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Logo of Phnom Penh Post newspaper Phnom Penh Post - Pailin bosses set to woo investors

Pailin bosses set to woo investors

PAILIN - Open-pit gem mines are not particularly common, but quarries with a city

in the middle of them are rarer still. The rumble of earth-movers shakes Pailin 24

hours a day. The rotating machines cast eerie spotlights against broken buildings

throughout the night. There are presently up to 72 machines chugging and clattering

in mines around the city and nearly 500 Thai workers operating them.

Estimates of the haul are sketchy, as rough gems are spirited out quickly. Ee Chhean's

administration collects $144,000 per month in taxes, according to Chhean's cabinet

chief, Nou Sarin. Leases on the land are collected privately.

There are 18 Thai companies extracting gems in and around the city, Sarin says. "Each

mine has three or four back-hoes and twenty to thirty workers," he says.

"Some plots are very expensive. It's difficult to say how much they pay,"

he says. "People have the right to lease their land and the companies have to

give the land back in good condition. Some of the people are very rich."

Apparently leaders of the two ruling political parties are not pressuring Pailin

for direct tax remittances. "[Defense co-ministers] Tea Banh and Tea Chamrath

wanted us to give money from the mining to the government, but promised to support

our people for two to three years," recalls Sarin. "We said that if the

government wants the money they have to support the people for two to three years.

They then said it was OK to keep the money."

He denies that the Pailin administration has cash and gold reserves. "Pol Pot

took 3,000 kilograms of gold from Phnom Penh to Samlot when the Vietnamese invaded.

When they pursued him, he buried some in the forest and left some on the ground.

When they found it they stopped fighting us and began attacking each other,"

he recalls. "I don't know whether any left the country or whether some Khmer

Rouge leaders have bank accounts in Thailand. I know Chhean doesn't have any."

The Pailin administration has always been dependent on Thailand for everything from

expertise to foodstuffs. Effectively cut off from the interior by hostility and impassable

roads, their western neighbor has always played a key role in commerce.

"Until the separation from Pol Pot, no other country dared to walk around this

place looking for gems," explains Sarin. "Some Cambodian companies didn't

dare to invest 200,000 Baht [$8,000] a month."

He admits, however, that even if others were interested, they were not allowed to

invest. "Before we separated, we allowed only Thai companies," he says.

"When we joined the government, we agreed with the government that we would

allow all companies from the world, because we want to develop our city."

Interest from other foreign investors in mining eclipsed following factional fighting

in February. "Nine companies from Taiwan, Hong Kong, Japan and South Korea wanted

to make business here, but after the recent events in Battambang the companies pulled

out," he says. "If it is stable in the future, I think more countries will

be interested."

Asked if he is 100 percent happy with the Thais, he replies that he is not sure.

"They helped us a lot during the CGDK [Coalition Government of Democratic Kampuchea]

days, but if some companies from other countries come to compete, we must agree,"

he says. "We would be happy with a mixture. Others can do it better."

Internal bickering in Thai companies reportedly poses the greatest headache for the

Pailin administration. Rusting machinery and abandoned pits litter the landscape.

"Some Thai companies are very good, but some are no good," says police

chief Bou Sarin. "When we look from outside they look good, but inside they

are not good."

He too welcomes other investors perceived to be less avaricious. "According

to what Thais say, they dare to kill somebody in the company to get the money,"

he reports. "[They are] not like European companies. They are good to each other."

Some lower-ranking soldiers are taking advantage of having the dry season off by

digging hundreds of small mines on the way to the Thai border. "Nobody here

will tell you how much they find, because they want to keep it secret," says

a visibly pleased man with a pick. "We wouldn't be here if we weren't finding

anything. We would be in the forest cutting wood."

Pailin officials have consistently stated that timber revenues pale in comparison

to gems. Now they say that the border is closed to log exports and that they are

only felling trees for local building materials. "Log exports to Thailand have

stopped," says Democratic National United Movement (DNUM) secretary-general

Long Narin. He says tat the logs scattered along the Rt 10 bypass are only to be

used to build houses.

Police chief Sarin affirms that the administration does all it can to stop illegal

exports, but may miss some shipments. "We were requested by the government to

close the border to logs. It is officially closed," he says. "Some may

be crossing unofficially. I don't know if there are still logs crossing the border.

I can't say."

A logger operating out of Front 250 to the north towards Malai grins when he hears

that the ban is being enforced. "Nothing has changed for me, but I run a small

operation," he says pointing to the forest he works. "Small people like

me are actually getting more than we used to. The Thais pay more now, but they only

buy high-quality wood in smaller volumes."

Theoretically, property prices have skyrocketed in Pailin since private ownership

was allowed. Many owners are cautious about selling, because they are not clear whether

they are allowed, given their uncertain legal status with the government. "His

Excellency Hun Sen has requested that we think twice about selling land," says

Narin. "He wants to curb speculation."

"People basically moved in last year," says a cafe owner.

"My family first occupied this place in 1978, but we haven't used it much. I

only live day to day and can't even afford to paint it," she says, looking at

the faded ochre walls. "It used to be beautiful here."

Khmer Rouge families abandoned the city after the government offensive three years

ago. "People left in '94, afraid to return because of the helicopters. In August

'96 they returned," says cabinet chief Sarin. "Before it was beautiful,

but the people were poor. It looked like a big city after living in the forest.

"There were three cinemas before the Vietnamese aggressors occupied the city

between 79-85. They destroyed many of the buildings looking for gems."

The Khmer Rouge re-took Pailin in 1989 only to find a shell of its former grandeur

left intact. "After the liberation some houses were broken by big guns. The

top of the pagoda was also broken. After 1990 it was rebuilt," says Sarin.

"Chhean says that we will build into a big city like Battambang, but it will

be more interesting." He chuckles at the prospect of developing a tourism industry.

"First we must build roads, then we can develop something. I hope it happens

soon, because I want peace."

The explosions that thud periodically in the distance towards Battambang are harbingers

of such a peace. Rather than keeping the government out, they are clearing the way

for closer communication. Some of the blasts are enormous.

"Route 10 is cleared of mines five to six kilometers from Pailin," says

Sarin. We plan to have it cleared by the rainy season with CMAC [Cambodian Mines

Action Center]. We work with them because they don't know where we put the mines."

In the meantime, a side road has been cut through the forest as an emergency measure.

"More products are coming from Phnom Penh via Battambang now. They are cheaper

than Thai products," says police chief Sarin.

Indeed, the selection is fairly wide and the prices are comparable to the interior

despite transportation costs. "I was surprised at the costs," says a drinks

shop owner from Takeo. "I think it is because the truck drivers don't have to

pay at the Khmer Rouge checkpoints."

So peace, wealth and affordable consumer goods come to Pailin as its leaders eschew

political ties, collect gems revenues and operate independently.

"The government says they are giving aid to Pailin, but in fact they are not,"

police chief Sarin complains. "They have just begun to build one school. In

Pailin, Ee Chhean has decided to develop the area."

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