- The Washington Times - Friday, September 19, 2008

SINGAPORE — 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.

Now, back in Cambodia since 1991, the 39-year-old 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 off Cambodia’s coast.

The country’s most-successful businessman, he supports Prime Minister Hun Sen and benefits from ties to the government, which granted the 99-year lease on the island for his resort. He is a Neak Oknha, an honor the royal family confers on a few of the wealthiest members of society.

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.

The entrepreneurial drive and technical skills the returnees bring with them 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.

“Suffering is my mentor,” says Kith Meng, who fled the terror, first to a refugee camp in Thailand and then, in 1981, to Australia. Black-and-white photographs of his 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.” They were two victims among the 1.7 million, or 20 percent of the population, who perished.

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 U.S. 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 percent a year from 2000 to 2007, the fastest pace in Asia after China, which expanded 9.9 percent 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 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 purported 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 it. Approved foreign direct investment rose to a record $4.4 billion in 2006, according to the Cambodian Investment Board. Investors can own 100 percent of a company, and they face no restrictions on taking money in and out of the country - in contrast to China or Vietnam.

Still, the business council’s Mr. Sciaroni, a former lawyer at the White House under President Reagan, says perceptions of Cambodia have not caught up to the changes.

“Where the perceived risks are greater than actual risks, investment opportunities are the result,” says Robert Ash, a former executive at the asset management arm of insurer American International Group Inc. “Such is the case of Cambodia.”

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