Drucker vs Pol Pot

They Smashed Banks for Pol Pot. Now They’re Founding Them.

By Julia Wallace, NY Times, March 22, 2017

MALAI, Cambodia–For years, Tep Khunnal was the devoted personal secretary of Pol Pot, staying loyal to the charismatic ultracommunist 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 realized 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 vigor as they once fought to destroy class distinctions, free trade and even money itself.

Mr. Tep 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 United States 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 Mr. Tep Khunnal’s original farmer’s bank, there are now six such organizations in Malai.

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.

Mr. 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 recollectivize 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: Mr. 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. Mr. 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 land mine. He is a fan of the English soccer team Arsenal and likes to check commodity prices and read about new agricultural techniques on his smartphone.

He praised Mr. Tep 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.

Malai was still a malaria-infested jungle stronghold when Mr. Tep 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, Mr. 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.”

Mr. Tep 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 neighboring province and is translating the theorist’s work into Khmer. He has even compiled his favorite 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.

During a recent lecture, Mr. Tep 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 judgment on that,” he said. “Let history do it. I think about the future.”