The Khmer riche: making a killing in Cambodia

Meet the spoilt, young elite who, unlike most Cambodians, enjoy the privileges of wealth - and aren’t ashamed to flaunt

(Agnes Dherbeys)

Kith Meng is an entrepreneur whose parents were killed by the Khmer Rouge

(Agnes Dherbeys)

A mansion being built in Phnom Penh for prime minter Hun Sen

(Agnes Dherbeys)

Victor in his parents' luxurious home in Phnom Pehn

(Agnes Dherbeys)

Sophy(far right), the 'Paris Hilton of Cambodia' at a shoot

(EPA)

A Memorial to the victims of the Cambodian genocide

via CAAI News Media

From The Sunday Times

February 14, 2010

Andrew Marshall

I am going to drive a little fast now. Is that okay?” There is one place in Cambodia where you can hold a cold beer in one hand and a warm Kalashnikov in the other, and 21-year-old Victor is driving me there. We’re powering along Phnom Penh’s airport road with Oasis on his Merc’s sound system and enough guns in the trunk to sink a Somali pirate boat. Victor is rich and life is sweet. His father is commander of the Cambodian infantry. He has a place reserved for him at L’Ecole Spéciale Militaire de Saint-Cyr. And, in his front passenger seat, there is a thin, silent man with a Chinese handgun: his bodyguard.

“His name is Klar,” says Victor. “It means tiger.”

Devastated by decades of civil war, Cambodia remains one of the world’s poorest nations. A third of its 13m people live on less than a dollar a day, and about 8 out of every 100 children die before the age of five, but Victor — real name Meas Sophearith — was raised in a very different Cambodia, where power and billions of dollars in wealth are concentrated in the hands of a tiny ruling elite. They prefer to conceal the size and sources of their money — illegal logging and smuggling, land-grabbing and corruption — but their children like to spend it.

I first met Victor at a fancy Phnom Penh restaurant called Cafe Metro. Outside, Porsches, Bentleys, Cadillacs, Mercedes and Humvees fight for parking spaces. The Khmer Rouge are dead; the Khmer Riche rule. The son of a powerful general, Victor has his future mapped out for him. He went to school in Versailles, speaks French and English, and now studies politics at the University of Oklahoma. “My mother wanted us to get a foreign education so we could come back and control the country,” he says. The shooting range is where Victor and his friends go to relax. “I’ve grown up with guns and soldiers all around me,” he says. Victor and his generation are Cambodia’s future. Will they use their education and wealth to lift their compatriots out of poverty, or continue their parents’ fevered pursuit of money and power?

Britain’s Department for International Development gave £16.5m of taxpayers’ money to the country in the last fiscal year, but has announced the closure of its Cambodia office by 2011. Perhaps the development agency tired of throwing money at a nation where so much poverty can be blamed on a grasping political clique and their luxury-loving children. The Khmer Riche kids sometimes seem indistinguishable from the old colonial ruling class. They carry US dollars — only poor people pay with Cambodian riel — and live in newly built, neoclassical mansions.

Sophy, 22, is the daughter of a deputy prime minister. Rich, doll-like, and self-obsessed, she could be the Paris Hilton of Cambodia. She imports party shoes from Singapore, selling them in her own multistorey boutique. It has six staff, no customers and a slogan: “It’s all about me.” Sophy’s name is spelt out in sparkling stones on the back of her pimped-up Merc. She is launching a magazine with her brother Sopheary, 28, and their cousin Noh Sar, 26. All three were educated abroad and prefer to speak English together. Sopheary, who studied in New York State, seems both amused and slightly embarrassed by his wealth and privilege.

“What can you do?” he asks. “Your parents give you all these things. You can’t say no. If someone gives you cake, you eat it.”

Cambodia’s official economy largely depends on garment exports, but there is a much larger shadow economy in which only the rich, the ruthless and the well connected survive and prosper. The closer you get to Hun Sen, Cambodia’s autocratic and long-serving prime minister, the better. Hun Sen staged a bloody coup d’état in 1997 and has kept an iron grip ever since. Opponents have been silenced, while loyalists have grown rich. The armed forces are a major player in the black economy. Cambodians are often driven from their land at gunpoint by soldiers or military police. Cambodia has been colonised all over again, this time by its own greedy and ruthless ruling class.

Ask Cambodian ministers how they got so rich on a meagre government salary, and they will reply: “My wife is good at business.” When I ask Noh Sar, whose father is a senior customs official, why his family is so wealthy, he smiles and says: “My mother works a lot.”

Victor’s mother, too, is good at business, according to Country for Sale, an investigation into the Cambodian elite’s wealth published by the London-based corruption watchdog Global Witness in February 2009. “She is a key player in Royal Cambodian Armed Forces patronage politics, holding a fearsome reputation among her husband’s subordinates,” says the report.

It is only in the past few years that the children of Cambodia’s elite have grown confident enough to show off their family’s wealth. “If you want people to respect you in Cambodia, you must have a good car, good diamonds, a good cellphone,” explains Ouch Vichet, 28, better known as Richard. “It’s an I’m-richer-than-you competition.” Richard drives a black Cadillac Escalade ($150,000) and wears a Hèrmes watch ($2,500) and a 2.5-carat diamond ring ($13,000). “My money is from my parents,” he says with refreshing candour, and then breaks it down. They gave him a villa ($500,000), and a rubber plantation that will generate income for the rest of Richard’s natural life. His parents-in-law gave him $100,000 in cash and another villa, worth $200,000, which he sold and invested in real estate. He also runs a nightclub called Emerald — his parents made their first fortune in gems — which provides him with “pocket money”. A party of rich kids can spend $2,000 on drinks and mixers in a single night — more than an average Cambodian earns in three years. His parents’ second, much larger fortune comes from real estate. A few years ago they bought about five hectares of land just outside Phnom Penh for $14 per square metre, then sold it for $120 per square metre two years later. They made more than $5m. “Where else can you make profits like that?” grins Richard. “It’s crazy money.” He has a daughter called Emerald and a son called Benz. His living room features giant chairs ornately carved from tropical hardwood, and a flatscreen television the size of a pool table.

Yet Richard’s house is modest by the operatic standards of Phnom Penh’s Tuol Kuok district.

A taxi driver shows me the neighbourhood — it’s like a “homes of the stars” tour in Beverly Hills, except that Tuol Kuok’s backstreets are piled with uncollected rubbish. My driver points out giant mansion after mansion, and tells me who lives there. Defence minister. Prime minster Hun Sen’s son. Hun Sen’s daughter. Secretary of state at the Ministry of Labour. A deputy prime minister — Sophy and Sopheary’s dad. A four-mansion compound with high walls, razor wire and a gate guarded by special-forces soldiers — Victor’s family. Tuol Kuok’s houses are well guarded for a reason: until there was real estate to invest in, many wealthy Cambodians kept their money at home in bricks of cash, sometimes for so long that the elastic bands around them rotted. “We don’t trust banks,” says Richard. “The old generation kept their money under the bed. The new generation keep it in safes in their houses.”

Victor’s family, too, stay away from banks, but for a slightly different reason. “If you put your money in a bank, everyone will know how much you have,” he explains. I had also heard that rich Cambodians had repatriated hundreds of millions of dirty dollars from Singapore banks after a post-September 11 shake-up of global banking, and that this money had helped fuel the land speculation in Phnom Penh. Richard had heard this too. The bank accounts had belonged to “government people”, he said. Buying land and selling land had not only enriched them further, but had also allowed them to obscure the source of their wealth. Laundering any dirty money was vital, since foreign donors were pressing the Cambodian government to pass anti-corruption legislation that would force the rich to declare their assets.

For the children, the wealth comes with one big condition: they must do exactly what Mum and Dad tell them.

“I wanted to go to art school, but my parents wouldn’t let me,” says Sopheary.

Most kids dutifully join the family business. For some, that business is politics. The commerce minister, Cham Prasidh, whose house is the size of an airport-departure hall — one with a jet-ski lake — gave a ministry position to his wife and made his daughter his chief of cabinet. Cambodia’s ambassadors to Britain and Japan are brothers, and their boss is also their father, the foreign minister Hor Namhong. “It’s not nepotism,” he insists.

Their parents also expect them to marry young and strategically, to someone from a rich and influential family. These marriages are often arranged. Many high-society Cambodians soon find themselves trapped in loveless unions; extramarital affairs are common. Sophy, that deputy prime minister’s daughter, was married off at 17 to the son of the rich and powerful interior minister. A web of marriages binds together the elite and ensures the ruling

People’s Party’s stranglehold on power. At the centre of the web sits prime minister Hun Sen. His three sons and three daughters are all married to the children of senior ruling-party politicians or, in the case of his son Hun Manet, to the daughter of the late national police chief. Hun Manet is being groomed to succeed his father. He graduated from West Point in 1999, amid protests by members of the US Congress over his father’s human-rights record. Senior Khmer Rouge figures such as Comrade Duch, the mass-murdering commandant of Tuol Sleng prison, are currently on trial at a United Nations-backed tribunal in Phnom Penh.

The Khmer Riche, on the other hand, remain above the law. Victor displays a military VIP sticker on the dashboard of his Merc. “It means that the police cannot touch me,” he says. Many of his generation abuse such privileges. Last August Hun Chea, a nephew of the prime minister, hit a motorcyclist with his Cadillac Escalade, ripping off the man’s leg and arm. Hun Chea tried to drive off but couldn’t, because the accident had shredded one of his tyres. Military police arrived, removed the Escalade’s licence plates and, according to the Phnom Penh Post, told Hun Chea: “Don’t worry. It wasn’t your mistake.” Hun Chea walked away. The motorcyclist bled to death in the road.

Hun Sen has yet another bad-boy nephew, the widely feared, mega-wealthy Hun To (“Little Hun”). In 2006 a newspaper editor filed a lawsuit against Hun To for alleged death threats, then fled overseas to seek asylum, with the help of the UN. Hun To owns, among other cars, a Lamborghini, a Rolls-Royce Phantom and a Bentley. Victor test-drove Hun To’s latest acquisition before it was put on a Cambodia-bound shipping container: a $500,000 Mercedes-Benz SLR McLaren supercar. “He’s built a special garage for it,” says Victor. He dares not criticise Hun To. But he is critical of Cambodian society. “From top to bottom, everyone is corrupt,” he says. He hopes one day to set up a foundation to help poor Cambodians send their children to study overseas.

“We want to change things, but we’ll have to wait until our parents retire,” he says.

But the older generation shows no sign of retiring — not when there’s so much cake to eat. In January 2009 foreign donors pledged $US1 billion to Cambodia, its biggest aid package yet, mostly donated by western tax-payers. The government relies on foreign aid for almost half of its budget. It could break this reliance by exploiting its reserves of oil, gas and minerals: the International Monetary Fund estimates that Cambodia’s annual oil revenues alone will reach $US1.7 billion by 2021. Could, but probably won’t. Why? Because the same elite who cut down the trees and sold off the land are now poised to extract the oil and minerals. And they will expect their children to help them.

Some Hun Sen loyalists have already been allocated exploratory mining licences, including General Meas Sophea. He recently hired a temp to act as his foreign liaison officer. The temp is his son. His son’s name is Victor.