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:


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.

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.


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.


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.

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.


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.

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.

Monday, November 16, 2009


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.

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.


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.

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.

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.