Hundreds of Millions Pledged, Many Reforms Sought [... and none of the reforms will see the daylight?]

The meeting between donors and Cambodia government officials at government place, Phnom Penh. (Photo: Chun Sakada, VOA Khmer)

Ros Sothea, VOA Khmer
Phnom Penh Tuesday, 08 June 2010

“We expect that the Cambodian government will make the best use of our assistance to Cambodia in an effective and transparent way in order to achieve economic growth,” Masafumi Kuroki, Japan’s ambassador, said. “If there is no economic growth, it is very difficult to reduce poverty. So we will strengthen mechanisms to monitor aid.”

Donor countries and international development agencies offered Cambodia up to $1.1 billion in aid this year, which came amid calls for reform. But those reforms can sometimes seem as varied as the streams of aid that accompany them. Local governance, macro-economics, education, the judiciary—each has proponents for reform.

“The money is going down, but there is no local accountability over how that money is spent,” Richard Bridle, a representative of Unicef, told VOA Khmer during an annual donor meeting last week. Once there is local accountability, he said, “they you get the level of scrutiny that allows citizens to be able to hold public servants accountable for the services that are supposed to be there.”

Bridle, whose Unicef pledged $16 million for the government, urged decision-makers to approve local financial laws that could be implemented as early as this year.

His suggestion represents a core reform inside public administration, but it wasn’t the only one. Many conditions were put forward by donors during last week’s two-day meeting.

Donors also pushed for reforms to battle corruption, which costs the country as estimated $500 million a year, or nearly half what donors pledged. The government passed an anti-graft law this year that was 15 years in the making, but it remains to be seen how well it will work. German Ambassador Frank Marcus Mann, in statements during last week’s meeting, asked the government how it will implement the law effectively.

Donors also urged the government to maintain economic stability and to reduce poverty, something they said will require efficient use of the money.

“We expect that the Cambodian government will make the best use of our assistance to Cambodia in an effective and transparent way in order to achieve economic growth,” Masafumi Kuroki, Japan’s ambassador, said. “If there is no economic growth, it is very difficult to reduce poverty. So we will strengthen mechanisms to monitor aid.”

Annette Dixon, the World Bank’s country director, told VOA Khmer at the end of the meeting that she wanted to see more economic diversity, improved competitiveness and investment climate, and land concessions that provide benefits to the poor. The World Bank is also looking for more transparency in managing the revenue of natural resources, she said.

Cambodia’s budget deficit, too, remains a concern.

IMF representative John Nelmes said the government should try to keep the deficit below 5 percent of GDP, which it could do by eliminating tax exemptions and tax holidays for investors that are not in fact the main attraction to them.

The EU, meanwhile, would like to see stronger education and higher enrollment.

“The number of people dropping out of school is still quite high,” said Rafael Dochao Moreno, Charge d’Affaires of the European Commission in Cambodia. “So it is one of the things that you should try to make sure of, that boys and girls have the same rights to go to school. So we can increase the number of girls going to school, and the second is that the rate of students abandoning school should be reduced.”

For all the concerns, donors offered about $110 million more this year than they did in 2009.

International finance institutions, including the Asian Development Bank, World Bank and Global Fund, provided the majority of funding, around $352 million.

Japan offered $131 million, followed by China with $100 million, and the US and Australia with $61 million each. Nine countries from the European Union pledged $255 million, including $65 million from Germany. The UN’s 13 agencies pledged $86 million in total.

Cambodia has around 4 million people living below the poverty line, and donor support has remained a major contributor to national development. Aid has steadily increased, from $700 million in 2006 to $1 billion last year. According to funding data, that could change, with donor funding expected to fall to $958 million in 2011 and $750 million the year after

Meanwhile, Cambodia is carrying around $4 billion in debt.

Rights and development organizations said during last week’s meetings they wanted to see more reform of the judicial system and greater transparency in the management of natural resources, but donor representatives said development can take a long time.

In the end, in a joint statement from the government and donors, each side said they were committed to pushing reforms in public administration, the judiciary, revenue management, and the implementation of the anti-graft law, among others.