Deadlock Likely to Delay Donors’ Conference

As Cambodian politicians haggle over where to negotiate the for­mation of a new government, diplomats expressed concern that Cambodia’s opportunity for major aid for reform slips further into the future. 

Because of the political deadlock, there are no immediate plans for an international donors’ conference to discuss in depth with the government Cambodia’s needs.

Before the July elections, many had hoped a conference could be scheduled before the end of the year. But now diplomats say it is unlikely one will be held before early next year.

“It doesn’t make sense to exa­mine our involvement until we see the priorities of the government,” British Ambassador George Edgar said Thursday.

The so-called Consultative Group meetings  are characterized by diplomats as the government’s big chance to appeal to donors for money.

“[The Consultative Group] meeting is the big event on the calendar for the donors,” said Bill Costello of AusAid. “By then we should have a fair idea of where Cambodia is going.”

About 20 representatives from donor countries and international institutions have gathered each year at meetings that were first held in 1993.

In the last two meetings, do­nors have pledged nearly $1 billion in grants and low-interest loans to fund major reform projects in Cambodia. In recent years, foreign aid has accounted for roughly half the government’s budget.

One foreign economist said that US officials in Washington are discussing “behind closed doors” the timing of the Con­sul­ta­tive Group meeting.

The US State Department has said in the past that it opposes the resumption of non-humanitarian aid to Cambodia until a new government is formed that includes the opposition in a “meaningful role.”

Diplomats say the government will need to persuade them that it is serious about reforming its revenue administration, forestry policy and civil service rolls—key topics on which Cambodia has made big promises, but little or no real progress.

The International Monetary Fund last year pulled out of the country, citing the government’s lack of movement on economic and forestry policy reform.

And the UN Development Pro­gram in a report released this week ex­pressed disappointment with the government’s commitment to ad­ministrative and finan­ce reform.

The IMF and UNDP are considered two of the government’s most important reform partners.

World Bank Resident Repre­sen­tative R Natarajan also said the World Bank is willing to discuss direct loans only after the new government forms.

“My guess is that they’ll need it,” he said.

The World Bank has pledged $267 million since 1993 in project support. Its last major loan commitments were made in 1996.

The Asian Development Bank, a major multilateral donor to Cambodia, last week indicated it will continue to provide about $90 million in annual low-interest loans, as it has provided every year since 1993.

 

 

 

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