Saturday, October 30, 2010

Building a House in Cambodia

I read this article in the New York Times a few days ago.

This house looks ugly as hell; only French people can build a thing like that (and I am not a Francophobe, quite the contrary). I know of a small hotel in Phnom Penh, the owner of which transformed a rented house into that nice boutique hotel – the Blue Lime. It turned out to be a success commercially, but the rooms are ugly as hell as well. He used only concrete and steel wire as furniture. On his website he calls it minimalist. But then I must be pretty old-fashioned as the guests like it. There is even one hotel that copied it to the T. (The ‘252’)

The house in Siem Reap in the picture looks like it also has just bare concrete walls; normally a nice coat of paint makes a house look more attractive, doesn’t it? Well, not to some French people, it seems. Perhaps that’s the new style in Southern France? I don’t know. I haven’t been there in ages. Anyway, what surprised me most was the price tag for that house. According to the NYT they paid approximately $300,000 for 3,000 square feet – it is not clear whether this includes the swimming pool - it looks more like a foot bath - and the yard. 3,000 square feet equals about 279 m2, in other words, they paid about $1,080 per m2. I am inclined to think that includes the yard as well. The house doesn’t like it is more than 4 m wide (standard Cambodian width) and 10 m long.

Cambodian builders have perfected the art of building a house in a jiffy. I see all these row houses spring up all over the city at an incredible speed. Since I just recently built a house myself and was involved in a smaller development I know a little bit about building houses.

Basic building materials like cement ($80/mt) and bricks ($400 for 10,000 pcs.) have come down from previous heights, but it may come as no surprise that construction prices haven’t. Usually, prices are quoted by m2, including everything from tiles to windows, doors, bathroom installations. Depending on the quality of the materials except bricks and cement and workmanship, of course, these prices can vary quite a bit.

A regular row house, ground floor only, costs about $200 to $220/m2, including that half-floor; the first floor will be at the same price, the second floor (half of which is usually a terrace) is half that price. So normally a row house is 4 m x 12 m, sometimes 4 x 14 m, or 48 m2 to 64 m2 of floor area (Cambodian lots are typically 4 x 20m – 4 m in front must be kept free as sidewalk, and 1 m in the rear needs to separate it from the adjoining wall there.) If you do the math this will come out as round about $10,000 to $12,000 for a ground floor only, with first floor $22,000 to $25,000. No kitchen cabinets or anything else besides the toilets and the wall shower are included. If you want things a little bit more complete or modern, like a real shower, you will have to figure in another $5,000 minimum. The price for the land is not included, of course.

If you fancy something more extraordinary there is no limit to what you might need to pony up. Those huge villas we see all over the place in Cambodia are around the $500 - $800 mark. Some of them are outright palatial; Khmer people have a tendency toward bigness, if they have the money for it. Modesty or understatement seem to be unknown terms for them.

But coming back to that French house in Siem Reap that price seems to be a bit high, even considering that the owner changed a few things while it was being built. The way it looks I would have guessed it at about $250/m2. To me it looks like half-finished, but then that’s me. Just look at the teal colored drain pipes sticking out from the first floor wrap-around balcony.

The rather plain house I built cost me $237/m2, not including air conditioning, shower stalls, special bathtub, special windows, window screens, the garage, the driveway tiles and around the house, the high ‘Tiki hut’, a water filtration system (well water), the connection to the power grid (about 1 km away), etc. Considering that the house is located in the countryside we got a pretty good deal. Prices in the provinces are usually higher as all the materials need to be hauled from Phnom Penh.

Of course, when you buy land (my wife is Khmer), you need to build a wall around it so as to officially stake your claim to the land and so that everybody can see there is an owner and this land is not for squatting. That wall plus the barbed wire, the gate, etc. are all extra, not to mention the yard or garden as we would rather call it, which is not nearly finished. We will do that bit by bit. The grass for about 1,000 m2 was about the same amount in dollars, with two thirds going towards the transport from the sod place to our house. I kept part of the land free for possible later construction of a boarding house for fishing tourists. Something I am planning to do on the side.

Altogether we spent about half the money that a ‘normal’ 2,000 sq.ft. house would cost in Florida, with the major difference being that the land is three times as large, and that all interior walls are brick. The ceilings are 3.50 m high, although not vaulted as is the normal style in Florida these days. The floorplan is such that the front and back door are in a direct line so that the wind can blow right through the house; additionally, we build a ventilation shaft so there is an air flow from the great room through the roof. We hardly ever need the a/c during the day; we just turn it on for about one hour before we go to bed.

A final word about workmanship; the quality of the brickwork is, as far as I can judge, equal to Western standards. The plastering and more delicate work in corners, etc., could do with some improvement. The ventilation shaft gave them a lot of problems, because it was a first for them. The roof frame is galvanized steel; the concrete foundation is solidly built 50 cm into the ground. The woodwork, like built-in under sink cabinets, or the slatted door to the walk-in closet are pretty poor as is all the sanitation work. The bathroom fixtures are all first quality (Karat), but the installation was definitely lacking. When we moved in I had redo all the hose connections as they were leaking. Also, what they obviously don’t know how to do is build floor-drains so that no odor wafts back from the pipes leading into the septic tanks. I closed them all as we have no need for floor drains since we have shower stalls, which incidentally were also leaking and needed to be re-sealed. Of course, the builder gave a 5-year warranty and all the repair work was done under warranty. The whole house was built in just 5 months. You can’t beat that for speed. Overall I am pretty happy with the work, and the builder did a terrific job. Seeing him for the first time you are not inclined to put your trust in him. But he came with good references and actually lived up to them too. It is located in a somewhat remote area, but that’s the way I like it.

Here is a look at it:

In comparison here is a look at the house I own in Florida, which as everybody can see is up for sale.

Wednesday, October 27, 2010

Big Events

It seems as if Cambodia is trying with all its might to obtain a higher international standing judging by the parade of foreign dignitaries that recently arrived, are here, or will be arriving soon. Of course, there are the usual inter-ministerial meetings between Vietnam and Cambodia, the frequent visits by Chinese officials, but this week the UN Secretary General Ban Ki-Moon was here and on Sunday, Hillary Clinton will arrive for a two-day visit.

In the Prime Minister’s typical fashion, he ‘suggested’ that the U. N. Rapporteur on Human Rights in Cambodia be removed from his post since he is just echoing the opposition parties’ complaints and acts as their mouthpiece. I guess it is well known that Hun Sen doesn’t take well to criticism of Cambodia’s human rights record, or of his policies in general, for that matter. The PPP reports that he even went so far as to indicate he would close this office. I haven’t read anything about Ban Ki-Moon’s response but it sure would have been interesting to be present for the actual reply.

Unfortunately, it indeed appears as if those rapporteurs actually do repeat the complaints of the various opposition and civic groups, though it shouldn’t come as a surprise as all those independent observers need to gain their knowledge from sources both within and outside the government, that is, from exactly those opposition and civic groups. The same applies to Human Rights Watch and other NGOs. In my view, the observations by NGOs and civic groups are almost or just as unbalanced as the government’s views. The only ones that seem to be somewhat more objective are the Cambodian Center for Human Rights and Licadho. But be that as it may, no one with a pre-cast Western mindset will have any luck in that position in Cambodia for the foreseeable future.

Hillary Clinton is one of the most prominent fighters for women’s rights but in her position as Secretary of State, she must represent the policies of an administration that may not always be identical to her views. Expediency and national interests shape policies, not ideals – and the world is far from being an ideal place. I am just wondering what the U. S.’s interest in Cambodia is. They hold joint military exercises, much to the chagrin of Mu Sochua and the opposition; it lauds Cambodia for its efforts in the fight against terrorism, in general is rather friendly towards Cambodia despite Cambodia’s poor human rights record as presented by the various international organizations. Vietnam with an equally poor record is a frequent destination for all sorts of U. S. officials; in fact, this will be Hillary Clinton’s second visit in the last three months. So one can clearly see that American politics is determined by economic interests first and foremost, and to a lesser extent by trying to counter Chinese influence in the region.

The thorniest issue will probably be Cambodia’s debt incurred during the Lon Nol years. That bozo, what else could you call such a man, of assistant deputy under secretary Yun had the nerve to testify before a Congressional committee and said that the U. S. does not have a policy to forgive debts. Of course, it did have a policy of secretly and illegally bombing this country causing thousands of innocents to die or to be displaced, not to mention the material and environmental damages the country suffered. ‘It would set a bad example to other nations.’ What was this man thinking when he prepared this unconscionable statement?
By any definition, these were war crimes and crimes against humanity as well. But who dares file a lawsuit against the U. S.? Of course, it would take a lot of guts, not to mention money, to pursue this. I am sure federal courts, the proper venue for such a complaint, would take it up. Mind you, the U. S., that bastion of the rule of law, does not recognize the International Court of Justice in The Hague. But as all those self-proclaimed fighters for justice point out, justice in Cambodia is served with two measures, one for the rich and powerful, and one for the poor. To me, this equally applies to the U. S. and small Cambodia as well.

Hillary Clinton’s visit should be a great opportunity for Mu Suchua. I really wonder how Mu Sochua will come off in her meeting with Hillary Clinton and how she will use it to her advantage and enhance her stature as the main opposition figure. The way things go these days it doesn’t seem even remotely likely that Sam Rainsy will ever return to Cambodia to lead the opposition in the next elections. Calling for Hun Sen’s arrest as a perpetrator of crimes against humanity and filing lawsuits against him in the U. S. and possibly other countries will make it very hard for Hun Sen to cast aside his personal animosity towards Sam Rainsy and allow him back in. (Not that those lawsuits will have any prospect of ever being actually tried. Hun Sen is a sitting Prime Minister of a diplomatically recognized country and enjoys diplomatic immunity, not to mention whether there is real evidence to file those charges in the first place. Sam Rainsy hasn’t shown a lucky hand in filing foreign lawsuits in the past. Attorneys will file any lawsuit as long as they get paid.)

Saturday, October 16, 2010

Khmer Intelligence

Khmer Intelligence operates as if it were a news service disseminating its reports by email. I get my copy from How I got on their mailing list, I do not know. They are, of course, anti-government and staunchly pro-SRP. I assume they are based in France, although they report in English.

A lot of times their reports serve only one purpose, it seems – to destabilize the government in order to get rid of Hun Sen who is seen as the primary source of all evil in Cambodia.

On October 07, 2010, this rather obscure outfit ran two reports. One is claiming that the Vietnamese leadership is quietly moving to have Hun Sen replaced from his position as the next candidate for Prime Minister in the 2013 elections. It also named Men Sam An as the possible successor. I am sure this lady was glad to read her name in this report. If she was vying for that job, nothing could have come at a worse time than this. If KI (are they connected to KI-Media at all?) is aiming to destabilize Hun Sen this was the wrong ploy. If indeed it were true, Hun Sen would just grill this lady what her plans were and simply sack her from her post. This way he would consolidate his power rather than weaken his position.

KI sent out numerous pieces of misinformation in the past, e. g. the wobbly state of the Foreign Trade Bank, and I venture to say that this is just another one.

The second story claims that Hun Sen equipped his most loyal army units with the new tanks Cambodia bought from Eastern Europe. The say he has become paranoid about a possible internal coup and will use those units to strengthen his grip on power. Historically it is true that autocratic heads of state get more paranoid the longer they stay in power but I can’t believe that this is the case with Hun Sen - quite the opposite.

Hun Sen is achieving ever-greater stature internationally with each conference, e. g. the U. S. – Asean meeting in New York, or the EU-Asean meeting in Brussels recently. The economy is on the rebound, people are not all unhappy with the current state of affairs, as in some way they do participate in it, as little as it may for the majority. I personally cannot see any unrest among the population in general.

In addition, one good indicator of the economic resurgence is the resumed strong building activity all over Cambodia, not only in Phnom Penh. Real estate prices have stabilized, although at lower level (but still too high in my humble opinion). The nomenclature, Hun Sen’s power base, is satisfied too and won’t want to upset the apple cart. And finally, Hun Sen is a close friend of Vietnam’s power elite and they couldn’t wish for a better ally in his post, I believe. So they have no reason to get him out.

It probably is true that China and Vietnam are maneuvering for dominance of the region, but it takes place on the economic front and nothing can beat China there at the moment, right?

I guess KI is just a bunch of old Lon Nol refugees in France, the U. S. and Australia who cling to their outdated views of the world and Cambodia and just can’t see that the 2010 world scene has drastically changed from the 1970ies, ‘80ies, and even ‘90ies.

This is proven in another piece they ran. Cambodian communities all over the world are organizing campaigns to revive the 1991 Paris Agreements.

Cambodian communities all over the world? Hey, how many are we talking about here – millions? Yeah, right. Estimates of overseas Khmer run anywhere from 300,000 to 400,000 worldwide. One third is too young to be politically active, one fifth is too old or too apathetic, and 80% of all adults are politically inactive to begin with (if you go by averages in other nations). What remains are maybe 20,000 people worldwide. (Wow that sure is an impressive number.) Additionally, they are not even Cambodian citizens; at least other countries see it this way. So do you think this will meet with great interest in the signatory nations? I don’t think so. As long as there is no strong movement from within Cambodia pushing for some international action, if such were needed, I can’t see how any of those countries’ governments will lend an ear to them. It is futile, can’t they see this? In this case even a constant drop in the bucket won’t fill it, believe me.

Cambodian Oddities

Although I usually refrain from writing about certain cultural particularities as this would sometimes lead people to be biased. I just consider them normal.

But there are a couple of things that really struck me as odd; they are also completely non-sensical.

There is this belief especially among middle-aged women – I have never encountered it in younger ones yet – that drinking too much water makes you fat. Consequently, they drink just a glass or two a day. It may come as no surprise to the discerning observer that a lot of people suffer from migrane and severe headaches; a direct result of dehydration. When those headaches get too bad they go see a nurse or a doctor who puts them on an IV of saline solution to replenish their body water. This is good business especially for the nurses who normally do this on the side at home; I don’t know where the saline solution comes form, and I don’t really want to speculate, but I do have my theory here.

Anyway, I wonder where this silly belief comes from. Why they choose to see a nurse for an IV so quickly – they call that whole thing ‘chah serum’ – may come from the Communist period. Health care at that time was free so it was really easy to get it. Nobody in the West would think of going to get an IV for the same symptoms. At $150 per doctor’s visit in the U. S. for instance, that is no surprise either.

The second oddity is that some people don’t dry their bodies with towels after a shower or bath. Reason: if you rub the body with that towel you rub that water into the skin. The water is not entirely clean as a lot of people, especially in the countryside, use rain water or bathe in the river. By letting their body air-dry they don’t get any bacteria into their body. Well, it may make perfect sense at first glance, but it also demonstrates a complete lack of understanding of the human body.

Wednesday, October 13, 2010

Business Korean Style?

This is something that has only now come to my attention. There is a pretty large Korean conglomorate that opened a bank, a construction company, and an architectural design office in Phnom Penh a while back.

They had plans to build some De-Castle style condos near the airport. One of their buildings called for a height of 42 meters (I wouldn’t know how many stories that would make it). As it happened, this building was right smack in the landing and take-off zone of the airport and exceeded the permissible structure height as prescribed by air traffic control procedures and aircraft performance criteria.

Now this is a big company and one would have thought they would have some pretty well-educated persons at the top. You know what happened? They wanted to bribe the airport and air traffic control officials to give them an exemption - never mind, air safety.

When their bribery attempts failed, they simply wanted to buy the company that operates the airport. That company is French-owned and they still have some 30 years to go on their concession. Perhaps, the concession is not sellable under the terms of their contract; perhaps, the offer was not good enough; perhaps the profitabiliy is so good that no offer would have been good enough.

Anyway, give me a break. What were those knuckle-heads thinking? Anything goes in Cambodia? A lot does, but not everything.

Moving to Cambodia

Although quite a bit has been happening on both the political and economic front in the past two months I have not been able to maintain this blog for some time. I have given up my U. S. residence for good now (although I still have my business and own property there). I also moved into new homes in Phnom Penh and in Sihanouk province, which kept me busy for the last two to three months. I had lived in a furnished 2-bedroom apartment in Phnom Penh and a weekend cottage before.

I think I will have a little more time to furnish some inside info on Cambodia again in the future. First, however, let me tell those overseas Khmer considering moving back to Cambodia lock, stock, and barrel what is involved in such a move; financially, cutting through red tape, setting up or building your own home, etc.

In the past I have always encouraged overseas Khmer to move back in order to help develop the country. We all know Cambodia is still in dire need of people with a better education, know-how in modern business, experts in various fields ranging from agriculture, mid-sized construction, to small manufacturing, knowledge of international trade, and teachers, among others.

From my many encounters with Cambodians overseas I know they all long to be back in their home-country but really don’t know what to do here; whether they can afford the same things they are used to in their adopted countries, maintain the same life-style, etc. It certainly is a big decision. I am aware that most overseas Khmer just make enough to make ends meet; not a whole lot have struck it ‘rich’ overseas; they just have normal jobs; many times they barely eke out a living, oftentimes due to the lack of proficient knowledge of English, French, or German; the languages of the countries that most of them went to. Of course, their children who were born overseas don’t harbor those feelings. They more or less assimilated into the new culture and feel as belonging there rather than here. But nevertheless, I would still recommend the younger people as well to at least consider it; the money might not be as good here, in fact, it definitely isn’t, but possibly it might be more rewarding in other respects.

However, once they are ready to go ahead with their plans they may be surprised how much it actually costs to make that actual move if you want to take your whole belongings with you.

Now I had furniture for a 4-bedroom house, one SUV, one motorcycle, one 22’ power boat. My residence was Florida, which is almost exactly halfway around the world from Cambodia, so the cost is higher than from California, or Europe for that matter.

First, I forgot about the power boat. It would have cost $15,000 for the freight alone; I had checked into how much the import duty would have been, but boats weren’t in the books of the customs department. Anyway, that was too much for my taste so I simply sold the boat.

Next, I wanted to take my SUV, a 2001 MB ML320, and my motorbike, a 2003 Honda 750 Shadow ACE. Put into a container the freight would have been $5,500 for both; import duty for the MB around $11,000, and $1,100 for the motorcycle.

The lowest quote I got for the furniture, another 40’-container, was $9,300 including insurance, so altogether I was looking at around $26,000 to $27,000 just for freight and duty. My freight agent in Phnom Penh also advised me that there would be some import duty on the personal belongings, e. g. TV, computer, and such. All of a sudden that added up to possibly over $30,000.

Consequently, I scratched the car and the motorbike. I sold both which paid for the freight for the furniture. That made it a lot more acceptable. Additionally, I had an SUV in Cambodia already. We needed to add the flight tickets for the family into our tally, which set us back another $6,000 (not to mention the trip to Washington, D.C. and New York my wife and I took as a farewell tour, which slimmed our pocket books by another $4,000; but after the hassle of packing things and getting the house ready for sale we thought we had earned that trip).

When we got to Cambodia we moved right into the house in Phnom Penh my wife’s uncle and aunt had prepared for us already; additionally two of our kids had arrived a month earlier, so we didn’t have to do much on that end. Nevertheless the house needed to be furnished, we needed motorbikes for the kids to get around, etc. – cost for fridge, TV, furniture, curtains, and so on, $7,000. The furniture from our house in the U. S. was to go to our house in Sihanouk province.

That container was still on the water and it took a month until it arrived in Sihanoukville port. Total transit time from the house in Florida to Cambodia was 51 days. While we were waiting we prepared all the paperwork for the import clearance. Besides the ocean bill of lading, the Cambodian customs department requires a commercial invoice (never mind that this was a personal move), and an itemized inventory of each item. Virtually everyone in the U. S. owns some kind of gun; so did I. I wanted to take them but those were definitely no-go items. I tried for a special permit but was categorically turned down; so sold they were too.

Of course, now the haggling started over whether or not there was any import duty payable. I left that in the hands of my freight agent. To my vast relief he reported to me on the day the container was finally cleared that we were exempted as the whole affair was declared as my wife’s return to Cambodia. Nevertheless, we still needed to part with a whopping $1,350, which broke down into fees for the port, Camcontrol (the official inspection agency), import permits, clearance fees, fees for documents, approval fees, x-ray inspection fees (each container is x-rayed, so forget about trying to smuggle in something illegal, e. g. weapons, drugs, etc.), warehousing, and transportation. In comparison to clear an inbound container in the U. S. is around $60 in agent’s fees, but the terminal handling charges are about $500; anyway, it is still way cheaper in the U. S. (I know; I have owned an import business there for 20 years).

If you do the math you get a neat $25,000 plus miscellaneous out-of-pocket expenses to make that move for a family of 4. (I had gotten rid of at least one quarter of our furniture in the U.S.) Obviously only few people will move into two homes at the same time, so take off the $7,000 for house in Phnom Penh. But $18,000 plus will still make you think twice. You may deduct about $2,000 if you move from California, and $3,000 if you move from Europe. Fewer belongings won’t make a big difference as a 20’-container is about $300 less than a 40’er. The only consideration might be to sell off your stuff and start from scratch in Cambodia. If you want to maintain a Western standard it will cost you at least $15,000 too to buy everything from fridge to sofa, chairs, etc.; and it is a question of quality too.

Is it really worth making that move? It all depends on your motivation for it. Mine was pretty clear; I have a Cambodian wife, and two Cambodian children who still live at home; I firmly believed the children should go back to make their contribution to Cambodia, as small as it may be. Others might think differently; in fact, I guess most of them do.

Most serious Westerners, of course, come to live here from world-weariness, that is, weariness of our Western - what I perceive as - degeneration. It is slowly finding its way into Cambodia too, judging by what young Khmer people consider ‘in’ in terms of life style and what’s important to them. It also used to be that Westerners came here for the low cost of living. That may turn out to be a fallacy. If you live and eat like a Khmer, yes, but if you continue with your Western life-style, there is hardly any difference any more, except for eating out, rent (if you rent), medical costs, clothes. Anyway, this is the second time that I have come here to live here full-time, so there is at least one person who thought it worth it.