Monday, March 07, 2005

Waking Cambodia

Waking Cambodia

Throughout the last forty years, all of the tragedies of the twentieth century seem to have made a home in Cambodia: regional wars, civil wars, starvation, and genocide.

Unfortunately, the name 'Cambodia' often conjures images of the infamous Khmer Rouge government. The Khmer Rouge rose to power in 1975, and within weeks of capturing the capital, forcibly relocated people from the cities and into the countryside. Money, travel, markets and communication were forbidden, and people were conscripted into agricultural work groups where they laboured for 12-15 hours a day. "Educated" citizens (many with little more than a primary school education) were marked for execution. Buddhist Monks were killed, manuscripts burned, and temples destroyed. Even the calendar was scrapped; 1975 became "Year Zero".

The Khmer Rouge killed an estimated 2.5 million Cambodians, and visitors can witness grim reminders of their rule throughout the country. In Tuol Sleng, a high school turned prison camp, pictures of prisoners stare at guests in deafening silence. A memorial temple containing almost 9,000 human skulls sits on one of the "Killing Fields" outside of Phnom Penh. Nearly two decades after the genocide, people who tour the area occasionally step on loose teeth or human bones protruding from the ground.

The Khmer Rouge's plan came to an end in January 1979 when Vietnam, in collaboration with rogue Khmer Rouge factions, overthrew the Khmer Rouge and ousted them from Phnom Penh. They were pushed west to the border with Thailand, where they remained until 1998, when Brother Number 1, Pol Pot, died of old age.

The Khmer Rouge stand with the other "social planners" of the twentieth century. Just as in Soviet Russia, Nazi Germany, and Maoist China, the piles of bones are all that remain when the system topples. A conversation with any Cambodian will show that behind the smiles there usually lies an empty hole where the love of a parent or grandparent used to dwell. As most of us were growing up happily unaware of the world, Cambodians were coping with starvation and the prospect of never seeing their loved ones again.

Since the Khmer Rouge disbanded, all aspects of Cambodian culture and civil society are re-emerging, even the French language. The arts, Buddhism, commerce and trade are all coming out of their bunkers and reasserting their role in the social fabric. It is this rapid re-emergence of civil society that makes Cambodia an exciting place to visit. For the adventurous traveller, there is much to do.

The temples near the ancient capital of Angkor Watt are a sight unmatched in the world (although Bagan in Myanmar is in close running). The city features an impressive style of architecture that shows Cambodia's Hindu roots, as well as its gradual transition to Buddhism. Some temples have stood for so long that ancient trees grow from within them, wrapping their stones in complex weaves of roots. A trip to Angkor is by far the most expensive part of a trip to Cambodia, but it is well worth the money.

Although not as bustling as Bangkok and Saigon, Phnom Penh is on the move. It is now a lively city with an active nightlife. Along the Tonle Sap River, locals and foreigners alike can enjoy a variety of foods and drinks. Drawing on neighbouring Vietnam and Thailand, Cambodian cuisine features a nice mix of tasty curries and sweet sauces. But Cambodians have also developed special foods just for foreigners that can only be purchased in Cambodia, including specialties such as "Happy Pizza" and "Happy Chicken Soup," which would land you in jail if consumed in the UK.

Tourists can also simply relax on the beach. The train from Phnom Penh to Sihanoukville, on the Gulf of Thailand, is not the most comfortable way to travel, but the memories will be first rate. Once visitors find a seat among the scattering of broken benches, they must make sure that their baggage is not near any of the holes in the bottom of the cart. Otherwise, they may find some of their possessions on sale to people taking the train back to Phnom Penh. If seating is not available, travellers can carve some holes in the wall to hang up their hammocks or can simply climb up on the roof and catch some sun.

Although Cambodia is not in the midst of civil war, it suffers from the problems that afflict other developing countries. Politics has replaced war, which is tremendous improvement, but the political system is far from ideal (but whose isn't).

The recently ratified constitution establishes a constitutional monarchy much like in England, with the power of government held by the National Assembly. The National Assembly is controlled by Hun Sen, a former Khmer Rouge officer who marched in with the Vietnamese to overthrow Pol Pot. Hun Sen has never run a business or created a product that people wanted to buy, but he has managed to become one of the richest men in south East Asia. The government is not good at collecting tax revenues, but why should it try? It is almost entirely funded with foreign aid money, and with his majority in the assembly so narrow, why would he want to start collecting taxes now?

To its credit, the government held peaceful elections in July, 2003 (but maybe because Hun Sen's party knew they were going to win). The usual election mayhem marred Election Day: polling stations moved at the last minute, some voters claiming that they never got an opportunity to vote. And of course the "Rotten Borough" problem persists, but this stuff goes on everywhere, even in developed countries.

For foreigners wishing to start a business there, it is not as difficult as one would think. In many ways, it is probably even easier than starting a business in the UK. Foreigners complain about having to pay bribes to get permits or pay the police for services, but this happens in western countries in the form of taxation. There is no sales tax or income tax in Cambodia (or the associated paperwork), only an import tax on capital goods. Given the absence of taxes, bribes are more effectively thought of as "user fees," and if one does not use the service, one does not have to pay for it.

The only real impediment to starting a business is that it is impossible to purchase land. This restriction is not unique to Cambodia, and maybe it is ethically defensible, but economically it handicaps foreign investment, and all the benefits that come with it: better jobs, human capital investment and knowledge cultivation. Many people evade this restriction by adopting a "silent partner," a local who can nominally own the land and receive a cut of the profits, but who has no major voice in the operation of the company. Usually, the silent partners are the local elite who have the connections to get title to the land in the first place.

This somewhat alleviates the problem of hindering foreign investment, but is a second best solution as it primarily benefits local elites (and their politicians) and, of course, keeps other Cambodians from selling their land to foreigners who are willing to buy. Also, as "silent partners," locals do not develop the knowledge that would be required to be "actual partners," and their relationship with their foreign business managers is built on distrust rather than cooperation. The information they are given is limited and often inaccurate (Who wants to pay all that money to someone who does not run the business?)

But Cambodia is growing. Construction is everywhere, and ten years from now the country will be completely different. At the same time, it will also be less fun. The openness and "anything goes" attitude will certainly be curtailed as the country becomes more international and concerns for safety begin to win out over the prevailing freedom. That being said, visitors should go now while the getting is good!

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