Former Khmer Rouge redoubt takes to business in Malai

Factory workers empty a truck filled with cassava on the outskirts of Veal Hat village in Malai last month. Omar Havana/New York Times

27 Mar, 2017 Julia Wallace - The New York Times

For years, Tep Khunnal was the devoted personal secretary of Pol Pot, staying loyal to the charismatic ultra-communist leader even as the Khmer Rouge movement collapsed around them in the late 1990s.

Forced to reinvent himself after Pol Pot’s death, he fled to this outpost on the Thai border and began following a different sort of guru: the Austrian-American management theorist and business consultant Peter Drucker.

“I realised that some other countries, in South America, in Japan, they studied Drucker, and they used Drucker’s ideas and made the countries prosperous,” he said.

The residents of this dusty but bustling town are almost all former Khmer Rouge soldiers or cadres and their families, but they have come to embrace capitalism with almost as much vigour as they once fought to destroy class distinctions, free trade and even money itself.

Khunnal helped lead the way, as a founder of an agricultural export company and a small microfinance bank for farmers before rising to become the district governor. From that position, he encouraged his constituents to follow suit.

The local market, fronted by a bright green sign featuring flying US dollar bills – an advertisement for a telecommunications firm – is run by a joint-stock company owned by a group of ex-Khmer Rouge officials. Inspired by Tep Khunnal’s original farmer’s bank, there are now six such organisations in Malai.

Tep Khunnal, photographed in front of the University of Management & Economics, where he teaches management theories, in Battambang province. Omar Havana/New York Times

The success of his agricultural venture has spawned about a dozen cassava export firms, most headed by former Khmer Rouge soldiers or followers. Every weekday afternoon, the town’s main road is choked by a queue of brightly painted trucks carrying cassava to the border.

“We joined the communists, and now we have joined the capitalists, which is much better,” said Dim Sok, a local official.

Dim Sok, 65, was a nearly illiterate farmer when he became a revolutionary in 1970, fighting in the jungles with the Khmer Rouge for five years before they seized power. In an effort to remake the country into an agrarian utopia, the Khmer Rouge government swept the urban population into the countryside to live like peasants and smashed up banks and schools. At least 1.7 million people died under their nearly four-year rule.

When they were ousted in 1979, they retreated to strongholds like Malai on the western fringes of Cambodia along with thousands of soldiers and supporters. While Pol Pot continued to restrict free enterprise in areas under his control, residents of Malai were allowed to conduct some trade and amass personal property starting in the 1990s.

The area broke away from the Khmer Rouge in 1996, in part to avoid Pol Pot’s attempts to recollectivise property, and soon after a few thousand ex-communists raised capital to build the market by issuing shares in a joint-stock company.

Each shareholder is entitled to quarterly dividends based on rents paid by vendors. The rate of return is high: Dim Sok said he reaps $10 every three months from an initial investment of around $50.

“It is like a stock market,” he said, beaming.

Dim Sok said he saw no contradiction between his current life and the years he spent enforcing an unstinting brand of communism.

“In communist ideology they accuse capitalism of exploiting people,” he said. “But now we are in capitalist society, and there are actually two things that can happen: You can be exploited, but you can also prevent others from exploiting you.”

Many here seem to have managed that nimbly.

Nget Saroeun, 62, spent over two decades as a soldier, much of it waging guerrilla war in the hills around Malai. Today, he is a prosperous farmer who hobbles around his fields vigorously despite having lost a leg to a landmine. He is a fan of the English football team Arsenal and likes to check commodity prices and read about new agricultural techniques on his smartphone.

“Previously, it was very difficult here,” he said. “It was full of forest. Now it is full of concrete houses.”He praised Khunnal for teaching farmers “to meet the demands of the market” by growing new crops like cassava, a tuber that can be processed into starch or animal feed.

Relatives, neighbours and friends of a former Khmer Rouge cadre pray in front of a group of Buddhist monks while children watch during his funeral in a local pagoda outside Veal Hat village in Malai. Omar Havana/New York Times

Malai was still a malaria-infested jungle stronghold when Khunnal moved here in 1998, bringing with him Pol Pot’s widow, whom he married shortly after his boss’s death.

Along with a barely educated but savvy ex-soldier, Soom Yin, he took out a bank loan to test some of his ideas. Their company bought the area’s first corn-drying machine, imported a new breed of sun-resistant corn from Thailand and set up a quality-control system for the corn and cassava that moved through their warehouse.

Today, Soom Yin owns the largest export firm in the area and can talk for hours about the minutiae of the cassava trade, from moisture levels to price fluctuations. In his spare time, he said, he reads books on management.

The Khmer Rouge ways are “very old now”, he said. “Even me, I don’t even dream about that anymore. We just do business.”

Khunnal, 67, retired from government and business a few years ago and now devotes his time to spreading Drucker’s ideas across the country. He teaches at a university in a neighbouring province and is translating the theorist’s work into Khmer. He has even compiled his favourite bits of Drucker’s wisdom into a small handbook.

“I’m sure that if Cambodia embraces this idea, Cambodia will walk in the right way,” he said.

He declined to discuss his finances, but he lives in a large gated compound surrounded by lush gardens. When his stepdaughter, Pol Pot’s only child, got married in 2014, he threw her a lavish reception featuring French liqueur and glass chandeliers hanging from pink-and- white tents.

He said he began reading about economics while serving as a Khmer Rouge envoy to the United Nations in the 1980s. Although he liked Milton Friedman, the free-market economist, and Frederick Taylor, who pioneered scientific management, he was most drawn to Drucker’s insistence that employees were central to an enterprise’s success.

“What I find interesting for me is that he talks about individuals, he gives power to individuals, not to collectivism,” he said of Drucker. “Frederick Taylor in the early 20th century, he talked about efficiency, but Drucker talked about effectiveness.”

During a recent lecture, Khunnal exhorted his students to remember that good management was just as important as good ideas.

“…In-no-vation,” he said, using the English word, “means a new idea, but to be successful you need strategy.”

Some of his talking points might have been useful for the Khmer Rouge in its final days, when the movement disintegrated into multiple warring factions.Asked whether Pol Pot had been a good manager, his former aide demurred.

“I don’t want to make any judgement on that,” he said. “Let history do it. I think about the future.”

Additional reporting by Neou Vannarin