World Bank Looks to End Funding Freeze

The World Bank could approve its first internally funded project in Cambodia in March, according to recently released reports, a move that would effectively end the freeze on new lending the Bank imposed on Cambodia over four years ago.

The Bank acknowledged its secret decision to suspend all new lending to Cambodia in August 2011, a move it made to protest the government’s forced eviction of some 3,000 families from Phnom Penh’s Boeng Kak neighborhood. At the time, it said money from its own funds would not start flowing for new projects until the government and the families reached a deal.

Hundreds of evicted families have yet to get the compensation they have been asking for. But according to documents posted to its website on Saturday, the World Bank may decide to resume new lending to Cambodia within months.

The reports on a proposed $15 million third phase to the Mekong Integrated Water Resource Management Project say that approval by the Bank’s board of directors is expected on March 17. The project includes money for fisheries and to help the government improve the management of its water resources in the northeast.

Since the lending freeze, the World Bank has continued to dole out money for projects in Cambodia from funds it holds in trust for other donors. But the money for the Mekong project would come from the Internal Development Association, one of the Bank’s own funds.

The Bank did not reply to a request for comment about the proposed project.

The new reports on the Mekong project come a few weeks after a visit to Cambodia by the World Bank’s regional vice president for East Asia and the Pacific, Alex van Trotsenburg.

In a statement about the October 23 to November 3 visit, the Bank said it was in the process of preparing a plan for re-engaging with Cambodia “using a full range of services, including analytical work, technical assistance and financial support.”

Families evicted from Boeng Kak and the housing rights groups helping them say it is too soon for the World Bank to re-engage with Cambodia because the government has yet to properly compensate the families, falling short of the one condition the Bank set for lifting the freeze.

The Bank hosted a number of meetings around the country earlier this year to gather input for its plans to start lending to Cambodia again. But it ignored calls from rights groups to meet with evictees as part of the process and has refused to explain why.

[email protected]

Related Stories

Latest News