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PHNOM PENH RIOT ANNIVERSARY
Businesses forced to play a waiting game
Achara Ashayagachat and Bhanravee Tansubhapol
Resuming business in Cambodia is not easy. Thai businessmen there need to stay vigilant and keep a low profile because of political uncertainty.
One year after the anti-Thai riot in Phnom Penh, several Thai businessmen whose premises were destroyed or looted by rioters have yet to receive any compensation. They are not as lucky as the Thai government, which was fully compensated to the tune of 252 million baht in less than two months after the riot.
Of the five Thai companies which signed compensation deals with Phnom Penh, only one was paid in cash while the other four were promised exemption from concession fees, import tax on equipment, income tax and land rental fees for a certain period, sources said.
Two firms were given verbal undertakings while the remaining 10 will likely see their demands cut by half or less. Worse still, they have to wait for the final word from the new Cambodian government, which is yet to be formed though it has been almost six months after the general election in July.
A Thai businessman in Phnom Penh voiced dissatisfaction with the compensation he got, saying most of the damaged businesses received unfair amounts after a long delay.
"If we asked for 100 baht in compensation, then we got less than 10 baht," he said.
However, he admitted that in terms of doing business there, the Thais could not demand too much. If they put more pressure on the Cambodian government, it might not be good for their future in that country.
The Cambodian inter-ministry committee in charge of negotiations on Thai business losses, headed by Deputy Interior Minister Prom Sukha, cannot make decisions, while Thai businessmen don't know how long the panel will survive as it could be replaced by the new government yet to be installed.
The delay and small amounts of compensation stem not only from the political uncertainty but also from the way the Thais do business there.
"We have to realise the fact there are those who brought in equipment or things without declaring them to the local authorities. Thus, it's difficult to reclaim them on the negotiating table," one Thai source said.
Supachai Verapuchong, deputy managing director of Thai Nakorn Patana, said the site of the Royal Phnom Penh Hotel remained untouched as overhaul and reconstruction needed a lot of investment, but he remained hopeful in the Cambodian market. His other affiliate in Phnom Penh, TNP Healthcare, has yet to be compensated.
Nantapong Chantrakul, managing director of CPAC Rooftile Co Ltd, said the damage from the rioting was fortunately not done to the CPAC MONIER factory but to its office. The factory could reopen soon after the rioting with the annual production of 600,000 square metres, which comfortably met the domestic demand, Mr Nantapong said.
Sahasin Yuttarat, deputy chairman of the Thai-Cambodian Businessmen's Association based in Phnom Penh, said until now new Thai investors have delayed their investment due to the uncertainty over the formation of Cambodia's government, as well as the economic recovery in Thailand itself.
However, if Cambodia's politics was more stable, and its tax, land and justice systems were more transparent, the Cambodian market still had a lot of potential, he said.
Also, if the Thais treated their Cambodian neighbours well, they could become good customers in the areas of tourism and health-care services.
Those still running their businesses in Phnom Penh said they were not so much scared as cautious.
"Doing business here is not easy as before. High returns now come with high risks," they said.
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