America’s misplayed debt diplomacy in Cambodia

Moralizing is all well and good but the Vietnam War era $700 million Phnom Penh owes Washington need not be a sticking point.

According to Cambodian Prime Minister Hun Sen, it’s “dirty” and bloodstained money. For the United States, it’s simply a debt that Cambodia, a sovereign state, must pay.

For years, Washington and Phnom Penh have clashed over a $278 million loan that Cambodia took in the early 1970s but which, after four decades of interest and non-payment, has now more than doubled.

In 2010, the US Congress put the figure at $444 million, including interest. In 2017, the US Embassy in Phnom Penh told local media that the debt had risen to $505 million at a concessional 3% interest rate.

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