YEAR ZERO Older members of the business community in Cambodia still look back with nostalgia to the 1960s, before the Khmer RougeEntrepreneurs battle to overcome tragic past.
As ASIAN BUSINESS CELEBRATES ITS 35TH ANNIVERSARY it's difficult, if not impossible, to find a business in Cambodia that is also marking 35 years in operation. It's not so much a question of whether a company was strong enough to survive, but whether its owners and employees are still alive. In 1965, Cambodia was emerging as a modestly prosperous farming-based country. Then, things went horribly wrong.
When radically Maoist Khmer Rouge guerrillas seized power in 1975, they banned all foreign investment, commercial trade and even money. They executed thousands of traders, manufacturers and entrepreneurs as capitalist agents.
Record-company executive Duong Khay Nhong was one of the lucky ones. He was in Hong Kong on a business trip when Phnom Penh fell to the Khmer Rouge. He spent the next few years watching in horror as his country cut all ties with the outside world and descended into tragedy. More than 1 million Cambodians starved to death under the Khmer Rouge's collective-farming policies.
The quality of life improved only marginally when the Vietnamese-backed communist government replaced the Khmer Rouge regime. Years of civil war stymied attempts at rebuilding the shattered economy. "I spent the whole time heartbroken," recalls Duong. "I could only wish my country could have peace and a free market again."
Cambodians still look back to the 1960s with wistful nostalgia. Then, the economic future looked bright. While the government of Prince Norodom Sihanouk owned a stake in many major businesses - department stores, soft-drink bottlers, fertiliser companies, import-export companies and even a casino - there were also private companies like Duong's Sagna Than Chan Chhaya recording company. Foreign investment was encouraged, especially in the dominant agriculture sector. But specific investment figures from the time are nearly impossible to find, says Tun Yeath of the Cambodian Foreign Trade Department. That's because when the Khmer Rouge took over, they declared Year Zero and destroyed nearly all records of previous regimes.
Now, with the long war finally over, Cambodian entrepreneurs like Duong have returned to find an economy in shambles. He now runs Mapmeng Peanich, a watch and electronics import business that last year had a total of about US$50,000 in sales - a fraction of the revenues his previous company enjoyed in 1965, he says. "The current business climate in Phnom Penh is still not so good. The Cambodian people are so poor, they cannot afford to buy much." Average annual income stands at around US$300. Anxious to rebuild, the Cambodian government has embarked on a campaign to attract export-oriented industry and Prime Minister Hun Sen has set an ambitious goal of 5-6% growth each year.
So far, low wages have attracted about 200 garment factories exporting about US$500 million in goods. But other investment has been slow - in fact, foreign aid is still one of Cambodia's biggest "investors", accounting for nearly three times the US$120 million invested in 1998, according to the Cambodia Development Review. With figures like that it's easy to see why many Cambodian business people still glance longingly at the now-lost past.