Legislation pending in Washington would instruct US appointees to international lending institutions to vote against loans to the central government of Cambodia, as part of a larger policy in which the US continues to shy away from direct engagement with Prime Minister Hun Sen.
The legislation buried in a bill is expected to pass, according to people familiar with US politics.
The US is the largest contributor to both the International Monetary Fund and the World Bank, accounting for around 17 percent of contributions to both organizations. As a result, it exerts considerable influence on both institutions and can ‘‘make things difficult” when it opposes loans, a World Bank official said.
‘‘But no single member can change the whole course of events and compromises can be reached,’’ Bonaventure Mbida-Essama, acting chief of the World Bank’s Cambodia office, said.
He noted that the US opposed a World Bank loan to China for projects in Tibet—a much higher profile issue in the US than Cambodia—and the loan was still approved.
This fiscal year, the World Bank has committed more than $75 million worth of loans to Cambodia for various projects. The IMF pulled out of Cambodia in 1996.
The legislation would allow US loans for support for ‘‘basic human needs,’’ which could be interpreted to mean basic rural infrastructure, and poverty alleviation. But it would rule out loans aimed at strengthening the economy, or such government initiatives as military demobilization.
The legislation, which is contained in a huge foreign operations spending bill awaiting final approval in the US Congress, underscores the influence of a small, but influential group of US lawmakers who oppose Prime Minister Hun Sen and have vowed never to assist him.
A stamp of US approval for Cambodian loans would undoubtedly make the process
easier and perhaps even lead to larger ones.
Some policy-makers in Washington have been pushing to expand US engagement with Cambodia, joining a growing number of countries in that have restored direct aid to the Cambodian government in the wake of last year’s elections.
Sok Siphana, secretary of state for the Ministry of Trade and Commerce, argued the lack of US engagement may harm US long-term interests in the region. Cambodia is in the final stages of securing a $45 million loan from the World Bank, and Japan last week agreed to loan Cambodia $39 million, he said.
‘‘You have to look at the broader picture,” he said. ‘‘Indonesia is fighting. Burma…forget it. Vietnam is confused. Cambodia has a chance to develop and is good for investment. Japan is taking a lead, and by the time the US shapes up, if a US company is bidding on a contract against a Japanese company, do you think the US will win? I don’t think so, the only thing the US will have to show is Highway 4.’’