriage contract that stipulates that the proceeds from the sale of the real estate property would go to you and a certain compensation to the divorced wife. How it would hold up in court, though, is another question altogether.

Even in this scenario foreigners should again think twice before buying a condo for upwards of a $100,000. They could buy land, say 10 x 20 m for around $20,000 and build a four-bedroom, four-bathroom house on it for $40,000 (2 floors – 160 - 180 m2 living space). For that they would get more privacy and better living conditions than in a condo. Where can they find this land? In Phnom Penh Thmey. If anyone is interested, they can contact me by email.

Friday, November 27, 2009

A Man Named Wattanak

I would like to post the exchange between somebody calling himself ‘Wattanak’ and myself to make it available to a larger audience, as I am sure not everybody reads the comments posted by readers.

To me this is noteworthy for the fact that people like this Wattanak profess a deep concern and love for Cambodia but their actions exhaust themselves in verbal insults and slamming people who have a different view of the reality on the ground. The internet is full of them. What they don’t seem to see is that nobody in Cambodia really gives a damn what these people think. They are mostly regarded as know-alls who think they have found wisdom, which is pretty half-assed if you look at it closely. They are well-liked by the people who profit from them – their next of kin in Cambodia. If it weren’t for that fact, these same people would turn away from them. They are frowned upon at best and hated outright at worst. He addresses me as ‘man’. I am not sure how good his grasp of the English language is and it may be different in the country where he lives, which I believe is Australia, but in American English this is certainly not polite. But then, the way he composes his comments show that he is not a well-bred man.

It is a relief to know that not all of them are like that, though. Judging from the content on the internet one would think they are the majority, but I believe that the opposite is the case. It is a very small minority in their late 40s and older.

Here goes:

Man,

you are nothing more than a fly-by-night businessman trying to protect his turf by sucking up to the ruling regime. You claim to be a neutral observer of Cambodian affairs, but your comments and criticism of the opposition parties show you to be someone who wants the status quo to remain so that you can rake in as much money as you can and then piss off to under whichever rock you crawled out of. As I recall, you wrote a little while back that the American lawmakers were too busy to hold the Human Rights Commission. It was never going to happen you said. You checked it yourself. Your credibility was shredded. No apology was ever seen from you, and you claim to be a "neutral observer"?

Who has more Khmer interest at heart? A PM who lets his masters do whatever they want to his own flesh and blood, and then punishes his own whenever they dare complain, or a man who is prepared to claim back ancestral lands? Oh wait, I forgot, you don't care about Khmer lands or Viet lands do you? So long as whoever is in power allows you to have your rubber plantation then you are fine.


Wattanak,
I only now came across your comment. You are so wrong with your impressions. I will let your comment stand despite the insults you are hurling at me again. If you had bothered to read more of this blog you would have known that I came to Cambodia first in 1989, a year when you were probably still soiling your diapers. I have been doing business here, among other things, for 20 years, and as opposed to you, an obviously pitiful overseas Khmer who can only voice hateful words and insults from abroad, have chosen Cambodia as my home country.
I don't want to maintain the status quo. When I criticize the opposition, I don't criticize the party as such, but their two prominent leaders for their ineffectiveness, populism, and mismanagement of a political party. I do have inside knowledge, you know.
The human rights hearings do not warrant a reply. Just read the comments.
The way you address me in your comment clearly shows what mindset you have. Please stay away from my blog.

My Eternal Friend KJE,

You can as much stop me from going to your blog as much as I can stop you from writing unfair criticism of Opposition parties and unfair praises for the Strong Man. It is true that by giving yourself the rights to censor comments contributed by fair-thinking Khmers, you have the power to make sure my contributions will never get read by others you want to read your blog.

Regarding your accusation of me trying to sabotage your blog, or whatever your fantasy takes you, please be assured that my many many years living in a truly democratic society have taught me to be open to all beliefs and opinions. So I have not even thought of wrecking your contributions to the continued misery and oppression in Cambodia.

As for your comment about me being one of the "pitful overseas Khmer full of hate", please spare me your pity and your false accusation. Reserve your pity for those who are now supposed to lead Cambodia but all they do is oppress their own people while appease their foreign masters. Sooner or later history will judge them as it judged the KR, and they along with those supporting them will be found to be traitors to the Khmer nation.

Wattanak,

You are so biased that you don't see the world for what it is any more. Actually, you are pathetic. You must be one of those old Khmer codgers who still live in the past and have not found out that we live in the 21st century. Ever heard of the term 'realpolitik'. If you mean the U.S. when you talk about 'democratic society' you should read both Amnesty International's and Human Rights Watch report on that country.
Anyway, for you it's time to go. Just like Sihanouk.


Man,

I hope that your statement "..for you it's time to go. Just like Sihanouk", does not mean that you wish me dead. For that is what people mean when they talk that way about him.

As much as I disagree with Sihanouk (I do not profess to be an expert on Sihanouk, just an interest in what he has said and done) and you, I have not at any stage wished for your or his death.

It would be a shame to learn that a person who espouses non-comformity, independence, etc. can turn so quick to anger and death upon another person. If that was your intention, and I am giving you the benefit of the doubt here, you have truly made a hypocrit of yourself. It should be me calling you pathetic. If your intention was different, then perhaps you can explain what you meant by "to go".

As for my contributions to ease misery in my motherland, like you I do whatever I can. I still have family there and unfortunately they do not own rubber plantations or riches like those in your circles. They are poor. They survive by making, selling, growing whatever they can. Everytime I visit, it costs me more in helping my family and general donations than in flights and accommodation for myself. Furthermore, from time to time I and like-minded Khmer friends collect money to dig a few wells, and provide bits and pieces for schools. Now, if the Cambodian government that you seem to support so strongly was doing its job, using the $500 million USD it receives in aid every year, then I and other overseas Khmer would not have to help twice like we do- once through our governments using our tax money, and again through our own wallets.

So consider this. Would the country be in such grinding poverty if the government was doing its job? Whatever official taxes you are paying at the moment, would you be paying the same amounts if your business was States-side? Have you ever wondered how your tax money is used? Or don't you care so long as they leave you to run your operation? Laissez-faire at its extreme seems to be the preferred economic policy amongst the Cambodian elites at the moment.

And one more thing, whatever you do, do not ever ever doubt my and other overseas Khmers' love for our place of birth. We came to be overseas through no fault of our own. After losing so many of our own through wars and starvation, we decided to try our luck in another country. And I can tell you that the welcome we got here was not the same warm welcome that Khmers would have bestowed on you when you entered Cambodia. We have made good, comfortable lives here in our adopted countries, through sheer hard work and will power. In our struggles to establish ourselves here, we had not hurt anyone, let alone maim or kill. We did not use or abuse anyone. And we followed the laws. We pay our taxes and are happy to do so because we can see that the money is spent on infrastructure and services that the country needs. Having gone through all of that, our minds and hearts are still with Cambodia. Our not being there physically does not mean for one moment that we forget the hurt, the suffering, the injustices that present day Khmers are going through becasue we ourselves suffered the same. So, KJE, do not dismiss us so contemptiously. You had not gone through the things we went through. Your being there for the last few years, living in your well-appointed villa(s), sending your kids to International Schools, having drivers taking you around everywhere, does not qualify you to pass judgement on us.


Wattanak,
Addressing me as ‘man’ shows disrespect at best or contempt and disdain at worst. This is another instance where you reveal your true character. From the beginning of this exchange you brought this exchange of posts to a personal level with insults and unfounded accusations and allegations. Now you are ouraged by my remark. When I say it's time for you to go, I mean to disappear from the scene and keep quiet because you have nothing to contribute, neither in terms of an intellectual discussion nor in substance. It’s time for you to go and disappear into the sunset of your life, like Sihanouk, and leave Cambodia to the homeland Khmer. (I originally thought you were older but from the context of your post you must be in your late 40s to early 50s.) You may be Khmer by birth and may have grown up there but your love for the country ends where you really would have to contribute and make material sacrifices. Your words are pathetic and void of any true meaning.

When you love your country so much why don't you go back and help educate people so that a new way of thinking permeates society there? You are the stereotype, vociferous overseas Khmer who condemns everything the government in Cambodia does or doesn't do. I said it before why is it that it's NGOs and foreigners who go there to help, invest, and help the country back on its feet. Why isn't there one Khmer NGO that is active in helping farmers learn how to use modern agricultural methods. (I am not disputing the work Licadho and other Khmer rights NGOs do.) You think by helping your family with a few dollars will help the country as a whole. It takes investment and I would think there are plenty overseas Khmer who have enough money to start businesses, provide jobs, and help with infrastructure. There are examples like Kith Meng and others who did it, like the owner of the Lucky supermarket, but they are blasted as cronies of Hun Sen and the CPP. Everybody who is somewhat successful must be in league with the CPP according to you people. Khmer who run donut shops in the U. S., and I don’t know what in Australia, could easily go and invest as well. I can only say put your money where your mouth is.

The government using the $500 million (it actually is almost $1 billion) in foreign aid adequately would translate into erasing poverty in 10 years is naïve, at least that’s the way you infer it. Look at other developing countries that have received aid for many more years than Cambodia and see where they stand in terms of poverty. Development is slow. It took Europe and the U. S./Canada the better part of a century to turn from a mostly agricultural into an industrial economy. These were countries with vast industrial resources. Have these erased poverty completely? No, approximately 15% of the populations of all industrialized nations still live below the official poverty line, and that includes Australia.

So you came to another country through no fault of your own? I assume then that your parents brought you as a child to a refugee camp in Thailand in the early eighties. So you are not one of those old geezers who fled Cambodia because they worked for Sihanouk and/or Lon Nol? Or did your parents flee for economic reasons? Then what about those people who stayed behind and suffered the ensuing Communist rule, first Vietnamese, then Khmer? They didn’t go through hardship, misery and destitution? Who had it better? You or them? Where was your national pride and professed love for your country then? And where is it now, really? No, I don’t believe you really love your birth country. Love means sacrifices. And this is where you are lacking. Look at the Jewish people who made it in the U. S. and Europe and still emigrated to Israel to help build the country. That’s what’s missing from the Khmer diaspora. You are just a poor copy of a nationalist Khmer. The internet is full of those.

Who are you to know what I went through? You always assume without knowing the facts. And you should really read what I wrote. I first came to Cambodia in 1989. How old were you at that time? Believe me I most likely spent more time in Cambodia than you in your lifetime. It is my right to voice my opinions and I do believe I am qualified to see things as they are in Cambodia and possibly even make judgments. I don’t agree with everything and the way the government runs the country, being a Westerner, but credit must be given where it is due. All you people out there judge the country with Western eyes and Western concepts, forgetting the deep disparities between Western and Oriental thinking. We can’t just impose our ideas and concepts on other cultures. This only leads to a greater schism than already exists. A prime example is the war in Iraq and now Afghanistan. (You are happy to pay taxes for that?) What is taking place in Cambodia and other Asian nations is an evolution not a development. And there are many bumps on that road.

Thursday, November 19, 2009

Cambodia's Hun Sen looks safe despite some unease

By Ek Madra

PHNOM PENH (Reuters) - Trouble is mounting for Cambodia's long-serving prime minister, Hun Sen, with rising unemployment and an economic slowdown on top of growing criticism from diplomats, rights activists and political rivals.

But analysts see little threat to his power or the long-term investment outlook in a country that has made great strides after decades of poverty, brutalilty and instability.

"Things are far from perfect in Cambodia, but democracy is a slow process and we have to see the bigger picture," said Pou Sothirak, a senior research fellow at Singapore's Institute of South East Asian Studies (ISEAS).

"Hun Sen's priority has been the economy, social order and the avoidance of conflict, and the current situation is a significant improvement from the past."

Hun Sen's government has come under fire recently, accused of corruption, abuse of power, and undermining the judiciary, raising concerns about future stability and its sincerity about carrying out long-awaited reforms.

Tens of thousands of people have been driven out of their homes in a slew of land seizures, while critics have blasted Hun Sen for filing lawsuits they say are merely attempts to intimidate journalists, activists and political opponents.

However, Hun Sen gets plenty of plaudits as well, and some analysts say the firm hand of the undisputed strongman is exactly what Cambodia and its economy needs.

"It's easy to criticise Hun Sen as a single-party ruler, authoritarian and totalitarian, but he's a pragmatist -- he does what he needs to do," said Ian Bryson, a regional analyst for Control Risks.

"There's no reason to forecast any instability in the near future. Cambodia's pretty rock solid. Hun Sen is healthy and he really is quite well-regarded."

Given the steady turnaround in Cambodia's fortunes since Hun Sen came to power 25 years ago, the popularity of the Khmer Rouge defector and former farmer and monk, comes as no surprise.

RECOVERY COURSE

Six years after Vietnamese invaders ended the Khmer Rouge's 1975-79 "killing fields" reign of terror, Hun Sen became premier and cultivated a reputation as a moderate, investor-friendly democrat, which helped put Cambodia on the road to recovery.

Until the global economic crisis struck, Cambodia had seen four straight years of double-digit growth fuelled by Hun Sen's pro-business policies, which created new jobs and infrastructure and raised living standards among the rural poor, many of whom live on less than $1 a day.

With backing from the poor, his Cambodian People's Party (CPP) scored 73 percent of the vote in 2008 elections, which observers said had only minor irregularities, to win its first outright majority after years of bickering coalition governments.

"I see no party that can challenge the CPP. They've improved the livelihoods of the poor and boosted their hopes and expectations for the future," said a Cambodian political science lecturer, who asked not to be named.

"The criticism Hun Sen has received does not reflect the overall situation. I can see the ruling party will continue to hold power ... and foreigners will continue to invest here."

Analysts say complaints about graft, cronyism, lawsuits and forced evictions from donors, rights groups, diplomats and financial institutions have irked Hun Sen, but will have little impact on his popularity.

The biggest challenge for the CPP, they say, is to revive the economy and ensure jobs are created to minimise the threat of social problems or civil disorder that could undermine its grip on power.

Foreign direct investment has slowed since the global financial crisis took its toll. Economic growth slowed to 5.5 percent in 2008 and the economy is forecast to shrink by 0.5 percent this year, according to the International Monetary Fund.

With a slump in demand from key markets like the United States, at least 130 garment factories have closed since late last year, prompting an estimated 50,000-60,000 lay-offs in an industry that brought in $3.8 billion in 2007.

But analysts say workers have accepted this is not the fault of government mismanagment, and that it looks unlikely to pose a threat to Cambodia's stability.

Neither, they say, will long-running diplomatic disputes with traditional foe Thailand over border demarcations, near the 11th-century Preah Vihear temple and in the Gulf of Thailand, where oil and gas deposits have been found.

Both sides have beefed up their military presence in the areas and seven soldiers died in skirmishes over the past year. But too much is at stake for both countries, and that is preventing the disputes from escalating significantly.

"It's been a bumpy ride for Cambodia, but stability is, and will remain, very much intact," added Pou Sothirak of ISEAS. "And for that reason, I expect foreign investors will return when the global economic situation improves."

(Additional reporting by Martin Petty)

Reuters India

Although this is an article that appeared in August it still has validity and describes the true situation in Cambodia today. This is from neutral journalists who are not blinded by political parties' pronouncements or denouncements.

This is how the majority of people in the countryside, in Phnom Penh, and also the majority of the foreign business community in Cambodia sees it.

It would behoove Sam Rainsy and Mu Sochua well to see the reality as it is. Seeking help from foreign parliaments won't bring about any change in Cambodia. The European Parliament's powers as such are limited to the competencies conferred upon the European Community by member states. Hence the institution has little control over policy areas held by the states and within the other two of the three pillars of the European Union. (Quote from Wikipedia) And you can see what happened to the much ballyhooed H.R 820 in the U. S. Congress - nada.

Tuesday, November 17, 2009

An Anonymous Khmer Voice

I happened to come across this comment somebody left on KI-Media in response to Khmerization's commentary on SR's stripped immunity.

I don't necessarily agree with the writer but there is more than a grain of truth in what he says. Especially his anti-Vietnamese stance is disturbing. I had stated before ultra-nationalism will only lead to disaster. History has taught us this lesson. Differences must be reconciled by negotiation, not by non-sensical activism or hateful propaganda.

Quote
You got it all wrong Khmerization. The problem is Sam Rainsy, not Hun Sen. As long as Sam Rainsy is the leader of opposition, Hun Sen will rule for ever. You can quote me for that!

Sam Rainsy’s leadership is too weak and uninspiring. He has not proved himself up to the challenges, and he is known to have made numerous tragic and costly mistakes. He could have made alliance with FUNCIPEC to counter CPP, yet he did the opposite with his 50+1 rule. He could take strong action to protest when Mu Sochua immunity was lifted, he didn’t do it… and the list goes on. Does he have any foreign country (USA, China, Russia or France ...etc) willing to BACK him and his party behind the closed door? The answer is no, and there is a good reason for that. Those countries don’t see him as a potential PM.

Folks, we can not save the country from yuons with candle light, bon takhen at pagoda …etc. We need a leader with a clear and decisive plan, and most important of all a leader who is not afraid to take bold measures. As the white guys say, we need a leader with balls. Over the last thirty years, Sam Rainsy has not shown any of those attributes.

If we want to unseat Hun Sen and free the country from yuons, the first thing to do is to get rid of Sam Rainsy. He is the bottle neck that blocks other nationalists to free the country from yuons.
Unquote

Monday, November 16, 2009

Comments

Since some people visiting this blog and leaving comments can't abstain from using foul, inappropriate, and insulting language, comments will from now on be moderated first.

Friday, November 13, 2009

Suspension of Immunity – What’s It All About

The National Assembly is poised to lift Sam Rainsy’s immunity so that the local government in Svay Rieng can subpoena him in connection with the removal of border markers.

In most but the most-ardent SR supporting circles, Sam Rainsy’s actions were seen as foolish and inappropriate for an elected MP. Sam Rainsy appears as though he is out to rattle Hun Sen’s chain whenever and wherever he can. What also riled Hun Sen obviously very much were Sam Rainsy’s remarks in Bangkok when he spoke at the Southeast Asian Press Alliance. Hun Sen made that clear in his various statements about the Thaksin issue. Equally clear to most observers is the fact that this is an issue of head-butting between the two, never mind that Sam Rainsy said he wanted to draw attention to the Eastern border and help local villagers. Hun Sen wants to show Sam Rainsy and others like him that there is no way they can accomplish anything by working against him and his government. Hun Sen’s feelings were expressed in his recent interview he gave in Tokyo regarding the Thaksin spat. He said this is between Abhisit and him, not between the countries. The same applies to the Sam Rainsy issue. This is not about political differences, this is about Sam Rainy’s hardheaded, intransigent approach to opposition politics versus Hun Sen’s idea of how to run the country and his severe dislike of Sam Rainsy - and Mu Sochua by the same token – returned overseas Khmer who led a comfortable life while the rest suffered through hardship. Just as Sam Rainsy uses every opportunity to show up the government and its failures, Hun Sen will use every opportunity to show Sam Rainsy who is the boss. And he will use the instruments of power given to him by his landslide victory in the last election.

Nevertheless, in this instance just as in the Mu Sochua case one must wonder whether the steps taken to make their point are appropriate too. Just as it would probably have been wiser to just let matters rest with Ms. Sochua, it would appear to be prudent policy to just give Sam Rainsy a slap on the wrist. Seeing this from a foreigner’s perspective, there must be other instruments available than lifting an opponent’s parliamentarian immunity to discipline him for inappropriate, possibly minor illegal, actions. Censure or simple reprimand comes to mind. The Vietnamese government could probably be mollified by an official apology, notwithstanding the fact that the border markers were possibly unofficial. But just as Sam Rainsy is pretty hardheaded so is Hun Sen. And there is no question who is going to be the loser. The Prime Minister is not just content to sideline Sam Rainsy as others more even-tempered heads of government would do, he must teach him a lesson. Sam Rainsy probably reckons the world will in the end step in to rein in Hun Sen if he indeed were arrested and possibly sent to jail. But history should have taught him that this is unrealistic. As much as Western governments pay lip service to human rights and democratic opposition politics, they consider this a country’s internal affairs and consequently will not meddle in Cambodia’s affairs.

Tuesday, November 10, 2009

Rubber News

It’s been a while since I last reported about the state of the rubber industry. As I had mentioned we needed to wait about a year until there was a rebound in prices. This is even happening sooner than I expected, so good news. Sure enough, yesterday’s prices for dry latex was KHR 7,500, up from KHR 4,800 at the beginning of the season, but still lower then last year’s high of KHR 10,800.

I believe this is about the level it should stay at, not that I wouldn’t mind higher prices, but those higher prices would surely be the result of another overheating, only to come down hard again. The main component in the recovery of Cambodia’s rubber industry is China, the main buyer of Cambodian crepe rubber, either directly or through Vietnam. China’ s economy is still humming along at an about 8% growth rate. They managed to dampen the effects of the financial crisis much better than Western countries, as many economists point out.

The Cambodian government privatized about 25,000 ha in 2008/9 – the right move in my mind – and I believe investing in a rubber plantation is still something worth considering if people have a mind for it. The total acreage under cultivation in Cambodia is about 85,000 ha. There is still room for a lot more until the planned 130,000 ha are reached; the government’s official target acreage. A lot of the previous state plantations are older trees, which will soon reach their end of productivity. So even if there is no increase in demand any new plantations will partially fill a void left by the end of production of those old trees.

Good land for cultivation is available from private sellers in both Kompong Cham and Kompong Thom provinces, although one might have to search hard. The best chances are in Rattanakiri province. The only drawback there is the access roads. The last 120 km is still a pitted dirt road, which was virtually unnavigable after Ketsana. The government with the help of the Chinese has started building a new paved road but completion won’t be until 2015. So until that time one must expect travel times of about up to 6 hours in the rainy season if you want to go easy on your car, and about 2 hours during the dry season. A good alternative is to use one of the overland coaches and rent a car/truck with driver in Rattanakiri. Believe me the trip is much more comfortable this way.

Prices for arable land alone is about $2,000/ha and once trees have been planted from $3,000/ha up to $15,000/ha depending on the age of the trees. Producing plantations go for about $20,000/ha. If the plantation is managed on ‘lean’ principles the return on investment can be anywhere from 8% to 12%. Prospects will be even better if prices stay at the a. m. level.

Monday, November 9, 2009

Banana Republic Politics?

For those of you who don’t know we are not talking about the apparel brand, by the way. Before relative stability entered Latin American politics, let’s not mention Honduras for the moment, the many coup d’états by the military in Latin America led people to call them Banana Republics, implying these countries were good at farming bananas but not at Western-style politics.

The Thaksin spat between Cambodia and Thailand certainly reminds one of that era in the Western hemisphere. However, what appears as gamesmanship on the surface on second look turns out to be a calculated maneuver on Hun Sen’s part.

Although Thaksin and Hun Sen seem to enjoy a friendly personal relationship, there were no great efforts to openly assist Thaksin after he was overthrown in 2006. His government’s legacy was that they had acceded to Preah Vihear being a Khmer World Heritage Site and there was practically no border dispute that seemed irresolvable at the time. For that, he was appreciated, but that was about all – yeah, he promised a huge Koh Kong development after that, but Cambodia has heard many promises from many people in the last decade.

This all changed once Preah Vihear was officially declared a Khmer site. The border issue bubbled back up full force again at the same time. We all know what happened after that.

Legally, it appears, Cambodia is in safe waters, so why hasn’t the government pressed their arguments more forcefully in their negotiations with the Thai government? Whenever the Cambodians indicated they might bring the issue up at the UN or even the International Court in The Hague, the Thais emphasized this is a problem that must be solved bilaterally. ASEAN obviously is no great help in that matter either. No tangible progress has been accomplished so far - so why that endless patience with the Thai counterparts?

An important factor is that Abhisit will soon face elections. One political analyst summed it up nicely when he said, “Hun Sen and other Cambodian leaders are likely aware of the anger that Thaksin’s arrival here will elicit from Abhisit’s government, but may be playing the two sides of Thailand’s intensely polarized domestic politics against one another. The Cambodian government may foresee that the pro-Thaksin group will win the next election in Thailand, so by then all border issues will be solved, and friendship will be rebuilt.” (Chheang Vannarith in the Phnom Penh Post).

Hun Sen’s maneuver, which many thought foolish at the beginning, might just play out that way. Although Abhisit gained substantially in the polls after the recall of the ambassadors, in the medium term his inability to rein in a ‘small, weak’ neighbor will cost him dearly within his own PAD movement, and Thaksin with his wide popularity in rural Thailand is just the right person to help Hun Sen resolve the ‘Thai problem’. Sam Rainsy’s remarks that the government just wants to divert attention from the pressing economic problems and the Eastern border issues are again characteristic for him and off the mark altogether in this chess game.

Hun Sen’s reasoning that Thaksin is for all intents and purposes a political refugee cannot be dismissed out of hand. Thaksin was elected fair and square, although the fair may have been a little tarnished. He was later overthrown in a military coup. The resultant conviction of corruption and tax evasion might or might not have been politically motivated. Who’s to know? In normal democracies, prime ministers or presidents are impeached if they commit crimes while in office, or they have to face a vote of no confidence. A coup d’état is illegal under any constitution. Strictly speaking, the present Thai government is illegitimate since it was the indirect result of a coup. Never mind, that Thaksin’s successor party – the People’s Power Party - won the election that had been called by the military junta; but then the party was disbanded by the court for election fraud. Let’s face it; Thai politics are as murky as those in a banana republic. Abhisit’s statement that the appointment of Thaksin was an insult to the Thai judicial system sounds hollow and hypocritical. Of course, the Thai government was recognized by virtually every nation, so the illegitimacy is somewhat moot. The fact that Thaksin is sought by international warrant won’t change his popularity with the Thai population. If he were to return to Thailand under pardon from the King (very unlikely) all bets are that he would win the elections hands down.

If, in fact, he will come to Cambodia as appears more than likely, that warrant would need to be carried out by the Cambodian police. As a fellow blogger noted Cambodia is a member of Interpol and would have to execute the warrant. Regardless of the Interpol membership, national jurisdiction supersedes any warrant issued by a foreign government. That’s is why there are bi- and multi-lateral extradition agreements in place. And in Cambodia what Hun Sen says counts.

Thursday, November 5, 2009

Extra-parliamentary Opposition

Many SRP followers hailed Sam Rainsy’s recent ‘publicity stunt’ as a great call of awakening. They see this as an overdue calling attention to the Eastern border problems, which, in their opinion, is just as grave as the problem with Thailand. Needless to say, this is a great misjudgment of the situation.

Sam Rainsy’s actions, however, are nothing less than outright ludicrous. One can only ask oneself, ‘What was he thinking?’ One can understand the local villagers that want to take matters in their own hands in the face of a possible border violation by probably Vietnamese villagers on the other side. Whether or not the border markers were inside Cambodian territory, it certainly is not appropriate for the leader of the opposition to pull the posts out. Perhaps he got carried away. Perhaps he thought this was a good opportunity to get back into the headlines as it had become a little quiet about him in recent weeks. After all, Hun Sen had one scoop after another recently, what with his invitation and now appointment of Thaksin.

The issue with the border markers would ordinarily have been rather insignificant had it not been for Sam Rainsy’s activism. An opposition leader’s place is in the National Assembly and at the helm of his party. These are the venues where he can make speeches, denounce the government, and lay out his proposals. As an MP he is a member of the legislative body, not the executive. Border disputes clearly are within the responsibility and jurisdiction of the government. As a man who constantly calls for the rule of law, he should be the first to abide by it.

He did the same as the Red or Yellow shirts in Thailand. But these are what’s generally called extra-parliamentary opposition. They can stage demonstrations, hold sit-ins, mass-rallys, or whatever else pleases them, in order to make their point of view known. They can also resort to civil disobedience. A member of parliament’s weapons are his or her voice, and his or her legislative actions. If they want to use the tools of the extra-parliamentary opposition, they should join them and resign from their seat in the National Assembly. That would be the right thing to do. Who knows, a career change might do wonders for his future.

Sunday, November 1, 2009

Hard News or Innuendo?

There is an organization calling itself Khmer Intelligence that circulates so-called confidential news by newsletter. They email it at irregular intervals. Although it uses a sort of journalistic format, the information disseminated clearly makes the reader understand what this group wants to say. On the basis of their selective news, it clearly demonstrates its anti-CPP and anti-government stance. As with most anonymous websites the source of their information is unknown and almost never revealed, as, of course, are the publishers. (And that includes my blog. I do, however, reveal my identity once people get in touch with me by email. I just don’t see the point in dragging my name all over the internet.)

Khmer Intelligence’s reports oftentimes contain sensitive information, as was the case a while back and in their most recent newsletter dated October 29.

A few months ago, they published that a number of banks in Cambodia are on shaky grounds on account of the real-estate bust. It specifically named the Foreign Trade Bank of Cambodia (FTB) and Canadia Bank. These banks are two of the largest banks in Cambodia. This prompted the government to issue a statement denying the allegations declaring that these banks are very stable and are not affected by the economic crisis, as their exposure to real estate loans was minimal.

On October 29, (I somehow got on their mailing list) Khmer Intelligence published another piece on these two banks.

Quote
Canadia Bank now controlled by Hun Sen's family (2)

Partly as a result of bad loans linked to the collapsing property sector, Canadia Bank, Cambodia's largest commercial bank, has recently come under the control of Prime Minister Hun Sen's family (wife and children). The information is not made public because of concerns about corruption probe and Canadia Bank is involved in several cases of land grabbing.
The Hun Sen family has also taken control of several large development projects abandoned by South Korean firms, such as the 42-storey Gold Tower.

Unquote

I wonder what KI (any relation to KI-Media?) is implying? Why would Hun Sen’s family become involved in a bank that’s suffering from non-performing loans? I don’t get it. Are we to believe that otherwise Canadia Bank would have collapsed? I know for a fact from ‘confidential sources’ – people that are in the real estate business and do business with Canadia Bank – that there are people indebted to Canadia and that, for all intents and purposes, their property is practically owned by Canadia. Most likely, some people in the upper echelons of government also own shares in the bank, possibly, and I really don’t know, Hun Sen’s family too. But why would they now want to control the bank? To me it doesn’t make sense.

Now the biggest scoop is the info about the Gold Tower. A while back, I had already written about a rumor that the government exerted subtle pressure on the Koreans building the Gold Tower not to abandon it, as they obviously had run into financing problems. One mustn’t forget that the Koreans had invested a lot of money in the land already. If they just abandoned the project, they would have lost a bundle. So here too, it doesn’t make sense to expose oneself to a disproportionate risk when the Koreans were eventually able to get financing back on track in Korea based on the previous investment.

So I take it what KI really wants to say is that the ‘voracious’ Hun Sen family is extending its tentacles ever more and won’t rest until they own all of Cambodia? I guess in this case it would have been appropriate to show some documents confirming all this. This way it is just another rumor, which they are spreading to bring both the bank and Hun Sen’s family in disrepute. They really needn’t have bothered because their newsletter is only read by government opponents, such as SRP members, and a certain segment of overseas Khmer, and these people have enough disdain and outright hate for Hun Sen already.

Equally astounding is the other information they published.

Quote
Foreclosures expected by the end of the year (2)

The government finds it more and more difficult to prevent several nearly bankrupt commercial banks ridden with property-linked bad loans (Canadia Bank, Foreign Trade Bank) from conducting foreclosures. A large number of properties will be seized by the end of the year from the banks' defaulting clients and sold at auction. Observers expect a further drop in property prices in the next few months.
Unquote

Again, what’s the intention of this piece? The government doesn’t like the banks to foreclose on non-performing loans? Ah, I get it; it’s bad for Cambodia’s reputation. It would undermine the already shaky state of the real estate and construction industry.

Whom is KI kidding? Probably themselves, because by now everybody knows that there hardly is any real estate industry to begin with (see my previous article). And will auctions revive this sector? I doubt it. Who would buy all those townhouses even at rock bottom bargain rates just to have them sit empty? How many Cambodians are there that have $30,000 for a townhouse (Eo only) - 4.5 x 20 m?

As I read it, they are seemingly happy that is has come to this point - that all those in their minds ill-gotten gains will now suffer or even collapse. A collapse of the entire sector and a few banks with it like in the U. S. would have much wider repercussions, and we really shouldn’t wish for that, should we? We’ll see what happens, but I don’t believe we’ll see large-scale auctions like in the U. S. These KI people really aren’t thinking clearly. It looks like their vision has become clouded and their intentions turned from being critical to being malicious, even pernicious. Perhaps I am wrong; I wish I were.

Wednesday, October 28, 2009

The Real Estate Market in October – Addendum

A couple of comments asked about the situation in Sihanoukville and also about constant flooding in Phnom Penh Thmey.

I left out Sihanoukville, although this is more or less my home market, because there really isn’t anything to report as the market is as good as dead. Beachfront property is offered at $300-$350/m2 (Otres Beach). Under normal circumstances this is way too low as you only have so much given beach in any country. In Western countries beachfront real estate is as valuable as inner city properties. Like inner city land beach front land is irreplaceable. Once it’s gone it’s gone. But in the absence of any major development, both residential and tourist, these prices can only serve as an indicator. The same maxim applies here just as in PP – if people need money they will sure be ready to negotiate. But I suspect that the people owning those properties all have money enough and don’t need to haggle. They can just bide their time. Back in 2007 I negotiated for one hectare and got an offer for $100/m2. I was planning a small modern resort at the time, but the financing fell through. This just goes to show how prices developed even without any development in sight. Similarly, Ream State Park was divided in the National Park and a zone available for tourist development. The government even announced an agreement with a Chinese company in 2008, if I remember correctly, but nothing has happened. The park is as pristine as it was before, if you disregard some slash and burn practice by local people.
In all other areas there is no visible activity – both residential and commercial. Just compare the number of listings on Bongthom.com with other provinces.

The situation of SHV applies to basically all the other provinces too. It’s really hard to gauge it when there is no activity to speak of.

As far as agricultural prices go they are holding steady. Prime fertile land in Kompang Cham and Kompong Thom is still around $3000/ha. Rice paddies in outlying areas might go for about $2000/ha.

I said I consider PP Thmey the up and coming area. I stand by that statement despite of the fact that parts of the area suffer from severe flooding during the rainy season, and especially this year with typhoon Ketsana and a longer than usual season. It appears as if the dry season is now slowly being ushered in. I am showing a Google map of the area indicating the areas.



Click on the map to zoom in - the black vertical longer lines roughly outline PP Thmey, the shorter lines delineate the flood-prone areas north and west of them.

It also depends largely on whether the land was filled up with dirt to road level or whether it is still low lying former rice paddies as you can see from the following pictures. Click on picture to zoom in.


Low lying - semi-flooded - ready for development once filled up.


Completely flooded - low lying.


Contrast between lot filled up and adjacent lot still flooded.


Entire area completely filled up, consequently dry.



Two inhabited lots on the road (in the background) - what are those poor buggers supposed to do?


Parcelled land, ready for development

It won’t take long before those ‘wetlands’ will dry up and look normal again. If somebody will develop their piece of land they will start doing this right about now. Filled-up land is, of course, easier to sell and much more attractive to the buyer’s eye. I personally wouldn't mind buying a lot like these provided that it is or can easily be connected to the public water and sewer system. One m3 of dirt is about $3; usually one needs to fill up about 50 cm. With a lot of 4.5 x 20 m you are talking about $135 to $150. So if somebody wants to buy in the area and needs some advice email me. I am not an agent so I am not interested commissions. It’s a free service.

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