World Bank Says Freeze on Lending Remains

After repeatedly equivocating about whether it has lifted a 2011 freeze on new lending to Cambodia in response to the government’s forced evictions of families in Phnom Penh, the World Bank has said that the suspension is still firmly in place.

“The World Bank has not yet made any new commitments for funding for Cambodia,” Bou Saroeun, the Bank’s Cambodia spokesman, said by email.

Housing rights groups and anti-eviction activists, however, said the Bank had effectively broken its promise by using trust funds to start or extend projects since the freeze was officially implemented.

In August 2011, the Bank confirmed that it had suspended all “new lending” to Cambodia and would resume funding only when the government reached an agreement with the families of Phnom Penh’s Boeng Kak neighborhood. By then more than 3,000 families had been forced out of their homes to make way for CPP Senator Lao Meng Khin’s highly ambitious real estate project, which is yet to get off the ground.

More than 600 families have received titles to their Boeng Kak homes since then. But nearly 100 families still face the threat of eviction, and the thousands already forced out say they have received paltry compensation. They have also received no direct assistance from the Bank, which admitted to compounding their plight with a flawed land-titling project suspended in 2009.

When last asked if the freeze had been lifted late last year, a Bank spokesman referred to a statement from Pamela Cox, the vice president for East Asia and the Pacific, which offered no answers.

Responding to fresh rumors among Boeng Kak families that the freeze was over, the Bank on Monday said it was still in place and that two projects approved in February and October did not mean it had been lifted.

“The two projects…are funded by trust funds provided by other donors and administered by the World Bank.” Mr. Saroeun said.

The project approved in Octo­ber commits $13.45 million for work in the health sector. The other commits $730,000 for a project involving microfinance lender Amret.

David Pred, who has worked to help the Boeng Kak families in his role as managing associate of Inclusive Development International, said the Bank was effectively “reneging” on its 2011 promise by using the trust funds.

“While progress has been made in securing the land rights of families remaining at the lake, there are still several dozen families that remain under threat of eviction, and more than 3,000 families who were previously forcibly evicted from the lake have received no support whatsoever and many have been impoverished as a result of the eviction,” he said.

Boeng Kak resident and anti-eviction activist Song Srey Leap said the Bank bore ultimate responsibility for the two projects, whether the money came from its own coffers or from donors, and agreed that the latest projects were a betrayal of the Bank’s 2011 promise.

“I’m disappointed to know the World Bank is giving funds to the new government because we don’t know if the government uses the money the right way because it is still corrupt,” she said. “I think the World Bank doesn’t take responsibility for its actions.”

Ms. Srey Leap said the Bank should only approve new money if and when the government puts a stop to all illegal evictions, gives titles to all Boeng Kak families still without one and releases Yorm Bopha, a jailed Boeng Kak activist.

(Additional reporting by Khy Sovuthy)

© 2013, All rights reserved.