The Cambodian city of Sihanoukville was a major international resort destination before the Wuhan coronavirus pandemic crippled its tourism industry. The city is now littered with empty and half-finished “ghost buildings” abandoned by Chinese investors. According to local entrepreneurs, these unsightly gang-infested husks are keeping the tourism industry from making a comeback.
Before the pandemic, Sihanoukville was a quiet little town on the Gulf of Thailand that had grown into the “crown jewel” of Cambodian tourism, the “Macau of Southeast Asia.”
A deep-water port brought trade and fishing to the area, which in turn financed development of its beautiful beaches. Over the course of the 2010s, Sihanoukville went from well-kept secret to chic tourist destination – and then arguably became an overcrowded, overdeveloped tourist trap.
Chinese investors smelled gold on those golden beaches and financed the incredibly rapid construction of dozens of hotels, casinos, and attractions. Sihanoukville was doing all it could to attract Chinese tourists at the time and was rewarded with over a million visitors from China, followed by a flood of property developers.
One especially ambitious development group in 2018 announced a billion-dollar complex of shops, hotels, and water parks dubbed “Wisney World.”
“The starting of this project is the right decision because now Sihanoukville is regarded as a rising star in the south east of Cambodia. I hope that Wisney World will fill gaps that are lacking in Sihanoukville’s entertainment sector,” chirped Cambodian Deputy Prime Minister Men Sam An, while bemused local officials said no one bothered telling them about any billion-dollar Chinese water park projects.
“I know that the companies from China have a lot of money, but such expensive projects, there must be strong support from the international market to be successful,” a Cambodian real estate developer warned.
Covid-19 struck during this cycle of frenzied development, and when the tourist industry collapsed, all those Chinese developers decided to cut and run. The timing could not have been much worse because only a few months before the pandemic, the Cambodian government responded to pressure from Beijing and banned online gambling, which was the other wildly successful industry driving the city’s growth.
“There was a lot of greed. Business people wanted to get money, even if they knew the prices of land or rent were too high. It was a bubble and people knew it would break, but you don’t think anything bad will happen to you,” a Chinese businessman told Nikkei Asia last month.
Sihanoukville is now strewn with 1,155 unfinished buildings, about 600 of them high-rises. Many are inhabited by gangsters using computers from the defunct online gambling industry to run Internet scams.
Some investors want to complete the buildings they were financing, but construction has been frozen by legal disputes. The Cambodian government seems uninterested in helping them, instead hatching plans to turn the city into a “commercial, services, and logistics hub,” without dwelling on all those half-finished and one-third-occupied casinos and hotels blotting out the sky.
“If the authorities would have taken measures to finish up those large-scale construction projects sooner, it would have been better for the people who have to make money for a living,” disgruntled shop owner Mean Samnang told Radio Free Asia (RFA) on Tuesday.
RFA noted the city’s festering crime problem combined with the unappetizing visuals of skeleton skyscrapers to drive tourists away. Local landowners went deeply into debt buying up property for lease to Chinese clients, and now that the Chinese clients are gone, only the debt remains.
“Who does not owe the bank?” remarked Cheap Sotheary of the Cambodian Human Rights and Development Association.
“Right now we aren’t seeing a lot of building demolition or building restructuring yet because the economic downturn has affected everyone regardless of whether they are rich or poor,” she said.
Some Sihanoukville residents who spoke to Nikkei Asia and RFA expressed hope that Chinese investment might someday return, but none could articulate a realistic scenario where that would happen, especially with China’s economy sinking and its own real estate market collapsing.
The hyper-development cycle that crashed and burned in 2020 left the city with a mess it might never be able to clean up without a huge influx of money to either complete the ghost buildings or demolish them. A few enterprising travel agents are trying to remind globetrotting tourists that if they can get past the ugly construction sites and avoid the predatory gangs, the beaches are still phenomenal.
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