Lakeside Resigned to Disappearing Businesses

When Dabash Ali opened the doors to his falafel shop seven months ago in Phnom Penh’s popular backpacker quarter, a 500-meter stretch along the eastern bank of Boeng Kak lake, he settled into what looked like a prime spot.

Facing the neighborhood’s main road, squeezed in between turnoffs to some of the area’s busiest guesthouses, Mr Ali should have been presiding over a steady stream of customers by now.

Instead, he is almost as likely to see a customer these days as one more of the lakeside’s Khmer families filing past with the polls and planks of their dismantled homes on their backs, off to start anew someplace else, someplace safe. Other business owners have no­ticed the same thing.

“That never happened earlier, only since about three weeks ago,” Mr Ali said on a recent afternoon last week.

Private developer Shukaku Inc in 2007 won a 99-year lease to the area—home to an estimated 4,000 families. And while the city has ignored all demands to let residents apply for formal ownership, development has proceeded apace.

The families are among the growing ranks of lakeside residents taking the city up on its compensation offer in return for agreeing to move. Housing rights groups and many residents say they have little choice.

A rare illustration of Shukaku’s plans released a few months ago shows the lake filled in and topped with new homes and office towers. For the moment, the firm is still pumping the lake full of sand. But as the lake disappears, the water has found new places to go. Once dry homes and guesthouses now flood with each heavy rain, turning alleyways into knee-deep pools of floating trash.

With ever fewer locals and tourists to serve, business owners are growing increasingly resigned to the prospect of having to leave, too. Unlike the lakeside’s nominal property owners, though, renters like Mr Ali say they are being offered nothing in compensation.

The Council of Ministers issued the first official map of the precise area around the lake slated for development in March. Council spokesman Phay Siphan, however, referred questions on compensation to City Hall. City and district officials either could not be reached or declined to comment.

Nguon Meng Tech, director-general of the Phnom Penh Chamber of Commerce, said he had no qualms about losing the neighborhood to developers.

“The businesses operating over there are not a big deal,” he said. “This place is where some backpackers smoke marijuana and it is no good for Phnom Penh.”

Even so, Mr Meng Tech said he felt bad for the business owners, but fell short of suggesting the city compensate them.

“The renters should talk with the property owners about their contracts,” he said. “I don’t take sides with anyone, but a better solution should be reached between the authorities and the people.”

For better or worse, meanwhile, residents and renters alike have been left with little to do but preside over a neighborhood’s slow death.

“If there are not tourists, there is not business,” Mr Ali said. “If there is not hope, there is no life.”

“To be fair…they must give us help,” said Mr Ali, who shuttered a five-year-old business in Pattaya, Thailand, after having had enough of the country’s political upheavals. “So I came here, found a place with some tourists, and with a little money I invested.”

After more than half a year, though, Mr Ali said he had yet to turn a profit. And with no word from the city on when the area will have to clear out, he has put renovations on hold.

Even some of the lakeside’s older business owners said they had not made a profit in months.

“Last year was much better,” said Thann Tong Srong, who opened Oh My Buddha restaurant five years ago, when the area’s main thoroughfare was still the heart of a bustling neighborhood.

Mr Tong Srong said his revenues were down a third compared to this time last year, and he did not know how much longer he would hold out. He and others said much would depend on the fate of the neighborhood’s budget guesthouses: No more guesthouses, no more guests, no more business.

“If no more people come to stay here because there are no more guesthouses, the people who have businesses will go,” he said.

“The main problem is that there are fewer floating guesthouses, so there are not so many tourists who come in,” agreed Ro Hanny, who said she might have to close her Indian restaurant in a matter of months after a two-year run. “I can only make $30 now on an average day. I cannot even break even.”

Without the promise of compensation, $1,000 out over the last four months, and with the prospect of higher rent elsewhere, she was less than optimistic about her future.

“I have no idea where I will go to run my business somewhere else,” she said, hovering over a row of empty lunchtime tables.

Guesthouse owners, the neighborhood’s adopted business barometers, said they were doing no better.

“I have lost money every month this year,” said No 10 Guesthouse owner Phan Na, whose 40 rooms jut over the lake on well-worn stilts. Coffers dry, he said he would not have the resources to start over if, or rather when, he moves.

“I think the government should consider [giving us] compensation,” he said.

Another guesthouse owner, who spoke on condition on anonymity, said his own exit was imminent.

“I will close soon because soon we won’t have guests,” he said. “There is only one person staying here now, and he stays here because he feels sorry for me.”

Considering that the only way to reach the guesthouse a few days ago was down a flooded alley, weeks after floodwaters had receded from the rest of the neighborhood, having even one guest seemed lucky.

“We are so worried right now. My whole family is worried,” he said. “I don’t know what to do because I have such small resources.”

(Additional reporting by Phorn Bopha)

 

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