Michael Chai, a director at WesTec Media, which built the cinema, is aiming at a young, internet savvy Cambodian market.

“If I look at Facebook for example, I've been looking at the numbers. In May 2010 there were only about 50,000 of them on Facebook. May 2011 we had almost 400,000. So that figure alone, that kind of growth, speaks a lot already. And most of them on Facebook are communicating to each other in English.”

While it would take most Cambodians several days to earn the price of the $6 ticket, the owners are betting that a growing middle-class will become regular customers.

Prum Seila, a 24-year-old office worker, is in Chai's target demographic. Just a few weeks after the theater opened, Seila has visited twice.

“I went there to see the Transformers 3. And I've never seen 3D in my life. I just saw the Transformers 3, and I know that in Transformers 3 there is a scene in Cambodia and [so] we should have seen it. And it is just kind of supporting stuff like that in Cambodia," Seila says.

The growth in Phnom Penh has been fueled in part by garment factories, an economic pillar in Cambodia, that are located around the capital, drawing young workers to the city.

The jobs and new technology are changing things quickly. A recent survey indicates more than 90 percent of young Cambodians have access to a mobile phone. Internet usage, though low, has doubled in a year to 6 percent.

Prum Seila, the eager movie-goer, grew up in the capital. He says he and his friends now spend their free time hanging out in food halls, scores of gleaming new coffee shops and entertainment venues named Diamond Island and Dreamland, where you can sing karaoke.

He says shopping is popular.

“The people like me they have jobs, they have money," he says. "They save money to buy expensive brands like Apple, iPhone. Some of the girls they try to buy the clothes from internet, from Facebook.”

In July, officials opened the country's first stock exchange. Although no companies have yet listed, the government says three state-owned firms will do so later this year. Others are expected to follow.

Stephen Higgins heads ANZ-Royal Bank, a joint venture between the Australian banking giant and a Cambodian firm.

“Long-term the stock exchange will be a positive for Cambodia," Higgens says. "It will help raise funds for development. It provides a means for private equity firms to exit their investments, which is very important for them when they first decide to invest. But these things are going to take time. Anyone who has a short-term horizon with the stock exchange, they're going to be disappointed.”

Ten years ago only a handful of banks had the ability to dispense cash over the counter. Now there are hundreds of cash machines from around 30 local banks, and some offer electronic payment of utility bills.

“Cambodia is coming from a long way back, in terms of its development generally but including financial services," says ANZ's Higgins. "It's catching up rapidly.”

Despite the changes in the capital, what happens here generally does not affect the 80 percent of Cambodians who live in rural areas. Income inequality has worsened in recent years as economic growth benefited the wealthy more than the poor.

The country's hospitals and health clinics still offer poor quality healthcare; corruption is rampant; and the judiciary is woefully inadequate. Poverty hovers around 30 percent.

But some changes do help: better roads and access to mobile phones, for instance, make a profound difference to the lives of the majority of the country who rely on agriculture for their livelihood. And the government hopes that the improvements that have come to the Phnom Penh will eventually ripple out across the rest of the country.

Labels: Cinema, Michael Chai, Phnom Penh

Labels: Phnom Penh

Labels: Corruption, Phnom Penh

In recent years, Cambodia has experienced a surge in the use of methamphetamines, known here and in Thailand as "crazy medicine." Apart from the 11 government-run centers, drug users in Cambodia have few places to turn for help with their addictions.Photo: Justin Mott for The New York Times - More photos

PHNOM PENH, Cambodia — Nguyen Minh Tam said he got used to the routine during three months in a government drug detention center, although he sometimes lost consciousness: three punches to the chest when he woke up in the morning and three more before he went to bed.

Another heroin addict said he was whipped until he passed out with a twisted metal wire as thick as his thumb. “They used a blanket to cover me, and they beat me,” said the detainee, who insisted that only his first name, Chandara, be used. “There were 10 of them beating me.”

Ban Sophea, on the other hand, an emaciated man who supports his heroin habit by collecting used cans and bottles, said things were quite different for him during a carefully monitored 10-day detention.

“They gave us medicine three times a day from a bottle that looked like a whiskey bottle,” he said. “The rest of the time we just wasted time and ate. They let us dance and eat cake. We were eating all the time.”

These treatments — both the physical abuse and the involuntary administration of an experimental drug — have stirred concern in Cambodia since they were documented recently by the New York-based monitoring group Human Rights Watch.

In a report last month, Human Rights Watch described in detail abuses in 11 government-run centers that included electric shocks, beatings, rapes, forced labor and forced donations of blood.

“Sadistic violence, experienced as spontaneous and capricious, is integral to the way in which these centers operate,” the report said. “Human Rights Watch found the practice of torture and inhuman treatment to be widely practiced throughout Cambodia’s drug detention centers.”

This description echoes a separate Human Rights Watch report, also issued in January, about compulsory drug detention centers in China that it said denied inmates treatment for drug dependence and “put them at risk of physical abuse and unpaid forced labor.”

In Cambodia, the government dismissed the report as being “without any valid grounds” but did not address most of its allegations.

“The centers are not detention or torture centers,” said Meas Virith, deputy secretary of the National Authority for Combating Drugs, at a news conference this month. “They are open to the public and are not secret centers.”

In December, the government tried another approach that also drew criticism from rights groups and health professionals: administration of an experimental herbal drug imported from Vietnam but not registered for use in Cambodia.

Twenty-one drug users were taken to one of the drug treatment centers and administered a potion called “bong sen” for 10 days before being released to their homes or to the streets. No systematic follow-up was done, and the national drug authority conceded that at least some of those treated returned to drug use.

“No information is known to exist as to the efficacy of this claimed medicine for the detoxification of opiate dependent people, nor to its side effects or interactions with other drugs,” said Graham Shaw, an expert on drug dependence and harm reduction with the World Health Organization in Phnom Penh, in a briefing note in early December.

Like its neighbors, Cambodia has experienced a surge in recent years in the use of methamphetamines, known here and in Thailand as “crazy medicine.” A smaller number of people are heroin users.

Vietnam has a network of drug treatment centers and is reported to be widely using the herbal drug in detoxification treatments. In 2003, Thailand embarked on a “war on drugs” in which an estimated 2,800 people suspected of being dealers were summarily shot and killed.

Apart from the 11 government-run centers, drug users in Cambodia have few places to turn for help with addictions. In some cases, desperate families commit their relatives to the centers, but most former detainees interviewed by Human Rights Watch said they had been locked up there against their will.

The centers appear to be used not only for drug users but also as a means to clear the streets of vagrants, beggars, prostitutes and the mentally ill, according to Human Rights Watch and the reports of other former detainees.

Government figures for drug use in Cambodia are unreliable and range from about 6,000 to 20,000. The United Nations has estimated that as many as half a million people in Cambodia may be drug users.

In 2008, the National Authority for Combating Drugs reported that 2,382 people were detained in government drug detention centers, almost all of them involuntarily. Some families, with no other recourse, pay the centers to take in relatives for what they hope will be a cold-turkey cure.

“If Cambodian authorities think they are reducing drug dependency through the policy of compulsory detention at these centers, they are wrong,” said the report by Human Rights Watch. “There is no evidence that forced physical exercise, forced labor and forced military drills have any therapeutic benefit whatsoever.”

Like other former detainees, Mr. Tam, 25, an ethnic Vietnamese, said he was committed involuntarily along with other drug users and street people. He confirmed allegations in the report that a number of the detainees were children.

He described what he called the “eight punishments” — painful and humiliating exercises that included rolling shirtless on the ground, running into walls and a series of physical contortions with names like leopard crawl, hopping like a frog, vampire jumping and shooting Rambo.

“I think this is not treatment,” he said. “This is torture.”

As soon as he was released, he said, he resumed his heroin habit.

“Inside, you are thinking of drugs all the time,” he said. “When you come out, you are free to use again.”

Labels: drug, Phnom Penh

A street scene in the city center of Phnom Penh in Cambodia. (Gavin Hellier and Robert Harding/drr.net)

Labels: Economic, Economic Success, Phnom Penh, skyline

Real Estate Boom in Cambodia's Capital

A decade ago, Phnom Penh didn't even have a traffic light. Now, high-rise condos and offices are in development and land speculators are raking in profits

by Susan Postlewaite
Source: BusinessWeek
June 2, 2008, 7:39AM EST

At a construction site in the middle of the city, a yellow backhoe levels rubble left from the previous building, an old hospital, while dozens of workmen in hard hats and rubber boots scrape away at the dirt. Nothing that noteworthy about this scene—until you consider the location: the intersection of Monivong and Sihanouk Boulevards, in downtown Phnom Penh.

After spending most of the past three decades struggling to recover from the legacy of the Khmer Rouge's genocidal rule, Cambodia is in the midst of a real estate boom. If all goes as planned, the dirt at Monivong and Sihanouk will soon sprout the country's first skyscraper, a 42-story residential building funded by money from South Korea. A few kilometers away, near the river, workers are clearing a lot for another skyscraper, also Korean and even bigger, with 52 stories.

A decade ago, Phnom Penh lacked even a single traffic light. Today, as land speculators rake in profits and new developments lure tenants, the dilapidated capital, which until recently was dotted with dangling electric wires and garbage-strewn lots, is getting a makeover. All over the city, shanty towns and old villas are being sold for land value and razed to make way for high-rise apartments, office buildings, shopping malls, and new villas.

Other parts of the country are seeing development, too. Developers are targeting Siem Reap (BusinessWeek.com, 4/21/08), near the ancient temples of Angkor Wat, for new hotels.

Does Cambodia Need Skyscrapers?

The Phnom Penh skyscrapers, which will be more than three times higher than the tallest existing building in Cambodia, are the most dazzling projects. And the most controversial. The developer of the $240 million Gold Tower 42, Yonwoo Co., expects construction to take three and a half years to complete. Already, says Teng Rithy, sales manager for Gold Tower 42, "high-ranking Cambodians and some foreigners from other Asian countries" are plunking down deposits. "We are 80% sold out," he boasts.

Not everyone is convinced the skyscrapers make sense. Many lawyers, bankers, and real estate brokers in the Cambodian capital are wondering whether the skyscrapers will really go up and whether there is demand for new construction. So far, new buildings are not having trouble leasing, since the city suffers from a shortage of modern office space. Tenants like the World Bank lease space in rabbit-warren-like villas with odd hallways leading in all directions.

But residential skyscrapers are a new concept in a country that not too long ago was still giving away property, not trying to market a 40th-floor condo for $1.6 million. "I feel it's a little bit early for that," says Sung Bonna, head of Bonna Realty, one of the leading real estate firms in Cambodia. "They said it's going to be a success. But I don't know. If it doesn't happen, it is not good for us."

Bonna says the whole idea of a real estate market in Cambodia is so new that no one can predict how it will turn. "We used to share property, not sell it. After the Pol Pot regime, however many properties you want, you can take all of them." He says there is a need for more modern restaurants, office buildings, and commercial centers, but the supply and demand for residential properties is in balance.

Korean Connection

For now, though, there are promising signs. Prime Minister Hun Sen—whose government at one point or another signs off on the big development deals—likes the skyscrapers and he wants more of them, according to his aide, Sry Thamarong. And land prices are hot. A traditional shop house—4 meters wide by 18 meters deep and going up four to five floors—along the river that sold in 2006 for $300,000 is now going for $600,000 to $700,000. But this is still much cheaper than Ho Chi Minh City in Vietnam, the real estate agents say.

Since Cambodia is still a very poor country that has never seen so much investment capital flying around, the trend is unnerving some observers. "Where is the money coming from? Cash coming out from under the mattresses, cash coming from overseas," says John Brisden, vice-chairman of Acleda Bank, the largest bank in Cambodia. He calls the real estate boom "very unusual" because much of it is not being financed by bank loans. Are there signs that the boom may be running its course? Brisden doesn't see a sudden popping of the bubble. Instead, he says, "people envision a slowdown. The scenario is a lot of empty high-rise properties but no forced sales."

Most of the big new projects are coming from Korea. Financing the Gold Tower 42 skyscraper is Korea's DaeHan Real Estate Investment Trust. Yonwoo is the developer. A director at Yonwoo in Seoul, who asked not to be named, says his company began exploring real estate development opportunities in emerging economies three years ago, when Korea's domestic construction market began cooling. "In view of a number of wealthy Cambodians and a growing number of foreign investors arriving in Cambodia, we are confident Gold Tower 42 will be a success," the director says. Phnom Penh-based salesman Rithy says there are "high-ranking Cambodians" involved in the project, but he won't say who.

Investors Face Legal Hurdles

The 52-story skyscraper announced in January is a project of Korea's GS Engineering & Construction. The Seoul company plans to start construction in June and finish in 2012. A 34-story project near the Russian embassy will have serviced residences for 280 households and several floors of apartment blocks on top, as well as shopping and an international school, according to GS spokesman Choi Byoung Geun. "Cambodia really needs this kind of Class A facility," says the business development chief in Cambodia, Mu-Hion Woo, who figures by the time the $1.2 billion project is built, the demand will be there.

A Korean developer is also behind Camko City, a new suburb northwest of Phnom Penh with a $2 billion price tag that is in the early stages of development. World City, the property developer, began construction last June and is scheduled to complete the first phase by November, 2009, according to Korean contractor Hanil Engineering & Construction, the Seoul-based company that is also the contractor for Gold Tower 42.

There are some legal hurdles for potential investors to overcome. For instance, foreigners are not allowed to own real estate outright in Cambodia. But there are plenty of ways to get around the law. Foreign investors can set up a joint venture with Cambodian partners, use long-term leases, or put the land in the name of Cambodian partners. There's even the possibility of becoming Cambodian. "With an investment of a certain size, you can get citizenship. It's a contribution to the country," says Matthew Rendall, a lawyer with Sciaroni & Associates, a law firm in Phnom Penh.

Evictions in the Name of Development

National Assembly lawmaker Sam Rainsy, a former Finance Minister and leader of the largest opposition party, calls many of the real estate deals "shady." He argues that Cambodia is awash in illegal cash plundered from the sale of national assets, including illegal logging and the sale of public lands, where land titles are easily changed and the sales revenues never get accounted for in the state budget.

And there has been a social cost to all the new development. The scramble for prime land has led to widespread evictions of people without clear land titles to the properties. A report by human-rights group Adhoc in Phnom Penh says in 2006 and 2007 more than 50,000 people were evicted for development. Chan Soveth, program officer at Adhoc, says he expects 4,252 families in Phnom Penh to be evicted from villages surrounding Boeng Kak, a lake in the city where a developer wants to build a new township that will have condos, a hotel, and shopping. "It is very bad and getting worse," says Soveth. Adds human-rights lawyer Am Sam Ath of the nongovernmental organization Licadho: "There is no balance between the big development and the rights of the people."

But with land prices continuing to skyrocket, regardless of what happens with the skyscrapers, there is no indication that the land speculation boom will stop. "No one can predict," says Bonna, but he thinks it could run "maybe five years more."

With Moon Ihlwan in Seoul.

Postlewaite is a reporter for BusinessWeek in Phnom Penh.

Labels: Economic, Economic Success, Phnom Penh, Real Estate