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24-Aug-2005
Last Edited

Go and look behind the Ranges-something lost behind the Ranges. Lost and waiting for you. Go! "
---
 Rudyard Kipling

Our second stop was Phnom Penh, Cambodia. One of the Thai companies we met with when commenting on doing business in Cambodia and the skills of Cambodian industry and labor ad-libbed that “the time difference between Thailand and Cambodia is thirty years.” In reality, although there is definitely a difference in levels of technology and training between the two countries, there is no actual time difference and the flight time is only one hour. Arriving in Phnom Penh Pochetong Airport, we were struck by the new international terminal, which is modern, new and well run. Visas are issued on arrival - $20 for tourist visas and $25 for business visas. The visas were issued in a mass production like assembly line of immigration officers and took less than five minutes from the time one handed in ones passport till the time the passport and visa were handed back. All in all a very efficient and helpful approach to encouraging both tourists and businessmen.

Cambodia is aggressively promoting tourism and both in Phnom Penh and in Siem Reap new hotels are coming up. Cambodian, Thai and to a lesser extent Western investments in travel infrastructure are particularly large near Angkor Wat and the Khmer temple complexes. In general, although service is still not up to Thai standards of friendliness and efficiency, the hotel and tourism sector is definitely growing and improving daily. For those of you who still are delaying your visit to Cambodia because of a fear of crime or violence, forget your fears. The central government has carried on an extensive program of weapons turn-ins and other measures. Guns are rarely seen on the streets and crime is very much down. Although travelers at night are advised not to walk alone in many areas of the city at night, these same admonitions are also true of many western cities.

Cambodia struck me as being open and receptive for business. Most of the businessmen we met spoke English and expressed a desire to work with us. Streets were being paved and new services inaugurated. One observer noted the government’s policy on import of automobiles. Cambodia is a very poor country – one of the worlds poorest - and most Cambodians don’t have the funds to buy new automobiles or motorcycles. Vietnam has a similar problem but the Vietnamese government response was to prohibit import of used vehicles and require companies to open auto plants there. Many did and many lost big money because of their ill-advised investment. Cambodia looked at Vietnam’s effort and also the fact that Thailand is next door and is the regional center for automobile production for all of Southeast Asia. From its observation, it concluded that Cambodia couldn’t compete with Thailand and that attempting to require automobile companies to relocate there wouldn’t work. The government also concluded that prohibiting import of used automobiles and spare parts would be unfair and just encourage black marketing. The government response was thus to allow imports of used vehicles and spare parts which created a vibrant market and has led to imports, sales and to government revenue where none existed before. This non-doctrinaire and flexible approach is true of much government economic policy and is to be lauded. Corruption continues to be a considerable problem but is no worse than in Vietnam or Indonesia and perhaps less predatory in many ways. The government is stable with the CPP Political Party controlling most levers of power throughout the country.

In business, one is still struck by the lack of large industry in Cambodia. Textile factories have gone through a boom and bust expansion and are expanding again despite labor unrest caused in large part by International Labor Organization activities. Although this labor organization effort was started with good intentions, it is in many cases short sighted and naïve in its approach. Thankfully the majority of other business is non-unionized and totally free market. Cambodian workers look at a $60 U.S. dollar a month salary as a good salary for unskilled work. The number of educated officials and businessmen has definitely been impacted by Cambodia’s history. Oftentimes if the people you are dealing with are in their 30s or 40s chances are they are probably Russian educated. Below this, most of the educated labor pool is young recent French educated graduates or even local graduates because of the virtual elimination of the educated elder generation by Pol Pot and the Khmer Rouge. Expect to have to restructure your plans in the event you choose to do business here to bring in Thai or Filipino managers and to look to Vietnamese and other workers for some of your skilled employees. Also, figure on a much-reduced level of productivity from your Cambodian staff and more need for training. Changing a travel reservation can often take up to thirty minutes and don’t expect the idea will transfer the first time even if you do speak the language.

One surprise I received during our stay in Phnom Penh was the extent to which Vietnamese and Chinese are spoken. I had expected that Cambodian language would be dominant, followed by Thai because of Thailand’s long involvement in Cambodia. Instead what I found is that the Vietnamese are everywhere and often fill secretarial, accounting and service jobs throughout the economy. These Vietnamese say there is some animosity against them by local Cambodians and oftentimes that they are harassed by the police but in general they seem able to work and this government policy again appears well reasoned as they often fill important mid level positions in many companies.

Additionally, I was shocked to the extent that Mandarin Chinese is spoken. During our stay, I spoke Mandarin with our driver, plus heard it spoken by numerous tour groups and business delegations. Over a drink that I was invited to share when a group of Chinese businessmen learned of my ability to speak their language, I was told that Chinese businessmen are now looking for investments in Cambodia and are traveling there frequently. My host who was from Shanghai noted that the countries limited population an agricultural base were some of its attractions and implied that the Chinese government supports this policy.