Thursday, March 13, 2008
Samne Thmey newspaper
Translated from Khmer by Socheata
Cambodia, which is still covered with poverty, claimed on Wednesday that it will reduce its foreign debt down to $2 billion after the 2008 general election.
During a speech given at a seminar on aids provided by the AFD (French Development Agency?), Hang Chuon Naron, secretary of state of the ministry of economy and finance (MoEF), said: “We hope that foreign debt will be reduced to $2 billion after the upcoming election.”
Based on the number provided by the MoEF, in 2006, Cambodia owes more than $3 billion in foreign debt. This amount included the new loans that the government borrowed from friendly countries, such as China, etc… Hang Chuon Naron indicated that: “The government of Cambodia will discuss with lending countries for a relief in the debt owed, and it will use part of the state budget to pay some back.” He added: “We will use $20 to $50 million of the state budge to pay back the US and Russia each year.”
Regarding this expectation by Hang Chuon Naron, SRP MP Yim Sovann considers this as good news, and that this would constitute as a pride for the nation, if the government indeed has the ability to repay back foreign debt.
Yim Sovann said: “I think this is a good thing if we can really do that. However, I believe that the government does not have the ability to resolve this debt issue in the near future, except when the government decides to use the oil revenue to pay back the debt.”
At the same time, Yim Sovann warned: “The government should not be reckless in pulling the oil revenue to pay back the debt, because doing so, the economy in Cambodia will get worse. The repaying of foreign debt is one thing, but the increase of money borrowed from foreign countries, China and a number of other countries in particular, without strong requirements, open the way for powerful government officials to make decision where corruption could occur, the borrowed money can be used without transparency, and this adds heavier burden on the poor people and their offspring.
However, Hang Chuon Naron indicated that what Cambodia is facing with, in terms of foreign debt, is more of a political issue rather than an economic issue, and that this is difficult to avoid. He also said: “I say that we can resolve the problem of foreign debt after the election, and reduce it to below $2 billion because we have a clear strategy and goal.”
There is no clear document indicating how much Cambodia owes in foreign debt since 1979. However, SRP MP Son Chhay used to declare that Cambodia owes close to $6 billion: starting from 1993, Cambodia owes more than $3 billion in foreign debt, and it also has an outstanding debt of more than $2 billion prior to 1993. The largest sum of foreign debt is the one owed to Russia (former Soviet Union) which amounts to more than $1.5 billion. The government is currently asking Russia to cancel this debt by claiming that it is a poor country and it does not have the ability to pay it back. However, Russia did not reply to this request yet.
Samne Thmey newspaper
Translated from Khmer by Socheata
Cambodia, which is still covered with poverty, claimed on Wednesday that it will reduce its foreign debt down to $2 billion after the 2008 general election.
During a speech given at a seminar on aids provided by the AFD (French Development Agency?), Hang Chuon Naron, secretary of state of the ministry of economy and finance (MoEF), said: “We hope that foreign debt will be reduced to $2 billion after the upcoming election.”
Based on the number provided by the MoEF, in 2006, Cambodia owes more than $3 billion in foreign debt. This amount included the new loans that the government borrowed from friendly countries, such as China, etc… Hang Chuon Naron indicated that: “The government of Cambodia will discuss with lending countries for a relief in the debt owed, and it will use part of the state budget to pay some back.” He added: “We will use $20 to $50 million of the state budge to pay back the US and Russia each year.”
Regarding this expectation by Hang Chuon Naron, SRP MP Yim Sovann considers this as good news, and that this would constitute as a pride for the nation, if the government indeed has the ability to repay back foreign debt.
Yim Sovann said: “I think this is a good thing if we can really do that. However, I believe that the government does not have the ability to resolve this debt issue in the near future, except when the government decides to use the oil revenue to pay back the debt.”
At the same time, Yim Sovann warned: “The government should not be reckless in pulling the oil revenue to pay back the debt, because doing so, the economy in Cambodia will get worse. The repaying of foreign debt is one thing, but the increase of money borrowed from foreign countries, China and a number of other countries in particular, without strong requirements, open the way for powerful government officials to make decision where corruption could occur, the borrowed money can be used without transparency, and this adds heavier burden on the poor people and their offspring.
However, Hang Chuon Naron indicated that what Cambodia is facing with, in terms of foreign debt, is more of a political issue rather than an economic issue, and that this is difficult to avoid. He also said: “I say that we can resolve the problem of foreign debt after the election, and reduce it to below $2 billion because we have a clear strategy and goal.”
There is no clear document indicating how much Cambodia owes in foreign debt since 1979. However, SRP MP Son Chhay used to declare that Cambodia owes close to $6 billion: starting from 1993, Cambodia owes more than $3 billion in foreign debt, and it also has an outstanding debt of more than $2 billion prior to 1993. The largest sum of foreign debt is the one owed to Russia (former Soviet Union) which amounts to more than $1.5 billion. The government is currently asking Russia to cancel this debt by claiming that it is a poor country and it does not have the ability to pay it back. However, Russia did not reply to this request yet.
