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.

SRP MP Son Chhay: Cambodia should not pay the debt, which is owed to the now-defunct Soviet Union, and not Russia

No Debt Forgiveness Yet: Russia

By Sok Khemara, VOA Khmer
Original report from Washington
11 December 2008

Russia has not decided to forgive Cambodia nearly $1.5 billion in debt, a news agency reported Thursday.

“Talks are underway. The debt exists and should be settled under the Paris Club agreement,” the Russian news agency RIA quoted Konstantin Vyshkovsky, head of the Finance Ministry’s department of international financial relations, as saying. “But we have not signed a bilateral agreement.”

Cambodian People’s Party lawmaker Cheam Yiep has said Russia informally agreed to erase 70 percent of the debt, incurred in the 1980s at a period of heavy fighting, during a delegate visit in November.

Opposition lawmaker Son Chhay said Cambodia should not pay the debt, which is owed to the now-defunct Soviet Union, and not Russia.

“We should not pay, as now the Soviet Union is no longer a union,” he said. “It has split into Russia.”

He added that Russia is now seeking oil, giving Cambodia a position of leverage.

Cambodia still owes around $2.3 billion to foreign governments and lenders. The International Monetary Fund recently forgave $82 million in debt, but the US has asked for repayment of more than $300 million in loans from the 1970s.

Cambodia has requested a forgiveness of this debt, too, but has received no response, Cheam Yiep said.

Russia could write off Cambodia's $1.5 bln debt

MOSCOW, November 10 (RIA Novosti) - Russia is discussing with the Cambodian leadership the possibility of writing off most of Cambodia's debt, which stands at around $1.5 billion, a senior Russian lawmaker said on Monday.

"Russia and Cambodia are holding 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," said Valery Yazev, deputy speaker of the lower house of Russia's parliament, after a trip to Cambodia and Laos.

Yazev said the debt's outstanding part could be divided into two and settled at concessional interest rates.

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