Donors Offer a Healthy $635 Million in Aid

International donors an­noun­ced Friday they will give Cam­bodia $635 million over the next year in loan and grant aid, about $150 million more than the government had asked for.

Of that, $241.6 million will come from loans made by the Asian Development Bank, the World Bank, the International Monetary Fund and the Korean government. The remaining aid will come as bilateral grants, said Bonaventure Mbida-Essama, the World Bank’s Cambodia representative.

The government expects anoth­er $45 million to $55 million to come from donations made by individual NGOs, Minister of Finance Keat Chhon said.

The government had asked for $1.45 billion in aid over the next three years, or about $485 million per year. Over the past three years, donors have disbursed around 77 percent of their actual pledges. A similar rate over the next year would give the government $473 million in actual dollars.

The government had also asked for a lump three-year contribution, but donors said they would continue with yearly allocations.

The pledges come despite complaints from donors about a lack of progress in the fight against corruption or the reform of Cambodia’s courts.

Donors heavily criticized the government for a lack of progress on the anti-corruption law and a slow pace of reform of the judicial and legal systems.

“Progress over the past year has not been adequate” in the fight against corruption, conceded World Bank Country Director Ian Porter. If Cambodia is unable to show donors significant pro­gress over the next year, he warned, “support will not be at the same level.”

However, he said, donors “continue to feel Cambodia is moving in the right direction” and “relative progress” had been made compared to last year.

The government has had an anti-corruption law in the works since 1995, but has failed to get a draft to the National Assembly. Prime Minister Hun Sen pro­mised on Wednesday to have a draft ready for debate by June 2003.

Donors “were concerned about the slow pace” of judicial and legal reform and the lack of an established anti-corruption law, the World Bank said in a statement. The World Bank co-chaired this year’s Consultative Group meeting.

Speaking to reporters after three days of talks, Keat Chhon said the government had made progress on corruption, especially in the areas of forest management, the military, civil servants and land seizures.

“We did score some success,” he said. “But corruption is an illness…that we need [remedied].”

Donors also noted “significant gaps” in the improvement of fores­try issues, civil service re­form, procurement and budget allocations to social sectors.

Donors commended the government for forming the National Audit Authority, adopting the Land Law, completing the Law on Investment and launching its demobilization program.

Japan will remain Cambodia’s largest bilateral donor, committing $107 million for the upcoming year.

Japan has the world’s second-largest economy, but woes at home have put pressure on the country to decrease its overseas development aid.

The country has cut its international assistance by 10 percent, but was able to give Cambodia the same amount of money as in past years, Japanese Ambassador Gotaro Ogawa said. “It was not easy for us, but I’m happy we could maintain this level.

“Some people think the pro­gress is slow, but most donors consider [that the government officials] are working hard,” he said. “I don’t think any donor decided to reduce the aid amount because it thought the Cambo­dians were not doing good.”

Canadian Ambassador Nor­man Mailhot called international assistance a “balancing act” bet­ween the demands a country can put on Cambodia while still fulfilling demands from home offices.

“There’s only so much pressure you can put on a developing economy like this one and at the same time produce results for a Western government,” he said.

Kao Kim Hourn, a political analyst and executive director for the Cambodian Institute for Coop­eration and Peace, called this year’s aid “a major stamp of approval of the current government.”



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