Debt levels among the more than 1,000 families being evicted by a $142.6 million railway project bankrolled by Australia and the Asian Development Bank (ADB) have reached “crisis” proportions and require major intervention, according to a U.S. resettlement expert who was hired by the ADB to study the impacts of the project.
To the sharp disapproval of local housing rights groups, the ADB is refusing to release the full report it commissioned last year from Michael Cernea, a former World Bank adviser on social policy, claiming the report was too sensitive and would delay the project and irreparably hurt the ADB’s relations with the Cambodian government.
But even Mr. Cernea’s summarized recommendations from the report, which the ADB reluctantly released Wednesday after an appeal by rights groups, tell of a project that has woefully failed the roughly 1,200 families who have been evicted to make way for the new railway.
In his recommendations, Mr. Cernea said that evicted families were in many cases at risk of losing their new government-issued plots of land to moneylenders and that falling into debt was “the single most dangerous risk” facing the resettled families.
“For some families this risk is immediate and, in the absence of effective counter-risk measures, will rapidly aggravate for many other families,” he said. “Unanticipated and unsustainable indebtedness accrued in the wake of relocation has undermined a recovery process that started well and had very strong promises of success.”
Mr. Cernea said the problem of indebtedness among the affected families was already at a well-advanced stage.
“At this advanced state of the indebtedness crisis,” he said, “it is probably beyond the power and means of only the project’s management itself, or even less of ADB and AusAid [the Australian government’s foreign aid arm] as outside and non-national agencies, to alone contain and push back the pervasive contamination of the project.”
Mr. Cernea did hold out some hope for a solution, but said the government’s help would be “indispensable.”
Among his recommendations was an immediate stop to evictees being able to swap their new land for loans, a thorough census of the families and their debts, and that the ADB and AusAid work with the government on a “full, project-scale” solution.
He also questioned whether it was even legal for the moneylenders to take the families’ new plots of land as collateral and urged the partners in the project to see what they could do to nullify the loan deals or at least punish the lenders.
Mr. Cernea said the efforts the ADB and AusAid were making to boost the incomes of the resettled families by teaching them to raise chickens and cut hair was lacking.
“A stronger pivot for recovery is necessary ahead of and in addition to these schemes,” he said, suggesting training in jobs such as mechanics and masonry as well as efforts to get employers to set up businesses around the relocation sites so families can put those newly acquired skills to use.
According to Mr. Cernea, the ADB was even failing to keep proper track of how the families were coping in the resettlement sites.
A “key finding,” he said, was that the ADB’s regular monitoring reports were not gauging such “fundamental” issues as the changes in the families’ living conditions and whether the bank’s efforts to boost their incomes was working.
The nearly 3,000 families who have not been evicted but have still lost parts of their properties to the railway project were ignored by the monitoring reports completely.
Finally, Mr. Cernea recommends that the Inter-Governmental Resettlement Committee, which has final say over the resettlement sites, solve its conflicts of interest by setting up an independent monitoring body and make it easier for families to make complaints.
“The current four-stage procedure is cumbersome, time-consuming to all involved and discourages submissions,” he said.
Mr. Cernea even suggested that committee members take a study trip to China, where he has worked and which he credits with having one of the better systems in place in the developing world for dealing with development-driven evictions.
The ADB said Wednesday that it was discussing the recommendations with the government.
In a statement issued Wednesday, the ADB said it was already working with the government to help the debt-ridden railway families.
“Discussions with moneylenders have led to some lenders reducing their interest rates while lengthening repayment terms,” it said. “Microfinance organizations and a financial expert have also been consulted to identify means of protecting resettled families from future, unsustainable debt loans.”
ADB Country Director Eric Sidgwick said in an email that AusAid had also set up a social safety net fund and 12 “self help groups” among the resettled families that can draw on the fund for emergencies, mostly health related.
Of the $276,000 in the fund since July, he said more than $5,300 had thus far gone to 103 families for medical emergencies and health insurance.
Nhean Leang, who sits on the government’s resettlement committee, claimed that of the more than 4,000 families affected by the rail project, only 25 were actually being hurt and shifted any blame onto the ADB and the families themselves.
“You should ask the ADB about the design, how they designed it. We just follow the designs of the Ministry of Transportation and the ADB,” he said.
“The people who are not happy just keep talking about the things they are not happy with,” he added.
(Additional reporting by Phorn Bopha)
