Thursday, January 3, 2013

Dollar and Riel - the twin currency of Siem Reap and Angkor Wat

Siem Reap is a beautiful town in Cambodia. Tourism is one of the biggest industry of the area primarily due to the Angkor Wat temple. The tourism industry is the country's second-greatest sourceof hard currency after the textile industry. Millions of visitors come to Cambodia every year and most visitors arrive through Siem Reap.Tourism has increased steadily each year in the relatively stableperiod since the 1993 elections and it is bound to increase even further. Most of the tourists are Japanese, Chinese, Filipinos,Americans, South Koreans and French people and the industry accounts for a significant percent of the kingdom's gross national products. Chinese-language newspaperJianhua Daily quoted industry official as saying that Cambodia will have threemillion foreign tourist arrivals in 2010 and five million in 2015. Tourism hasbeen one of Cambodia's triple pillar industries. The Angkor Wat historical parkin Siem Reap province, the beaches in Sihanoukville and the capital city PhnomPenh are the main attractions for foreign tourists.

The main marketing slogan for promoting Cambodia internationally is the "Kingdom of Wonder".
It's designed to demonstrate 3 key elements:
1. Cultural Attractions - a unique cultural heritage spanning more than a thousand years of history.
2. Natural Attractions - astonishing scenery with dense, unexplored mountains, forest, rivers, caves and waterfalls.
3. People and Traditions - Cambodians are extremely hospitable, resilient, welcoming and kind; smiles are heartfelt.

While visiting, there is another wonder, which I call 4th element, that people come across. People can trade using Cambodian Riel or US dollar. US dollar is accepted as if it is local currency. Even small sellers are happy to take Riel or dollar. At first it seems surprising and the tourist will feel that they might get bad rate for their dollar but the rate that is offered is standard no matter where one goes. This usage of dual currency also benefits locals as foreigners tend to spend more since everything seems cheap say 1 dollar, 2 dollar, 5 dollar, etc. One can get a transport called Tuk Tuk for the whole day including the driver for 20 dollar.

The free use of dual currency in Siem Reap is a win win for both locals and tourists and has also eliminated the need for a middle man called currency exchange service. It is a great example of how a country can reap great benefits with simple yet elegant policy decisions.


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