Saturday, December 25, 2010

Will Sihanoukville Ever Become a Real Resort Town?

Ochoeuteal Beach

There have been many enthusiastic reports about the more or less imminent development of Sihanoukville into a major tourist destination. This was to be the premier resort town of Cambodia. Of course, there isn’t any other town on the coast that would offer similar prerequisites. So it stands to reason that all efforts would be concentrated here. Not too long ago the city/provincial government even sent notice to all business owners on Otres beach to vacate their land as the beach is going to be developed. Never mind that some of the business owners had just gotten their license a few months before and were not told about those plans. In the end, most of the affected businesses just moved their shacks to another part of the beach. It pretty much looks the same as before.

Anyway, I had wanted to be part of that development at one time; 3-4 years ago to be exact. I was looking for about one hectare on Otres beach to build a 15-bungalow 3-star international resort. Everybody had land to sell, so not surprisingly, I found a suitable piece of land rather quickly. Of course, it came at a price, which I at the time thought was not too farfetched – about $100/m2. They are asking for more than double, even triple that money now. For beachfront land this is not too much either, I believe. After all, there is only so much beach available; once it has been taken, it is gone. My plans did not come to fruition, though, as I couldn’t find solvent investors for the project, which had a total volume of about $8.0 million. Many were interested, but when it came to showing the money, the communication abruptly ceased or I got an earful of excuses. When the financial crisis hit there was no chance I could find any investors so I forgot about the whole project. Nevertheless, I occasionally go back to check on what’s going on there now. I read there was a Greek casino operator that wanted to built a resort with casino (of course); some Chinese were supposedly coming in too. Well, to make a long story short, I have yet to see a resort on Otres beach going up, Greek or otherwise; so far not even an indication of one being initiated. That one hectare I wanted to buy is still sitting there vacant, in the meantime overgrown with weeds.

The city/provincial government promised an Otres Beach Park. Well, look at the picture below. This is what has materialized so far. This is not to say they won’t build it but it might go the same way as the Hun Sen Beach Park. They erected a corrugated iron wall, behind which some construction activity could be heard, and trucks drove in and out. Now the wall has come down again, and lo and behold, I did not see any difference to the way it was before. So I guess they have given up on their plans, or the money needed to be spent somewhere else. Before they even start contemplating a park like that for Otres Beach they should build proper access roads. The dirt road really isn’t going to cut it if they want more people to travel the distance to it. Those squatters along the road close to the beach won’t help either. They have been there for the last 7 or 8 years. Just imagine the public outcry if indeed the government were to move those people. They are not fishermen; they have no visible means of support; yes, they are poor but what are they doing there? I can sympathize with them, but I don’t understand it.

Proposed Otres Beach Park

Having been in the tourist/travel business for a long time, I am naturally interested in those developments. In previous posts, I wrote about what was needed to attract foreign (Western) tourists. (Western, because those tend to spend quite a bit of money.) First and foremost is adequate hotel accommodation, that is, in the 3 to 5 star category. So far there is only the Sokha Beach Hotel and the Independence Hotel. The Sokha Beach added some nice bungalows on stilts in water in quasi-Khmer style with thatched roofs.
Sokha Beach Hotel Bungalows

On Ocheouteal, I saw a new Diamond Hotel about to open their doors. But this looks just like another Khmer-hotel that will probably soon go to seeds because they usually don’t do anything in terms of upkeep. I remember the Jasmine Hotel when it first opened in 2003. I thought it was quite nice, although lacking a decent restaurant for breakfast. If you go to stay there now, it is a run-down place and surely not worth more than the $20 they charge for an air-conditioned room. Other than that, there is nothing worth mentioning as far as attractive accommodations go. The bottom line is that Sihanoukville is a far cry from a resort town. It’s still a backpackers and single male travelers destination as is evidenced by the many single man, mostly on the wrong of side of 50, roaming the streets on mopeds or tuk-tuks with a usually much younger female Khmer companion, although during season the picture changes slightly.

Koh Puous is still moving along at a snail’s pace. The bridge is due for completion in 2011. Then the island development is going to begin. In other words, it will be some time before we see any tourists there.

Koh Puous Bridge

Hawaii Beach has practically disappeared with the Emario Shonan Resort being built there. Although the beach is accessible to the public, as with all beaches the 15 m, sometimes 30 or 50 m of waterfront, remain state property, I wonder how many Khmer will actually go there once the development is finished. According to their website the company is Khmer-owned and the architecture is good evidence of that. ( I haven’t found out how much the flat-houses, or the bungalows, or the marina houses will cost. But the whole thing looks a little like overkill to me. They are building a hotel with conference center, a casino, restaurants, a shopping mall, and an apartment house. They all bank on foreigners and wealthy Khmer buying into this. Well, who doesn’t want to have their own beachfront property? Bearing that in mind, on second thought, it might well succeed too, with the foreigners buying the condos, and the Khmer the ‘flat houses’ (but what about the shopping center?). Once luscious landscaping will make it look attractively tropical, I am sure it will add to Sihanoukville’s appeal both here and abroad.

Emario Resort

Now Pearl City on the other hand is one development where I am wondering what it is supposed to accomplish for the overall development – more flat houses and more shopping centers. The developer is Thai Boon Roong, one of the seven groups in Cambodia that virtually control most of the country, both in real estate and business. So they have enough money to pour into something that is planned well into the future. It is too big too soon for Snooky at this stage in its development, that’s for sure. It’s huge, currently ugly (well, it is a construction site), and planned well past the pocketbooks of the majority of Khmer. They make exactly the same mistakes as all the flat house developers in Phnom Penh – too much and too expensive for today’s Khmer real estate market. I wonder whether these people have ever heard of market research, demographics, income distribution, and such. There is also a resort that recently partially opened nearby – the Khmer Broneth Resort. Another big miscalculation Khmer hotel developers make is that they think a nice hotel with a swimming pool is a resort. That property is one of them. Well, how about some activities and entertainment รก la Club Med? Now that’s what I call a resort!

Pearl City

However, I know a piece of land that would be a gem if someone like the people who designed the Sokha Beach Hotel properly developed it. It is a gem of sorts already; it currently houses the Treasure Island restaurant with excellent seafood. The location is ideal. It is secluded enough (notwithstanding the onramp for the Koh Puous bridge nearby at the beginning of the access road), and it practically has its private beach. Although the Koh Puous bridge is going up within sight of the beach, I don’t think that will matter much once the bridge is completed. As far as I know the property is leased to a Hong Kong Chinese for 50 years. Either he doesn’t have the money to develop it, or he doesn’t know how, or he is simply not interested. It is a real shame, though. This property would be just the site for a 20-bungalow resort like the one I had planned. For the time being, though, try out their fresh seafood; you won’t be disappointed. It’s a beautiful, romantic setting if you eat there at night in one of the gazebos along the beach. The fishing boat that ran aground there adds to the overall ambience.

Treasure Island Restaurant Beach

Tuesday, December 21, 2010

Through the Roof?

For those of you interested in the rubber industry, and there are quite a few judging from the visits I get on those posts, it may not have escaped your attention that the price for crepe rubber has risen to heretofore unseen heights. Here is the relevant table for Cambodia’s main export CSK5L - kg prices in US cents:

Source Malaysian Rubber Exchange

Yesterday the price hit $4,640/mt (or 464 cents per kg). Although it had touched that point once before but came back down to between $4,400 and $4,550/mt. Compared to a low price of around $1,500 to $1,600/mt in March 2009, this is a tripling of prices in 20 months.

By any standard this would be considered unhealthy. Personally, I am a little worried, too, as my experience has taught me that those rapid price increases tend to end up in a crash. This is, of course, all driven by the Chinese economy which hums along at an 8% to 9% growth rate. Economists see a certain danger looming up ahead for the Chinese economy as their growth is also based on an exploding real estate market, and readily available loans from banks, which, however, helped China avoid (just as India did) the severe consequences of the world-wide recession. A real estate bubble and easy money were the same ingredients that led to the crash of the U. S. economy, though; the one big difference appears to be that Chinese banks do not repackage their loans in what later became known as toxic derivatives. China is expected to tighten monetary policy by raising interest rates next year. This should cool down the economy somewhat.

The connection to the rubber growing industry is to a large extent China’s auto manufacturing industry. Today China has the largest single auto market in the world; it surpassed the U. S. in 2009. Coupled with an underproduction of crepe rubber this has led to this explosion of rubber prices. Besides, oil prices also drive other commodities, especially rubber – high oil prices, high rubber prices. Why? High oil prices make synthetic rubber more expensive so the markets turn to natural rubber.

Hopefully, China’s economy will indeed cool down next year, which will then also lead to a stabilization of prices, which is certainly needed in the rubber industry. It’s nice to make some extra money now, and we should enjoy it while it lasts; but we should be wary of a rude awakening. Should it come we can only hope that we won’t fall out of bed in the middle of a nice dream. But then, there are also sage people who say the Chinese economy is going to be growing for the next ten years.  In that sense, investing in a rubber plantation is not a bad idea. The Chinese do it - killing two birds with one stone - securing their supply and earning decent money on their investment.
      18-month old plantation

Sunday, December 19, 2010

Does the Country Need This?

Christmas is around the corner in the Western world. It finally caught up with Cambodia too. It was here before but this year it really made a big splash, so to speak, what with all the Christmas carols blaring from the sound systems of the shopping malls and supermarkets, like Lucky and Bayon, and with (artificial) Christmas trees in many restaurants; even the ones where you wouldn’t expect it, like my favorite Chinese-Khmer breakfast place, the Mekong. Thankfully, I believe most Cambodians ignore all that hustle and bustle that is normally associated with the pre-Christmas season, e. g. buying presents (after all who has the money), the office parties, etc.

Now since this is a Christian holiday, that is, before it declined into a purely commercial event, this brings me to the question why there are so many Christian organizations in Cambodia. They really seem to proliferate. It appears as if it’s mostly American and Australian churches, or denominations, that abound. Of course, Americans have always been great missionaries, and they are found all over the world. Wasn’t it American missionaries that annexed Hawaii? But you also have your German Lutherans, and Roman Catholics, e. g. the Don Bosco padres, etc.

I know I am not the only one who is asking himself the question whether or not all these Christian organizations are here for the help they extend to the poor and needy, or are they here for their souls? Now, why would a family of six from Oklahoma pack up and go to live in Cambodia? Aren’t there any souls to be saved in their dusty home state? Wouldn’t they have a much more comfortable life back home? Why leave all that for some backwater, ‘uncivilized’ country like Cambodia?

Yeah, I know, they all do good work here, and traditionally churches have always been on the forefront of humanitarian aid. But obviously, their underlying purpose is to proselytize and convert people to the Christian belief, whether it’s Protestant or Catholic, with the numerous protestant denominations outweighing the Catholics 99 to 1, I would guess. One of their insidious ways of getting Cambodian converts is by schooling them. One primary example appears to be the Hope schools, incl. Logos. They teach a normal American curriculum but each day has one period of Christian lessons, like Bible study. They also teach the theory of Intelligent Design (including that ridiculous belief that the earth is about 5,000 years old), alas alongside the Darwinian Theory. Those schools are not for free, but they do offer scholarships to Cambodian children. Some Christian schools, though, offer a free elementary education; that age period when children are most impressionable and easily indoctrinated.

I wonder who funds all these NGOs. I know people in the West donate tons of money for good causes, and in the U. S. whole churches exist on their members’ donations. So is this where all the money comes from? And it’s not that these missionaries live an ascetic life. No, they drive nice cars, mostly SUVs, rent villas, and employ maids. I guess it must be worth it to leave all that materialism behind and help people here.

In the plus-column, though, we can note that they do offer a quality education, if you disregard their religious lessons, they do help with community projects, they do provide much-needed health care in some rural areas. But could they just do it without wanting to convert people, or to show them the ways of the Christian God and their Savior Jesus?

After all, the Cambodians have an older, perfectly acceptable, and livable religion in Buddhism, or philosophy as some would say, in terms of how to live a good life. Some would say it is a better religion as it has not brought forth so much evil that was committed in the name of Christianity.

I mean, Christian ethics as expressed in their 10 commandments, which actually is a Judaic postulate, and the teachings of their prophet Jesus weren’t new ideas. The same principles were espoused long before Jesus came along. Plato and Socrates come to mind. Buddha laid down more or less the same principles. That all happened well before Jesus’ time.

Christianity is just a sect that sprang from Judaism, just as Islam did. Religion has a way of splitting up into Churches. It’s only too human. When people differ in their beliefs, they just start their own church. And there is no place like the U. S. where anybody can start their own church, mega-churches even, that oftentimes rake in millions of dollars. Similarly, anybody can come to Cambodia in the name of Christianity, start an NGO, collect money, and do some good work, right? Don’t get me wrong. I am not accusing any organization of coming here for the money. But it would be possible, now wouldn’t it?

And what are these Mormons doing here? At the time I was still flying back and forth between the U. S. and Cambodia, there was hardly any time when I did not see a group of Mormons on the plane that usually dispersed in Taiwan taking their flights to the different Asian destinations. Each Mormon must spend 2 years as a missionary. This is a dictum of their church. So you have them here in Cambodia, of all places, bicycling along in their white shirts, black pants, always wearing a helmet. Clean-cut, nice guys, no doubt. And you have to give it to them. They all speak Khmer. So they come well-prepared, and they surely have the most prominent ‘Christian’ building in Cambodia. But, as far as I know, they don’t do squat in terms of doing some good deeds. They just spend their time trying to convert people. Now, I would think they had better pack their magic underwear and head back to where they came from. Cambodians need them as much as a dose of VD. (Note to those who don’t know: Mormons wear special undergarments, or garments, that are supposed to protect them from evil, and also remind them of the promise they made to God. There are some other interpretations and a lot of ridicule about those magic underpants. If interested Google it.)

I mean, to each their own. Sure, let them come here and do good; and the Cambodian government lets them. Just don’t be so ostentatious about it. Cambodians regrettably copy enough of that Western, mostly Americanized, life-style as it is. They sure don’t need that Christian belief too. I am sure secular organizations could do just as good, if not better, a job. I am thinking of Oxfam, or the GTZ (German technical NGO). But as to the Mormons: you are not needed here, nor anywhere for that matter.