Is Chinese investment going to swamp Cambodia in debt?

Direct foreign investment from China into Cambodia now outstrips that from all other sources combined. Is this a problem?

Right now the biggest national issue that everyone is talking about in Cambodia must surely be the topic of Chinese investment. Due to sizeable land transfers particularly around Sihanoukvlle, and with the instant-high-rise nature of Phnom Penh there is a strong and palpable perception that China is disenfranchising local Khmer people.

Property and real estate are the leading forms of foreign investment. In part because the effort going into starting an actual new business (such as a clothes or bicycle factory,) is still harder work in Cambodia than in most of its Asian neighbors. The World Bank puts Cambodia 138th on their Ease of Business Index – with neighboring Vietnam 69th and Thailand 27th by comparison. Cambodia lacks clear business laws and is penalised for the level of paperwork required.

So a big hotel is simpler. Sold as a property development – on a land concession made simple by the Government – the advent of Chinese-built hotels, run for Chinese tourists, with minimal wages going to local Khmer staff (who work 12 hour shifts) and with profits going straight back to China is a highly visible form of direct foreign investment that is hardly leading to a wealthier populace.

The Government has already overturned morality based laws (gambling for money is illegal in Cambodia but has been legalised for visitors to the little-Macau Chinese casinos of Sihanoukville.) So much for sovereignty.

Land concessions are also a big part of the perceived problem. Human Rights Watchdog LICADHO estimate that 2 million hectares of land have been made available for developers, local and foreign, but often at the cost to local land owners who have been kicked off their farms.Dispossessed, (as the ABC of Australia reported of farmers who lost their land to a Sofitel development in March 2016) protestors were shot and wounded by armed forces on behalf of the hotel group.

Here is a map detail land concessions across Cambodia. Concession awarded to Chinese interests are marked in red, local interests are in blue while Vietnamese interests are in green.  Source map is bigger, clearer and interactive. Click here.

But is Chinese money exposing Cambodia to a future of debt-laden servitude? Right now Cambodia’s foreign debt as a proportion of GDP is relatively modest, though climbing quickly. There are two prices to be paid though.  One is the social debt – the idea that Cambodians are becoming, and will remain, in a cheap labour economy.

Then there is the fiscal debt. Here Cambodia needs to watch itself. The question is: who owns the infrastructure. Historically this has always been the business of Government, but China has the capital and human resource to come in and extend the sea port, put in hydro schemes and develop the currently struggling road network – then the ‘rates’ must surely get paid to the country that funded these things.

This from the Hong Kong Trade Development Council website: August 2018.

At the end of last month, Cambodia’s Ministry of Public Works and Transport (MPWT) announced that work had been completed on 2,000 kilometres of new roads, seven major bridges and a container terminal servicing the Phnom Penh Autonomous Port. All these initiatives had largely been backed by the Chinese mainland, with funding provided from within the framework of the Belt and Road Initiative (BRI).

In an article published by the Phnom Penh Post, on March 27th, 2018, journalist Robin Spiess noted that China’s financing and investment of the Belt & Road projects in Cambodia could lead to a significant rise in public debt, and even take it to ‘distress’ levels.

According to a policy paper released by the Center for Global Development, Cambodia will likely see a significant rise in debt to China as a result of the Belt and Road Initiative. At the end of 2016, Cambodia’s total public and publicly guaranteed debt was $6.5 billion, a relatively low percent of the country’s $20 billion GDP. About half of that $6.5 billion debt was owed to China, according to the report.

Miguel Chanco, lead Southeast Asia analyst for the Economist Intelligence Unit (EIU), noted that the report was accurate regarding the risks to Cambodia, but also said any prediction of future debt levels was complicated by the overall lack of transparency of BRI projects.

“Our estimates put the country’s public debt stock at around 35 percent of GDP, which is well below the median for Asean and emerging markets at large,” Chanco said. “Having said that, I am concerned about the lack of transparency in many of China’s projects in Cambodia, as it makes it difficult to determine the latter’s overall sovereign debt commitments.”

Publicly declared projects at the end of 2016 were predicted to leave Cambodia indebted to China by an additional $3.5 billion though this figure might well be much higher.

One example is China’s proposal to develop over two million kilometers of national expressways [in Cambodia] by 2040”, which is a broad-brush swoop of a figure to begin with, and given the geo-technical engineering risks of building on a flat, sand-based terrain could easily blow out beyond the estimated cost of around $26 billion. A blow-out could leave the Kingdom significantly more in debt to China.

Meanwhile estimates of the national debt to 2020 is less fuzzy.

The EIU forecasted a rapid rise in Cambodia’s external debt in the next few years, according to Chanco. “We expect the country’s total foreign debt stock to rise to $17 billion by 2020,” he said.

Right now Chinese investment hasn’t pushed Cambodian debt prospects over the brink, unless you factor in the very real human rights costs. But in pure money terms Cambodia is going for the quick and easy path to economic growth.  It has a long wayto go however, before it becomes an economy – like that of Singapore – where business is easy to conduct and where locals are not in underpaid jobs. Current policy is growing the economy, but it is a recipe for dissatisfaction and a real sense of disenfranchisement.

I write these blogs as an observer of changing Cambodia. I’ve been involved in a small NGO since 2004 back when the tallest building in Phnom Penh was 8 storeys high. I hope expats, volunteers and others in the Cambodian community find these reports useful.  I try to compile hard data from credible sources.

Meanwhile: China and the US square-off in dispute over recent history.  Click here.

 

Free, free at last.A precious shared moment in Cambodia.

My friend Pin. I went to visit him in prison and got mixed up in his release.  It was a mighty moment to share – a privilege – but his background, right back to his childhood, is still stacked against him.

Cambodian prisons used to be a horror story of violence and starvation, not to mention corruption.  But they seem to have cleaned up their act – and today the focus is more on rehabilitation. My friend Sopin, or just plain Pin, has been to prison twice on drugs charges – weed – and told me that these places used to be places of fear.  Now, he told me, they’re places of learning and counseling.

On December 28th I went out to visit him with a mutual friend Savong whom I’ve known since 2004 when Pin introduced me to Savong. We subsequently went on to build a school in the countryside. Pin was never central to the school project, but he is the person who connected Savong and me together. He was the key to the story that basically changed my life.

Pin is a handsome guy, with chiseled features and deep, but sparkling eyes. He has a natural charm that belies the fact that he endured a terrible upbriging. He knows no family and was raised at a Buddhist Monastery: Wat Thmey – which is known as the killing fields pagoda in Siem Reap.  On display there are skulls and bones from many hundred who were slaughtered during the genocide of the 1970s. After the years of genocide, when a quarter of the population lost their lives in Cambodia, the nation then endured years of poverty, cut off from world trade or aid.  Cambodia was so poor it could not grow enough rice to feed its own people. Children like Pin became beggars at age 6, and some survived eating insects and the bark off trees. Monasteries took these kids in, and it was at Wat Thmey that Savong grew up with Pin. They have a loyalty that goes way back, though in recent years this has been strained by Savong’s relentless drive to become a businessman and Pin’s loose, somewhat lost lifestyle – dabbling in work and trying out drugs. He served some time as a medic assistant in the army, a time he enjoyed, but three years ago he got arrested for smoking dope and engaging in gambling: in Cambodia you are not allowed to gamble for money – unless you’re a Chinese tourist in which case your Casino dollars are welcome. We’re talking about a weekly poker game.

On that occasion we organised a lawyer and he helped trim 2 years off Pin’s 5 year sentence. Pin resided in Siem Reap Prison where I visited him once.  He had a black eye due to a fight in his cell – where 21 prisoners shared meagre food and a shortage of space.

But he got released after 3 years and photos show that he actually put on weight.  Far from the sallow, hungry image of my imagination, Sopin emerged fit and healthy.

It was not to last.  With a record against his name, in a land where everyone carries around Cambodia ID, and everyone seems to sport a CV in the search for good jobs, Pin couldn’t get work.  A tuk tuk we’d given him 5 years earlier had been lost to drugs and gambling.  Soon he was back with mates who supplied him once more with drugs. It was only a matter of time before he got arrested again. This time he was sent to another prison – one aimed at re-education and rehabilitation.

Savong and I went out to visit on December 28th. The prison consisted of two main buildings set inside a flat dusty spread of farmland. On the left were the kitchens and the classrooms while the building on the right housed the prisoners, just 42 of them.  The gap between the two ground-level buildings was roofed over so that people could take advantage of the shade. We visited in the ‘cool’ season but the sun was already scorching when we came out that afternoon.

The centre is minimum security, with a basic 8ft fence around the grounds, and a guards station at the front gate. This is where we enquired whether we could meet Pin and meet the chief warden. The atmosphere was extremely casual.

As we strode in the 100 metres toward the two buildings we could see at least a dozen prisoners gathering to chat with each other and meeting visitors. Pin saw us and ran up and gave me a mighty hug. He was really happy to see two friends.  He’d not had other visitors in months and while I talked to him, Savong asked a guard whether he could discuss Pin’s case with the chief warden. I didn’t realise the guy he was talking to was a guard: I thought he was one of the prisoners.  Like them he wore a t-shirt, though his was red where everyone else was in blue.

Pin was in good spirits, and he showed me around the prison; the classrooms where they learned cooking and other life skills, as well as the main office in which I could see Savong busy in discussion. A few minutes into our meet up a small boy in blue pants and blue t-shirt came up to Pin and wrapped himself around Pins legs.

“He’s 10,” Pin explained. He was clinging to Pin and sensed something was up.  Our conversation spread out and was shared by other prisoners, all who seemed pretty relaxed though a couple of older guys looked pretty ravaged by drugs.  They stuck to themselves. Pin explained how he’d become the informal leader of the 42 prisoners, and had made sure the small boy – who was inside for glue sniffing (his parents were deemed unable to provide adequate care,) – was getting adequate care. Pin had clearly become a father figure for the boy.

Soon, Savong came out and explained that the prison was at a tipping point with Sopin. He’d made good progress, and the warden had noted our big hug too: an indication that Pin had a support network outside the prison gates. Finally they said that rehab prison was costly to provide and that Pin had been unable to pay anything toward the rehab. Technically he owed the Centre. It wasn’t a bribe, but it is hard to explain the leeway that the Chief Warden had at his disposal. What we did was suggest a few hundred dollars would settle what was owing, as well we could offer the promise to support Pin once on the outside. Would this be enough for the prison to let our friend go?  Suddenly this seemed to be on the cards.

Pin realised that the course of the discussion was about his future – and he could sense the possibility of an early release – and as I tried talking to him he really couldn’t concentrate on our particular conversation. He indicated that his heart was jumping out of his rib cage.  His future was on the line.

Savong said he needed to get back into town to get some cash, and he left me there so we could talk some more. Meanwhile the junior guard, the guy with the red shirt, was summoned to the Chief’s office and told that Pin could be released immediately. Word got around everyone in the shaded area within about 10 seconds. Pin lit up with the news and his mates rushed up to congratulate him. The small boy was crowded out and I nudged the well-wishers to one side so that the boy could snuggle up to Sopin. The boy was in tears.  How many times had he lost the people he’d learned to trust?  Now he was losing again.

I’m told that another chidren’s welfare NGO has good plans to look after the boy, but in the midst of what was proving to be an enjoyable visit the look on the small boy’s face was haunting.

Savong soon returned and signed some papers and, well, that was it.  Pin was free to go. Savong headed back to his car while I helped Pin carry some of his meagre possessions from the dormitory block where, now that visiting time was up, the prisoners had returned.  They were now behind bars, hanging onto these and watching Pin’s exit.

What a mighty feeling that was. As Pin walked the hundred meters back to the guard’s gate the other prisoners stood and gave him a ‘kar teahdai’ which is Khmer for a round of applause. Pin’s chest swelled and he strode in the same way astronauts in the movies stride when they’ve come back to earth – the slow motion walk of heroes. It was a pleasure to share that moment, though I bit my lip at the same time. This was just the beginning for Pin, once more, and I wondered how he’d cope this time, now he was out again. But what got me most was the face of the small boy in blue. He was standing at the barred window and applauding like the others. But when I turned to see him he momentarily stopped applauding and wiped away tears.

PS.  A week or two later I learned that Pin has gone back, as a visitor, to check that the little boy is okay. I hope they stay in contact.

Link:   A joke about Cambodian Prisons that got a little too close for comfort.

By the way – if you find my blogs thoughtful,  interesting or entertaining, don’t forget to hit the follow button! I love to write and I’d love your company.

280 Jailed Kids – Cambodia

The story about my visit to a friend in prison hit a nerve I think, because several people told me their stories of Cambodians who have ended up in prison, serving long sentences either for minor offenses (like my friend) or for totally trumped-up charges.

One organisation that works in this arena is LICADHO – the Cambodian League for the Promotion and Defense of Human Rights. They have their work cut out for them. They monitor 18 prisons and their reports show that, inside prison walls, life is dominated by corruption.

As they say: “There is a price tag attached to every amenity imaginable, from sleeping space to recreation time. Those who can’t afford to pay are forced to endure the most squalid conditions.”

For the past 20 years, on International Human Rights Day, LICADHO has provided small packages of extra food to the prison population and entertainment such as games, traditional dancing and shows performed by the prisoners themselves as well as speeches on the importance and universality of fundamental human rights.

What we do

LICADHO believes that regular visits by prison researchers deter abuses in prison and make it easier for LICADHO to intervene when they do occur. LICADHO’s prison activities include:

• Interview incoming pretrial detainees to ensure that they have legal representation and can communicate with their families
• Check for violations of pretrial detainees’ rights, such as illegal arrests and excessive pretrial detention/li>
• Monitor the actions of court and prison officials to ensure that the legal process is conducted properly/li>
• Assist families in visiting their relatives in prison and provide assistance in avoiding corruption/li>
• Provide legal assistance, advice and support to prisoners who have suffered human rights abuses in prison or in police custody/li>
• Work with prison and court authorities to ensure the timely release of convicted prisoners who complete their sentences/li>
• Distribute food and materials to prisoners/li>
• Provide medical treatment for prisoners and prison staff (provided by LICADHO’s Medical Office)/li>

LICADHO’s prison researchers also monitor living conditions in the prisons, looking at issues such as the quality of food, water, sanitation, the size and cleanliness of living areas, and exercise for prisoners outside of their cells. Information about prison conditions and any violations of prisoners’ rights are compiled for LICADHO reports and used for other advocacy purposes.

LICADHO is currently the only NGO in Cambodia with access to prisons that regularly shares its findings with the public.

They have a particular focus on basic human rights, (food, education, health,) as well as a determination to improve the lot of children who are either in prison on charges (sometimes streets are ‘swept’ of beggars) or are children of adults who have been incarcerated.

At the end of April 2014 there were a total of 280 juvenile prisoners incarcerated in the 18 prisons monitored by LICADHO, a more than 50 percent drop in the juvenile prison population since 2011. In addition there were 13 pregnant women and 40 children living with their incarcerated mothers.

Their research into prisons does not make easy reading when you know somebody who is stuck inside a Cambodian jail.  One guy who contacted me talked about a conversation he’d had with a prison guard who admitted, more or less, to beating-up prisoners. His rationale: “we want prison life to be less attractive than life in poverty outside of prison.”

For more on LICADHO’s Prison Project read PRISON PROJECT.

Also Caritas Cambodia and education-based NGO This Life Cambodia run positive programs assisting prisoners and their families. These are well worth checking out and supporting.

If you find my blogs at all interesting please feel welcome to press the FOLLOW button at the top left. I write as a supporter of Savong’s School in Bakong, but my topics of interest spread right out to education in general as well as to the arts and life in Cambodia in general. I try to write well-researched pieces and provide links where I can.

 

 

 

 

 

 

A visit to prison in Siem Reap, Cambodia

From the outside the pprison actually looked festive and friendly. The sign on the gate said “welcome!”

On the inside of the gate it bids farewell with the words: “have a good life.” For me it was a happy/sad visit.

Last time I was in Siem Reap, during Pchum Ben (which is the local thanksgiving festival,) I had arranged to meet an old friend that I’d first met in 2004. We’ve stayed in touch mainly through Facebook as well as through my sporadic visits. My friend is a tuktuk driver.

Now, tuktuk drivers have a life that would be recognised by taxi drivers everywhere. Times of busyness punctuated by long periods waiting for a job: for the next flight to arrive, or for the tourist season to pick-up.

As I found in Bangkok, being a western tourist – one becomes an easy mark for tuktuk drivers to do a little side business. In Bangkok the patter goes: “Hey mister, you want ride?”  I shake my head. “You want girl?” No thanks I say.  “Perhaps you like boy?” he tries. I wave him away.

In Siem Reap there seem to be just two levels to the hustle. “You want ride?” And if you say ‘no thanks’ then one is frequently asked: “you want drugs?”  Which I’m told is usually the offer of marijuana. Western backpackers probably generate a lot of business in this respect. Me? I’ve never used dope, though I did unsuccessfully try inhaling on a soggy spliff back when I was a student.

Now back to my friend. We had agreed to meet but he never showed up.

That was unusual, so Savong helped me locate my friend. We asked dozens of tuktuk drivers if they knew where he was. We showed photos. We tried bars where he was known to hang out. Nothing. He had disappeared.

Then word came through from one of the drivers. The police had – in an anti-gambling sting – raided a house and arrested several drivers who were gambling: betting on cards which is illegal in Cambodia. You can bet on kick-boxing, and you can put money on volleyball games, but you can’t gamble with cards. My friend was one of 12 arrested.

Savong phoned a policeman friend and we found out where our friend had been taken: to a prison on the south-eastern edge of town. The  Armed Forces Prison.

Now this is the good prison. There’s another prison in town which is older and with conditions that are, I’m told, far worse.

We went out to visit the next day. The photo above shows me standing on the driveway. Far from being a cold bastion of incarceration, the front entrance looked, well, festive. Silk banners were flying in the hot October breeze. Families, big and small, rich and poor, were turning up to visit. It felt like picnic day.

We registered our names, and handed in our cellphones, then waited in a small shaded waiting room, watching prisoners in their orange clothing which was more reminiscent in this country of Buddhist monks really, than of the standard prison garb we see on TV.  Some prisoners were carrying out light duties – escorting visitors to the meeting room, and running messages for the guards. One young guy, who clearly loved his role, had the task of announcing to visitors when their inside friend was ready to meet.

He proudly exhorted the two of us: “Mister Savong and Mister Duncan! – your friend is ready to see you!”  His enthusiasm was genuinely infectious.

So we went to the meeting room – a long room with half-height walls to let the breeze through, but divided down the centre by a long bench and chicken wire. Visitors on this side. Prisoners, at least 30 of them, on that side. One of them was my friend.

He lit up! After two weeks he’d had no visitors. The police had taken his phone and he has no family – he’s an orphan – so he had no way of knowing if anybody cared.  His face shone like a beacon.  Well, he had a black-eye also, but it was his smile that I most recall.

In Cambodia the law works upside down. If you are arrested you basically go straight to jail and if you have resources, then you can get a hearing to either plead innocence or plead for a lighter sentence. If you have no resources then basically you have to take what you’re given – in this case 3 – 5 years imprisonment. For a card game.

So no wonder he felt some relief. He had not been forgotten. Touching fingers through the chicken-wire we talked and laughed for a few minutes, then we talked about next steps. I’m helping Savong get a lawyer and we’ll do what we can do get our friend out. I suspect a judge will want to see reparation of some sort: money no-doubt.

The visit was unexpected and on one level incredibly interesting and actually enjoyable. Seeing my friend was really valuable and it honoured a promise I made 11 years ago, that I would never forget my friend. These promises are important to keep.

We were given a scant 15 minutes to talk and right near the end I asked him how he got his black eye.

“There is always a fight over food,” he told me. “Every dinner time, there is not enough food. People fight in our cell.”

“How many people in your cell?” I asked him.

“Twenty one brother. And me.”

And that’s the good prison. I hope upon hope that we can get him out soon.

• An update to the story, March 2016

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Cambodia’s balancing act on bicycles

New bicycle!

Bicycles are the most common form of transport in Cambodia and yet there aren’t enough of them. When the photo above was taken, in late 2005, the boy had been the victim of a cycle theft; a first at Savong’s School. The thief had waited until class was in, and then helped himself to one of the many parked bicycles. The victim was distraught and it was not a good event for the brand new school’s reputation. We made good by promptly replacing the boy’s bicycle with a new one – and we placed the students’ bicycles under guard from then on. None have gone missing since.

But bicycle thefts are common in Cambodia, a signifier of the poverty that still plagues the country, as well as the thirst, especially, for new generation mountain bikes with their virtually puncture-proof tyres and sophisticated Shimano gears. One Facebook friend of mine lost his within 60 seconds after stopping at a roadside stall. He turned around and his Giant bicycle was gone.

As anyone who has ridden one knows, bicycles represent freedom. You can sail a bicycle further than you can comfortably walk, and it is the provision of bicycles that makes the difference for children in poor, remote areas between attending  school and missing out school completely.

Not surprisingly then, a large number of charitable organisations are dedicated to providing bicycles for disadvantaged Cambodian children.These include:

• Bikes 4 Life – Cambodian Children’s Fund
• Bicycles for Cambodian Kids (Korean initiative.)
• Bikes for Cambodia – South East Asian Prayer Center

Readers are invited to add others – there are many such initiatives.

The irony is, while we collectively buy new bikes, or gather and recondition used bikes from the west, and send these by container to Cambodia, the Kingdom is probably flooding your market and mine with bicycles made, actually, in Cambodia.

Cambodia is one of the five biggest bicycle exporters

These Cambodian made bicycles are selling fast in Europe where sales have climbed from 200,000 units per annum to more than 600,000 units (estimated) in just three short years. Cambodia is now the second biggest exporter of cycles into Europe now, behind only Taiwan.

Today, several Taiwanese-owned bicycle manufacturers are operating in Cambodia. They include Atlantic Cycle and its subsidiary A&J, who have operated in Cambodia since 2006, as well as relative newcomers Smart Tech (Cambodia) and Worldtec Cycles (Cambodia). The manufacturers are located in Svay Rieng province, near the Vietnamese border enabling components to be imported from Vietnam, and finished product ready for export across the border.

More recently the well regarded manufacturer of Specialized bicycles has also begun assembly in Cambodia.

To put things into perspective, here is the league table of global bicycle exports, as tracked by Daniel Workman, the founder of World’s Top Exports (WTEx) website: a great analysis of world trade patterns. Below are the 15 countries that exported the highest dollar value worth of bicycles during 2013:

1. China: $3,189,787,000 (34.1% of total bicycle exports)
2. Taiwan: $1,749,182,000 (18.7%)
3. Netherlands: $669,720,000 (7.2%)
4. Germany: $560,742,000 (6.0%)
5. Cambodia: $437,076,000 (4.7%)
6. Belgium: $275,488,000 (2.9%)
7. Italy: $254,054,000 (2.7%)
8. Spain: $185,760,000 (2.0%)
9. Portugal: $173,618,000 (1.9%)
10. Indonesia: $140,457,000 (1.5%)
11. France: $139,044,000 (1.5%)
12. Hungary: $137,902,000 (1.5%)
13. United States: $125,300,000 (1.3%)
14. Czech Republic: $118,654,000 (1.3%)
15. Bulgaria: $115,392,000 (1.2%)

That was 2013, and exports have jumped since then.

Three reasons why Cambodia is the hot nation for bicycles

Why all this action? The answer is based on three things: cheap labour, anti-dumping moves against Chinese and Vietnamese manufacturers, and zero-tariffs for Cambodian sourced bikes into EU.

It is most probably the anti-dumping sentiment in Europe that kick started the growth of Cambodian cycle manufacturing. In Europe there was a concerted response to Chinese and Vietnamese made bikes that were flooding the market and threatening to damage, if not destroy the local bicycle manufacturing industry. Some manufacturers got round this by simply moving. their assembly factories from Vietnam to Cambodia

Besides labour costs in Cambodia are significantly lower than in neighbouring Vietnam and Thailand, which has also seen an out-migration of cycle manufacturing. With factory workers earning little more than $US65.00 for a 6 day week of full-time work, and the promise of fast-track approval by Government to remove any business red-tape, Cambodia has become attractive as an assembly point for bicycle manufacturers.

But here’s the clincher. Where bicycles from China or Taiwan or Thailand attract a 14% tariff in the lucrative EU market, Cambodian bicycles attract zero tariff.

The zero tariff goes back to an UNCTAD (United Nations Conference for Trade And Development) initiative, adopted by the EU, to encourage economic development amongst the world’s poorest nations (the so-called GSP List) by cutting tariffs.

According to the website of UNCTAD the scheme helps foster growth and job creation in developing countries. But according to the UNCTAD website the brakes may be coming on. Europe is likely to apply “cumulation” criteria to all bicycle imports. Put simply, if the parts are made in wealthier countries, and all Cambodia does is assemble these into bicycles, then the free tariff ride may be over.

Will the local cycle industry be big enough and resilient enough if this happens? And will the factory workers – whose conditions have been overshadowed by the garment workers case – get more than a living wage?

And does it make any sense to export bikes to a country that accounts for 5% of global cycle exports?

The answers, as usual in this complicated country, are not simple. The outcomes seldom fair.

In Cambodia – social hierarchy is important

Hierarchies are everywhere in Cambodia. Everybody has their place in a complex social pecking order.

Cambodians have a very strong sense of hierarchy within society. Parents are superior to children, teachers to students and managers to subordinates. Even in the way the Khmer language is structured: the various pronouns recognise the relationship between two people in conversation.And, as ever-faithful Wikipedia points out, there are rich traces of hierarchical or social classifications in everyday language.

The Khmer language reflects a somewhat different classification of Khmer society based on a more traditional model and characterized by differing linguistic usages (see Languages, this ch.). This classification divided Cambodian society into three broad categories: royalty and nobility, clergy, and laity. The Khmer language had—and to a lesser extent still has—partially different lexicons for each of these groups. For example, nham (to eat) was used when speaking of oneself or to those on a lower social level; pisa (to eat) was used when speaking politely of someone else; chhan (to eat) was used of Buddhist clergy, and saoy (to eat) was used of royalty.

You can see hierarchical behaviors in everyday scenes. Monks can be seen walking in rank order, highest in front and most junior at the rear.

A feature of social hierarchy in Cambodia is the “patron-client” relationship in which wealth and power trump poverty and dependence. You see this expressed on a grand scale (the Prime Minister’s patronage/power versus the public) but also on an everyday level where a village elder who is both typically older and wealthier than the people under his patronage, may have many people obligated to him in return for this or that favour.  That’s the essence of the hierarchical relationship: it isn’t held together by overt power so much as by nuanced reciprocity. This from Dr Judy Ledgerwood in her paper: Understanding Cambodia: Social Hierarchy, Patron-Client Relationships and Power.

Both sides provide goods and services to the other. The patron possesses superior power and influence and uses them to assist his clients. The clients in return provide smaller services and loyalty over an extended period of time. The relationship is complementary, with both sides benefiting. The client is protected and assured a minimum level of subsistence. The patron in turn has followers, who serve to increase his power.

The relationship between the patron and the client is a personal one. The clients are not united as a group; rather they are linked to the patron by personal obligation. This then works in a pyramid fashion, midlevel patrons know someone higher and they in turn know someone higher – up the social ladder. The only way to get something that is beyond your capacity is to attach yourself to a superior.

Where does this social stratification come from? It is thought that it originates more than 1000 years ago in the Hindu caste system, though it has been tempered by the more egalitarian Buddhist philosophy. But herein lies a spiritual dimension to the patron-client relationship. There is an inference that success and power in life reflects one’s spiritual attainment and that you are my patron not simply because you are powerful, but because you are spiritually more blessed having shown great piety in your life.

Again, one can see this linkage, quite overtly in the political theatre – and it’s not unique to Cambodia – where powerful leaders invoke religious devoutness in their various ceremonies. But the charade kind of works! A good patron must do as a good Buddhist – and be generous of spirit, and grant favours to the less fortunate. In a sense there is some social control here to ensure a measure of fairness in an otherwise unequal relationship.

But the social acceptance and institutionalization of hierarchy has a dark side as well. As my patron, you might expect me to show my humility (when asking you for a favour,) by granting you an offering. Fair enough? Though at what point does this constitute simply a bribe?

And in an increasingly complex society who are my Patrons? One hundred years ago it might have been easier to answer this. My village elder perhaps. Or the head monk at my monastery.  But today a villager must also pay respect to the village elder, the local police, quite possibly the local political part organisation, not to mention the bank.

Meanwhile these patrons are bound less by religious values, and more by the desire for more power, or greater wealth. The old rules may apply, but the game has changed.

Foreigners are often greeted with a long list of questions as Khmer try to ascertain your place in the hierarchy. Are you the President of your company? Or a low level employee? Are you a friend of the Government and the Minister in charge?

I recall Savong telling me of an incident that occurred 3 years ago. A policeman was trying to bribe him, and he wanted Savong to meet him at Police HQ, Bakong to “sort out a little matter.” According to the Policeman the District Governor was “most displeased” with Savong’s School because it wasn’t registered. (Actually it was, and Savong had the papers.)

The Policeman phrased his story as a Patron. Look, he had contacts with the Governor’s office, and for a small consideration (of several hundred dollars) he could sort this matter out.

“Why don’t we sort this matter out right now?” replied Savong cheerily. “I have the Governor himself on speed-dial.”

And he did, because he’d had genial dealings with the Governor a few months earlier. He picked up his phone.

As soon as Savong began dialling, the panicky Policeman back-pedalled and said there was no need to call and that there had been a terrible misunderstanding. No money was required, there had simply been a mix-up.

When he first told me the story I saw it as a naked example of corruption and bribery. Clear and simple. But now I see the exchange as a much more nuanced exchange, where a young cop wasn’t simply asking for a bribe – he was trying to create a dependency relationship; he was trying to elevate himself, power-wise, up above my friend.

This is one game that any NGO leader needs to be good at playing. A few years earlier the outcome of that meeting could have been quite different.