Minister of Finance Keat Chhon on Monday dismissed the possibility that postponing the annual donors’ Consultative Group meeting would hurt the country’s economy.
The World Bank last week said the CG meeting, at which donors pledge aid and evaluate the government’s development progress—usually on a yearly basis—cannot take place until a new government is formed.
Members of the Alliance of Democrats have expressed concern that Cambodia cannot bear the financial burden of delayed aid packages, and could lose international support.
Foreign aid comprises more than 50 percent of the budget, but Keat Chhon said Cambodia will enjoy continued support from certain countries, despite the political uncertainty.
“Even though the economy has some impact from the situation called ‘political uncertainty,’ it’s just normal,” he said after the first session of the new National Assembly. “Even in this situation, China made a contribution of money to the government. So have other governments.”
China last month awarded Cambodia a $6.1 million grant for unspecified use and a $24.1 million interest-free loan for ongoing work on National Route 7.
The minister downplayed the importance of the donors’ meeting, noting that Japan already has gone ahead and offered support to the Hun Sen-led government.
“Countries such as Japan do not just wait for a new government or wait for the consultative meeting,” Keat Chhong said. “They have already pledged to Cambodia. All the [economic] reforms are happening.”
Kazumi Jigami, counselor of the Japanese Embassy’s economic cooperation sector, said Monday the CG meeting remains a critical tool for assessing government progress.
“We would like to have a CG meeting as soon as possible,” Jigami said.
“It is a good opportunity to know Cambodia’s needs and to know other donors’ opinions,” he added.
Despite this, Jigami said postponing the meeting won’t affect Japan’s previously approved aid package.
“Up to now, there is no relation of the CG meeting to the implementation of aid,” he said.
But, Jigami said, Cambodia cannot receive funds until government agencies such as the municipality or the Ministry of Health, sign contracts with private Japanese companies to receive the money.
For the 2002-2003 fiscal year, which ended in March, Japan offered Cambodia approximately $94 million in the form of 12 project grants, Jigami said.
None of that money has been dispersed, as it is still waiting to be put up for tender, he said.
Urooj Malik, Asian Development Bank resident representative, said neither the CG postponement nor the impasse will affect the ADB’s assistance to Cambodia.
For the 2002-2003 budget, the ADB approved three loans and is waiting to discuss a fourth, he said.
But Cambodia will not receive the $99 million in loans for social sector, agricultural, infrastructure and regional cooperation projects until the Ministry of Justice approves the legality of the loan agreements, Malik added.
Sam Rainsy Party parliamentarian Keo Remy said Monday that even if loans are available, the interim government is not legally permitted to accept or use them. The government may only execute administrative duties, he said.
Without the CG meeting, donors cannot legitimately assess and support the country, Keo Remy said.
At the last CG Meeting in June 2002, donors pledged $636 million, about $150 million more than the government sought.