Thursday, January 6, 2011

Polyglot Nation – An Overview of Cambodia Today

The Cambodian people run the gamut of skin pigmentations from almost lily white to nearly black as African, but in contrast to America where people are hyphenated as African-American, Hispanic-American, Asian-American, etc., here they are all Khmer: there’s never a hint of differentiation. Closer to home, in neighboring Thailand, people of Chinese ethnic background, even those who are only half ethnically Chinese proudly refer to themselves as Chinese, whereas in Cambodia, if the response of an older Chinese-Khmer woman I know is a valid indicator, ethnically Chinese Khmer, when asked if they are Chinese, say no, I’m Khmer.

They also cover a wide variety of facial types. First there’s the round faced, broad nosed, medium dark indigenous Malay people, then the very dark, beak-nosed Indians who started migrating here more than a millennium ago, then the light skinned, slanty eyed Chinese who’ve come here consistently over the centuries. Those three basic racial types have mixed very easily since the first migrations so now most people reflect combinations of types. You see narrow eyes on round Malay faces, long Indian noses on light skinned faces and it’s still possible to see quite a few Khmers who look totally Indian or Malay or Chinese and that’s not referring to recent migrants.

That racial melding hasn’t stopped the general population from looking down on dark skin. They all want to be white which is undoubtedly reinforced by everyone who appears in Cambodian television having almost white skin. A lot of the women use all kinds of concoctions, some clearly toxic, to whiten their skin. The problem is it often makes them look pale and sickly, almost ghostly, as well as a little lighter in complexion.

More recently were the European colonizers who added their genes over the last century to the point where, for instance, you can see dark skinned people with green eyes. Finally, today’s immigrants are now mixing with the Khmer people who are coming at least partly as a result of one of the world’s most open immigration policies. The majority of my expat friends have mixed children.

Anybody who wants to live in Cambodia is welcome, though I have heard that immigration officers sometimes try to extort large sums of money from Africans in the visa process. Officially, anyone in the world who thinks they can make it here is welcome to try, there are no restrictions. Moreover, there are no onerous requirements that you leave the country periodically to renew your visa, you can renew it indefinitely within the country. As a result Cambodia has a very diverse expat community that’s becoming integrated into the larger society. In a sense, this may compensate a bit for the loss of so much of the country’s intellectual community in the Khmer Rouge era: people who wore glasses, for instance, were targeted as enemies of the state.

Also targeted at the time as potentially disloyal were the country’s Cham people who are Muslims. While Cambodia is overwhelmingly Buddhist, other religions are tolerated with very few instances of discrimination or communal violence. As opposed to the situation in most other neighboring countries in which many Muslims have been radicalized and/or are participating in violent insurrections, they are completely at peace here. I’ve never caught a whiff of anger or dissent on the part of the country’s Muslims towards the government or any public action to suppress them. People in leadership positions sometimes complain about Christian evangelizing - Seventh Day Adventists are nearly everywhere, as you’ll not be surprised to learn – but there too, there is no public disapproval of any religion. This is all part of the welcome and tolerance Cambodia has towards all who live here or desire to make it their home.

Easy immigration is one of the several reasons why Cambodia had the seventh fastest growing economy in the world over the past decade. Not many people are aware of that fact because the country is so small and is starting from such a small base it just doesn’t register. There are now, I would guess, between 150,000 and 200,000 foreigners living in the country.

They have several functions within the economy. For one, many provide essential services like English teaching in which native speakers cannot be substituted by local teachers. They also are employed in the many non-governmental organizations trying to uplift the nation. Others invest in the country by opening businesses. It is very easy to start new enterprises and there are no requirements of partial local ownership. That’s created a situation in which there are often more businesses oriented towards the expat community and tourist trade than can be currently supported; they are generally ahead of the curve. But it also can happen that lots of new businesses will attract the customers.

Both sectors, expats and tourists, are growing rapidly so I expect the new entrepreneurs are hoping customers will eventually come. Tourism has increased tenfold since I first arrived in 2001 from 200,000 per year to 2 million. I’m constantly surprised at the number of ordinary looking, middle aged, middle class people wandering around Cambodia in contrast to a decade ago when only the most intrepid traveler would dare to come. In Siem Reap, gateway town to the Angkor temples, that’d be expected since it’s one of the great wonders of the ancient world, but to see them in Phnom Penh and other small towns is still a shock to me.

The majority of tourists in Cambodia come to take in the temples and visit no other part. Angkor Wat refers to the largest and grandest of the temples, which were built between the eighth and twelfth centuries, but there are about half a dozen other temples of breathtaking stature and lots of smaller ones in an archeological park that encompasses about 50 square miles – 125 square kilometers. I spent three days wandering around the area, two days on bicycle, and still did not take in all the major sights.

The problem with having a business in Cambodia is the great difference between high and low seasons. Even if it does well in high season, it might only break even during the slow half of the year. If you’ve ever dreamed of opening a bar, for instance, with five or ten grand you can be in business in no time. If you don’t make a lot of money it also doesn’t take a lot to keep it going, though rents are going up in the more expat/tourist parts of Cambodia.

Finally there are the retirees like myself and others who have independent means so don’t need to work, who only add income to the country. We come for the low cost and ease of living: For as little as $150 or $200 per month one can rent a decent apartment in the heart of Phnom Penh. The other attraction is the very open and friendly nature of the Khmer people. Khmer parents teach their little ones to say hello to every white face they see.

It isn’t just the small timers that are attracted to Cambodia. There are now nine mobile phone companies, though there will soon be some consolidation happening since the market simply can’t support that many. Still, you have a spare $100 million and want to have your very own phone company? No problem, it’s your gamble. If you lose your wad in Cambodia, it’s no loss to the country.

The country now has 31 banks… and, once again, there’s always room for more if you’ve got the wherewithal. Most are internationally based with eight or ten countries represented. It’s hard for me to imagine where the customers will come from - Cambodia itself certainly can’t support that many - but the ease of opening banks may turn the country into an international banking center. Eighty or ninety percent of transactions are in US dollars which I imagine would facilitate banking on a more than national scale.

The recent run-up in property prices until the crash in 2008 was also a major factor in the country’s growth. Property prices went through the roof and helped to create a construction boom, which is continuing, if currently somewhat subdued. Even now with values cut in half, per square meter prices in central Phnom Penh are equal to those in Seoul, a first world city with eight times the population. I too got caught up in the enthusiasm and bought a small plot of land but now, if I could find a buyer, I’d be lucky to get back half of what I paid.

The run up in prices has resulted in a lot of displacement and land grabbing. The Khmer Rouge abolished all private property and then torched almost all the records, leaving land ownership very murky. In addition, whole families were wiped out, leaving many properties without owners. Out of that confusion, laws were passed which give anyone living on land for five years ownership rights. That worked fine when prices were rock bottom, but as soon as land became valuable, conflicts arose. In some cases, after villagers have lived on land for ten or twenty years, a well connected individual appears with paperwork saying he/she purchased the land ten years previously. The peons are powerless against the elite in that event. Urban squatters are booted off land they’ve lived on for a long time and are compensated, but not at anywhere near the current price level. Once the land is cleared, it is sold off to developers at high prices.

The other mainstay of the economy is the garment industry which now has more than 300,000 workers and is responsible for 90% of the country’s exports. That growth was facilitated by a quota system put in place by the US and Europe to insure that several countries could develop garment industries and not allow China take over the entire sector itself.

The entire industry is unionized. Many manufacturers hate that and do their best to harass union reps, as you would find in a lot of places. On the other hand, some retailers, The Gap, for one, purchase from Cambodia specifically to be able to say that their workers have union representation and are treated fairly. That fair-labor part of the industry makes up about 20% of output. Workers are not shy about asserting their rights and strikes and wildcat strikes are not infrequent.

In spite of a recent small increase, wages are still pretty dismal at $61 per month for 60 hour weeks, but for many workers that still provides a much better income than they could otherwise obtain. Even at that paltry sum, many workers send money home to their families. The unions have been fighting for $93 per month, what they calculate is a living wage, but that’s very unlikely to happen soon considering the fierce competition in the sector from other even lower cost countries like Bangladesh. They may, in the end, be able to convince the government to raise the minimum wage to around $75.

Cambodia expects to export nearly 4 million tons of rice next year but the sector is barely developed so almost all of that is in the form of paddy, or unmilled rice. The country is working on upgrading its processing facilities so it can sell milled rice at international standards but that’s still a ways off. Also lots more can be done to increase the harvest. Yeilds are higher in neighboring Thailand and Vietnam, world’s biggest and second biggest rice exporters, because they use a lot more fertilizer. They are also far more advanced than Cambodia in using irrigation so get three crops a year to one here. This is a very watery country so there’s no shortage of resources for irrigation.

While corruption here is all pervasive it seems to have no effect on the country’s pace of development and in some ways facilitates it. There are substantial informal fees involved with starting a business, but they make for a speedy process. In some ways living with corruption makes life easier. For instance, when I went through an agent to get my Cambodian driver’s license I was told I had to pay an extra $5 for an eye test since I was over 60. But, the fellow said, this is Cambodia so you don’t need to take a test only pay the five dollars. Passing an eye test would be no problem, but finding the office, possibly waiting around for service and especially dealing with bureaucrats with limited English language skills could be a real hassle, so a little corruption was a small blessing.

Since I had a valid license from another country I was issued a license without having to pass any kind of test. And if you get caught driving without one a simple bribe of $5 or $10 will get you on your way. Since the license costs $40, it’d probably be cheaper to pay an occasional ‘fine’ than be totally legal. Anyway I prefer having all my paperwork in order.

All in all, in spite of endemic corruption, intense poverty and immense social problems, the country is at peace with less conflict and unrest than almost all surrounding countries. And in spite of many and glaring deficiencies it is also more democratic than most in the region. When polled eighty percent of the people approve the direction the country’s going in. Without getting into politics, the current prime minister, now in power for 24 years, has brought stability and growth in a very free and open economy and the future is looking good.