Hun Sen's Flooded Parade

«ប្រជាពលរដ្ឋ​របស់​យើង​មេត្តា​យោគយល់​ផង​ដែរ​ទៅ​លើ​បញ្ហា​ស្ថានភាព​នៃ​ការ​លិច​ផ្លូវ​ក្នុង​ពេល​ភ្លៀង​ធ្លាក់​ខ្លាំង​ម្តងៗ។ ម្សិលមិញ​នេះ​ភ្លៀង​ធ្លាក់​ប្រមាណ​ជា ៧០ ទៅ ៨០​មិល្លីម៉ែត្រ​អ៊ីចឹង​ទោះ បី​ជា​យើង​មាន​លូ​ធំ​ជាង​ហ្នឹង​ក៏​មិន​អាច​ដោះ​រួច​ទេ ទីក្រុង​ប្រទេស​ខ្លះ​ក៏​លិចលង់​លើស​ពី​ទីក្រុង​យើង​ទៅ​ទៀត ព្រោះ​ម្សិលមិញ​ហ្នឹង​វា​មក​មួយ​ភ្លែត​​គឺ​សម្បើម​ពេក»។

នាយករដ្ឋមន្ត្រី ហ៊ុន សែន ២៩ កញ្ញា២០១៤​

“I totally agree with Prime Minister Hun Sen. We should not stop developing the city. We have worked so hard since the city looked like a city of ghosts.”

Chhay Rithysen, director of the municipality’s Bureau of Urban Affairs, The Cambodia Daily, 22 January, 2004

“It has stopped raining for four or five hours already but the water has not gone down. It should recede faster than this.”

Grocery store owner Nut Thim in Srah Chak commune, 29 September 2014, The Cambodia Daily

“We cannot predict how many years it will take to stop this problem … because the rain is difficult to manage.”

City Hall spokesman Long Dimanche, 30 September 2014, The Phnom Penh Post

“Technicians will need another 8 years to free Phnom Penh from floods.”

Director of Phnom Penh public works and transport Sam Piseth, 6 June 2014, Radio France Internationale

Phnom Penh is booming, definitely. On construction grounds, many condominiums and high-rises are racing to reach the sky. On paper, there are more to come; in the first half of this year alone the construction sector attracts $2.5 billion of foreign investments. Developers are smiling at the next growth engine for the economy. This is indeed an impressive response to Hun Sen’s call only ten years earlier for skyscrapers in Phnom Penh.

Then come rains that flood Hun Sen’s parade. The rain is traditionally hailed by worshippers as blessings from the sky - usually the more the merrier, especially in countryside. The latest rainstorm in the city, however, is so severe that one may wonder why there is so much blessing. It takes longer than four hours for the flood it has caused to begin receding in Srah Chak.

Sam Piseth gives three reasons why the city flood is inevitable. First, the rain on that particular day pours 92 mm of water into the sewerage system that can take only 30 mm. He says the total length of pipes – small in diameter – in the city is 469 km, which is only 12% of what the city needs. Thus, while the city expands with more roads, the pipes have not.

Second, the current drainage infrastructure is more than half a century old and dilapidated; it has relied on pumps that are of limited capacity to move water. Hence, the city must remain flooded longer.

Third, another major factor is rubbish piles that Phnom Penh residents throw into the system, blocking the drainage flow. About 50 to 60 truckloads of garbage per week find their way into the pipes. Again, this is another problem that persists as if there is nobody effectively enforcing any regulations, allowing the residents to treat the sewerage pipes as their refuse tips.

Therefore, the government of the last 35 years – with assistance from the Japan International Cooperation Agency on sewerage projects since 1999 – has firmed up the following legacy of working with and fighting against water in Phnom Penh: the dilapidated drainage system that remains in disrepair, grossly inadequate, and is routinely blocked with household rubbish.

Sam Piseth claims the Phnom Penh flooding will linger for eight more years, while Long Dimanche has no idea when the city will ever be flood free; he may just resort to praying for less blessing. Some logical questions remain, however. Is the government incompetent, and what really drives Hun Sen’s decisions?

Hun Sen has not even managed to at least get the public to appropriately dispose of their rubbish. Hun Sen does not even understand that pipes with a wider diameter will somewhat help ease the flow, ceteris paribus. He may be right though that other cities suffer from worse floods; perhaps, what he has in mind is Italy’s Venezia, which some say is permanently flooded.

Nonetheless, it seems Hun Sen will continue – like a broken record – begging for public patience, confident that any excuse of his is good enough.

Ung Bun Ang

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Pseng-Pseng is published on the first, tenth, and twentieth day of every month. Previous issues are archived at pseng-pseng.blogspot.com

Hun Sen and GMAC Bark on The Wrong Tree

“If we demand too much, our rice pot will turn upside down and we will not have rice to eat.”

Minister of Industry and Handicraft Cham Prasidh, 3 October 2014, The Phnom Penh Post

'It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own self interest.

Adam Smith, The Wealth of Nations, (1776)

 “The military uniforms placed on the mannequins were meant to honor Chinese heroes who lost their lives in battle. Our Chinese director was not trying to insult the workers’ nationality.”

Long Yang, administrative director at Y&W garment factory, 2 October 2014, The Cambodia Daily

“Price, we always claim that it’s one of the most important factors, and it is. But before the buyers can even consider your price, they need to have the confidence that we are able to hold on to our end of the bargain, we are able to deliver the goods. If they have no confidence in our promise to uphold the contract, then we can be as cheap as you want… And the longer you delay, unless you have very clear plans, that’s going to create more uncertainty.”

Ken Loo, secretary-general of Garment Manufacturers Association in Cambodia (GMAC) 8 October 2014, The Cambodia Daily

Hun Sen government and GMAC continue with their push to secure and sell cheap labour to investors. Their favourite threat of a collapse of the rice pot is legendary.

While claiming the industry would collapse under the weight of the wage demand, absolutely nobody discloses any verifiable financials for the supposedly industry’s precarious conditions. Meanwhile, there has been a 50% rise in garment workforce since 2011 despite continual industrial unrests. Factory owners cannot be so ill-advised to continue employing more and more workers amid industrial chaos unless they make super returns on their investment. Yes, Adam Smith says so; everyone – including Hun Sen, his personal interest groups, and the investors – is looking after their own interest.

Part of keeping the wages low, the government ensures the workforce skill remains low. It has done little in the past three decades to turn around the devastated education system left by the Khmer Rouge. The current education minister still holds the regime responsible for the education system that mass produces low skill workforce, which is a perfect excuse for doing and achieving little.

Hun Sen has done more than enough for foreign investors to think the workers are so soft and thick that they can be intimidated even by scarecrows, deserving nothing better than the slave wages they are getting. Garment factory Y&W is so encouraged by the government’s contemptible treatment of the workers that it dresses up mannequins in the Royal Cambodian Armed Forces uniform, and displays them to confront its striking workers. If the mannequins were meant to honour fallen Chinese military heroes – not to insult the workers, as Long Yang claims, they would then be dressed in the Red Army uniform. Hence, either the factory could not afford live army mercenaries to bully the workers, or it just follows Hun Sen’s lead in showing disdain for the workers.

Anyhow, Hun Sen and GMAC are barking on the wrong tree. They are so focussed on securing cheap labour that they ignore what their colleague Ken Loo has to say about a more important business of certainty. Ken Loo is right it is the certainty that buyers are looking for – more than cheap labour that inevitably comes with hungry workers. If GMAC chairman Van Sou Ieng is not exaggerating that orders across all factories have fallen by 36% this year, then it is time to realise the current uncertainty arises from hunger, and the protracted disputes from greed, not the wage demand.

The $177 minimum wage would bring certainty and benefits to many. Healthy happy workers with full stomach would deliver a higher productivity and profit. The industry’s profit-to-revenue ratio might be lower, but there would be more money in absolute terms. Higher wages for garment workers mean more money would remain in the country, generating higher local economic activities. Hence, this would improve a living standard for all, except perhaps, the personal interest groups that may have to re-negotiate their facilitation fees as their rice pot would now be at risk.

Ung Bun Ang

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 NagaCorp and Bushy Institute

“Naga…is still experiencing notable growth in revenue and we expect it to continue to do so going forward.”

Grant Govertson, a principal analyst at Union Gaming Research Macau, 24 September 2104, The Cambodia Daily

“If NagaWorld does not comply with the Ministry’s instructions [that it must rebuild the gate to its original form], the Ministry will rethink and decide accordingly.”

Minister for Cult and Religion Min Khin, Letter to NagaWorld, 5 May 2014

“Bringing a horse to exchange for a horse is good policy for the government. At the end, a horse is still a horse. We did not lose anything.”

Premier Hun Sen on building and land swapping metaphor, 9 February 2012

“Besides the work of the Buddhist Institute, the Ministry of Cult and Religion has budgeted for building repairs and renovations, and for a new four or five floor building on the Buddhist Institute location to carry out programs connecting Buddhism to society, to provide halls for training Ajars, offices, which are long term objectives in accordance with the government’s guidelines.”

Ministry of Cult and Religion, Public Announcement, 17 September 2014

NagaCorp shareholders are laughing all the way to the bank. The company that runs its flagship NagaWorld in Phnom Penh rakes in a net profit of 40.6% of revenue in 2013. The shareholders investment has grown 8.4 times since 2009 with an annual average growth rate of 53%.

The jaw-dropping profitability is likely to continue. NagaCorp holds a 70 year licence running through 2065 that includes a 41 year monopoly within a 200 kilometre radius of Phnom Penh. It pays no taxes on income or gaming revenue, besides a fixed fee of $5.1 million in 2013, amounting to a mere 1.5% of total revenue.

So how does NagaCorp manage to secure such a sweet monopoly that will last for so long? It cannot be a questionable mental health of government decision makers. If it were, they would be locked up in an asylum, not running Cambodia for decades.

It must be then that their brain is tainted with financial incentives that are undisclosed. NagaCorp is clever enough not to reveal anywhere what they pay for the numb brains. Or more likely, they could give those decision makers, or their proxies, parcels of shares the value of which will grow in concert with their push for NagaCorp profits.

Nevertheless, NagaCorp proudly lauds its contribution of over $530,000 in 2013 to its claimed long-standing and strong partner Cambodian Red Cross. It doesn’t care that the partner has not publicly recorded the donation anywhere, or what the partner does with it.

What NagaCorp does care about is ensuring on-going fortunes for its shareholders.  It is so confident of business successes that it has begun planning Naga3, though it won’t complete the current $369 million Naga2 until 2016. Naga3 is a further expansion into hotel businesses to be located where the Buddhist Institute (BI) currently sits.

Hence, will the BI be allowed to stand between local NagaCorp shareholders and piles of cash?

NagaCorp has indeed cultivated a straight flush. Minister Min Khin who runs the BI is very accommodating. He permits NagaWorld to flatten the BI’s main gate, as part of Naga2, to construct an underground carpark underneath the BI. And if NagaWorld fails to rebuild the gate to its original conditions, there may be no repercussion.

Min Khin has already leased 3,000 square metres of BI land for Naga2. It is only a logical progression that Naga3 will be allowed to bulldoze the BI out of its present location. The accommodating minister may sell it, or swap it.

For properties swapping, NagaCorp won’t find any decision maker anywhere more understanding than Premier Hun Sen. He has a simplistic view on property values – they are all the same. Therefore, he is likely to accept NagaWorld’s possible offer of a block of bushland somewhere for the prime BI location. And he will be thrilled if NagaWorld throws in a four-or-five-floor building to keep Min Khin excited about his expansion plan for the BI.

Then the NagaCorp straight flush will turn BI into a Bushy Institute.

Ung Bun Ang

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Parthian Shot:

Who runs the Cambodian Red Cross, the recipient of NagaCorp’s generosity, and how they manage their financial affairs? Some of the answers are in “The Dark Cross Cambodia Bears”, Pseng-Pseng, 20 May 2014 at pseng-pseng.blopspot.com.

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(Pseng-Pseng is published on the first, tenth, and twentieth day of every month. Previous issues are archived at pseng-pseng.blogspot.com)