World Bank Shows No Interest in Views on Freeze

New documents from the World Bank on its preparations to lift a 2011 freeze on new loans to Cambodia show that the international lender is giving short shrift to public opinion on whether it should restart lending in the first place.

The Bank put a hold on new loans to Cambodia four years ago after the government evicted 3,000 families from Phnom Penh’s Boeng Kak neighborhood to make room for a ruling party senator’s high-end real estate project. Last month, the Bank wrapped up two weeks of meetings with government officials, lawmakers, businesspeople and NGOs aimed at helping it decide how to re-engage with the country.

–News Analysis

But at none of the meetings was the question asked: Should the bank re-engage at all?

The Bank’s summaries of the meetings, released over the weekend, reveal that each of the groups was asked the same three questions concerning what Cambodia’s main development opportunities and challenges would be, and what the country’s priorities should be over the next two to three years.

The questions were “missing its biggest blind spot: whether it should resume new lending at all,” said Sophal Ear, author of “Aid Dependence in Cambodia: How foreign assistance undermines democracy.”

“I think the question should have been asked,” he said in an email. “But the modus operandi seems to be: Don’t ask questions to which you don’t want to know the answer.”

The Bank’s failure to ask those questions has some concerned that if lending resumes, it might repeat mistakes made in the past. For example, the Bank reluctantly admitted that the Boeng Kak evictions were partially the result of errors in its own land-titling project.

“It’s actually a wonder that the World Bank has not already resumed new lending to Cambodia given how very much its staff wish to see this resume,” said Mr. Ear, an associate professor of diplomacy and world affairs at Occidental College in Los Angeles, who says he knows some of the Bank’s top advisers.

“I personally know they [World Bank officials] have wanted to resume new lending a long time ago, but they just could not do it until now,” he said. “Four years of only pumping new money into old loans has left a lot of World Bank staff frustrated.”

Though the Bank has continued to fund projects here using money held in member countries’ trusts, its own spending commitments in Cambodia fell from $69 million in 2011 to zero in 2012, where it remains.

When the freeze took effect, the Bank said new loans would resume only when the government and Boeng Kak families reached an “agreement.” But it is now preparing to restart loans even though many of the evictees have yet to receive what they consider to be fair compensation.

This has convinced some of the groups that the Bank met with last month that it should continue to withhold new loans. NGOs that attended the Bank’s meetings told the lender that new loans should only be restarted after it had made amends with the families its projects have negatively impacted.

El Sotheary, head of programs for the Cooperation Committee for Cambodia, an umbrella NGO, who attended one of the meetings with the Bank, confirmed that she was not asked whether it should start lending again.

She said the Bank should present its new plans for Cambodia first and then ask whether the proposed projects should go ahead.

“That way, if we don’t see the Boeng Kak issue in their development projects, we can ask about that,” she said. “I don’t think that [whether the World Bank should resume lending] will be asked of the stakeholders because the World Bank has not scheduled any more meetings with them.”

The Bank did not reply to multiple requests for comment.

The Bank has kept a tight lid on its recent meetings. World Bank country manager Alassane Sow was irate with a pair of reporters who sat in on one of his meetings with mid-level government officials in Phnom Penh. Officials at the meeting told the reporters they were eager to see the Bank start lending again.

Sensing the Bank’s own enthusiasm for lifting the lending freeze, a group of NGOs wrote to the institution earlier this month urging it to, at the very least, provide a clear plan for helping the Boeng Kak evictees once new loans start flowing in.

Mr. Ear said the Bank’s failure to solicit broad input on whether it should start lending again was a major risk.

“The risk is a repeat of Boeng Kak Lake,” Mr. Ear said. “Then-World Bank President Robert Zoellick thought the freeze could change Cambodia’s path.”

“Is four years enough?” he said. “Hardly. But then again, Einstein’s definition of insanity is to keep doing the same thing and expecting a different result. Let’s look under the hood. What will the Bank and the authorities do differently? What have they learned? I don’t see introspection and reflection in the three questions that were asked, only a fixation on the next 2-3 years.”

(Additional reporting by Khuon Narim)

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