Kith Meng grew up in Australia as an orphan and a refugee from Cambodia's genocide. He tells of washing dishes and mowing lawns to make ends meet while living in Canberra. Being a poor outsider made him stronger, he says, and unusually driven.
Back in Cambodia since 1991, Kith Meng, 39, has built his Royal Group into an empire that owns Cambodia's biggest mobile phone company and television network and is developing a $2 billion resort and casino on a fishermen's island on Cambodia's coast.
The country's most successful businessman, he supports Prime Minister Hun Sen and benefits from his ties to the government, which granted the 99-year lease on the island for his resort. Kith Meng is a Neak Oknha, an honor the royal family confers on a few of the wealthiest members of society.
Black-and-white photographs of Kith Meng's parents adorn one wall of his office in the capital city of Phnom Penh. They starved to death during Pol Pot's reign, when Cambodia's fertile countryside became the killing fields —- two victims among the 1.7 million, or 20 per cent of the population, who perished. Kith Meng fled the terror, first to a refugee camp in Thailand and then, in 1981, to Australia. “Suffering is my mentor.” he says.
Thousands of former refugees, with their own harrowing stories, have returned to Cambodia, and now investors hoping to profit in the next frontier market — a term Standard & Poor's coined for economies smaller or less developed than traditional emerging markets — are coming to the country, too.
‘Discovery Story’
The entrepreneurial drive and technical skills the returnees bring with them from overseas are breathing life into the economy. Three decades after Pol Pot exterminated the country's educated classes and emptied its cities, Cambodia's gross domestic product is just $8 billion a year.
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Political and business leaders are grappling with poverty, inadequate health care, poor education and a lack of roads in this nation of 14 million. Corruption is slowing progress, says Joseph Mussomeli, the US ambassador.
“The trick with a frontier market is getting the timing right,” says Douglas Clayton, who founded Leopard Cambodia Fund LP last year and is raising $100 million to invest in real estate, banking and agribusiness. “Cambodia is really a discovery story — and it's being discovered.”
Cambodia grew 9.5 per cent a year from 2000 to 07, the fastest pace in Asia after China, which expanded 9.9 per cent a year. Political stability under the administration of Hun Sen, 56, has helped the Cambodian economy take off, says Bretton Sciaroni, chairman of the American Cambodian Business Council in Phnom Penh.
Hun Sen
Hun Sen has run the country since 1985. He came to prominence as a communist while the Vietnamese occupied the country, having pushed Pol Pot's Khmer Rouge from the capital. He strengthened his grip with a landslide victory for his Cambodian People's Party in July's parliamentary elections. An opposition leader has alleged manipulation of voter rolls, and the royalist party that shared power in the 1990s has been reduced to two seats in the legislature.
Clothing exports and tourism have buoyed the tiny economy, though the revenue of any of the world's 500 largest companies would still dwarf Cambodia’s annual economic output.
A 1994 law to open the country to foreign investors has encouraged some to put money in. Approved foreign direct investment rose to a record $4.4 billion in 2006, according to the Cambodian Investment Board. Investors can own 100 per cent of a company, and they face no restrictions on taking money in and out of the country — in contrast to China or Vietnam.
First KFC
From 1994 to 2007, foreign exchange reserves expanded 16-fold to $1.6 billion. Cambodia is scheduled to open its first stock and corporate bond markets by the end of 2009.
Global companies have opened offices in Phnom Penh, encouraged by the robust economic growth — and by the prospects of oil and gas development following a discovery off Cambodia’s coast in 2005 by Chevron Corp.
They include power-turbine maker General Electric Co, Microsoft Corp and London-based Knight Frank LLP, a property consultant. Kith Meng has brought Phnom Penh a KFC chicken restaurant, the nation's first foreign fast-food chain.
Government revenue from Chevron's planned project could reach $1.7 billion when peak production is reached in 2021, an International Monetary Fund report said last year.
“The significant oil discovery by Chevron really was the one that pushed me over the edge,” says Stuart Dean, president for Southeast Asia at GE, which also provides aircraft leasing, water treatment and health-care services.