As Secretary-General of the Council for the Development of Cambodia
(CDC), Sok Chenda Sophea travels the world urging investors to come to
Few guys are more suited to this job than
the erudite, multilingual Sok Chenda. Simply to meet him in full
sartorial splendor and hear his finely honed spiel is to be half
convinced about a benighted country that has faced terrible adversity.
But the salesman tag does not do him full justice, for Sok Chenda is
already a full minister and a member of the Central Committee of the
Cambodian People's Party. He oversees the Special Economic Zones and
often travels with Prime Minister Hun Sen. Make no mistake, behind the
suave exterior, there lurks a hard center – which leads some to
characterize him as moody, thin-skinned and arrogant. He admits to
being a tad volatile. Don't mess with this man.
Is the global financial crisis hurting Cambodia?
No, we are not really harmed financially because our banking system is
not yet well developed and sophisticated. But for sure, our overall
economy is affected because we are now more integrated into the global
trading system. I was part of the team that secured our membership of
the World Trade Organization in 2003. We took that step to open up a
larger market for Cambodia – really, we are now very open in the
private sector, especially compared to our neighbours.
course, when our markets in the United States and Europe are not doing
well, we are affected. Businessmen express concern. But I tell them:
please be calm. Look at the figures. All of our exports to the US are
low-end or middle price, not high-end. And in troubled times, it is the
luxury items like foie gras, cognac, caviar and designer clothes that
people stop buying. They still buy bread and butter, you know, the
basic things like jeans, T-shirts and so on that we export to them. So
we may not be too much affected.
There may even be an advantage?
Well, you know, whenever there's a crisis, there are opportunities.
Consumers in our export markets are now going for the cheaper products
that we make. So instead of having a market shrinking, we may have the
reverse. And remember, Cambodia has been through worse hell in the
past, so this latest crisis does not scare me. Don't get me wrong,
there is stormy weather ahead. And if we sit back and just say let's
wait and see, we'll have problems. But if we take proactive measures to
boost our competitiveness and be cheaper and faster than the
neighbours, we'll weather the storm. We must work harder on trade
facilitation, that is the key. That's why we are setting up the Special
Economic Zones, which I'm overseeing.
How do you "sell" Cambodia to investors?
I tell them to look around. Not only do we provide excellent fiscal
incentives, but we are the only place in the region that allows total
foreign ownership. Here, they can they run a 100 percent foreign-owned
bank, insurance company, telecoms company, even a newspaper. It is
amazing. You cannot do that in Thailand, Malaysia, Vietnam, even
Singapore – don't mention that place. We are quite unique. Also, I tell
them, yes, as a businessman, you can go to London or Tokyo with your
wife or your girlfriend, but what can you do? Most sectors there –
energy, transport, construction, they are all covered. They don't need
you. But here, there are so many untouched sectors, so many
opportunities. And it is easy to set up here.
you were joking a bit, giving me the sobriquet of "salesman of
Cambodia", but you are right. Except you forget that I'm not only
selling to investors but also to my colleagues in government. You
cannot imagine the time I spend selling good governance, streamlining
the formalities and all that to them. I'm the go-between. The
matchmaker. I really do it. I have so many meals and drinks with
colleagues telling them that the destiny of the country is in your
hands, brother. And the next day, it will be another brother.
Why does Cambodia get such a low rating in business surveys?
Good question. But there is hopeful news. In the World Bank's ‘Doing
Business 2009' report, we moved up to 135 out of 181 countries. Last
year, we were only 150. But you know, in real life, investors never
compare one country to another like that. They don't look at the
physical incentives, the political regime, not even the religion –
Ramadan or not, they don't care. It's about money. Investors never
mention these surveys. Of course, I did ask the World Bank how they got
their information, because I'm not sure they picked up the right
indicators. Take the number of days needed to register a company in
Cambodia. They say it takes a long time, but this is strange, because
at my institution, the CDC, that does not happen.
speaking frankly, as a businessman, I would not care how many days I
have to wait for my registration. What I would care about is if, in the
operation of my business, I face harassment and other problems, because
that is my daily life. The registration is a one-off thing. So to me,
the survey is not an issue. I don't care about it. If I see the
Cambodian people are less poor and have a better life, that I care
about. But the indicators in a piece of paper, I don't know who pays
attention to it. You put me at the bottom of your survey, I just don't
care. It doesn't make my life better.
But many foreigners still think of Cambodia as a backward, corrupt country.
It's true and not true. If it were really true, we would not have all
these investors still doing business here. They are staying and making
money. So it cannot be that awful. For businessmen, the bottom line is
profit or loss. If I am making a profit, then okay, I may have to make
some payment that I should not really have to make, but at the end of
the day, I make a profit. And when I say this, I am not accusing
anyone, I am just speculating. Because in this region, if you look at
transparency, Singapore is always number one. But Singapore has
policemen and jails for a reason – because they also have people who
are corrupt and who cheat the tax department. So they are not all
angels in Singapore.
Businessmen complain about other things, like expensive electricity and transport.
true. At the moment, our production costs are too high because of our
high electricity costs, and high telecom and transportation costs. That
means that if your company is a big consumer of energy and you have
operations, say, in China, and you want to diversify your source of
supply, where will you go? You look around and the first place you
cross out is Cambodia because the price of energy is too high.
remedy this, we are buying a lot of electricity from Vietnam. What else
can we do? No electricity, no activities. So let's be pragmatic, forget
about energy independence and buy from the neighbours. It's sensitive:
if they switch off, we are dead. But by doing this, we can supply power
and some activities can come in. Those activities create a local market
and so more businessmen come and invest here. If we didn't start like
this things would never take off.
Are they taking off now?
are moving in the right direction. Things are much better than ten
years ago and getting better and better. Much better than some other
places in the region. Our priorities are peace and stability. Other
countries have never had to deal with such political and social
upheavals as we did. Do not forget that Cambodia has only been fully at
peace since 1999. That means that long-term investors, those who need
peace and stability and who want to develop our reserves – the oil and
gas and bauxite, they have only had ten years. So our reserves are a
bonanza that is still untapped. But give us until 2011 or 12 and it may
be another story. And remember, longterm investors like growing up with
the host country. Sure, they want to make money, but they also want to
do something for you. So it's a win-win situation.
It would be more win-win if you had a better trained work force.
agree it would be an additional plus if our labor force was more
skilled. We have to do more. That's why I want the aid donors to help
us set up vocational training programs, because when investors come
here, they say: Oh, it's quite nice, but do you have skilled labour?
That's my problem. I keep harping on about it to the foreign agencies,
the Asian Development Bank, the World Bank, the United Nations, the
Japanese, the French. But they don't seem to hear me, they don't react.
You've been quite critical of the international donors.
Well, personally, I, Sok Chenda, do not agree with some of their
programmes. They have their agenda, but do they really think about the
needs of the Cambodian people? In my opinion, only if you create jobs
so that people make money, will you reduce poverty. It will take time,
but it's the only way. So I tell them: Gentlemen, save all the money
you spend on your programs for social development, human rights,
democracy, whatever. Let's get to the point and don't blah blah.
mean, consider their attitude to the Special Economic Zones. They ask:
Where are they located? I tell them: Well, they're not in the middle of
Central Park in New York, if that's what you think. They're far outside
Phnom Penh, in the remote provinces, near our borders with Vietnam and
Thailand. There, they'll create jobs that will keep villagers near
their homes and help them get more qualifications. Then, because
there's a shortage of skilled labour, businesses will go there and we
will prevent the classic urban migration problems of prostitution,
drugs, crime and so on. In this way, I told the donors, you will save
the money you would spend trying to fix these problems. Perhaps I am
being a bit simplistic, but perhaps I am right.
Your tourism sector has tanked due to the global slump.
keep things in perspective. This is not 1929. When you watch TV, you
don't see long queues at soup kitchens. Yes, people will cut back on
travel, but they won't stop entirely. It's like if you are used to
eating filet steak, now you go for sirloin. And there are other
factors. You know why the Koreans are our top visitors [by air]? It's
not Angkor Wat. It's not our other temples, our beaches, our wonderful
people, the food. It's direct flights. There are no direct flights from
the U.S. or Europe or Japan to Cambodia. If we had regular direct
flights from Tokyo, as we do from Seoul, the Japanese would be number
You travel a lot with Prime Minister Hun Sen, what's he like?
Before working for him, I didn't know the real meaning of the word
"vision". He is a man of vision. Without him and his vision, there
would have been no peace agreement in 1991. And he listens to all
points of view. You may find that surprising when you look at Singapore
and other places that do not tolerate any opposition press. Here, if
you read Cambodian newspapers, every morning you have some newspapers
criticising him. If he were the dictator people say he is, he would put
them all behind bars. But that's not the case.
know, years ago, when I read the newspapers, I thought, like everybody
else, that Park Chung Hee, the President of Korea, was a dictator. But
perhaps Korea's success today is due to him. The same for Mahathir in
Malaysia. Later on, you look back and say: Oh, but thanks to him, here
we are. Lee Kuan Yew. He never tolerates criticism. I just tell you
because Singapore is a piece of stone, a piece of rock. It's not a
country, it's a city state.
You can be pretty scathing and rather volatile, especially with journalists?
Yes, it's true. I very rarely agree to do interviews, because most
journalists go for sensationalism. Afterwards, they say: No, it was not
me, it was my editor. You know the line. I don't buy it and one
newspaper here I have boycotted because of this. I would like
journalists to respect other people. Because you have a responsibility.
If you are rational in reporting economic issues, you can give hope.
But you can kill that hope by saying everything is dark and grey. Then
the dark that would normally not occur, happens. It has a lot to do
with pyschology. So you, too, Roger, I have to seek your kind
understanding, because sometimes people need to be reminded. Okay? Now
I have to run. I have to pick up my daughter at the British School.