Recent events have beamed the spotlight on Cambodia’s massive ‘pig-butchering’ scams. Cambodia is in the international news, especially in Korea (a Korean student was tortured to death) and the United States (the leader of Prince Group had 15 billion dollars in illegal money confiscated).
Prince Bank is undergoing a huge bank run, as investors try to withdraw their money.
Anyone reading the news about this scandal will raise some questions and draw logical conclusions:
1. Chen Zhi, the indicted kingpin of the Prince Group, reportedly owned 10 crime centers, raking in, as he boasted, some $30 million dollars per day. The United Nations and other agencies have identified some 53 crime centers. Who owns the other 43, and what is being done about them?
2. On such a huge scale, amounting to billions and billions of illegal dollars (an estimated 60% of Cambodia’s GDP), as well as some 100-120,000 slaves working under threat of torture and electrocution, there must be massive corruption in the Cambodian government, as high-ranking officials are looking the other way and protecting the cyber criminals.
3. Cambodia has a surfeit of banks, casinos, and real estate companies. How is an investor to know which ones are legitimate, and which ones are conduits for laundering the billions of illegal dollars from the cyberslave centers?
Any investor who pursues these questions is bound to swear never to invest a cent in Cambodia. Even invested money already in Cambodia is already being pulled out. Cambodian investment is about to take a huge hit. Tourism is affected, as Korea (and probably soon to be others) is warning tourists of the dangers of Cambodia, and actually banning Koreans from visiting cities with known cybercrime centers.
The Cambodian government, faced with this damaging reputation, can turn in either of two directions. On one hand, it can address the issue head-on and clamp down on the corruption. The 53 crime centers, and their kingpins, are well known, as reported and even photographed in the international press. The Government could go after the criminals and shut down the crime centers.
On the other hand, there are too many influential and powerful people feeding at the trough, raking off billions of dollars. They may not be willing to get off the gravy train. If they insist on maintaining the status quo, the problem of corruption and pig-butchering will persist. Investors will stay away from Cambodia and the economy will suffer.
Which option will Cambodia choose? It may depend on the severity of sanctions applied by foreign countries, to finally force the government into action.