Cambodia Diary August 2007

2.  Demolishing the $250,000 Villas

On the way, we passed a great pile of rubble, where a development of expensive, brand-new villas for rich people  in ta large lake had recently been demolished.  Close to the airport.   It is very interesting to know about the story and I tell this story partly to show the kind of politics of the country.

• In this project, a very wealthy businessman from Taiwan, said to have good connections with politicians, got some sort of special  rights to develop a large piece of land by filling the lake..  It was to be a housing project for rich people - large villas that were to sell for something like US$250,000 per unit.  As part of the agreement, the company was allowed to fill in and reclaim land that was originally part of the lake.  But instead of filling in the 30 hectares they were allowed, they filled in and reclaimed about 100 hectares of land and started to construct those big houses and other infrastructure
• Then there were people reporting this case, and a very high level politician wasn't so happy.  So he reportedly ordered the company to stop work immediately and to dig out the extra land they had illegally filled - within seven days!  And it happened that the company couldn't do so, so the order came for 300 soldiers with all heavy equipments  and demolition machines to demolish all the 20 villas that had already been built.  So all those rich villas were torn down and their rights to develop the project is not certain now.  So there are problems since some buyers have already bought them.        
  
  

It was like an eviction - but an eviction of the rich. 

3.  Visit area where community is purchasing land to resettle, near Kork Kleang

This is the area near the airport where several other communities have resettled, in community-driven resettlement projects from Block Tan Paa and various other roadside settlements.  One of the projects that will be proposed in the UPDF meeting on August 9, 2007, is a project to get a UPDF loan to collectively purchase alternative land for a  resettlement project. 

It's good land, located next to the street, close to jobs, but could still be costly for the poor  
Now, the land is rice fields and will need to be filled.  The cost of the land is about $15 - $20 per square meter, which sounds rather expensive for this poor country.  About six months ago, they proposed to UPDF for a loan to purchase some other land for resettlement, but we were all a little uneasy about the cost of land being so high, and worried that people would not be able to repay to loan.  Then, because of that, they went back out searching and tried to negotiate another piece of cheaper land.  So this land they found, seems to be about as cheap as possible.  Location was good.  Close to the airport.   

Along the street from the airport to this community and to Phum Andong community, several pieces of land in the vast rice field along the street have been filled for land development projects all over the place.

4.  Phnom Penh and probably the whole country are facing serious problems of land speculation which becoming one of the most important motivating factors behind eviction of poor communities in Cambodia

At Kok Kleang, we started asking about land prices.  The people told us that land prices - even in these peripheral areas of the city - are increasing tremendously these days.  If you buy a piece of land today, a year from now you can sell it for at least double what you bought it for.  In all the suburban land around the city, there is now a great motivation for land speculation, land grabbing by many agents of land speculators and investors. 

• Land speculation is the new gold mine in Cambodia now, I think, and represents a great threat to people's access to land for housing. 
  Not only in Phnom Penh, but could be all over the country.  Why?  Because Phnom Penh has come under the process of urbanization at a time when there are so many sharks in the world!  So the money from outside - from various countries like Hong Kong, Singapore, China, Malaysia, Taiwan, Thailand etc., - is pouring into Cambodia for investment opportunities and to set up companies with local people and buy up land. 
• Big companies are doing their own kind of "land pooling" 
  Somsak was telling us that some of the big companies are purchasing small pieces of land from farmers to put together into a big plot of land.  They don't necessarily use this land themselves, but sell it on - at great profit - to other big companies which then either hold on to it speculatively or use it for their commercial projects.  The big companies want big pieces of land.  Since the land prices are doubling in a year, the buying and selling of land is becoming a business opportunity, even without any development on that land. 
• Therefore land speculation is becoming one of the key factors leading to evictions of poor people settlements in the city or in the suburbs  
  This is the country that is quite open up economically, and there are so many speculators, investors and money markets coming into Cambodia.  And land is the biggest valuable commodity.  The government seems to support the private sectors to help build supply for housing.  However, there seems to be problematic bureaucracy to still prevent real estate housing development to boom but land buying, subdividing and speculating seems an easier business.  
• It is mostly foreign capital that is fueling this speculation. 
  Of course the local people may join into this speculative activity, and may sneak into getting the rights to certain pieces of land through politicians.  I am just afraid that this phenomenon is now probably predominating development in Cambodia. 
  

And these speculative forces are now determining the shape of the city - not planning! 

 

Idea :  Make a serious study of this land issue in Cambodia -

The changes in land values and changes in land use in the country.  This is going to be an extremely striking force of change in the country.  It's happening so fast, the stakes are so high, and there are so many interesting actors who are now determining how land is valued and used in the country.  It would be interesting to study in detail how the buyers and people with money get involved, and how the local people put together companies and then sneak to the high-up officials to get their land and land rights.  It is also interesting to understand the process since in Cambodia, the way to unlock land and bring it into this speculative market is by linking with the politicians and government officers, who can sign away the relevant paper and land title.     
            

Next

5.  Visit to community upgrading and walkway construction at Ek Reingsey Communities (1 and 2) (Sangkat Chroy Changva,  Khan Roessei Keo)