PM Calls World Bank Demand an ‘Injustice’

Prime Minister Hun Sen on Friday called the World Bank’s de­mand that the government repay $2.8 million in misap­prop­riated funds an “injustice” and said that. in the future, Cam­bo­dia would not work with the financial institution on military demobilization.

A World Bank-funded, $18.4 mil­­lion project, intended to ease de­­mo­bi­­lized soldiers into civilian life ground to a halt in 2003 after the bank declared misprocurement on a government-awarded con­tract.

As part of the settlement, the go­vernment was required to re­pay $2.8 million in funds that were al­le­ged­ly misused. It was reported this week that the World Bank sent letters to Hun Sen and Fi­nance Min­is­ter Keat Chhon threat­ening to freeze all funding to Cam­bodia if the sum was not prompt­ly re­turned.

“Regarding the payment to the World Bank, we agreed to pay it back, but this is an injustice,” Hun Sen said Friday. He explained that the government was only involved in the disbursement of compensation packages, while the World Bank was responsible for hiring the firms to implement the pro­ject.

The World Bank announced in No­­vember that four companies and five individuals involved in the project were subject to sanctions for fraud.

Keat Chhon said this week that the Finance Ministry had already deposited the $2.8 million in a World Bank account, but added that he was not sure who was at fault for the misappropriation.

“What we did was right but they saw us as careless,” he said Wednes­­day. “It is good that we and the World Bank are respon­sible enough to have a discussion and finish the project.”

And once this project is settled, Hun Sen said, there won’t be any more like it. The World Bank and the government have “agreed that a new com­pany should be hired to make a financial re­port and clear up the prob­lem,” he explained.

“About the future of the demobilization process in collaboration with the World Bank; we have fi­nished this issue and will seek ano­ther source of funding,” he added.

(Additional reporting by Yun Sa­mean)

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