Foreign Minister Hor Namhong met with US Deputy Assistant Secretary of State Joseph Yun yesterday to discuss resolving Cambodia’s $445 million Lon Nol-era debt, a ministry spokesman said, adding Mr Namhong had again requested converting 70 percent of any payments into bilateral aid.
Mr Namhong and Mr Yun, who arrived on an unannounced visit, met for 45 minutes at the Foreign Ministry but they took no questions as they left.
The ministry’s spokesman, Koy Kuong, told assembled reporters the minister had proposed turning the bulk of Cambodia’s debt into US aid to the country, while he also asked to reduce the debt’s interest rate.
Mr Namhong “requested…first to reduce the interest rate from 3 percent to 1 percent, and secondly to convert 70 percent of the debt to development assistance, 30 percent will be paid back to the US,” he said. “Mr Yun said this proposal brings us closer to a resolution,” Mr Kuong said, adding that the assistant secretary also met with the minister of finance yesterday to discuss details of the proposal.
By the end of 2009, Cambodia’s total debt to the US totaled about $445 million. It originates from US loans of $274 million to the Khmer Republic from 1972 to 1974.
Cambodia has asked the US to forgive the debt on several occasions in recent years—Prime Minister Hun Sen has described the debt as “dirty”—and it has previously suggested converting 70 percent of the debt into bilateral aid.
However, resolving the debt requires approval from US Congress, and in November Mr Yun told a congressional committee that Cambodia does not qualify for the US debt relief programs due in part to its strong economic growth.
US Embassy spokesman Mark Wening wrote in an e-mail that Mr Yun’s visit to discuss the “long-standing bilateral issue” of Cambodia’s debt followed from the promise made by US Secretary of State Hilary Clinton in late November to help resolve the matter.
Mr Kuong said Mr Namhong had briefed Mr Yun on joint border talks scheduled in April between Thai and Cambodian officials in Indonesia under the Asean chair’s auspices.