May 27, 1993

CAMBODIA HAS A FUTURE WITHOUT THE CARPETBAGGERS

Eric Ellis, Phnom Penh

DAVID Morris knows what he'll be doing when the United Nations' bubble bursts in Cambodia.

"I've tendered for their Somalia contract, then I reckon it's South Africa, Burma and I reckon they'll have to go back for another go at Angola," says the Brisbane-based caterer whose $US32 million contract with the UN has kept the entire peace keeping force fed and watered for the past 14 months.

"I'm what you might call a food mercenary," says Morris, and he has a fleet of helicopters and planes with Khmer Rouge bullet holes to prove it.

The UN might be a movable feast for entrepreneurs such as Morris, but for a Cambodian economy which has boomed on the UN's sudden $US2 billion cash inflow, the so-far peaceful outcome of this week's election raises inevitable questions about what happens when the UN personnel and their $US130 a day allowances move on.

Cambodia is hardly a dynamic Asian economy.

Years of civil war have left it impoverished and lacking basic infrastructure and work skills. Many educated Cambodians were exterminated by Pol Pot's Khmer Rouge rule in the 1970s. But with the UN in town, what it has is a predominance of bars, restaurants and hotels catering to the free-spending 22,000-strong foreign population.

There are two new English-language newspapers in pitched battle, every second house in the smart suburbs has a satellite dish, every second street a video outlet.

"The Cambodian situation is totally artificial," says Professor Robin Davies, seconded to the Institute of Economics.

"Cambodia has acted as a place for foreigners to exchange their consumer goods," says Mr Keat Chhon, chairman of Cambodia's newly created National Investment Committee.

"Very little of this big influx of US dollars trickles down to Cambodians.

A former Industry Minister in Prince Sihanouk's exiled government of the 1970s, the Sorbonne-educated Mr Chhon has the task of charting an economic future for post-election Cambodia.

Firmly convinced of the market economy, he says: "The first thing we need is peace. At the moment we have neither peace nor war. Then we need aid and assistance from the international community."

The UN presence in Cambodia has created unprecedented economic disparities. The local currency, the riel, is barely worth the paper it is printed on, having lost up to 75 per cent of its value against the overwhelming US dollar in the past year, crippling the average Cambodian with little or no access to US dollars.

With its developed Western ways, the UN has introduced a wage push inflation, remarkable in a country whose per capita earnings average less than$300 a year.

The UN is paying anything from $US400 a month to $US2,000 a month for its local staff, creating huge resentment among the average Cambodians whom the UN claims to be helping.

The foreign business presence in Phnom Penh has a smell of carpetbagging around it with a predominance of trading companies trucking and flying in consumer goods from Singapore, Thailand and even Vietnam.

The city is plastered with billboards advertising foreign beers and cigarettes.

Foreign businessmen are believed to have been actively funding the election campaign of Prime Minister Hun Sen's Cambodian People's Party. They fear that a new government may be less inclined to the investment policies of the Vietnam-installed regime, according to the local representative for the Dutch trading house, East Asiatic Company, purveyor of Marlboro cigarettes and M & M candy.

The UN military presence has also created and guaranteed a stable environment for investment, exemplified by the incongruous sight of Japanese officers in fatigues swanning through the lobbies of the capital's five-star hotels.

"When UNTAC pulls out I estimate you will see a 50 per cent drop in business," Mr Poul Leineweber says.

But there is some hope for Cambodia's economic future and its 8 million people.

Mr John James, general manager of Standard Chartered Bank's representative office, says he has noticed some signs of a manufacturing industry emerging.

He also says a successful outcome to the election could unlock up to $US1 billion in aid, thereby seeing non-governmental do-gooders replacing UN peacekeepers in the bars.

Mr Chhon, of the Government's NIC body, is pushing for the wholesale restructuring of the economy and talks grandly of free-trade economic zones on the Gulf of Thailand to create mini Hong Kongs.

Mr Chhon, who lost some of his family under Pol Pot, believes tourists will replace the journalists and military officers now occupying Cambodian hotel rooms.

"We want tourism Cambodian style, not tourism a la Thailandaise. We will allow some massage parlours but not too many," he says.

"We want cultural and environmental tourists but we know they are not monks."