$80 Million at Stake as IMF Studies Reform

Discussions this week between the International Monetary Fund and the government could result in an $80 million loan, officials said Wed­nes­day.

A five-member IMF delegation arrived for a one-week stay to review the government’s pro­gress on a list of reforms.

The influential international lender pulled out of Cambodia in 1996 because of the government’s inability to combat illegal logging and generate funds for the national budget.

“We had a very good discussion,” Chanpen Puckahtikom, assis­tant director of the IMF’s Asia and Pacific department, said after her mission met with Fi­nance Minister Keat Chhon. “We have positive expectations [on economic and policy reforms].”

Cambodia has asked the IMF for a three-year, $80 million loan. Major government reform must be implemented before IMF assistance resumes, officials have said. The IMF’s Board of Execu­tives is scheduled to meet in September and the government’s track record will be scrutinized.

Although she would not speculate on the outcome of a series of meetings before official work sessions start today, she is hopeful an agreement could be reached on resuming loans to Cambodia.

“We have been discussing [resumption of aid] since May. We will continue discussions,” Puckahtikom said. “We look for lots of progress.”

The visiting delegation met with National Bank Governor Chea Chanto for one-and-a-half hours Wednesday to review progress on banking reforms. The mission then visited the Ministry of Finance and had talks with Keat Chhon for another one-and-a-half hours on financial and economic reforms.

“We had good discussions,” Keat Chhon said after the meeting. “The outcome we’re expecting is to have the resumption of aid. We are very positive.”

The mission will meet many officials, including Minister of the Council of Ministers Sok An and Senate President Chea Sim.

The IMF had a $120 million loan program for Cambodia but canceled its $20 million installment in late 1996. In March 1997, the IMF and the government set up an economic policy plan, indicating necessary reforms for resumption of assistance.

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