Prime Minister Pledges Arrests Over False Debt Promises

Prime Minister Hun Sen on Monday threatened to have any politician arrested on the spot for promising to erase people’s debt if elected, revisiting criticism that he leveled against the opposition CNRP prior to the 2013 national election.

In a speech at an annual microfinance conference at his office building in Phnom Penh, the premier said unnamed politicians had claimed that the government could make people’s loans disappear because their debt belonged to the state.

Prime Minister Hun Sen speaks during a conference about the microfinance sector at his office building in Phnom Penh yesterday. (Khem Sovannara)
Prime Minister Hun Sen speaks during a conference about the microfinance sector at his office building in Phnom Penh on Monday. (Khem Sovannara)

“I would like to send a message to any political party not to commit a cheap act by cheating citizens [by saying] that it will cancel everybody’s debt if it wins the election,” he said. “I think such acts should be recorded and there should be an arrest.”

Mr. Hun Sen insisted he was not making threats. “But it’s an in flagrante delicto offense that you commit,” he said, using a legal phrase for being caught in the act of a crime.

“So I request an arrest at the scene of any political party, lawmaker or party leader who will cheat the people by claiming they will erase all debt because the debt is state debt.” he added. “It’s deception, which contradicts financial rules.”

The prime minister did not name the politician who allegedly made the promise that raised his ire. However, during a speech in May 2013, Mr. Hun Sen compared the CNRP to the Khmer Rouge for its supposed plan to wipe away debt.

“They have said both openly and in whispers that once they are elected they will eliminate everyone’s debt,” Mr. Hun Sen said at the time.

“They have to do like Pol Pot and destroy all banks and regulations,” he continued. “They have to destroy the banks in order to liberate the debtors. Otherwise, if they don’t do it, it means they have lied to the people.”

CNRP officials denied at the time that they had made any such pledge.

A story about Mr. Hun Sen’s latest speech published on Monday by the Voice of Democracy noted that Prince Norodom Ranariddh, president of the royalist Funcinpec party, made a pledge to eliminate debt during a speech in Banteay Meanchey province in June.

Say Hak, Funcinpec’s spokesman and secretary-general, would neither confirm nor deny that the prince promised to eliminate people’s debt if elected but said the party would abide by the prime minister’s wishes.

Am Sam Ath, technical supervisor for rights groups Licadho, said Mr. Hun Sen, despite his claims to the contrary, was indeed making a threat and that pledging to eliminate debt, however unfeasible, was a politician’s right.

“I think it’s just the opinion of a politician being a demagogue, so there’s no offense and saying such things does not cause chaos,” he said. “Looking at the law, it’s not incitement.”

At Monday’s conference, Mr. Hun Sen also took aim at microfinance institutions (MFIs), accusing many firms of operating without the necessary permits and deliberately making loans to people with bad credit at onerous rates with the express intention of collecting their collateral.

“They charge high interest rates and use exploitative loan repayment methods and their lending practices are fast and loose, which allows borrowers to get loans from them,” the prime minister said.

“Most of them result in defaults and the inability to pay and their property, like land, houses and farms, is confiscated by these NGOs, associations and lenders,” he added. “They seem to have the intention to confiscate the property.”

Mr. Hun Sen urged local authorities not to seize property as soon as someone defaults and to send the cases to court first.

“The Ministry of Economy and Finance and the National Bank of Cambodia have to look at the problem seriously; it is destroying people by using loans as bait to gain benefit from families that can’t repay their debts,” he said.

“So I send a message to local authorities at all levels and the police: If something is not clear, don’t be busy helping the microfinance institutions that intend to confiscate too much property…. This has to pass through the courts.”

Kuy Sengmoeun, CEO of lender KAK, said his company had about 1,000 borrowers and that Mr. Hun Sen’s fight was with informal lenders, not MFIs or NGOs like his.

“I have never seen NGOs or MFIs confiscate people’s property because the rule is that their property can be auctioned off if they give their consent. And the process must be legal, which means the court can make a decision and we can’t,” he said.

“My organization has never confiscated property from the people yet. We had only one case where we filed a complaint with a commune chief. But the complaint was not to confiscate their property; it just pushed them to pay.”

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