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The Great Divide: Opportunity costs of living in year 1008 when in 2008

The Great Divide: Opportunity costs of living in year 1008 when in 2008

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Every time I ride through Oddar Meanchey from Samrong to Anlong Veng or cut through the hills and villages of Ratanakkiri, Mondolkiri, Stung Treng or weave through rice paddies of Svay Rieng, Prey Veng, Takeo, I am constantly taken aback by the changelessness and timelessness of the villages, lifestyles and mentality of my countrymen.  It is as if I have been thrown back in time to the dark ages or the year 1008; as if there is a great divide between my life in Phnom Penh and the rest of Cambodia:  in Phnom Penh, I live in the year 2008; when I step outside of Phnom Penh, I am in the year 1008.

Historians have noted this frozen-in-time Cambodian setting; casual visitors (traditionally Westerners) have romanticized this timelessness as bucolic beauty to be preserved (of course, for the culture and traditions of the Cambodians, never for their enjoyment!).  Rural Cambodia is one of the few places left where modern visitors can insert themselves into another millennium for a moment of their choosing in a manufactured manner, well-oiled with sunscreen and their Cafe Lattes in hand. 

Without vs. within perspectives

The without perspective is beautiful and romantic because it is sanitized and temporary; running water, electricity to run the air conditioner, CNN and fresh sheets are awaiting us (be it in guesthouses, riverside apartments or suites at Le Royal) after our excursion from venturing into another millennium of 1008.

But what is it like to be trapped within the year 1008 while the rest of Phnom Penh and the world live in 2008?  The within reality is often times Hobbesian – where there is “continual fear, and danger of violent death” and life is “solitary, poor, nasty, brutish and short”.  I am fortunate (or cursed!) to have the without and within perspectives, even if the within perspective of living in grinding poverty is now only a distant memory, but nonetheless still strong enough to know that I want to live in 2008 with the educational, health, material benefits and comfort that this affords.  I can say with great certainty that my relatives in rural Svay Rieng, the villagers I met in Oddar Meanchey and elsewhere would also like the choice to live in the year 2008 with all its comforts and opportunities.

Opportunity cost

For me, the issue is best framed by asking, what are the opportunity costs of living in the year 1008 when in 2008? Well, let’s first define “opportunity cost”.

Scarcity of resources (including ideas!) underpins the basic concepts of economics.  Scarcity requires trade-offs; trade-offs lead to an opportunity cost.  While the cost of a good or service often is thought of in monetary terms, the opportunity cost of a decision (or idea!) is based on what must be given up (the next best alternative) as a result of the decision.  Any decision that involves a choice between two or more alternatives has a sacrifice or opportunity cost.

An opportunity cost differs from an accounting cost in that accounting costs do not factor in foregone opportunities.  Consider the case of an MBA student who pays US$5,000 per year in tuition and fees.  For a two-year MBA program, the cost of tuition and fees would be US$10,000.  This is the monetary (accounting) cost of the education.

However, in making the decision to return to school, a person is confronted with the opportunity cost of the income that the student would have earned from the alternative decision of remaining in a job.  If the student had been earning US$20,000 a year, then US$40,000 in salary would be foregone as a result of the decision to return to school.  This amount combined with the educational expenses results in the cost of US$50,000 for the degree.

Opportunity cost is useful when evaluating the costs and benefits of choices.  It often is expressed in non-monetary terms – the real cost of output foregone, lost time, pleasure or any other benefit that provides utility.  It expresses the tension between scarcity and choice; it is the choice between desirable, yet mutually exclusive results.  Stated differently, opportunity cost is expressed in relative price, the price of one choice relative to the price of another.

Back to the Great

Millennial Divide

The concept of opportunity cost has a wide range of applications, including consumer choice, production possibilities, cost of capital, time management, career choice, analysis of comparative advantages.  Here, I want to relate the application of opportunity costs to governance and public administration and management, and how poor governance and mismanagement – of government and civil society alike – contribute to the widening of the great millennial divide, whereby Cambodia lives simultaneously in the years 1008 and 2008, with the majority in a Hobbesian existence. 

Every action has an opportunity cost.  With one million dollars, Leader A builds 100,000 schools.  With the same one million dollars, Leader B builds 1,000 schools of the same quality and size.  What is the opportunity cost of poor leadership?  99,000 schools. 

The opportunity costs of poor governance and mismanagement are the relegation of a people, of a nation to living in the year 1008, while the Phnom Penh elites and much of the rest of the world live in the year 2008 and use their knowledge and opportunities afforded by 2008 to exploit and suppress those limited by the opportunities and knowledge of 1008. 

In sum, the opportunity costs of living in the year 1008 when in 2008 are education, health, culture, identity, dignity, grace and soulfulness foregone.  The costs are lives and quality of life.

_______________

Theary C. SENG

Executive Director

For past columns, please visit
www.csdcambodia.org

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