I
received this comment on my previous post. It shows both truth and despair but
does not indicate a balanced view of the circumstances and the special
situation in which Cambodia finds itself. I thought it worthy of a reply outlining
my thoughts.
The
comment:
“Don't look back but to learn from mistakes and always look
both ways before you proceed. How can a young professional Cambodian work for
300 USD a month and get ahead? How can we ever save to buy a house as houses
here cost as much as they do anywhere else in the world? How could we ever
afford anything more than a motorbike? When we work for another, our time is
not our own, and so there are all sorts of demands and expectations, along with
demands and expectations from family, there is now way we will ever get ahead.
You explain it to me. You explain what needs to happen for poor Cambodians to
own a home, and a nice boat like you have, and what makes you any better than
the rest of us? Why is it that you deserve what you have and we have our lot?
Yes, post this or don't post it, but aswer it.”
The reply:
Dear Anonymous,
I sense a great frustration in your comment, perhaps even
bitterness. First let me explain how I got where I am now; not that my
situation in life is such that one would count me among the rich. I would say I
am well-to-do. But now I am in my last third, possibly even last quarter, of my
life, so everything I have now has been earned over a lifetime, and it was
acquired abroad, not in Cambodia, and, most importantly, it was acquired
legally, not by theft, fraud, or corruption. It was not earned by speculating
or gambling either. I am a very conservative businessman when it comes to these
things. I don’t like high risks. These only rob you of your sleep and give you
headaches, nightmares, and make for a bad family and social life, possibly lead
to high alcohol consumption, or even drug use.
I got a decent education in several fields, both business
and technical. After working at several well-paying jobs I opened my own
business on a shoestring. According to opinion polls, being independent is more
important to young entrepreneurs than making a great deal of money. This
applied to me too.
Subsequently, I owned companies in several countries, among
them Thailand and Cambodia in SE Asia in the early 1990ies. I do have to say
though that my endeavors in Cambodia at that time weren’t overly successful.
Although I did well, I left without any profit because of high expenses (guess
why?) and shrinking profits as my solitary position as a foreign trading
company slowly disappeared with the lifting of the U. S. trade embargo. I
resettled in the West and joined another business.
I finally cashed out when I sold that business at a very good
price after running and growing it for 14 years. One overriding principle in my
life was that I did want to enjoy life while I was still able to – in the years
when one is not yet frail and shriveled. My ambitions were, therefore, not the driving force behind my business
activities. A friend of mine proved my point only too well. He started out at
the same time as I and worked his butt off his entire life because his career
was paramount to him. He is dead already. He made a lot more money than I did.
But I am still around to enjoy life. In the end, however, I fall into the same
category as most somewhat successful businessmen; I made most of my money after
I was 50.
Those stories of the billionaire wunderkinder, such as Mark
Zuckerberg, are one in millions. Altogether, the U. S. only has around 3
million millionaires, that is less than one percent of the total population. At
the same time the U. S. has about 15% of the population living below the
poverty line, in other words, more than 50,000 Americans are poor. And don’t
think poverty in the West is any different from poverty here.
Wealth is distributed very unevenly everywhere in the world.
A lot people say it is getting ever worse. I personally believe the
distribution is clearly out of balance tilting towards the super rich, ever
since someone came up with the term ‘shareholder value’. This is just to put
things into perspective. Don’t deplore your lot. Recognize what’s available and
try to make it work for you.
I only came back to Cambodia to live here as I have a
Cambodian wife. I used part of my money to invest here and to build a nice house, and buy a
boat – my major hobby. I don’t see why I should not enjoy the same lifestyle
that I had and would have had if I had stayed in the West. I had all these
things before I came here. Do I deserve them? You bet I do. I worked hard
enough for them. Am I better than you? I think not. I just had better
opportunities, grew up in a better economy and generally better era – at least
in my mind. It helps if you are halfway intelligent and smart too.
So what can a young Cambodian professional do? First, and I
guess you have that, he/she needs to get a good education. That’s easier said
than done seeing as the educational system leaves much to be desired, to put it
mildly. Nevertheless, there are chances even in the public educational system. If
young people make an effort and study hard they can get a head-start on those
who just watch videos on You-tube or play mindless video games. Choosing the
right course of study at the right school is extremely significant too.
The big difference comes with the vast disparity between the
economies of the Western countries and Cambodia. One must not forget the last
40 years in Cambodia’s history to understand why Cambodia is still so much
behind Thailand. But despite its many negatives, the Cambodian economy is
catching up. What took Thailand 30 years to accomplish, namely to grow from an
underdeveloped country into a threshold country, will take Cambodia only 15
years – on account of the more modern technology available today and the fact
that changes happen must faster now. In my opinion, the first 5 years of those
15 have happened already.
Even with the best education it is still hard to find a job
that would pay well enough so that people can afford the things that
commercials on TV make them believe they need and want. A good used car easily runs into the $20,000
range, a house in Phnom Penh is even more expensive than in most places in the
U. S.; I would say they have reached European standards, where real estate is
prohibitively expensive in most places. I would venture to say that most of the
real estate, such as condos, duplexes, and villas, are owned by very few people
who bought them for speculation or to rent them. Nevertheless, there is a growing
middle class in Phnom Penh that can buy into those mush-rooming ‘ ‘Borei New
World’ developments.
There is a very simple explanation why comparitive wealth
spread to a large part of the population in the West and Japan – it is debt.
Banks original purpose was to lend money to businesses and people to acquire
things they needed to invest in growth and for individuals to fulfill their
needs and other desires. This way they made more money available to average
people so they could consume more. More consumption meant more production, more
production meant more jobs, more jobs meant higher pay, and so on, and so
forth. Almost the entire U. S. economy is based on home consumption.
This economic cycle is in its infancy in Cambodia. But banks
do extend loans for purchases of motorcycles, cars, and homes. The
collateral of at least 40% is still
rather steep but it is a start.
Another difference to the West is that when people get
married there they don’t have kids right away so they can both work and save
money for larger items, e.g. cars, homes, etc. In some countries they sometimes
hold off having kids for 15 years just so they can afford all the things they believe
they need. Here in most cases the new
couple promptly has the first baby almost exactly 9 months after their wedding.
So traditional culture is an obstacle to material well-being. This, of course,
does not take into account social implications.
But here, even young people can sometimes make it happen.
When did most people make most of their money in Cambodia? Right, during the
real-estate bubble. I know an at the time rather dumb young man without
education. But he grasped the opportunity when it presented itself. He bought a
small lot of land that appreciated quickly, so he flipped it and bought another
larger one, flipped it, and so on. You didn’t need a lot of money to start with
then, prices were so low. He is now in his early 40ies and lives very
comfortably in his own house with a wife and two kids.
Another young man acted as a guide to Korean businessmen who
came looking for real estate. He watched how they did it and imitated them on a
very small scale and then traded his way up. He now owns 3 villas and a night
club. Sure enough he also drives a new big Lexus SUV.
That’s all nice and fine, but what how do these examples
help you? Keep working hard, look out for opportunities, and grab them if they
promise a good return. But don’t make any stupid moves by borrowing money at
high interest rates from people in the market, e. g. 120% per year. Don’t play
those traditional money lending games like ‘tontin’. There is always a loser in
a game. Look for niche products that would be a novelty and where you would be
very competitive. The important thing is to get an exclusive because if you
don’t others will follow doing exactly the same thing. Cambodians have a way of
always doing the same as everybody else. That happened to me several times back
in the early days. Look for a field that is a growth sector. How many phone
shops, hair and nail salons, restaurants, computer shops, or even car dealers
does Cambodia need? Investing in those you will probably be able to make a
living, but just barely so. Another tuk-tuk on the streets might not be
greatest idea either.
An individual many times does not have enough seed money to
start up his/her own business. They way out is a partnership.
A nice mid-range guesthouse is still a good business despite
their abundance all over the place. Most of them are run poorly and earn
equally poor money. I know a string a very successful mid-range boutique
guesthouse which turn a nice profit – but they are all run by foreigners.
Because of their business background abroad foreigners have more experience and
knowledge so they know how to run things in an efficient way. This knowledge is
largely absent in many Cambodian businesses, as is the attention to detail,
customer service, or reliability.
But then there is this seemingly insurmountable problem of
family or traditional expectations a young man needs to fulfill unless he does
not want to risk being estranged from his family. This is an area where I can’t
really give advice nor do I want to. It is too tricky and too individual. One
thing is for sure, tradition and conservatism hold back development. Just look
at the definition of the word ‘conserve’ – to keep it the way it is. Too much
progress too fast has not proved to be the right way either, as the recent
examples in Arab countries demonstrate. This issue you must address and resolve
for yourself.
And
finally, this blog is not meant to arouse envy or jealousy in Cambodian
readers. It is supposed to provide some insights and experience for other
foreigners, overseas Khmer, and whoever is interested in things Cambodian.
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