Bank Urged to Take Firm Anti-Graft Stance

Observers following the scandal over the misprocurement of funds in a World Bank-sponsored demobilization project urged the Bank to continue pressuring the government to stomp out corruption on Wednesday.

The Bank announced Tuesday that it had extended its deadline from February to mid-May for the government to submit a complete audit of the demobilization project, before suspending millions of dollars in aid to Cam­bo­dia.

The government had made “significant progress” in resolving the scandal, the Bank said in a statement.

In January, the Bank had threat­­ened to withhold assistance to Cambodia if it were not repaid funds that were intended to procure motorbikes for former soldiers. The government subsequently repaid $2.8 million in misused assistance.

Opposition lawmaker Son Chhay said Wednesday that the World Bank’s actions were “confusing.”

“I have been involved in the demobilization issue for a long time. I wrote letters to World Bank representatives but never received a response,” he said.

“Even after their own investigation revealed irregularities in the [demobilization] contract they seem reluctant [to take action],” he said. “They seem to hide their faces and want to put the problem in a bag and say you are making progress.”

Son Chhay added that no opposition lawmakers have been invited to participate in meetings with Bank President James Wolfen­sohn today and Friday on the future of the Cambodian economy, but he has been pushing for a private meeting.

“It is important for the top guy to get first-hand information about what is going on here,” he said. “Otherwise the organization will continue to allow these dirty deals to go on.”

Son Chhay said he has been pressuring the World Bank to have all its loans debated in the National Assembly, but the Bank has ignored his requests.

“They say they are authorized to work only with the Government,” he said.

Independent economist Kang Chandararot, director of the Cambodian Institute for Development Study, thought the Bank’s had issued a good statement.

“The year 2005 is the year of putting words into actions,” he said. “I think the World Bank will push the government to speed up its anti-corruption efforts.”

He added that donor pressure is key to getting the government to act.

“We have been waiting for a long time for the passage of an anti-corruption law,” he said.

Lao Mong Hay of the Center for Social Development agreed that donor pressure is important.

“Threatening to withhold funding was a strong statement. Now the World Bank has got its money back, but I believe the government must be pressured to pursue a complete investigation of the companies and people involved in this demobilization program,” he said.

“The government I think listens more to donors than it does to its own people,” he added.

Kang Chandararot said he believes the World Bank should meet with Sam Rainsy lawmakers this week.

“To have the reality of the situation at the meeting you should invite all relevant people in the society, not just those from one viewpoint,” Kang Chandararot said.

World Bank communications specialist Bou Saroeun explained the exclusion of opposition lawmakers, saying that it was “a private development sector conference organized by the government.”

Prime Minister Hun Sen will open the conference, he said. But: “Politicians or lawmakers were not invited.”

Reacting to Son Chhay’s accusation that the World Bank is now going soft on the government over the demobilization scandal, Bou Saroeun said the World Bank is working with the government on anti-corruption reform.

As for the reason behind the extension of the deadline, he said, “the auditing firm selected by the government will not be able to begin work until March.”


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