Donors Pledge More Than $900 Million

Despite continued complaints about the slow pace of reforms, in­ternational donors are pledging more than $900 million in aid to Cambodia for 2009, a substantial in­crease from previous years and from the government’s request of $500 million, a senior Finance Min­istry official said Thursday.

Government officials and donor representatives met behind closed doors Thursday for the start of the Cambodia Development Coopera­tion Forum. Official aid figures will be released at the end of the conference today.

Asked if the pledge figure topped

Despite opening their wallets, donors were more reserved in their praise of the government. They expressed satisfaction about the country’s impressive economic growth and advancements in health and education, but noted the continuation of slow progress on judicial and institutional reforms.

In his keynote address to the meeting, Prime Minister Hun Sen touted the country’s economic success, including double-digit growth in the past four years. He also reaffirmed support for judicial reforms and for the anti-corruption law, which has remained stuck in the drafting process for 14 years and is a constant demand of donors.

“[T]he Royal Government is strongly committed to ensure rapid conclusion and adoption of this law,” Hun Sen said.

The anti-corruption law was discussed at a Thursday session, but aid levels weren’t tied to its passage, UN Resident Coordinator Douglas Broderick said.

“There was no notion at all of boycotting…absolutely not,” Broderick said, adding that donors clearly wanted to see anti-corruption measures in place but that it would be a long process.

Rafael Dochao Moreno, chargé d’affaires of the European Commission, which has already committed in a multi-year plan to donate about $35 million next year, said the government told him the law would be passed next summer.

“We’re never happy 100 percent, in any country, even in our own European countries, but the fact that there is a reform, it’s already good news,” he said.

Eva Gibson Smedberg, resident representative of the Swedish International Development Cooperation Agency, expressed stronger criticism. She said the government was “lacking the real urge to go ahead” in passing the anti-corruption law and should also reform the courts and implement the Land Law. Donors, too, should propose other solutions to fight graft instead of “making a statement and hoping something will happen,” she said.

Swedish aid, she said, is not a stamp of approval for the government.

“It’s more a show that there is a need, and we are there to help, not approval,” she said.

Other reasons can also push countries to increase their aid, said Volker Karl, director of the Phnom Penh office of KFW Bankengruppe, a German financial cooperation institution. Germany, for instance, has increased its aid worldwide to respect previous commitments to the G-8 summit, he said.

International Monetary Fund Resident Representative John Nelmes warned against attempts to increase military spending-which Hun Sen has previously announced he would like to do. Rather, the government should focus on infrastructure building, Nelmes said.

“When you put infrastructure in place, it creates the capacity for the economy to grow at a faster rate without creating inflation pressure,” he said.

Piper Campbell, chargé d’affaires at the US Embassy, said she was impressed by the frankness of Hun Sen’s speech and the range of issues he covered, adding it was a “good starting point.”

The US will not make a pledge during this conference because of the presidential transition in Washington and will announce figures later, Campbell said.

Once aid figures from the US and the Global Fund To Fight Aids, Tuberculosis and Malaria are announced, international aid to Cambodia for 2009 could surpass $1 billion, the Finance Ministry official said.

That figure, however, could be misleading.

For the second year running, China’s aid was included in the government figure, even though China does not participate in the donor meeting, according to the Finance Ministry official.

The government unveiled Wednesday a financial package of $215 million from China, only $7.3 million of which is aid and the rest loans that will need to be repaid.

Prime Minister Hun Sen has previously praised China for giving aid without the reform conditions imposed by other donors.

“It’s clear that for instance there are points of difference of opinion between the European Union and China. That means we advocate that the EU always has policies on democracy, on good governance and other countries don’t,” Dochao Moreno said.

China’s deep pockets and no-questions-asked attitude could be weighing on the donor conference.

“It’s true that emerging donors are making the environment different,” said Alain Goffeau, project implementation specialist at the Asian Development Bank, when asked if China’s position could be forcing donors to hold back in criticizing the government.

Chinese Embassy spokesman Qian Hai could not be reached for comment.

The political opposition held a news conference ahead of the donor meeting on Wednesday, wherein SRP President Sam Rainsy said that the government was “cheating” donors by not carrying out necessary reforms.

Mu Sochua, the SRP deputy secretary-general, said Thursday that she was disappointed the donors had decided to pledge more money than ever while also not being aggressive enough in seeking real change from the ruling party.

“It’s so much money when the reforms that have been promised have not been implemented,” she said, calling on donors to seek more oversight and set solid benchmarks for reform.

   (Additional reporting by Yun Samean)


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