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Cambodian seaside town’s startling makeover comes with heavy price

FORUM Staff

Not long ago, Sihanoukville was a laid-back retreat on the Gulf of Thailand in Cambodia, popular mostly with beachgoers and backpackers. Not anymore. Chinese money has dramatically changed the town in less than a decade. Now it’s a haven for gamblers, white-collar criminals and global scammers.

The idyllic coastal vibe gave way to what some describe as a Macau or even a seaside Las Vegas, bustling with high-rise casinos, neon-infused nightlife and features of a fast-paced, transnational urban area already on the decline: money laundering, illegal drug sales, arms deals, and human and wildlife trafficking.

Observers say the sweeping makeover is due to an influx of Chinese investments and tourists that peaked in the mid-2010s and may resume as the COVID-19 pandemic ebbs.

The community’s notorious reputation is exacerbated by its deep-water port, the only one in Cambodia. There’s also an international airport nearby. Crime syndicates use both to send and receive illicit cargo.

Sihanoukville, like much of Cambodia, is deeply entwined in the People’s Republic of China’s (PRC) One Belt, One Road scheme. There’s a new highway connecting Phnom Penh, Cambodia’s capital, with Sihanoukville. The PRC has funded bridges, hydropower dams, a stadium and more roads, China Labor Watch reported in August 2022. (Pictured: High-rise buildings, many not completed, obscure Sihanoukville’s beaches on the Gulf of Thailand.)

Many residents initially welcomed Chinese investment. The casinos brought jobs. But they also brought organized crime, and real estate demand spurred inflation. Then, in 2019, Prime Minister Hun Sen banned online gambling in Cambodia and the pandemic chased away many remaining tourists. The disappearing crowds, comprised mostly of Chinese citizens, left behind brightly lit casinos that contrasted starkly with unfinished buildings.

“Now there’s so much garbage, and the roads are bad,” longtime resident Sampoah told The Atlantic magazine. “Before, Sihanoukville was very nice — now it’s very bad.”

Paula Bronstein/Getty Images

Many Cambodians say Sihanoukville was gutted by the casino boom, according to The Diplomat, an online news magazine. “Crime has spiked. Locals have been outpriced. Many will no longer go to the city, previously a popular location for weekend getaways. Casinos have tarnished Cambodia’s reputation and that of legitimate businesses,” The Diplomat reported in late August 2022.

Global Initiative, which analyzes and recommends ways to combat organized crime, called Sihanoukville “a hub of multifaceted criminal activity” in a September 2022 report.

Sihanoukville entered international criminal networks as an exporter of illegally logged timber, the report found. Criminals expanded into other lucrative realms, including tourism and real estate. They pivoted to avoid generally weak law enforcement, “adapting and relocating their operations to respond to changing regulatory and enforcement priorities and activities,” according to Global Initiative.

Many of the criminal syndicate players were Chinese, according to the Los Angeles Times newspaper. Their activities ranged from digital scams to online gambling to drug and wildlife trafficking.

Many transactions involved cryptocurrency, a popular tender among organized crime operators, scammers and opportunists, Global Initiative reported.

The influx of criminal activity in Sihanoukville has damaged Cambodia’s reputation. In a 2021 assessment of public sector corruption in 180 countries and territories, Cambodia ranked 157th, according to Transparency International. Public sector corruption is fertile ground for human rights abuses, “setting off a vicious and escalating spiral.”

Sihanoukville is part of a “broader pattern of illegality [with] Chinese organized crime dominant and having a massively distorting effect on the local economy,” an expert on Cambodian politics told Global Initiative.

The rapidly growing Chinese influence has changed Sihanoukville physically as well as economically, The Atlantic reported in January 2020. “Cranes and scaffolding are ubiquitous, hills and forests have been bulldozed, and a lake that was once vital for drainage during heavy rains has been filled, causing flooding. … With development far outstripping wastewater treatment and other vital infrastructure, piles of trash are everywhere, and sewage is often piped out to the city’s three miles of beachfront, which are now covered in garbage as well.” (Pictured: Cambodians live in poverty surrounded by Chinese-funded construction projects in Sihanoukville.)

Residents earning low wages were hit hard when Chinese investors and tourists left town. The criminal underworld replaced casinos and construction as the main source of revenue, according to China Labor Watch. Scamming and human trafficking became leading industries, with victims from many Asian countries.

Youk Chhang, a longtime visitor to Sihanoukville who grew up in Phnom Penh, remembers the bucolic Gulf of Thailand and its endless beach that “belonged to Cambodians.”

“The Sihanoukville I saw was no longer the city I once knew,” he told The Diplomat in November 2021, a month after visiting the town. “Here were streets lined with high-rises, many used as hotels and casinos and others empty or under construction. … When I arrived, I felt so empty. I could not breathe. What I knew of Sihanoukville no longer existed.”

 

IMAGE CREDIT: GETTY IMAGES

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