Cambodia has had it rough in recent history. From being dragged into the Vietnam conflict, to the subsequent civil war and the emergence of one of the bloodiest regimes in modern history – the Khmer Rouge.
During the Vietnam war the US waged a shadow war in Cambodia against the North Vietnamese forces who used the country’s territory as a supply route. The US Air Force data indicates that from 1965 to 1973 the United States dropped almost 2.8 million tons of ordnance on the country. To put things into perspective, the Allies dropped just over 2 million tons of bombs during all of World War II, including the bombs of Hiroshima and Nagasaki. Cambodia may well be the most bombed country in history.
As if that wouldn’t be enough by itself, the war developments have brought the Khmer Rouge revolutionary forces in power. During their 4 year rule, from 1975 to 1979, an estimated 2 million people – about a third of the population – died from executions, starvation, overwork and disease.
In their utopian revolutionary zeal the Khmer Rouge immediately evacuated the cities and sent the entire population on forced rural work projects. They attempted to rebuild the country’s agriculture on the model of the 11th century, discarded Western medicine, and destroyed temples, libraries, and anything considered Western. You were considered an intellectual threat if you spoke a foreign language or wore glasses.
The unrest in the country lasted for almost another 20 years after the fall of the brutal regime. But the economy hasn’t looked back since then. From 2001-2010 Cambodia was growing 7.7% on average, making it one of the world’s top ten countries with the highest annual average GDP growth.
Despite that the government depends on foreign aid for almost half of its budget. That is soon about to change though, as Cambodia becomes an oil producer. A discovery offshore in the Gulf of Thailand in 2005 estimated Cambodia’s oil resources at 400m barrels, enough to earn about $1.7 billion a year, more than the government’s budget.
As the oil production will get online in late 2012 or early 2013, the immediate impact will be felt in the city of Sihanoukville, Cambodia’s main port. The town with a population of 200.000 people already attracts a significant number of foreigners, some who are drawn to visit it because of its long sandy beaches and beautiful offshore islands, others have moved there and established a business.
The expat community is already pretty sizable for such a small town. Just walking on the street you can see Indian, Italian and German restaurants (called “The Schnitzel”), bungalows and other accommodation options owned by Slovenians, Australians and the British.
One British who has been living there for a while is selling his bar/restaurant. He was running it for 5 years and he’s moving up north with his Cambodian wife and their family. To give you an indication of prices and costs to run such an establishment in Sihanoukville: the place is about 160 m² big and he’s selling it for a negotiable price of $40.000.
Since Cambodia is continuously ranked as one of the most corrupt countries in the world I was wondering how much of a hassle is to run a bar/restaurant business in Cambodia in that regard.
Everything is very straightforward according to his account: tax is levied by an inspector who arrives at the property and counts the number of tables an establishment has. For the property in question that amounts to a $10 tax a month. Besides that there’s an operating/business licence that costs $50 a year.
Cambodia is about to jump from the ranks of one of the poorest countries in the world. Combine that with an ever growing tourist appeal and a strong consumer culture in Cambodia (iPhones and SUVs abound), and it is evident that there are numerous opportunities to profit from Cambodia’s boom. And the city is Sihanoukville is especially poised to benefit from the fresh money when the oil starts flowing.
The country is especially appealing for intrepid entrepreneurial young people who are willing to get their feet wet abroad. With a young, English-speaking population and very low labor costs, the barriers to entry into business are much lower then right about anywhere else in the world.
