pailin – Hay Chien Tong, 50, serves up the best Khmer beef sour soup in this rugged northwestern town.
But the Sihanoukville native’s two-month-old Meng Kry restaurant off Pailin’s muddy main street has failed to take off.
Hay Chien Tong says he had expected tables to be filled with visiting businessmen and tourists. Instead, the only people coming to Pailin are penniless gem diggers who don’t patronize his restaurant. “Their living conditions are very poor,” the restaurateur said last week.
The influx of poor, jobless migrants and no big-money spenders like tourists and traders is all part of a worsening headache for officials in this former Khmer Rouge stronghold.
The challenging task of transforming Pailin from communist collective to free market economic zone is being jeopardized by the sinking national economy and unstable political situation in Phnom Penh, authorities said here last week.
The bickering political parties’ inability to compromise to form a government has spooked investors in Pailin’s natural resources and cross-border goods trade with Thailand, they said.
While Pailin’s two-year-old business awakening has been put on hold, most businessmen like Hay Chien Tong are optimistic the economic climate will improve as the government settles down to work. For now, Hay Chien Tong’s restaurant is one of many businesses struggling in Pailin.
The Canadia Bank’s branch in Pailin has picked up just 200 accounts in seven months of business—not enough to make a profit, a bank official said.
The Thai Boon Roong Co’s two-month-old Caesar International Casino draws about five customers per day, staff said last week.
And worse still, the area’s famous gem business is in decline. “The gem business has caught malaria,” said Sok Kim, 41, a Pailin native and gem trader since 1981.
As long as political tension remains in Phnom Penh, the approximately 30,000 Pailin residents—both long-timers and newcomers—will struggle and local businesses and merchants will starve, residents say.
“I want companies to come and change [Pailin’s] living conditions,” Katt Kann, Pailin’s third deputy governor, said in an interview last week. “I believe that this area could be developed from top to bottom if the [national] government was stable.”
City administrators say they do not make enough money from taxes and prospecting contracts to provide for the town’s most pressing needs: electricity—it’s all done by expensive private generators—and clean water.
Pailin city officials cannot pay salaries themselves, according to Ieng Vuth and Katt Kann. The little money the town does garner pays for police salaries and food aid for the needy, they said. Additionally, the second consecutive below-average annual rainfall could worsen the area’s food shortage.
After Pailin’s defection from the hard-line Khmer Rouge in 1996, Phnom Penh authorities granted local bosses control of area resources as part of a loose autonomy pact bringing the former guerrilla zone closer to longtime adversaries in Phnom Penh.
The Thai gem prospecting companies pay $5,000 per month to the government for digging rights, Katt Kann said. Pailin also receives duties on some goods transported across the border checkpoint about 20 km away.
Pailin Governor Y Chhien last week articulated his fear of Pailin being left to fend for itself.
“If we have only natural resources, Pailin itself cannot be modernized,” he said in a speech at a school outside central Pailin. “We must depend on foreign organizations and the government to help Pailin develop.”
Thai companies now investing in prospecting is down to three from about 40 in the early 1990s, local officials say. And the Phnom Penh government has no money to send, they say.
“Pailin needs more investment to produce capital,” Ieng Vuth, Pailin’s second deputy governor, said in an interview last week.
Mei Mak, the city’s cabinet director, says Pailin will struggle as long as Cambodia does.
The droves of penniless people coming to Pailin reflect the prevailing agricultural and political instability nationwide, he said. Despite the town’s good security and business possibilities, Pailin is hopelessly tied to Phnom Penh, almost 300 km away, people say. Economically—the primary currency here is the Thai baht—it is closer to Bangkok.
“Pailin is not its own kingdom anymore,” says Tim Lup Mul, 50, a drill instructor for the Pailin-based RCAF Division 22 and an area resident since 1990. “When investors listen to news from Phnom Penh about the government, they are afraid to come here.”
Residents and city officials here talk about Korean, Chinese and Thai companies which they say have come recently to examine the prospects of setting up an electric or water company, a paper mill, a four-star hotel and a coffee plantation.
Political instability has scared them all off, residents say. “I don’t have the confidence that anybody will come to set up a paper mill here,” Katt Kann said. “And I’ve heard rumors about a four-star hotel coming, but it’s not true.”
Ieng Vuth said investor interest has not grown beyond initial stages, forcing city planners to scrap their development schedule. “A lot of investors have come to talk to me…but it’s only talk,” he said.
Pou Sothirak, the minister of industry, said Tuesday that no companies interested in setting up a power plant in Pailin have come to him. He blamed slow investment schedules in Pailin and in other parts of Cambodia on political uncertainty.
Pung Kheav Se, general manager of Canadia Bank Ltd, said Tuesday that the lack of infrastructure in Pailin—notably, no public electricity or paved roads to larger population centers—could be holding up further investment as well.
Meanwhile, Pailin continues to construct buildings quickly in expectation of improved tourism and trade while the local authorities have received some outside assistance.
Y Chhien and a few “local businessmen” are paying for a new police station, an orphanage and an agriculture department, officials say. First Prime Minister Ung Huot donated $50,000 for two health centers and the CPP and a Japanese NGO have built at least four schools in the area.
Guesthouses, importer-exporters and at least two gas stations—one owned by Thailand’s PTT—are under construction. A town that only a year ago was silent at night now throbs with karaoke bars and several packed disco clubs. And Samart plans to bring cellular telephones to Pailin possibly by the end of year.
The ominous development that could be lasting is the struggling gem business.
Many long-time residents herebelieve that heavy Thai prospecting in the early 1990s has depleted the ground of most of its precious stones.
In addition, prices for gems are down while the competition for the stones is up.
Ou Sothea, a 28-year-old trader from Phnom Penh, picks through the stones in his open palm and smiles grimly at the nearby neon-couched Caesar International.
“There is no place to be happy in Pailin except the casino,” he sighs.