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In Southeast Asia, the tiny nation of Cambodia is trying to put its grim, war-torn past behind it. And economically, at least, it's making progress.

The economy grew at a record 9 percent in 2007, and would have done almost as well last year had the global financial slowdown not hit.

That growth has brought big changes to the capital, not all of them welcome, as NPR's Michael Sullivan reports.

MICHAEL SULLIVAN: It's been almost two years since my last trip here, and the changes are remarkable. Where there were just two cell phone providers, there are now six. And the streets of the capital are now surprisingly clean, after the city hired a Canadian firm to keep them that way. There's a fresh coat of paint on Wat Phnom, in the heart of the city. And the steep stairs to the pagoda at the top have been repaired, too.

Most of the vendors and beggars have been removed from the park below, but you can still buy a songbird to take up the stairs to release for luck if you make it to the top.

Across the street from Wat Phnom, there's a spanky new playground that would look at home anywhere in the U.S. And while there's no Starbucks -not yet, anyway - the Kentucky colonel has continued his march across Southeast Asia. Cambodia, the latest domino to fall.

Unidentified Man #1: (Speaking foreign language)

SULLIVAN: This gleaming, new KFC is on Monivong Boulevard, just around the corner from the art deco central market. And the market, too, is getting a makeover.

(Soundbite of construction)

Unidentified Man #2: (Speaking foreign language)

SULLIVAN: Phnom Penh has its first serious skyscraper as well, the 27-story Canadia Bank Tower, where workers scramble to finish the health club and restaurant on the 25th floor in time for a scheduled May opening.

Architect Chea Vuthy is the project manager.

Mr. CHEA VUTHY (Canadia Tower Project Manager): (Speaking foreign language)

SULLIVAN: Every day, he says, we come to work and have the cleanest air and the nicest view in the city. He's right; the view from up here is magnificent. The Mekong, Tonle Sap and Bassac rivers spread out below to the east, and the iconic Boeng Kak Lake to the west.

Chea Vuthy says it's a good thing for the city to have skyscrapers like this one to help illustrate the pace of Cambodia's development.

Unidentified Man #3: (Speaking foreign language)

Unidentified Man #4: (Speaking foreign language)

SULLIVAN: But all this development comes at a price.

(Soundbite of laughter)

SULLIVAN: Boeng Kak Lake, for example, is now being filled in with sand to make way for a new, high-end, commercial complex. These young men are enjoying a soccer match on a beach that didn't exist a few months back and won't exist a few months from now, either, once the new development is finished.

Ms. BE PHARON: (Speaking foreign language)

SULLIVAN: Be Pharon belongs to one of 4,000 families being evicted from their homes on the lake. And the $8,000 developers are offering her for her one-room house, she says, won't even begin to pay for something comparable elsewhere in the city, where residential property can go for as much as $3,000 per square meter.

Ms. PHARON: (Speaking foreign language)

SULLIVAN: Nobody wants to leave here, she says. It's close to the school and the hospital. And if we accept the developer's offer and move, we'll have to go far away, she says, farther from work, farther from school, farther from everything.

Mr. CHOUNG CHOUG NGY (Lawyer): (Speaking foreign language)

SULLIVAN: Choung Choug Ngy is the lawyer for the families being forced out. In Phnom Penh, he says, development is a synonym for eviction, and says he'll keep fighting until the families get a better settlement. But that's a risky proposition in a country where the rule of law often takes a back seat to the desire of those with power.

Ms. SARA COLM (Senior Researcher, Human Rights Watch): The mindset is they want to move these people out. And if people don't accept the compensation, you know, they could find themselves with nothing.

SULLIVAN: That's Sara Colm, senior researcher for Human Rights Watch in Phnom Penh. She says tens of thousands of urban poor have been forced out of the city in the past five years.

Ms. COLM: And when they dump them this far out of town, it's very hard for them because their livelihoods were here in town. They were pushing the little carts, selling sugarcane or doing the motorcycle-taxi thing or cyclo drivers. And they were able to make their livelihood off of other people here in town in an honest manner. But when they're dumped that far out of town - it's been very difficult for them.

(Soundbite of crying)

(Soundbite of laughter)

SULLIVAN: Anlong Kro Ngyan is one of those faraway places outside the city limits. It's a place where there's no electricity and no running water. But it's a place Chum Savoeun calls home.

Ms. CHUM SAVOEUN: (Speaking foreign language)

SULLIVAN: She and her neighbors were among the first batch of squatters forced from the city center a few years back, after a suspicious fire gutted their homes. Bulldozers moved in a few days later to clear the land for development.

Chum Savoeun and her neighbors were brought here and given small plots of land to build on.

Ms. SAVOEUN: (Speaking foreign language)

SULLIVAN: But things quickly turned bad, she says, after her husband got sick with HIV. She was forced to sell their small plot of land to pay his hospital bill. He died not long ago, and now she finds herself a squatter among former squatters - HIV-positive herself with three small children to feed. She supports the family by picking morning glory, a kind of water spinach, from a nearby lake and selling it to her neighbors. She makes about a dollar a day.

Chum Savoeun's biggest fear is getting kicked out again and forced to move even farther out as the city continues to expand. Things will be much harder then, she says, but there's nothing I can do but wait.

Michael Sullivan, NPR News.

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