A $135 million horde of gold in a Swiss bank account recently awarded to the Cambodian government will probably remain in the account for the time being, according to government and bank officials.
Chea Sok, general director of the National Bank of Cambodia, said Tuesday there is no consensus on what to do with the gold.
“Nothing has been decided yet. But in my opinion we should maintain the gold [in Switzerland] for foreign reserves,” Chea Sok said.
Opposition politicians are asking what the cash-strapped government intends to do with the account.
The government can withdraw the funds, spending the money on public works projects, military offenses, civil servants’ salaries or other needs. Or it can leave the gold in the account as foreign reserves, which are essential for stabilizing the Cambodian riel, according to economists.
“I think [the account] should be frozen,”opposition figure and former finance minister Sam Rainsy said Sunday, “because the government’s current legal status is not fully recognized.”
“I think the [Swiss bank] should be very careful,” Sam Rainsy said.
“They can’t pretend to ignore the political situation in Cambodia….The new government could sue them and they could be held responsible for complicity in misusing this national treasure,” he said.
Aides for deposed first prime minister Prince Norodom Ranariddh said Sunday he had no comment on the matter.
The Bank of International Settlements in Basel, Switzerland, granted the National Bank ownership of the deposit in February, but the deal only came to light Friday in a Phnom Penh Post article.
The account was opened in 1958 during the rule of King Norodom Sihanouk and was last active in 1971 under the Lon Nol government.
However, documents proving the Cambodian government’s ownership were destroyed during the Khmer Rouge period, according to the article.
Te Duong Tara, an economic adviser to the government, said Monday it was unlikely that the money could be withdrawn before a new government is selected in the upcoming elections.
He suggested that the matter of ownership of the gold may not be totally resolved, and if it were, the amount would have to be taken out in increments because of the Swiss bank’s rules.
“If there is enough evidence, the government would be very willing [to withdraw the money], because now the country badly needs such kinds of reserves to help the country,” he said.
Te Duong Tara, however, said there has been little discussion so far in government financial circles on what to do with the gold because of the upcoming elections.
Several Finance Ministry officials declined to comment on the gold, or had not heard of it, including Minister of Finance Keat Chhon, who said Tuesday: “It is a matter for the National Bank of Cambodia.”
“I think we should keep it for the coming government to resolve,” Te Duong Tara said.
“It should be used to develop the country, to invest in some way. It cannot be used without any return.”
“The original idea was to use this money as foreign reserves abroad, so that might be likely first, and then we can consider how to use it later,” he said. “Because if it used in a way that is not appropriate, then there may be a lot of comment on that.”
If the National Bank did decide to transfer the $135 million back to Cambodian coffers, it would greatly boost the national budget.
The 1998 budget was $419 million, but how it would be spent would be a matter for legislators, Te Duong Tara said.
“According to the law, not one party can take the money out of the bank, It would have to be decided by the National Assembly [how to spend it].”
The government first tried to recover the gold in 1994, but was not able to do so until it first changed the laws governing the National Bank, according to the Post. The changes were made in 1996. (Additional reporting by Henrik Bork)