China to Gamblers: Come to Cambodia

Chinese development at Botum Sakor National  Park

3/21/2012
Forbes

Pity the poor Chinese gambler. Barred from making legal bets in his own officially straight-laced country, he undergoes much trouble and expense to indulge his habit anywhere he can, from the new casinos of Macau and Singapore to Las Vegas, where a tiny band of baccarat players from the Mainland accounted for 42 percent of all table betting last year.

But if developers have their way, gamblers from China could soon enjoy a new East Asian haven where controls are few, the regime’s entirely on their side, and they have a free hand to displace locals and even bulldoze government nature preserves: Cambodia.

In the most recent deal, the Cambodian government sold off more than 130 square miles of a national park to a Chinese developer, Tianjin Union Development Group, which promises “extravagant feasting and revelry” and has already cut a 40-mile road through virgin forest that’s habitat to endangered tigers and elephants, and sent the people who lived in these lands for generations off packing.

And it’s thinking big, planning a city-sized $3.8 billion complex with a casino named after the fabled Angkor Wat. Not even Sheldon Adelson, whose Venetian Macao is among the world’s largest, has his own dock for cruise ships, or an international airport.

It’s just the most recent result of Chinese largesse to Cambodia. The mainland government has become its major donor by far, with just under $2 billion in direct aid last year for various infrastructure projects. In return, more than 400 Chinese investors have flocked to Cambodia between 1994 and 2011, much of it in large scale projects like mining and hydropower on what used to be public land.

The proceeds are funneled mainly to figures close to the regime of Prime Minister Hun Sen, who has already attained a global reputation for selling off huge tracts of land to private interests from other countries – according to The Guardian, putting almost half of the country on the block since Hun Sen came to power in 1985.

Certainly there’s a long list of beneficiaries, from French and Russian fortune-seekers to hedge fund and private equity funds, drawn to Cambodia by the permissive attitude toward money-laundering, nine-year tax holidays but mainly the power for foreign-owned Cambodian companies to lease land for 198 years – terms which make Cambodia unique among Asian countries. In Phnom Penh cafes where foreign investors hang out, it’s said their favorite color of luxury Hummer is canary yellow.

But there’s an even longer list of Cambodians who have been dispossessed by this land grab, starting with the more than 360,000 refugees from the Khmer Rouge whose land Hun Sen seized for the government in the 1990s. Cambodia should ‘start over’, he explained. Since then, a boom in resort development has forced tens of thousands of coast-dwellers out of their homes in land officially protected from private development. By now, almost all accessible beach property is in new, private hands.

Little can be done about this. Cambodian politicians lacks the disclosure rules that most of the world takes for granted, leaving such deals to flourish in secrecy from the public.

Casinos are a new goal for Chinese developers. Already the largest casino in Cambodia is controlled by a foreigner, Malaysia’s Chen Lip Keong. http://www.forbes.com/lists/2012/84/malaysia-billionaires-12_Chen-Lip-Keong_FM4Z.html. But the Union development is intended to dwarf his 500-room NagaWorld, hemmed into its location in central Phnom Penh where it holds a monopoly.

Chinese players go to a lot of trouble to get at legalized gambling, still frowned upon by the regime as a moral contagion. Just a few years ago game-seekers made a remote so-called economic development zone across the border of northern Laos into such a hotbed of violence and corruption that the Chinese government abruptly shut down access across the border. http://www.forbes.com/global/2011/0808/companies-laos-china-economy-gambling-gangsters-bungle-jungle.html