Debt and poverty in Cambodia

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The photo of offerings, above, is one I took during Pchum Benh in 2015 near Siem Reap. I’ve been fascinated time and again by how consumer goods are such a price in Cambodia, relative to incomes, that cigarettes are often sold individually, at least in rural markets, rather than in packs. When you choose to buy one cigarette at a time, there is a thin line between solvency and debt.

I’ve been considering lately how poor Cambodians can climb out of poverty. There is a universal desire to get ahead, but there are no easy avenues to wealth for the poor to travel. Lenders who might advance some capital, for example through a MFI or micro-finance institution are not just lending against the ability of a borrower to give their business venture their very all; they are also lending against the high tide of risks faced by lower income people who live, daily, on the precipice of disaster. A crop failure. A stolen motorbike. An illness. Westerners are well insulated from such set-backs, we have insurances or sufficient economic resilience to take these things in our stride.

MFIs also face another risk – and that is the prospect that the borrower, desperate to raise enough capital to start a thriving business, already has loans with other micro-finance organisations. The risk isn’t about dishonesty so much as about financial literacy. The hopeful entrepreneur can only see the upside without appreciating the very high risks they face.

This is causing concern for micro-finance institutions of which there are around 45 registered organisations that are signatories to a shared set of operating principles and are members of a well-respected industry association, the Cambodia Micro-finance Association.  Together these MFIs have lent to 1.8 million borrowers, which is around one in every five adults aged 22+ – a staggering number.

Or it may be less staggering, given that a significant proportion of borrowers appear to have loans from more than one MFI (which is a practice actively discouraged by the lenders themselves.) Some of these are savvy borrowers, calling into question the idea of ‘one client: one loan.’

But not all borrowers are in this boat. Some are taking out extra loans because they are having trouble meeting existing debts.

Just as troubling, a report cited in The Guardian in March 2015, conducted by the Institute of Development, found that half the borrowers had taken such measures as eating less, or eating poor quality food in order to meet their repayments. Talk about a thin line between solvency and debt.

MFIs are adapting to the changing marketplace, but a general conclusion drawn from a 2007 Stanford Social Innovation Review study, by Aneel Karnani, into the effectiveness of micro-finance concluded that the service works for those above the poverty line, but often fails – deeply – when it comes to serving the needs of those below the line.

If the MFIs are adjusting to the market, and serving a growing class of more financially savvy customers (only a 15 years ago banks were having trouble attracting retail customers who had lost everything under previous regimes,) there is another problem in the sector: the unregistered lenders of which, there are estimated to be 60 in operation, and that’s not counting the traditional pawn-brokers in Cambodia.

In fact the Government’s financial strategy blueprint Financial Sector Development Strategy 2011-2020 ,expressly tasks the Cambodian Micro-finance Association (CMA) with bringing rogue operators under their umbrella and developing stronger consumer-friendly rules with which to self-govern members as well as introducing financial literacy programs to help educate the public.

The regulation of pawn brokers and money lenders is a harder task, but the Financial Sector strategy has these operators in their sights. Again there will be a focus on developing rules that help protect borrowers from over-zealous lending, or the onerous penalties of repayment failure. A frequent practice right now is to use farmland as collateral, and if a borrower gets behind, well, they lose everything.

Getting ahead usually requires capital. Unfortunately for the very poor, the best lenders may be of some benefit, but the marketplace is full of dangers. I think Risk is a concept about which every student needs to be taught. Some education may help keep some more people on the right side of that thin line.

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A visit to prison in Siem Reap, Cambodia

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.

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Garment workers in Cambodia cost a small fraction of what you pay for your t-shirt or shoes.

discrimination-workers-cambodia-retailersIn October 2015 Cambodia lifted the official minimum wage of a garment worker to $US140 per month. The big unions had initially demanded $177 per month in view of the high cost of living in Phnom Penh, home to most garment factories.

The decision followed a vote among representatives of the government, factories and unions, in which the majority supported a raise from the current $128 to $135, which the government then increased to $140.

Not that the Government has a history of being generous. In early 2014, at least four people were killed and more than 20 were injured when police outside Cambodia’s capital opened fire to break up a protest by striking garment workers.

The clothing and footwear industry, 90% of staff of whom are women, is Cambodia’s biggest export earner, employing about 700,000 people in more than 700 garment and shoe factories. In 2014, the Southeast Asian country shipped more than $6 billion worth of products to the United States and Europe.

The average workweek of a garment factory worker is almost 60 hours, and conditions are often very poor by western standards. Check out this link to a report (Work faster or get out!) prepared by Human Rights Watch.

Their report was well researched: and is based on interviews with more than 340 people, including 270 workers from 73 factories in Phnom Penh and nearby provinces, union leaders, government representatives, labor rights advocates, the Garment Manufacturers Association of Cambodia, and international apparel brand representatives.

Of some 200 apparel brands that source from Cambodia, Human Rights Watch was in contact with Adidas, Armani, Gap, H&M, Joe Fresh, and Marks and Spencer.

Some of these brands are getting their act together to prevent exploitation and abuses of the garment workers (do over time or get fired, sexual harassment, child labour etc)  but certainly not all.  Next time you buy Made in Cambodia (which should be a good thing) check the policies of the brands you’re supporting.  On a thirty dollar item, the labour component is probably no more than $1.50.

Cambodia – opinion poll captures cautious public mood.

I have long been a fan of public opinion polls because they bring an often ignored voice – that of the public – to the attention of those in power. A wise government need not necessarily be a slave to public opinion, the best decisions may be considered to be unpopular at the time, but it should always heed the sentiment of the public.

Having enjoyed a history of tight media controls, (the television broadcasters fundamentally ignore politics in favour of game shows and pop music,) Cambodia’s Hun Sen government is now operating in a much more openly informed environment. The press, namely the Phnom Penh Post, as well is Cambodia daily, have been active champions for journalistic freedom. Add to that, the Voice of America which, perhaps unlike the VOA the 1960s and 70s, which was very much a propaganda mechanism for the United States, is respected these days for bringing fair reportage to the Cambodian public.

As witnessed in the 2013 elections, the voice of the people themselves – using social media such as Facebook – has emerged as a potent voice in the political mix. The swell of support for the opposition clearly rocked the government. It is perhaps little wonder that this government is now actively gathering of intelligence from the Internet: identifying “troublemakers” in an effort to maintain some kind of control public opinion.

But here’s the thing: the public in any nation tends to have a good common sense understanding of whether the nation is heading in the right or wrong direction.

Right now, 59% of Cambodians feel their nation is heading in the wrong direction.

This is the finding of a significant survey, diligently conducted face-to-face, (I don’t envy the fieldwork design that must have gone into this study,) of 1000 citizens aged 18+.

The news is not all bad for the government, not at all. There is a general sentiment that the public considers the growth of the economy and the development of infrastructure to be good things for the nation. But they sound warning bells – highlighting corruption, deforestation and economic inequities as being causes for real concern.

From my perspective, as a researcher, and as an observer of Cambodia, the The Asia Foundation poll seems to be eminently fair. The Asia Foundation is a watchdog organisation, and for sure, they have an agenda –  “to assess attitudes and priorities of the voting public that may contribute to or constrain democratic reforms,’ but this hasn’t hindered the from asking balanced, non-leading questions, and enabling the public to voice their opinions in their own words.

This from Germany’s public news broadcaster DW.

Survey shows Cambodians increasingly concerned about country’s direction

Despite rapid economic growth, more Cambodians than at any time since 2004 feel their country is moving in the wrong direction, a new poll found. Corruption, deforestation, and economic issues top the list of concerns.

The nationwide survey, published by The Asia Foundation on Wednesday, December 10, shows that while 32 percent of respondents feel Cambodia is heading in a positive direction, a majority (59 percent) believes things in the Southeast Asian nation are going the wrong way.

Conducted between May 19 and June 9, and titled Democracy in Cambodia – 2014: A Survey of the Cambodian Electorate, the public opinion poll cites corruption (19 percent), deforestation, and economic issues (26 percent) as the main reasons for the increase in pessimism. The tangible results of infrastructure (27 percent) and economic growth (21 percent) are cited by those who believe the country is going in the right direction.

The representative survey is the organization’s third on democracy in Cambodia, a follow-up to polls conducted in 2000 and 2003 and is based on 1,000 face-to-face interviews with Cambodian citizens aged 18 and older in 23 provinces (excluding Kep) and the capital Phnom Penh.

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Learning through play – 70% of Cambodia’s poorest children have no toys.

Mind the gap. Two thirds of the infant children of Cambodia's wealthiest 20% will attend pre-school.

Mind the gap. Two thirds of the infant children of Cambodia’s wealthiest 20% will attend pre-school.

One of the first impressions I had of infant children in Cambodia was formed in 2004 when I first visited Siem Reap. Each day as I travelled to and from the Angkor temples – I had a wonderful guide named Joe Topp – we would pass small villages and farmhouses, and standing outside these places were young children, listless, just watching the world go by.

Their blank faces haunted me: these children seemed somehow disengaged from the world around them: I realised I saw very few children actually playing. They weren’t pushing toy trucks through the mud, or sploshing merrily by the pump – they were just standing there.

In a couple of posts recently I have talked about pre-school education, and I was rightly critiqued by one reader who reminded me that early childhood education isn’t simply a matter of formal classroom interventions, but is a whole process of socialisation and engagement – very often through play.

So I wondered if there were any figures around this usually elusive topic. UNICEF is where I started, and sure enough I got from their website the figures which populate the chart above. Here, they compare the likelihood that young children from the poorest 20%, and from the richest 20% of Cambodian families – will attend formal early childhood education.

Yes, but what about toys or books? After all, one could have a perfectly fantastic upbringing in a home where children are encouraged to take part – for example in the way my mother used to encourage us kids to get involved whenever she was making biscuits. We were given the task of cutting the dough into shapes.

Well, here’s one indicator; again from the UNICEF website. Below, we compare the presence of books and learning materials appropriate for young children in the homes of the poorest 20%, versus the homes of the richest 20% of Cambodian families.

ECE 20 CHART2

Here the gap (12.5%) isn’t so wide, partly on account of the fact that so few of any Cambodian homes have learning materials suitable for the youngest members of the household. Only one relatively wealthy home in every eight has such materials available for their young kids.

The UNICEF surveys also asked about playthings, and here the figures are somewhat better.

  • Some 30% of the poorest 20% of households have playthings at home for the children.
  • Of the richest 20% of households, those with kids that is, some 57% have playthings available for their children.

Perhaps the gap doesn’t sound so bad – but what this still means is that 7 out of every 10 children in poor regions don’t have toys.

I would caution readers who take this as an open invitation to flood Cambodia with just any old toys. Toys should be sturdy, versatile, educational and encourage imagination. In Phnom Penh, the day after I visited S 21 I happened to walk past a toy store which seemed, unfortunately, to specialise in plastic replica guns. These looked like the real thing, and it struck me what a wicked thing to encourage kids to play with – especially  for the generation born within years of the National Holocaust.

Breaking the rice pot – a Cambodian proverb

Cambodians have hundreds - perhaps thousands of proverbs.

Cambodians have hundreds – perhaps thousands of proverbs.

One of the more vibrant Facebook sites  dedicated to things Cambodia  is the group run by expats from around the world – who dwell in Cambodia. Each day the site is populated by a wide variety of comments.  There are the unfailingly  generous  comments from the Rosy guesthouse, and the help wanted  requests  from expats who are finding it hard  to locate  a house to rent, or a hairdresser  who is used to working with the mysteries of European hair.

This week one of the stories that unfolded concerned a Samsung Galaxy notepad  that had been stolen.  Unfortunately for the thief, the photos they took –  as proud new “owners”  of the device –  ended up  hosted  not on the device,  but in the Cloud, and could be accessed by the victim of the theft.

The photos were selfies, and the thief  wasn’t simply anonymous,  a desperate youth,  but an easily recognisable  disabled person. Caught on camera! I gather it took  only 48 hours or less  for the Samsung device to be recovered.

What hurt was  that the thief  had been supported (with food and shelter,) over previous months  by the victim. The English proverb  comes to mind;  ” don’t bite the hand that feeds you.”

Cambodia has more than its fair share of proverbs as well,  and the proverb  copied above reads something like this:

Taking the opportunity to embezzle from those who help you, through the use of cheap, disgraceful tricks, thinking they are unaware of attempts to cheat them – this is breaking your own rice pot.

Judging by comments  posted on Facebook,  the owner of the Samsung device has been far from alone in their experience.  Others attest to the fact that they too have been ripped off by people they had previously helped.

I’m not saying dishonesty is especially widespread in Cambodia, (the first time I was there  a stranger tapped me on the shoulder and pointed out that my wallet was half out of my back pocket, and was at risk,) but l have often wondered  at the immense temptation that many people face. A lifetime is spent scratching for dollars, and  there, within easy reach  is a laptop, or tablet,  or wad of cash – it must surely cross anyone’s mind  that one quick snatch  might be life changing.

Savong and I have discussed this a few times,  and the issue of forgiveness comes up. I’m afraid  that if he caught a thief  he would be less forgiving than I would. Or perhaps simply less soft.  I searched Google  for Cambodian proverbs about the subject of forgiveness,  but so far  I have not found anything quite so elegant as the old European  adage: “To err is human.  To forgive – divine.”

Instead  I see more Cambodian proverbs instructing owners to be careful with their goods, and instructing servants  to avoid the penalties  that come with dishonesty.  Here are two such proverbs:

Stealing may bring profit, but hanging costs far more.

Don’t let an angry man wash dishes; don’t let a hungry man guard rice.