The Cambodian Daily wrote about the Mu Sochua case in Friday’s paper reporting that by some people’s account it enhanced her stature, especially among women. One person was reported as saying that about 50% agree with her while the other half does not. Be that as it may – I don’t believe for one moment that this ‘drama’ was on the forefront of people’s thoughts – one thing is for certain.
By impounding her salary the court avoided a greater political international scandal. Domestically, the whole case was just old hat. Internationally, of course, it caught a few headlines, although by and large it wasn’t something that aroused great interest in the Western press.
If the court had had her arrested that would certainly have produced outrage among the Western international community with possibly some consequences. The government would really have had a hard time explaining this. So far, it was just a lawsuit, a personal matter as a spokesman said. But prison for insulting the Prime Minister? It would also have made a martyr out of Mu Sochua, a person who is probably liked best within Cambodia among the opposition politicians. That was not something the government really wanted. So they found this way out. A little beyond what is generally accepted as good democratic practice, but, hey, this is still a 'fledgling democracy'. The good thing is that it is over; Mu Sochua said as much. Turn to the real issues now.
Saturday, August 14, 2010
Friday, August 13, 2010
A Cambodian Dilemma
A 26-year-old man, let’s call him Sun, came to me seeking advice in a very personal matter. He is planning to get married to a woman from his home village. However, he is facing a big problem. First, he has a competitor; second, he doesn’t have a home, nor enough income to support a wife, or a family for that matter. The potential father-in-law makes a living panning for gold in the Mondulkiri mountains and is moderately successful at it. That father-in-law’s brother had at one time struck lucky when he found rocks containing the equivalent of 1 kg of pure gold.
The competitor works as a carpenter in his father’s shop; in most villagers’ eyes he would be considered a good match. On top of it this, that man is Sun’s cousin. The girl herself doesn’t say much. She relies on her parents’ judgment. Sun doesn’t really know whether he loves that girl either, but he is eyeing her parents’ potential wealth; even though their current situation is not too bad already.
The girl’s parents are not exactly averse to Sun marrying her as he is also quite flexible when it comes to making money. Most of the time he acts as a guide to tourists, taking them all over town and occasionally to Siem Reap as well. He owns a car, which he bought with borrowed money from that gold prospector who lucked out once. He has since paid back the loan, so his standing with the family is quite good.
Marrying the girl would definitely mean going back to his home village in Kratie province. But what kind of job would he have there? He is still going to college too. Now that’s the real dilemma. If he loses out to his cousin that would certainly affect his manliness, at least in his mind. If he marries the girl, however, he would most certainly face a life of hardship for the first few years, if not most of his lifetime. Would he still be able to graduate from college?
He is not even sure whether he really loves the girl, and whether the girl really loves him. On the surface it looked to me more like a case of hurt pride than a basis for a marriage. Being a Westerner most will probably know what I advised him to do. After all, there are many beautiful young girls out there, or as the saying goes, there are many more mothers with beautiful daughters, why put all your money on one?
The second dilemma, of course, is Khmer tradition. Decent girls just can’t go and live with a guy to see whether they are a good match. In the West young people go out together for a while, have a relationship, and eventually move in with each other, before they get married. That’s a no, no for normal Cambodian girls. If they defy that tradition they are put on an equal footing with prostitutes. The perception of young people about this is slowly changing, but it will be a long time before people will shed their concept of the role of the sexes. Some people will even say why should it change?
So what’s a guy to do? Well, in the end he heeded our advice and let go of that inner compulsion to get married for all the wrong reasons and is now playing things by ear. The other day he told us he had to help another girl-friend in Phnom Penh whose mother was sick. It looks like it wasn’t such a big love after all.
The competitor works as a carpenter in his father’s shop; in most villagers’ eyes he would be considered a good match. On top of it this, that man is Sun’s cousin. The girl herself doesn’t say much. She relies on her parents’ judgment. Sun doesn’t really know whether he loves that girl either, but he is eyeing her parents’ potential wealth; even though their current situation is not too bad already.
The girl’s parents are not exactly averse to Sun marrying her as he is also quite flexible when it comes to making money. Most of the time he acts as a guide to tourists, taking them all over town and occasionally to Siem Reap as well. He owns a car, which he bought with borrowed money from that gold prospector who lucked out once. He has since paid back the loan, so his standing with the family is quite good.
Marrying the girl would definitely mean going back to his home village in Kratie province. But what kind of job would he have there? He is still going to college too. Now that’s the real dilemma. If he loses out to his cousin that would certainly affect his manliness, at least in his mind. If he marries the girl, however, he would most certainly face a life of hardship for the first few years, if not most of his lifetime. Would he still be able to graduate from college?
He is not even sure whether he really loves the girl, and whether the girl really loves him. On the surface it looked to me more like a case of hurt pride than a basis for a marriage. Being a Westerner most will probably know what I advised him to do. After all, there are many beautiful young girls out there, or as the saying goes, there are many more mothers with beautiful daughters, why put all your money on one?
The second dilemma, of course, is Khmer tradition. Decent girls just can’t go and live with a guy to see whether they are a good match. In the West young people go out together for a while, have a relationship, and eventually move in with each other, before they get married. That’s a no, no for normal Cambodian girls. If they defy that tradition they are put on an equal footing with prostitutes. The perception of young people about this is slowly changing, but it will be a long time before people will shed their concept of the role of the sexes. Some people will even say why should it change?
So what’s a guy to do? Well, in the end he heeded our advice and let go of that inner compulsion to get married for all the wrong reasons and is now playing things by ear. The other day he told us he had to help another girl-friend in Phnom Penh whose mother was sick. It looks like it wasn’t such a big love after all.
Sunday, August 8, 2010
Is The Recession Over?
By economic standards, yes. The Cambodian economy is growing again, so officially it is over. This is borne out by the increase of tourist arrivals, the rise in exports, sale of cars and trucks, where imports jumped by 35% and the resumption of construction activity in the first half of 2010. According to the Ministry of Commerce, the agricultural sector is contributing to the growth significantly, which I can, of course, personally confirm from my own experience.
Unfortunately, this is combined with increased inflation, one sign of which is the increase in gasoline prices. Regular gas is now about $1.04 versus about $.90 per liter at the beginning of the year. The riel has also come under pressure prompting the National Bank to sell dollars from its reserves, trying to reduce the volume of the riel. So far, as much as I can see, this has had limited effect, as the riel still is at KHR 4270 to the dollar. The National Bank tries to keep it between KHR 4000 to KHR 4200.
What surprises me most, however, is the real estate and construction sector. I am no longer involved in looking for land or in developments, but from what I can see around Phnom Penh, there are still many Cambodian–style flats, or town houses, sitting empty. But I see new ones springing up everywhere now. Where and to whom are these people selling their houses? Where I live in PP, about half of the ‘gated community’ sits empty, but the developer nevertheless added about 20 units. Of course, all the existing ones had been sold (prior to the bust). People who bought them as investments aren’t getting any return on them, neither as rent nor by re-selling them at a profit.
Opposite that gated community a new development is being built. Guess what? It’s a compound of Cambodian flat houses again. I don’t really know what to make of that. There is glut on the market already but they are still building new ones?
Camko has resumed building their high-rises. From what I hear they have a new management in place, which was obviously able to tap into fresh working capital. Other than that, however, I don’t see any of the big development plans, e. g. Koh Rong resort development, or the Stung Hao international port, making any great strides towards realization or making much progress. Stung Hao International Port has put up an impressive portal and they started blasting the hill, but I haven’t seen any other activity for over a year now.
In the West they usually build the entrance last, but here it is obviously important to have a great portal first in order to show (off) the size of the investment. That ridiculous gate at the Grand Phnom Penh City is a case in point.
A little digression here: I also like the new Koh Pich. They built a nice park for the public. Although it still needs more landscaping it makes for a nice view of the area. I just don’t know what it is with the Greek monopteros-style gazebos. They do look nice but I find them a little misplaced in Cambodia. An absolute eyesore in my mind is the almost completed government building next to the new Council of Ministers building on Russian Boulevard. Whereas the existing building is daring in its architecture and definitely an interesting design, that new building is just a monstrosity, which reminds me of Soviet-style architecture with a slight Cambodian touch.
So money seems to be flowing again, what with the multiple projects under way all over the city, and new cars coming onto the roads (I only wish new trucks would replace those old run-down, ready-to-break-down trucks in use now). On a different note, I seem to be seeing a lot more vehicles with military plates again; also the green plates of the state appear to be mushrooming. They also appear on high-end SUVs all of a sudden, whereas before that was rather the exception.
But as before, that money seems to flow in the same circles, namely the ones who have it use it to hand it over to other people who also have it, in other words, it’s the business people and the upper echelon civil servants driving all this. Of course, there is also foreign money from China, Vietnam, and South Korea still flowing in. The consuming part of the population, however, is still so small that it will not have any noticeable effect on boosting a consumer-driven economy. That will still be some time in coming. A good way of seeing this is the Lucky market clientele. Besides all the expats and tourists, you see what I would call the Khmer upper-middle and upper class shopping there. You can tell by the way they dress.
Average people still have a hard time making the money it takes to break through the subsistence level. Most people just make enough to eat; they live hand to mouth so to speak. There is nothing left over to put aside for getting a business started, or expand the one they might already have.
But this is in large part due to the prevalent general ignorance of people of how to go about getting a loan, for instance. A good example is a couple who started a car/driver-for-hire business. They borrowed $5,000 from a loan-shark; they euphemistically call themselves micro-finance people. There are many of those operating in every market. The couple is paying $150 a month as interest, in other words, 36% p. a. Of course, there is no collateral so a higher interest rate in justified, but 36%? Well, somebody told the couple to go ACLEDA, the largest small-business lender in Cambodia, and a highly successful one at that. ACLEDA loans money for this kind of business using the car as collateral. The interest rate was 15% p. a. The couple was told to contact a certain person who is an acquaintance of the person advising them.
They did go to the bank, but spoke to somebody else who just shoved a sheaf of paper into their faces, which they didn’t know how to fill out. Intimidated by all this, they left it at that and now continue paying $150 a month.
Another example is a young man who will graduate next year from college with a degree in ‘tourism’, which includes some sort of business management classes. He wanted to start a fishing business in Rattanakiri and needed $500 to buy a motor for a boat. Did he do any research whether or not this business would be viable, what the competition is like, etc. No, he didn’t. Consequently, he didn’t get that $500. It looks like there are enough fishermen around already, right? Why would somebody who is studying tourism want to go into the fishing business?
This all just goes to show, that the key to improving their livelihoods starts with a good education – a sort of a platitude, I know, but that’s what is boils down to. Yeah, I know the educational system sucks, but, still, there are people who know how to use it to their advantage. I know a young lady who got a BA in marketing from the state university. She graduated top of her class and got a Fulbright scholarship in the U. S. Now she is back with a master’s degree and found a job with a financial institution.
A final word to some of my readers who simply disagree with everything I write about. Don’t start making comments again about corruption and it’s all the government’s fault that Cambodia is in this state. We have covered this ad nauseum, so save your energy.
Unfortunately, this is combined with increased inflation, one sign of which is the increase in gasoline prices. Regular gas is now about $1.04 versus about $.90 per liter at the beginning of the year. The riel has also come under pressure prompting the National Bank to sell dollars from its reserves, trying to reduce the volume of the riel. So far, as much as I can see, this has had limited effect, as the riel still is at KHR 4270 to the dollar. The National Bank tries to keep it between KHR 4000 to KHR 4200.
What surprises me most, however, is the real estate and construction sector. I am no longer involved in looking for land or in developments, but from what I can see around Phnom Penh, there are still many Cambodian–style flats, or town houses, sitting empty. But I see new ones springing up everywhere now. Where and to whom are these people selling their houses? Where I live in PP, about half of the ‘gated community’ sits empty, but the developer nevertheless added about 20 units. Of course, all the existing ones had been sold (prior to the bust). People who bought them as investments aren’t getting any return on them, neither as rent nor by re-selling them at a profit.
Opposite that gated community a new development is being built. Guess what? It’s a compound of Cambodian flat houses again. I don’t really know what to make of that. There is glut on the market already but they are still building new ones?
Camko has resumed building their high-rises. From what I hear they have a new management in place, which was obviously able to tap into fresh working capital. Other than that, however, I don’t see any of the big development plans, e. g. Koh Rong resort development, or the Stung Hao international port, making any great strides towards realization or making much progress. Stung Hao International Port has put up an impressive portal and they started blasting the hill, but I haven’t seen any other activity for over a year now.
In the West they usually build the entrance last, but here it is obviously important to have a great portal first in order to show (off) the size of the investment. That ridiculous gate at the Grand Phnom Penh City is a case in point.
A little digression here: I also like the new Koh Pich. They built a nice park for the public. Although it still needs more landscaping it makes for a nice view of the area. I just don’t know what it is with the Greek monopteros-style gazebos. They do look nice but I find them a little misplaced in Cambodia. An absolute eyesore in my mind is the almost completed government building next to the new Council of Ministers building on Russian Boulevard. Whereas the existing building is daring in its architecture and definitely an interesting design, that new building is just a monstrosity, which reminds me of Soviet-style architecture with a slight Cambodian touch.
So money seems to be flowing again, what with the multiple projects under way all over the city, and new cars coming onto the roads (I only wish new trucks would replace those old run-down, ready-to-break-down trucks in use now). On a different note, I seem to be seeing a lot more vehicles with military plates again; also the green plates of the state appear to be mushrooming. They also appear on high-end SUVs all of a sudden, whereas before that was rather the exception.
But as before, that money seems to flow in the same circles, namely the ones who have it use it to hand it over to other people who also have it, in other words, it’s the business people and the upper echelon civil servants driving all this. Of course, there is also foreign money from China, Vietnam, and South Korea still flowing in. The consuming part of the population, however, is still so small that it will not have any noticeable effect on boosting a consumer-driven economy. That will still be some time in coming. A good way of seeing this is the Lucky market clientele. Besides all the expats and tourists, you see what I would call the Khmer upper-middle and upper class shopping there. You can tell by the way they dress.
Average people still have a hard time making the money it takes to break through the subsistence level. Most people just make enough to eat; they live hand to mouth so to speak. There is nothing left over to put aside for getting a business started, or expand the one they might already have.
But this is in large part due to the prevalent general ignorance of people of how to go about getting a loan, for instance. A good example is a couple who started a car/driver-for-hire business. They borrowed $5,000 from a loan-shark; they euphemistically call themselves micro-finance people. There are many of those operating in every market. The couple is paying $150 a month as interest, in other words, 36% p. a. Of course, there is no collateral so a higher interest rate in justified, but 36%? Well, somebody told the couple to go ACLEDA, the largest small-business lender in Cambodia, and a highly successful one at that. ACLEDA loans money for this kind of business using the car as collateral. The interest rate was 15% p. a. The couple was told to contact a certain person who is an acquaintance of the person advising them.
They did go to the bank, but spoke to somebody else who just shoved a sheaf of paper into their faces, which they didn’t know how to fill out. Intimidated by all this, they left it at that and now continue paying $150 a month.
Another example is a young man who will graduate next year from college with a degree in ‘tourism’, which includes some sort of business management classes. He wanted to start a fishing business in Rattanakiri and needed $500 to buy a motor for a boat. Did he do any research whether or not this business would be viable, what the competition is like, etc. No, he didn’t. Consequently, he didn’t get that $500. It looks like there are enough fishermen around already, right? Why would somebody who is studying tourism want to go into the fishing business?
This all just goes to show, that the key to improving their livelihoods starts with a good education – a sort of a platitude, I know, but that’s what is boils down to. Yeah, I know the educational system sucks, but, still, there are people who know how to use it to their advantage. I know a young lady who got a BA in marketing from the state university. She graduated top of her class and got a Fulbright scholarship in the U. S. Now she is back with a master’s degree and found a job with a financial institution.
A final word to some of my readers who simply disagree with everything I write about. Don’t start making comments again about corruption and it’s all the government’s fault that Cambodia is in this state. We have covered this ad nauseum, so save your energy.
Tuesday, July 27, 2010
Rubber News – July 2010
It’s been awhile since I last reported on this subject. So for all those people interested in this aspect of the Cambodian economy here is another take.
Despite my expectations to the opposite, prices have held steady this year, hovering around the $3,500 mark on the Malaysian Rubber Exchange. Since Cambodia still lags behind with their pricing, traders here pay around $3,100/mt for the top-grade CSK5L crepe rubber. The reason is still the industry’s reliance on Vietnamese buyers. On the one hand this is good for the processing plants as these buyers come with cash in hand. They don’t have to deal with letter of credits and banks, and all the paperwork that is involved when shipping their products. On the other hand they lose quite a bit of money because of that. If they were a little more educated in modern business techniques they could reap a higher profit. The next economic crisis may be just around the corner, that is if the Chinese cannot dampen their overheated real-estate market, then that extra income could be put in the piggy bank for a rainy day.
Rubber plantations get about $2.20 per kg of dried latex which is lower than it should be but since pricing is pretty much uniform throughout the country you can’t do much about it. Prices should be $2.90/kg. So the lack of a heterogeneous market deprives both farmers and processing plants of sorely needed income; income to build reserves for market fluctuations and re-investment for planting new trees, which, after all, take 6 – 7 years to mature, for acquiring updated machinery/ovens, new trucks, etc.
So there is still a lot to be done. In the past 4 – 5 years the industry expanded considerably in terms of added acreage but not too much in the field of technology.
Despite the relative profitability of rubber plantations and processing plants there a number of privately held plantations which are up for sale. They are 4,000 ha, 5,000 ha, or 6,000 ha respectively; tapping areas vary, as do areas with immature trees. They all come with their own processing plant, all machinery, trucks, etc, and all staff that are well-trained in their fields. I am actively involved in the divestiture of these plantations and currently in talks with one large foreign company. Nevertheless, should there be someone else interested in either one or more of these businesses, please contact me by email and I will be in touch right away. I have all necessary documents on hand and can provide any information required. But please, only serious, qualified parties should contact me.
Despite my expectations to the opposite, prices have held steady this year, hovering around the $3,500 mark on the Malaysian Rubber Exchange. Since Cambodia still lags behind with their pricing, traders here pay around $3,100/mt for the top-grade CSK5L crepe rubber. The reason is still the industry’s reliance on Vietnamese buyers. On the one hand this is good for the processing plants as these buyers come with cash in hand. They don’t have to deal with letter of credits and banks, and all the paperwork that is involved when shipping their products. On the other hand they lose quite a bit of money because of that. If they were a little more educated in modern business techniques they could reap a higher profit. The next economic crisis may be just around the corner, that is if the Chinese cannot dampen their overheated real-estate market, then that extra income could be put in the piggy bank for a rainy day.
Rubber plantations get about $2.20 per kg of dried latex which is lower than it should be but since pricing is pretty much uniform throughout the country you can’t do much about it. Prices should be $2.90/kg. So the lack of a heterogeneous market deprives both farmers and processing plants of sorely needed income; income to build reserves for market fluctuations and re-investment for planting new trees, which, after all, take 6 – 7 years to mature, for acquiring updated machinery/ovens, new trucks, etc.
So there is still a lot to be done. In the past 4 – 5 years the industry expanded considerably in terms of added acreage but not too much in the field of technology.
Despite the relative profitability of rubber plantations and processing plants there a number of privately held plantations which are up for sale. They are 4,000 ha, 5,000 ha, or 6,000 ha respectively; tapping areas vary, as do areas with immature trees. They all come with their own processing plant, all machinery, trucks, etc, and all staff that are well-trained in their fields. I am actively involved in the divestiture of these plantations and currently in talks with one large foreign company. Nevertheless, should there be someone else interested in either one or more of these businesses, please contact me by email and I will be in touch right away. I have all necessary documents on hand and can provide any information required. But please, only serious, qualified parties should contact me.
Saturday, July 24, 2010
Car Repairs
After so many political commentaries I am turning to a rather mundane subject; but to people living here this may be of some interest.
Since I go off-road quite a bit I drive a Toyota 4-runner, one of the best off-road 4WD vehicles around (eschewing the more ostentatious full-size SUVs for simple economic reasons). Whenever there was a problem, and I must say there were very few, I took it to one of the many free repair shops that abound along the roads in Phnom Penh. I favored the one across the Rattanak hospital in Tuol Kork. One time they really didn’t know how to adjust the brakes – they went by the trial and error method - so I took it to the Toyota dealership on Russian Boulevard. In the end the slightly higher prices would make up for them being able to fix things the first time around, so I thought.
They promptly located the problem, fixed it, and I was good to go. Some time later I needed the wishbone joints replaced (part of the suspension). Unfortunately, they didn’t have the spare parts in stock. Ordering meant a wait time of 21 – 45 days by air, or up to 90 days by ground. Luckily, I didn’t need the truck for some time as I was out of country for some time. So when I go back everything was fixed nicely again.
Now just recently I had this problem with the water getting too hot and actually overheating. I had to put in about 2.5 ltrs. every day. I went to Toyota and found that the radiator lid was defective, so we replaced it. They didn’t find a leak in the radiator itself and said if the problem persists we would need to replace cylinder head gasket. There is probably a tiny leak in there making me lose all that water – sounded credible to me, although the engine oil checked out all right, but who am I to doubt a specialist’s word?
Ok, the problem didn’t go away, so I took it back for the gasket replacement. Lo and behold, they didn’t have the gasket in stock, wait-time 21-45 days. No way could I go on driving this vehicle without proper cooling for 3 – 6 weeks.
I decided to use my old shop again. They quickly found the leak in the radiator, replaced it, and $200 and 3 hours later I was all set - no problem with the gasket. Come to think of it, a simple compression check would have proved that. Lesson learned: I won’t use the Toyota shop again. They are no better than the rest, though one might expect more. First they didn’t diagnose the problem and I would have had to pay for an unnecessary repair and second, how can a qualified repair shop work without a sufficient stock of spare parts? It’s not that this is an exotic make around here, and the 3.4 ltr. engine is used in many other Toyota models too. So if you think of going there for a repair be prepared.
Since I go off-road quite a bit I drive a Toyota 4-runner, one of the best off-road 4WD vehicles around (eschewing the more ostentatious full-size SUVs for simple economic reasons). Whenever there was a problem, and I must say there were very few, I took it to one of the many free repair shops that abound along the roads in Phnom Penh. I favored the one across the Rattanak hospital in Tuol Kork. One time they really didn’t know how to adjust the brakes – they went by the trial and error method - so I took it to the Toyota dealership on Russian Boulevard. In the end the slightly higher prices would make up for them being able to fix things the first time around, so I thought.
They promptly located the problem, fixed it, and I was good to go. Some time later I needed the wishbone joints replaced (part of the suspension). Unfortunately, they didn’t have the spare parts in stock. Ordering meant a wait time of 21 – 45 days by air, or up to 90 days by ground. Luckily, I didn’t need the truck for some time as I was out of country for some time. So when I go back everything was fixed nicely again.
Now just recently I had this problem with the water getting too hot and actually overheating. I had to put in about 2.5 ltrs. every day. I went to Toyota and found that the radiator lid was defective, so we replaced it. They didn’t find a leak in the radiator itself and said if the problem persists we would need to replace cylinder head gasket. There is probably a tiny leak in there making me lose all that water – sounded credible to me, although the engine oil checked out all right, but who am I to doubt a specialist’s word?
Ok, the problem didn’t go away, so I took it back for the gasket replacement. Lo and behold, they didn’t have the gasket in stock, wait-time 21-45 days. No way could I go on driving this vehicle without proper cooling for 3 – 6 weeks.
I decided to use my old shop again. They quickly found the leak in the radiator, replaced it, and $200 and 3 hours later I was all set - no problem with the gasket. Come to think of it, a simple compression check would have proved that. Lesson learned: I won’t use the Toyota shop again. They are no better than the rest, though one might expect more. First they didn’t diagnose the problem and I would have had to pay for an unnecessary repair and second, how can a qualified repair shop work without a sufficient stock of spare parts? It’s not that this is an exotic make around here, and the 3.4 ltr. engine is used in many other Toyota models too. So if you think of going there for a repair be prepared.
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