At the close of the Consultative Group meeting on Tuesday, major international donors pledged a total of $504 million in loans and grants for Cambodia, while also calling for more substantive reforms in areas long targeted by development efforts.
Although the amount may appear significantly less than the $635 million offered at the last CG meeting in 2002, Ian Porter, World Bank country director and co-chair of the conference, told reporters that the discrepancy was due to new methods used to calculate total pledges. By the new criteria—which do not include aid from NGOs and for regional initiatives—donors only pledged $514 million in 2002.
“Comparing apples with apples,” Porter said, “The overall pledge is only very slightly less than 2002…and consistent with what Cambodia requested from this meeting.”
Finance Minister Keat Chhon had announced earlier in the day that the government was seeking about $500 million per year for the next three years, roughly the same amount it has asked for in the past.
Although donors complimented the government’s planned reforms, they also offered scathing criticism when it came to the lack of progress on governance and accountability.
A dire need for improved anti-corruption measures and legal and judicial reform came up repeatedly throughout the conference. Both issues have been topics of past CG meetings and the government has repeatedly failed to keep past promises.
The passage of an anti-corruption law, actual trials of corruption cases and the adoption of a basic legal framework were earmarked as goals for the coming year and a joint news release from conference participants noted that significant progress on those goals was a condition of future assistance.
“Both the amount and composition of future pledges will be a function of Cambodia’s performance on its reform agenda,” the release stated.
Other goals that will be used to judge the government’s future performance include civil service reform and improved management of natural resources.
The slow progress made by the government on key reforms was made evident by the World Bank’s pledge of $45 million, significantly less than the $70 million that the agency offered in 2002.
Unlike donor nations, the World Bank’s pledge is tied directly to Cambodia’s performance since the last meeting. That performance is calculated through a number of set conditions, among which governance weighs heavily.
“Basically it’s because other countries have been doing better than Cambodia on these indicators that we’ve had to reduce our allocation,” Porter said.
But Japanese Ambassador Takahashi Fumiaki said that despite some disappointments on the reform agenda, Japan will continue to support Cambodia both economically and socially.
“We don’t think we have seen improvement as everybody expected,” he said. “But still we know, at the same time, the difficulties facing not only the Cambodian government but also the Cambodian society as a whole.”
Upholding its reputation as the country’s largest bilateral donor, Japan committed $123 million for this year, nearly one-fourth of all support.
Speaking to reporters after the pledges, Keat Chhon defended the pace of reforms and likened the government’s productivity to winners of last month’s boat races at the Water Festival, who walked away with monetary prizes.
“If the boat is rowing slowly, the funds for support are also small,” he said.
For part of the proceedings Tuesday, the spotlight was turned away from the government and shone on the donors, as delegates examined the effectiveness of past aid to Cambodia.
In remarks on behalf of all the donors, Danish Ambassador Ulrik Helweg-Larsen said that through a lack of coordination, both with each other and with the government, donors have not always made the best use of development money.
In some cases, he noted, “aid has actually made matters worse by undermining the capacity of state institutions.”
Donors were also asked to rethink the immense amount of money spent on technical assistance, which Helweg-Larsen put at roughly $162 million in 2001, “or more than the government’s total wage bill.”
Prime Minister Hun Sen urged delegates on Monday to ensure that some of the international aid that goes directly into the pockets of foreign experts be used to bolster the government’s human resources.
“A clean administration cannot be cheap,” he said.