No loans until poll: World Bank

World Bank Vice President Pamela Cox speaks with the Post Thursday, Dec. 6, 2012 at the bank's Cambodian headquarters in Phnom Penh. Photograph: Heng Chivoan/Phnom Penh Post

Friday, 07 December 2012
Bridget Di Certo
The Phnom Penh Post

Discussions on restarting World Bank loans to Cambodia will not commence until after the 2013 elections, a bank official said yesterday.

After a landmark freeze on loans announced in December 2010, a response to the forced evictions by the government of residents of the Boeung Kak lake area in favour of a building development, talk of resuming loans could happen after the next national election, World Bank Vice President Pamela Cox told the Post yesterday.

“The government has elections coming up and a new government coming in, so what we do is we try to time our strategies with when the new government comes in. [The current government] would like to wait until after the elections when the new government is in place,” to discuss reintroducing loans, Cox said.

When asked whether there were any specific indicators the bank would need to see from a newly elected government to reintroduce loans, Cox said the bank does not have “conditions like that on our lending”.

“The message is very much that the time has come to start focusing on some of these development challenges, and we do not put conditions on loans,” she said.

An Interim Strategy Note, which would be a bridge to resuming loans, will be discussed with the new government, Cox said.

When asked about the election history of Cambodia and the likelihood that the government elected in 2013 would bear marked similarities to the current government, Cox stressed that the bank wanted to be aligned with the election schedule.

“Things do happen. People do lose elections. Things do change. And normally we try to tie these things [discussions of resuming loans] to that political process.”

Cox also noted that Cambodia faced unique governance challenges.

“In Cambodia – a country that lost a large chunk of its trained and educated populations during the war and really had to reconstruct these institutions ... a new group of people coming in and trying to develop a new government from scratch, the institutions tend to be weak.”

It could take 20 years or more for change and to put functioning institutions in place, said Cox, who has spent a significant portion of her career in Latin America.

“What I saw in Latin America is that much of the impetus for improving governance and more transparent government really came from the people,” she said. “Journalists, [civil society organisations], citizens voting. There became more and more public pressure that you have to address these issues.

“I thought the Arab Spring demonstrated quite clearly that people can change governments quite easily. And I think governments around the world are paying more attention to that.”

For the Boeung Kak project, which prompted the bank to freeze loans two years ago, Cox said there had been “progress”.

“Over 635 families have received titles. The government is still in negotiations with 64 families about their remuneration,” Cox said.

The World Bank’s Cambodia country page states: “[The] World Bank does not expect to provide any new lending to Cambodia until an agreement is reached between the Government and the residents of Boeung Kak Lake.

“We do remain very concerned about land issues not only in Cambodia, but quite frankly the region, and these are increasingly development issues.”

While Cox said she could not speak specifically to organisational or operational changes that had been made on the World Bank side after the reported shortcomings of the bank’s involvement with land titling in the Boeung Kak area, she did stress that land titling alone was not a solution.

“We actually need to have a broader look at how we ensure people use that land productively, in the case of rural areas, and that when people have grievances, people have redress.”

Cambodia is a post conflict country and has made remarkable progress in some areas, Cox said.

“Compared across the world, the fact that you have so many children in school when 20 years ago 80 per cent of teachers had died is to me quite extraordinary,” she said.

“Our message on Cambodia is they have come a long way from where they were, they still have challenges, and we are here to help them with those challenges.”