Cambodian official: 70% of Soviet-era debt to be forgiven [-Hopefully CPP Cheam Yeap checked his information this time]

PHNOM PENH, Dec. 30 (Xinhua) -- A Cambodian lawmaker insisted that most of the 1.5 billion U.S. dollars of debt that Cambodia borrowed from Russia will be scratched, although the lender had denied it, national media said on Tuesday.

This cancellation will potentially reduce almost two-thirds of the debt that the kingdom owed to foreign nations, said English-language daily newspaper the Phnom Penh Post.

Cheam Yeap, chairman of the Committee of Finance, Banking and Audits of the National Assembly, on Monday assured other lawmakers that Russia will cut 70 percent of Cambodia's debt.

If not, Cambodia will still be in good shape financially, he said.

"If Russia doesn't eliminate our debt, Cambodia will continue to repay it and will still be able to ask for additional loans from other countries," he added.

According to the Ministry of Economy and Finance, Cambodia now owes 2.37 billion U.S. dollars to foreign countries, which is equivalent to 23 percent of the country's Gross Domestic Product.

Around 63 percent of the debt is owed to Russia due to loans in the 1980s when the former Soviet Union was a major benefactor to Cambodia.

Russia denies deal to write off Cambodia's debt

MOSCOW, December 9 (RIA Novosti) - Russia's Finance Ministry has denied a report that the country had agreed to write off most of Cambodia's debt, a Finance Ministry official said on Tuesday.

China's Xinhua news agency earlier on Tuesday quoted Cheam Yeap, a senior Cambodian MP, as saying that Russia had agreed to write off 70 % of the debt that Cambodia owes.

"We do not confirm this information. The talks are underway. The debt exists and should be settled under Paris Club agreements. But we have not signed a bilateral agreement," said Konstantin Vyshkovsky, the head of the ministry's international financial relations department.

Valery Yazev, deputy speaker of the lower house of Russia's parliament, said in November after a trip to Cambodia and Laos that Russia and Cambodia were in talks to write off Cambodia's debt of around $1.5 billion.

"The principal sum [about 70%] of the debt could be written off as part of Russia's participation in the Paris Club of Creditor Nations," Yazev said, adding that the debt's outstanding part could be divided in two and settled at concessionary interest rates.

The MP said the next round of negotiations on settling Cambodia's debt to Russia would be held early next year in Moscow.