WEEKLY SELECTION/DEVELOPMENT-CAMBODIA: Hun Sen Gets Aid — and New Chance

By Suvendrini Kakuchi Reprint | | Print |

Suvendrini Kakuchi

TOKYO, Feb 27 1999 (IPS) - Japan led international donors Friday in pledging a total of 470 million U.S. dollars in aid this year to Cambodia, aiming to give the troubled country yet another new start.

But the group of 23 donors, consisting of 16 donor governments led by Japan and seven international financial institutions, also said that the effective use of funds would be subject to review every three months.

The condition came amid pressure from governments, critics and rights activists who wanted aid tied to a better human rights record in Cambodia and fulfillment of pledges to crack down on corruption, deforestation and to reorient the military.

At the end of the two-day Consultative Group meeting here however, Hun Sen’s government not only got more than what it expected by way of aid funds, which support nearly half of its operating budget.

It also got a boost in acceptance — if grudgingly for some — by the international community.

Aid pledged to Cambodia was a “watershed event that allows Cambodia to make a bold new beginning on the international stage,” said the World Bank’s Ngozi Ojonko-Iwela, chairman of the meeting.

The Tokyo meeting was the first to be held among Cambodia’s donors since the July 1997 ouster by Hun Sen of his co-premier, Prince Norodom Ranariddh and since last year’s elections won by Hun Sen’s party.

Japan, Cambodia’s biggest bilateral donor, accounted for the biggest portion of the aid deal by pledging 100 million U.S. dollars, Okonjo-Iwela said at a press conference Friday.

Okonjo, the Bank’s director for South-east Asia and Mongolia, said the World Bank pledged 75 million dollars. A French delegate said his government had endorsed 28 million dollars.

The pledged aid package is a little higher than the 450 million dollars Cambodia gets annually at present.

Cambodia also got an extra concession from Japan, a promise to resume billions of yen in official loans in the next fiscal year that starts in April.

Tokyo’s decision to offer official loans, which constitute a major portion of Japanese international aid, is the first in 31 years and signifies Japan’s support for Cambodia. Tokyo had frozen yen loans to Cambodia since 1969.

A foreign ministry official could not give details about these loans, but said Tokyo was likely to start with loans worth 2 to 3 billion yen to rehabilitate facilities at Sihanoukville port in the south-east.

Bulk of the 470 million dollars in aid will go to poverty alleviation though social development, support for education and health and infrastructure. Some money will pass through non-government organisations as well.

“The issue of human rights was discussed thoroughly, but this conference was more about economic and social stability,” Okonjo-Iwela said.

Many doubt the sincerity of reforms promised by Hun Sen, who came to the donors’ meeting seeking 1.3 billion dollars for three years.

Even Japan, though state foreign minister Nobutaka Machimura, on Thursday called on Hun Sen to implement his commitments on political, economic, and social reforms including urgent issues like revenue mobilisation and forest management.

Hun Sen told donors he was not merely making fresh promises to woo donors and “gain temporary reprieve from criticism”.

Cambodian opposition leader Sam Rainsy, however, called the granting of more aid at this point “the path of least resistance” and said giving it would be “pouring taxpayers’ money into the sinkhole for foreign aid that Cambodia has become”.

He said donors like Japan and others should first find out how Cambodia has used the 2 billion dollars in aid it received in the last decade.

Without political reforms of accountability and transparency “their (donors) billions will disappear into the pockets of the corrupt once again, and Cambodia will never throw away its begging bowl,” added Rainsy, who was here this week.

Donors like Japan, however, say Cambodia cannot survive without foreign aid. Even while demands are growing for respect for human rights and better governance, they know that there is even less chance of that improving if problems like food shortages get any worse.

Whatever some donors think of Hun Sen’s rights record, Cambodia’s pressing needs are bound to the first priority at this point.

Thus, Machimura said: “Japan is resolved to lend support, to the extent possible, for Cambodia’s development and prosperity in the upcoming years.”

It remains to be seen how firmly donors can and will hold Phnom Penh to its conditions on aid.

Discussions at the donors’ meeting centred on problems like illegal logging, an unruly and huge army and a defense budget that accounted for 35.6 percent of the national budget in 1998.

Hun Sen said his country’s long internal conflict had caused the situation, but “we are now in a position to reshape and reform the military and security apparatus”.

So Ah, senior minister in charge of the Office of the Council of Ministers, disclosed a timetable for downsizing the army. He said 11,500 soldiers would be cut in 2000, 11,000 in 2001 and 2002, and 12,000 in 2003.

Cambodia has appealed for 104 million dollars in financial, technical and material support over the next five years for demobilising 55,000 soldiers.

By World Bank estimates, Cambodia spends 3.7 percent of GDP on defense and security, 2 percent on education and 1 percent on health. The Bank wants more resources spent on health and education instead of defense.