Editorial | Articles about Cambodia | Khmer

Wednesday, February 27, 2008

Corruption! Two Million Dollars Per Month Squandered By Mr. Hun Sen

Editorial by Khmerization
Originally posted at http://khmerization.blogspot.com/

About a week ago, I editorialised that Mr. Hun Sen has corruptly squandered the national budget by unnecessarily appointing all opposition defectors who joined the CPP to many high paid government positions. Now it is evident that Mr. Hun Sen has just corruptly squandered public money to the tune of two million dollars per month by promoting 70 of his CPP stooges unnecessarily. Mr. Hun Sen seemed to wrongly think that, as a prime minister of a country, he has the right and can appoint anyone at his own will. Mr. Prime Minister, you are wrong!

In a parliamentary democracy, under a constitution that was written and approved by the constituent assembly of which you were a member, the prime minister is accountable and is answerable to the constitution, to the parliament and to the people. And in a fully democratic country your actions are unconstitutional and are impeachable by parliament.

In 1974? President Richard Nixon was impeached and forced out of office due to a moronic action of one of his party workers who broke into the opposition candidate’s office and stole some documents. In 1975, an Australian prime minister, Mr. Gough Whitlam, was sacked by the Governor-General due to a very ambiguous reason. As of this week an Australian minister is facing the sack after he appointed his friend to a high paid government job. These are just a few examples that have been actioned in a fully democratic country that Mr. Hun Sen should be aware of.

Coming back to the $2 million a month spent on the wages of the 70 newly appointed CPP stooges, it is pure corruption. The $2 million squandered in such a fashion is just a tip of the iceberg. If the opposition is correct, when they claimed that there are thousands of unneeded government advisors, it meant that Mr. Hun Sen has corruptly squandered $30 million a month, or $360 million a year. Coupled with $500 million (World Bank figures) a year lost through corruption, it meant that Cambodia has lost $860 million a year because of official corruption. Considering that the Cambodian economy is a small economy, this amount represented a titanic amount.

So, how Mr. Hun Sen can be stopped? Well, MP Son Chhay has done a small step by strongly reminded Mr. Hun Sen, through his media appeal and letter to the Prime Minister himself, that there will be legal consequences if the prime minister does not right his wrongs.

Another measure would be that the parliament move a motion to censure the prime minister over his actions, request for an audited lists of appointments and audited salaries being spent on those appointments. If his appointments were found to be corruptly unjustified he should be impeached and force out of office. This measure is a wishful thinking and would most definitely fail because all of the CPP parliamentarians, due to their vested interests, will not agree to move such a motion to impeach their prime minister. But such a measure, success or without success, must be tried. If Mr. Hun Sen is allowed to do whatever he wants, without regard for the laws and without anyone putting a stop to it, Cambodia would still be poor as long as Mr. Hun Sen is still the prime minister. Poor Cambodia!

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Saturday, February 02, 2008

Bringing Commerce to Cambodia

On The Cover/Top Stories
Bringing Commerce to Cambodia
Ron Gluckman 02.11.08

Brash, ambitious, some say ruthless, Kith Meng is building an empire in the newest tiger economy.
A towel around his neck, the slight Cambodian in a sweaty Nike (nyse: NKE - news - people ) sports shirt shouts instructions into a cell phone. He's stomping across the spacious lawn of the Cambodiana Hotel with an arrogant swagger, like he owns the place. Which, in fact, he does.

He's Kith Meng, and that same swagger is on display practically everywhere you look these days in Cambodia. From hotels to telecoms and television, banking, insurance, even education, Kith's Royal Group has a finger in nearly every pot simmering in Asia's newest tiger economy.

Long derided as a backwater that utterly missed the Asian economic boom, Cambodia has been racing to make up for lost time. News that the economy surged by more than 13% in 2005 caught everyone's attention. But growth has averaged 9% annually since 1998, says Stephane Guimbert, senior country economist at the World Bank. That's the second fastest in Asia, after China. Last year growth may have hit 10%.

Granted, it's from a very low base, and exports are mainly textiles. But investment has picked up in the expectation that oilfields off the southern coast will be developed. Real estate is skyrocketing, faster than anywhere in Asia outside of China. And the country drew more than 2 million visitors last year for the first time. Plans call for a stock exchange to open in 2009.

Susan Schwab, who in November became the first U.S. Trade Representative to visit Cambodia, praises its liberal investment laws and a commitment to cleaning up rampant corruption. "This is a wonderful story, for any country, more so one so scarred by its past," she says. "If the buzz factor hasn't already hit, it's definitely developing." Her visit coincided with a landmark Phnom Penh investment conference. "We expected 300 people, but there were over 500," says Christopher Bruton in Bangkok, one of the organizers and a researcher and consultant in Cambodia for decades. "We have never seen such interest in Cambodia."

Kith happily notes: "Before, people used to think of this as a place of war and instability. But now we are part of the global economy, and everyone is coming."

When they arrive, many have no choice but to court Kith, who, more than any of the country's other tycoons, stands as the rugged role model for wheelers and dealers in this anything-goes, frontier economy. "He's a real rags to riches story," says Dean Cleland, chief executive of ANZ Royal, which is planting ATMs and the bank's vivid blue logo everywhere around Phnom Penh. Australian banking powerhouse ANZ holds 55% in the joint venture, with Kith holding the rest, but nobody would consider him a meek minority shareholder. "We have strong and rigorous board meetings," Cleland says.

The word around town is that the two sides battle constantly, with ANZ struggling to distance itself from a meddlesome Kith. "Who said that?" Kith snorts, temper flaring at any inkling of criticism. Yet he quickly calms down, chuckling as he concedes: "My role in the partnership is to push. And push. I'm like the driver."

It's clearly a role he relishes. And, whatever confrontations ensue behind closed doors, the combustive mix has propelled the venture into a lead role in a banking market that may be growing at 30% a year, fueled by the bubbling real estate market. Of course, Kith also claims plenty of prime Phnom Penh plots.

New high-rises are rapidly reshaping a city skyline still dominated by a 15-story Intercontinental Hotel. But 40-story office, commercial and residential towers are on the rise. Just to trump them, Kith vows to build one 45 floors high. Then came the announcement last month that the 52-story International Finance Tower had gotten approval. Kith will surely adjust his sights higher.

Many of Phnom Penh's streets are still unpaved, and there isn't a single Golden Arches or Starbucks (nasdaq: SBUX - news - people ) yet. Hence, at the opening late last year of a Swensen's, a U.S. chain of ice cream parlors, none other than the U.S. ambassador and the commerce minister cut the ribbon. The hunger for fast food will be satisfied this year by the first Kentucky Fried Chicken outlets opened by--who else? Kith, who also has the Pizza Hut concession.

"He's not an entrepreneur in the traditional sense of creating new businesses," notes one close friend. "What he does is go out and get the business that Cambodia needs. He brought in mobile phones, television, banking, insurance. He's the right guy at the right time."

Take ATMs. When ANZ opened in late 2005, there were hardly any in Cambodia. "We wanted to bring in 25," Cleland recalls. Kith wanted 100. "We ended the year with 52, which seemed a fair compromise," Cleland says. The number quickly topped 90 and will surpass Kith's goal any day.

Not that Kith is satisfied. Now he's barking about credit cards. No Cambodian bank issues plastic, not surprising considering the country's rather recent financial turmoil. Money finally returned to circulation after the Khmer Rouge outlawed currency, blew up the banks and turned clocks--and this war-torn nation--back to Year Zero.

Cleland says there may be 6,000 credit cards issued by overseas banks in the country. He reckons that cards rarely make financial sense until the number reaches 100,000. But Kith is guided by intuition, not market studies. "In his words, you cannot be the number one bank without credit cards," Cleland says. And guess what? "We're rolling them out in April," he notes.

The bank boss may not be very excited about the $1.5 million likely to be spent on the rollout, but he's quite satisfied with a profit of $541,000 for 2007--years before any profit was projected. All the more impressive, it comes as the bank plows cash into expansion. "This has been a good partnership, for both sides," Cleland says. "[ANZ] tends to be more cautious, but that definitely isn't his style. He's very aggressive, very bullish."

ANZ almost took a pass on Cambodia. "If not for Kith Meng, I don't think we'd be here," says Cleland. "A lot of people ask why ANZ is in Cambodia. The answer is that he went to Australia looking for a bank for the country. He made the rounds and came back and told us that of all the banks, we were the one that had said 'No' the most politely." Cleland says ANZ had previously assessed Cambodia: "It came up as a market that was too small, and it was too soon." Kith pressured ANZ to reconsider, suggesting that it fly people in for a new look. If they didn't like what they saw, he would pay for the trip. What ANZ saw was a huge cash economy bigger than what bank deposits indicated. "We caught the wave at exactly the right time," Cleland says.

ANZ may know banking, but Kith has the Midas touch in Cambodia. And he clearly stands apart from both the old money--made mainly in mining, logging and smuggling in the 1980s and 1990s--and the new entrepreneurs starting restaurants and tourism businesses. The older tycoons tend to be reclusive and tied by blood or marriage to the political leaders. In contrast the brash Kith is only 39, unmarried and linked to nothing but the pursuit of profit. Many call him the new face of Cambodian capitalism.

Nobody would have sized him up as such in the early 1990s, when he returned to Cambodia from Australia. He grew up there, just another skinny, shell-shocked refugee kid who had managed to escape the Khmer Rouge; about a quarter of the country's population perished during its brutal reign of terror in the 1970s.

Kith was the youngest son of Kith Peng Ike, among the many landlords and merchants of Chinese heritage who were an early target of the Khmer Rouge. Kith watched both his parents starve to death and often refers to his family's suffering but rarely gives details. After Vietnam toppled the Khmer Rouge, he made his way to Phnom Penh in 1980, then fled with a sister in 1981 to a Thai refugee camp. They immigrated to Australia, settling in Canberra.

These were the defining years of young adolescence for Kith. Many say his personal history explains his "go-for-the-throat" business style. "He is ruthless," concedes one close friend, "but Cambodia is a ruthless place. And you have to remember where he comes from. It made him a closer. He doesn't mince around."

Kith says he studied economics at the University of Canberra but talks little of the decade he spent Down Under, except when it suits him, as on an Australian tour with Cambodian Prime Minister Hun Sen. He's a major supporter--and beneficiary--of the prime minister, say many in the Phnom Penh business community. He holds the title of Okhna, bestowed on those who make civic contributions of $100,000 or more. Yet Kith denies receiving any special privileges, launching into a rage over a recent story on the Internet that suggested that he had the prime minister's ear.

He rarely talks to the media, which is surprising because he travels around the region touting investment in Cambodia at various conferences. "I'm an ambassador for Cambodia," he says proudly. And he gladly took over the presidency of the Cambodia Chamber of Commerce--and "revolutionized it, made it effective, modern," concedes a Bangkok businessman and Kith critic. Other Cambodian tycoons prefer backroom deals, but quiet isn't in Kith's vocabulary. "He loves to exaggerate his importance," says the same businessman. Even friends agree that he's a big talker with a short attention span.

His reluctance to talk to the press is understandable, since the coverage he gets tends to be negative. He has been linked to numerous scandals--unfairly, note associates--including real estate deals in which residents or monuments were reportedly moved aside to give Kith development rights. His response: "I don't move people. That's the government's role. I'm a businessman."

The reason he avoids discussing his Australian upbringing, meanwhile, is because of bad memories, says one member of his inner circle. "He suffered from horrible racism," he says. "I remember one time he was telling me about taking a cricket bat to school, and it wasn't for sport. It was for protection."

Now he travels with an entourage that includes several assistants working a battery of phones and the usual bodyguards, standard in Cambodia, where arguments are often settled with muscle. One old tale concerns another tycoon so perturbed by a flight delay that he pulled out a gun and shot out the plane's tires. Stories of Kith's dispatching assistants to voice his displeasure are legendary. "He is tough," Cleland concedes. "But I think he actually likes all these rumors and gossip. It's part of Cambodia. He's told me, strength is in how people see you."

Kith, for his part, says that what sets him apart from others in Cambodia's new economy is his work ethic. He describes workdays that start at dawn, ending long after dark. Only recently have friends persuaded him to devote time to short workouts; he likes the treadmill, perhaps because he can still field calls. "I remember the first time I told him I was going on annual leave," recalls Cleland. "He said, 'Why?' He never takes a holiday. He told me he couldn't imagine anything worse. He just loves to work."

Kith Meng returned to Cambodia in 1991, following his eldest brother, Sophan Kith, who had resurrected the family business, then called Royal Cambodia Co. It flourished as one of the suppliers to the United Nations, then involved in its largest peacekeeping mission to date, with a budget of $10 billion.

Royal began its revival by arranging shipments of furniture and food. Soon it had the concession for Canon (nyse: CAJ - news - people ) photocopying machines, a huge asset in an era before e-mail. "Kith himself was never a big player in the early days," recalls another supplier of the U.N. "He mainly was in the shadow of his brother." But his brother died under mysterious circumstances in 1994, prompting rumors that he was poisoned.

Kith Meng took over Royal and began a steady expansion through a series of partnerships. The key deal was a stake in MobiTel, which under Kith's chairmanship has become the leading mobile telephone company in the country and Royal's cash cow. Most of his other ventures remain long-term plays that have yet to pay dividends. "If Kith Meng has any weakness," says one foreign friend, "it's that he hasn't sold anything yet. It may be timing, but it's typical of self-made men in Asia. They just hold on to things too long." He adds: "Cash flow? He doesn't have a clue."

Still, he says Kith is maturing quickly. "Building a modern, diversified conglomerate takes a lot of different disciplines. I see it happening." Critics and colleagues alike say he puts his divisions in good hands. Unlike the established elite here, who tap family members, Kith recruits Western talent. "And he treats them well," says one competitor.

"Kith is raw and unpolished, but I think he's genuine," adds a longtime business consultant. "He doesn't read books or magazines, but he reads people."

Dropping his towel, Kith sits at a table on the lawn of his Cambodiana Hotel and begins discussing deals with potential investors from Thailand and America. Forget complicated business plans. "I know how to make money," he says. "That's why people do business with me."

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Every day is 'busy' in Cambodia

Every day is 'busy' in Cambodia
Mike Morgan Guest Columnist

I have been very negligent in writing my article to the newspaper, and I repent and promise to be more punctual. I have been so busy with all of our assignments the article has dropped down the priority scale. I use the word "busy" because that is the most common word in Cambodia. When we speak with people about attending church or other activities, the most common answer is "I am busy." We have been serving more than one-third of our time in the mission field, and it seems like every day is more challenging but every day is very "busy."

We have spent our first Christmas out of the United States and away from our family. It was a very difficult time for my wife. Luckily, there are very few men in Cambodia who are built like Santa Clause. We were asked to play Santa a number of times - 12 to be exact. I ordered a Santa suit from the states, but it still hasn't arrived. We managed to adapt an old Santa suit and life went on. Cambodia is 95 percent Buddhist, but there are many Christens from Europe, Australia and the United States on assignments in Cambodia, as well as many native Cambodians who want to celebrate Christmas and the holidays. Many of the stores sell decorations, trees and other Christmas items. We played Santa for probably 500 kids in church units, orphanages and schools. We were so "busy" worrying about helping others, we scarcely had any time to worry about home, family and the holidays.

Recently my wife and I traveled with a puppet show from the church, a company of about 10 young people, out into the provinces. The area we were in was very rural and had many very, very poor people. Most homes had no electricity and probably would not even be called shacks in the U.S. There were a few water wells, but most collected the rain water for a water supply. The weather does not get below about 65 degrees all year, so keeping warm is not a factor. The puppet show group would pull up into a village and begin playing music and setting up their portable set. The skit was very simple and cute, teaching people about breast feeding, hygiene, clean water, simple disease and mosquito control. After the music was playing for about 30 minutes, about 50 to 75 people - mostly mothers and young babies - would gather and sit on the ground and enjoy the performance. The people were so kind and appreciative of the presentation.

I read the e-mail from the T.R. almost every day, and I enjoy reading the articles and news about the community. I, of course read the sports columns and the obituaries, but I also follow the election results and some of the local politics as well. I compare the editorials about the taxes and school levies to life in Phnom Penh, where there are no taxes. The schools receive almost no money from the government officials. Teachers make about $30 per month and almost all teachers work several jobs. If a student wants homework or anything more than babysitting, the student pays the teacher directly. There are many, many private schools throughout the city, but they are very expensive. Additionally, there is one fire station and five fire trucks to handle the fires for a city of more than 2 million people. There is also one post office for the entire community; no home or business mail delivery system. There is no sewage treatment plant, as the sewage dumps into an open canal that courses through the city and empties into the Mekong River. There are two or three police officers on many of the street corners and pull over motos and some cars for various violations. The violator pays a fine directly to the officer, who keeps the money as a supplement to his salary of $30 per month. As I evaluate the community services in this third world country to the services we receive in the states, it makes the taxes that we pay a bargain. I love the USA.

Mike and Mary Lee Morgan are on an 18-month assignment in the Cambodia Phnom Penh Mission of the Church of Jesus Christ of Latter-Day Saints. They have been assigned to do both proselyting and humanitarian services for the Cambodian people. Dr. Morgan retired from his dental practice in Zanesville, after 41 years of practice. He will periodically write about their adventures.


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