Washington, DC
October 15, 2007
The World Bank
An editorial that appeared in the US newspaper, The Wall Street Journal on October 11 wrongly suggested that the World Bank has not taken corruption in Cambodia seriously. In fact quite the opposite is true.
Governance has been a long-standing focus of the World Bank’s Cambodia country strategy and it was in fact World Bank regional staff working on Cambodia who first raised concerns in 2004 about corruption in projects there. Subsequently, these staff joined with the Bank’s Department of Institutional Integrity (INT) to undertake a fiduciary review that identified specific problems causing leakages in World Bank projects. INT then investigated the indications of corruption that arose from that review.
In June 2006 the Bank suspended the Cambodian Government’s right to draw funds for the three active projects where problems were identified by INT. In February 2007, after the Government had undertaken a series of measures that the Bank had required as conditions for resuming disbursements, the Bank lifted the suspension on the three affected projects. These activities included initiating the process of hiring an international procurement agent, and increasing audits and the use of beneficiaries in project oversight.
The World Bank cancelled $2.5 million in project funds. Subsequently, Cambodia agreed to repay the Bank $2.89 million and to implement a substantially strengthened governance effort. The Government agreed to:
Cambodia, which suffered a genocide, needs help to strengthen its capacity for good governance as well as to build the foundations for inclusive growth. Today, World Bank projects are helping build roads, bring water to poor communities, and enable poor people to secure ownership of their land and homes for the first time.
The governance message was a specific focus of World Bank President Robert Zoellick when he visited Cambodia in August. He coordinated with the donor community to make the case to the Prime Minister and other senior officials on the need to stay the course on governance, anti-corruption, and strengthening the legal system.
James W. Adams
Vice President, East Asia and Pacific Region
Governance has been a long-standing focus of the World Bank’s Cambodia country strategy and it was in fact World Bank regional staff working on Cambodia who first raised concerns in 2004 about corruption in projects there. Subsequently, these staff joined with the Bank’s Department of Institutional Integrity (INT) to undertake a fiduciary review that identified specific problems causing leakages in World Bank projects. INT then investigated the indications of corruption that arose from that review.
In June 2006 the Bank suspended the Cambodian Government’s right to draw funds for the three active projects where problems were identified by INT. In February 2007, after the Government had undertaken a series of measures that the Bank had required as conditions for resuming disbursements, the Bank lifted the suspension on the three affected projects. These activities included initiating the process of hiring an international procurement agent, and increasing audits and the use of beneficiaries in project oversight.
The World Bank cancelled $2.5 million in project funds. Subsequently, Cambodia agreed to repay the Bank $2.89 million and to implement a substantially strengthened governance effort. The Government agreed to:
- Incorporate legally binding anti-corruption action plans in all active and future World Bank-financed projects;
- Establish an Anti-Corruption Working Group to identify, promote, and implement anti-corruption measures in accordance with terms of reference satisfactory to the Bank; and
- Initiate a program with INT to help strengthen Cambodia’s investigative capacity.
Cambodia, which suffered a genocide, needs help to strengthen its capacity for good governance as well as to build the foundations for inclusive growth. Today, World Bank projects are helping build roads, bring water to poor communities, and enable poor people to secure ownership of their land and homes for the first time.
The governance message was a specific focus of World Bank President Robert Zoellick when he visited Cambodia in August. He coordinated with the donor community to make the case to the Prime Minister and other senior officials on the need to stay the course on governance, anti-corruption, and strengthening the legal system.
James W. Adams
Vice President, East Asia and Pacific Region
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