World Bank freezes funding to Cambodia over evictions

Aug 9, 2011
DPA

Phnom Penh - The World Bank said Tuesday it had frozen new funding to Cambodia over evictions linked to a controversial development project.

The announcement follows the forced evictions of thousands of people in recent years from the Boeung Kak lake area in the capital. The lake is being filled in for a controversial 2-billion-dollar development of the 133-hectare site.

Country director Annette Dixon said the World Bank had last loaned money to Cambodia in December.

'Until an agreement is reached with the residents of Boeung Kak lake, we do not expect to provide any new lending,' she said.

The development is being carried out by the company of a prominent ruling party politician and a Chinese firm called Erdos Hong Jun Investment.

Government spokesman Phay Siphan said Phnom Penh was not concerned at the announcement.

He said the bank was using the issue of Boeung Kak lake as an excuse for its decision, adding that the organization had overstepped its mandate.

'It is a lending institution and (does not have) extra power to exercise beyond that,' he said.

Phay Siphan said the government's obligation to the bank was solely to repay the loans.

Earlier this year the World Bank, which was previously involved in a nationwide land titling programme, said the evictions had caused 'grave harm' to lakeside residents.

Few if any of the lake's residents have been able to get land title documents from the local authorities, despite legal experts saying many are entitled to them.

Dixon said the World Bank was 'continuing to encourage the government to reach an agreement to provide on-site housing for the remaining residents.'

'Discussions between the government and residents are ongoing and we look forward to an early resolution of this issue,' she said.

Earlier this year the bank's own assessors found significant failures with its handling of the 24-million-dollar land-titling scheme.

The government cancelled the titling project in 2009 after the World Bank raised its concerns about evictions.

The investigation found key failings by its own management, and said the evictions of thousands at the lake had violated the bank's policy on involuntary resettlement.

It also found that residents had been denied due process in having their claims assessed, and had been evicted by authorities in violation of agreed procedures.

In recent years land prices have rocketed as the economy has strengthened, with tens of thousands of people driven off their land by the powerful and well-connected.

Cambodia's land tenure system was destroyed during decades of conflict. Around 1.6 million households have received land title documents since the programme began in 2002.