Shadowy Chinese Firms That Own Chunks Of Cambodia

October 1, 2023 Edward Dever

Interesting BBC piece on exploitation of Cambodia's resources. The only thing that seems to have changed over the past 30 years is the nationality of those doing the exploiting.

In the mid to late 1990s, French and Malaysian investors attempted, often successfully, to take advantage of Cambodian government officials.

Almost 30 years later, it is Chinese investors although they now deal with a far more sophisticated government apparatus as indicated by the increasing wealth disparity between Cambodian government and business figures and the rest of the population.

Looking back at the land speculation deals dressed up as rice farming projects and the favourable airport concession arrangements, one ultimately unsuccessful deal stands out.

In late 1996 and early 1997, there was a grand plan to erect a sound and light show at Angkor Wat. This proposal would have seen management of the temple complex outsourced to a Malaysian conglomerate which would have had full authority over the area. Cambodians were to be excluded from their own temple other than on particular religious holidays. The Malaysian group was to have total control over the content of the sound and light show and would be entitled to make modifications to the temple complex as they erected their equipment and built fencing.

Equally concerning was the plan to build hotels right up to the front of Angkor Wat, a detrimental step that was unlikely to have ever been reversed.

The contract was a particularly one-sided affair with the Cambodians effectively ceding sovereignty over Angkor to a foreign corporation.

The deal reached an impasse and, in the second half of 1997, an economic tsunami hit Asia. A number of Asian economies fell like dominoes commencing with Thailand. Malaysia enacted currency and capital controls, effectively walling itself off from the rest of Asia.

The economic crisis severely impacted the Malaysian conglomerate and it went home to try to revive its finances. Its grand plans for Angkor Wat came to nothing. The economic crisis had saved what would arguably have been Angkor Wat's destruction.

Today, as tourists return post-Covid to gaze at the wonder of Angkor Wat, they should say a quick thank you to one of the silver linings of the Asian Economic Crisis.

The shadowy Chinese firms that own chunks of Cambodia

October 2023

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Cambodia - Supercars And Lions Become Consumer Accessories

June 30, 2021 Edward Dever

The sight of supercars and pet lions shows how much things have changed in Cambodia in the past 25 or so years.

I remember my first flight into Phnom Penh's Pochentong International Airport in 1995. As we landed, I looked out across the scorched bare fields and thought Pol Pot had really done a number on the country.* Of course, it was the middle of the hot season. When I flew in later in the year, there was a rich tapestry of rice fields as we came into land. Those fields consumed a Vietnam Airlines flight (VN815) in September 1997 when it crashed short of the runway in poor weather.

When I checked in at the Cambodiana Hotel (the only acceptable hotel choice at the time), The Killing Fields was the in room movie of the day. Meetings were often held in the hotel. Several Government officials lived in the hotel in those days. You generally just ate in the hotel. By the third day, you had eaten everything on the menu. The two restaurants and room service shared the same limited menu items.

Occasionally, meetings would be held in fairly run down mansions such as the former French Ambassador's residence which apparently had then become Pol Pot's HQ and then the UN HQ before assuming the function of the offices of the Council for the Development of Cambodia (CDC). If you didn't keep the hotel car at a meeting, you would need to flag down a motorcycle to take you back to the hotel. From memory, it was USD 1.00 for the return trip.

On one of my trips, the first set of new traffic lights in Phnom Penh was installed. The first escalator in a shopping centre was some years away (2002).

Legal agreements needed to be comprehensive as the laws in many areas were deficient or non-existent. You could register a company at the Ministry of Commerce but there was no company law.

The practice of first-in-time in registering trademark applications was a fluid concept if you were a business person with sufficient influence within the government. The government would also roll out tanks to protect said business person's hotel during the 1997 coup. And he wasn't sanctioned when he shot out the front tyre of a Royal Air Cambodge Boeing 737 after disembarking. (That was an interesting discussion with the Chairman of RAC.)

Intellectual property enforcement was in its infancy. Sheraton had some success, getting a hotel using its name to change to "Sharaton" but the "McSam Restaurant" logo bore a striking resemblance to McDonald's.

The wealth disparity in Cambodia was evident back then but has only grown over the intervening years. The seeds of that growth were planted during and immediately after the UN period. The difference in 2021 is that wealth and conspicuous consumption are on constant display, particularly among the elite's offspring. One need look no further than the Supercars of Phnom Penh Instagram page.

Pet lion seized from home in Cambodia capital after appearance on TikTok

* It is estimated that the Pol Pot regime killed around 25% of Cambodia’s population between 1975 and 1979.

June 2021

The Threat of Criminal Proceedings as a Gag

June 10, 2021 Edward Dever

All too often, Thailand's criminal defamation provision and the Computer Crime Act are used as a weapon by anyone accused of misconduct to gag media reporting.

The latest instance involves claims that certain parties were involved in attempts to bring about a favourable court ruling in relation to excise duty payable on the import of Toyota Prius parts into Thailand. The duty amount involved is USD 350 million.

The issue came to light following an internal investigation by Toyota and its disclosure to the US SEC that its Thailand operations may have violated the Foreign Corrupt Practices Act. A grand jury has been empanelled in Texas to examine the issue.

In response, all named parties have threatened criminal defamation proceedings and action under the Computer Crime Act against parties involved in the initial reporting. Some parties have also made the same threat against Toyota and anyone who shares the reporting on social media. The result of these threats is two-fold - it gags media not wanting to be dragged into criminal proceedings but also amplifies interest in the issue.

The Court of Justice has indicated that it will investigate the issue. This seems odd given that there is a National Anti-Corruption Commission in Thailand and the issues raised would seem to fall within their authority. The NACC is apparently investigating allegations that Rolls Royce paid bribes to Thai Airways.

Bribery is endemic in certain South East Asia countries. At times, it is quite sophisticated, involving offshore payments dressed up as consulting arrangements or interposed entities in joint ventures allowing share participation.

It often involves the purchase of equipment at inflated prices. One of the odd outcomes of this type of arrangement is bribes being depreciated as a component of a balance sheet asset due to the relevant asset's higher initial carrying value.

The grand jury investigation in the US may shine an uncomfortable light on certain dealings in Thailand..

June 2021