With a record $690 million in pledges of foreign aid, the first Cambodia Development

Cooperation Forum (CDCF) was lauded as a success by government and donors alike,

but some observers say the decade-long pattern of rewarding inaction with aid has

not been broken.

For the first time this year, the Cambodian government took full control of the major

donor-government meeting. At previous meetings, which were known as the Consultative

Group (CG), the World Bank co-chaired the event.

"Now, the Kingdom of Cambodia serves as the chair," said Keat Chhon, minister

of economy and finance, at the end of the meeting on June 20. "This means that

we, the receivers of development aid, can be the driver and owner of programs."

In his opening remarks at the CDCF, World Bank country director, Ian Porter, congratulated

the government on its "efficient management of the arrangements for the meeting."

After the event, a number of donor representatives said, on condition of anonymity,

that they felt it was the symbolism of the government chairing and managing the event

on their own, rather than any real practical changes in format, that was important.

But the change did, they said, mark an important step forward in terms of the government

seizing more control of the development agenda and the resources they receive.

But civil society leaders remain unconvinced that increased government ownership

will bring about any concrete changes in the management of aid flows.

"Nothing has changed except the name," said Kek Galabru, president of local

rights group Licadho. "The meeting has become a routine. We know that nothing

will change. There will be promises from the government - the same promises as last

year - and after the meeting everything will remain the same."

One Western diplomat, speaking on condition of anonymity, said that Porter's introduction

had managed to summarize the concerns of the donor community regarding the lack of

progress on sensitive issues such as the anti-corruption law and land dispute resolution,

without being overtly confrontational.

"By and large I think all of our concerns were raised even though the tone [Porter

took] was conciliatory and certainly much more subdued than at the last meeting,"

the diplomat said. "But the message to RGC was very clear, even though it was

delivered in the form of constructive criticism."

One participant said they felt the event was largely "scripted," but many

donor representatives said that there had been a number of good spontaneous debates,

particularly around the joint monitoring indicators, aid conditionality and aid effectiveness.

The session that was described as "the most stilted" by one donor representative,

was that on gover- nance where donors as a whole were, the source said, disappointed

with both the quality of dialogue and the overall lack of progress on important issues

for poverty reduction.

One major achievement cited by both donors and government alike, was the production

of the first ever 2007 Aid Effectiveness Report, (AER) which identifies a number

of key issues that must be addressed to improve the effectiveness of donor aid. Donors

described it as a high quality, evidence-based piece of analysis that set a clear

agenda for change.

One key problem, cited by the development partner's statement on the aid effectiveness

report, is the fact that the portion of assistance provided to Cambodia as technical

assistance still accounts for over 50 percent of the total aid the Kingdom receives.

Technical assistance, or TA, are those funds paid to foreign consultants, some of

whom make $15,000 per month or more when perks like housing and vehicles are included.

Providing consultants and specialists who can create impressive analytical documents

and well-written speeches does not go far towards improving the lot of the average

Cambodian citizen, said Ou Virak, president of the Cambodian Center for Human Rights

(CCHR).

"Too many organizations are still providing experts to do things that are not

really advancing the causes of human rights and democracy," he said. "They

write speeches for the government. I am not saying stop engaging with the government,

but donors need to look closely at the way that they are spending their money."

The 2007 AER recognizes that it is imperative that aid money is used more effectively,

said Chhon.

"Cambodia will still need aid for some time to come," he said. "Our

needs are still great. This is why we are still receiving foreign aid, but we are

trying to attract more Foreign Direct Investment (FDI)."

In the long term, it is FDI not aid that will allow Cambodia to solidify its economic

gains, said Chhon. While FDI flows increased to $381 million in 2005, up 34 percent

year-on-year, overall investment remains small and isolated to a few key sectors.

"Economic growth has been in the double digits for the last few years but we

still need more assistance to help shift our economy into a virtuous not vicious

cycle," said Chhon. "When we receive aid, we use it to diversify the economy

so that we don't have to rely so heavily on garments and tourism - we are trying

to kill two birds with one stone."

But according to Galabru, the government's ongoing failure to pass key laws - such

as the anti-corruption law - and the creeping pace of judicial reform is having a

knock-on effect on Cambodia's appeal to foreign investors.

"Do you think that an important company would want to come and invest in Cambodia

when there is no credible judicial system in place?" she asked. "Look at

countries like Singapore and Japan - they have not invested very much in our country

yet."

But donors have not established clear, precise and practical conditions under which

aid will be given which would help oblige the government to push through the institutional

reforms necessary to attract new FDI, said Theary Seng, director of the Center for

Social Development (CSD).

"For example, the donors could say that if the Anti-Corruption Law is not passed

by 2008, a certain amount of the pledged aid will be cut," she said. "To

just demand broadly 'good governance' is too vague."

The Western diplomat said that the Prime Minister himself had sought to reassure

the donor community that the passage of the anti-corruption law was of the highest

priority for the government.

"Hun Sen spoke of corruption as being the 'cancer' of society," the diplomat

said. "But I found the speech made by Sok An to be less satisfactory."

According to the diplomat, Sok An claimed in his speech that slow progress on the

anti-corruption law was due to the fact that it had to be harmonized with the newly-approved

penal code.

"This is self-evident," the diplomat said. "But they have had more

than enough time to make the two laws consistent so it did not really convince me

that this was the reason for the delay."

Virak argued that donors are not living up to their responsibility to the Cambodian

people to ensure that the aid they provide is tied to concrete improvements.

"This is the fifteenth time that promises have been made by the government [at

CG/CDCF meetings] and then subsequently broken," said Virak.

"The international community needs to let the government know clearly that this

is not acceptable. But it is easier to play this game with the government rather

than take the more difficult route of staking out one clear position and putting

pressure on the government."

Galabru agreed that Western donors have a responsibility to link their aid to reform.

Over the course of the last year, democratic space has been shrinking but donors

have rewarded the government with a record amount of aid, she said.

"What about judicial reform?" asked Galabru. "What about respect for

human rights? Donors could be a good influence on Cambodia, but they are not playing

a good role at the moment. We have less and less freedom and yet the donors give

more and more money."

Linking aid to reform may become increasingly difficult in the future. One reason

why the total sum of aid pledged at the CDCF meeting is so high - a record $690 million

- is because China, which unlike Western donors attaches no strings to its aid, has

for the first time added its own pledges to the total figure.

According to Seng, it was a politically shrewd move on China's part to join the mainstream

donor community in providing its assistance to Cambodia.  It reflects China's

larger international political move to legitimize its economic and political standing

on the world stage, she said.

"It is also a boon for Cambodia and the rest of the donor community to have

China to begin to show its hand," she said. "It is a good step forward

toward greater transparency of Chinese aid to Cambodia."

But CCHR's Virak argues that the addition of China to the CDCF has not yet brought

about any greater level of transparency.

"What are China's strings?" he asked. "What are the conditions for

their loans to the government? The promotion of human rights and democracy or giving

their companies more land to mine and timber to export? I have never seen 'no strings'

aid, they are just attaching different strings. The question is - what are they?"

For many, events on June 19, the morning the CDCF meeting opened, served to illustrate

how hollow many Western donors' commitment to their own "strings" - such

as respect for human rights, freedom of speech and freedom of assembly - really is.

Just before the meeting began, eight foreign nationals were detained outside the

CDCF's venue, the Council for the Development of Cambodia (CDC), which is located

next to Wat Phnom.

Two Canadians, three Americans, one Briton, one New Zealander and one Dane, had been

driving two trucks around Wat Phnom bearing posters of Bourn Samnamg and Sok Samouen.

The two men are currently serving 20-year jail terms for the 2004 assassination of

Free Trade Union leader Chea Vichea, but are widely regarded as innocent.

The event was aimed at raising awareness of Samnang and Samouen's plight among donors

and government officials, said Christian Corneliussen, a Danish citizen who participated

in the episode and was subsequently detained for approximately nine hours.

"At 8.30am an official who identified himself as an immigration police ordered

uniformed officers to take control of the trucks saying we were in violation of Cambodian

law," said Corneliussen. "We asked which article of the law are we violating,

and he said 'pick any one you want'."

The detention of the eight foreigners reflects the limits of freedom of expression

and assembly in Cambodia, and this timely example of a government crackdown on a

peaceful protest should not have been ignored by donors and diplomats at the CDCF,

said Seng.

"The donors have expressed that they are advocates for rule of law and respect

for human rights," she said.

"Well, there was a clear violation of human rights and rule of law before their

very eyes in the illegal detention of these foreigners."

Brad Adams, Asia Director of Human Rights Watch, said the donor's silence speaks

volumes. It shows it is not only the Cambodian government which lacks political will,

he said.

"There is a lack of political will among donors, too, and has been for many

years," he said. "Everyone knows what the problems are - they've been listed

in every CG document for more than a decade - but few donors want to rock the boat.

They prefer to act like what the country needs is a little tinkering when it is failing

almost every key governance test and the country's leaders continue to plunder it.

Cambodia is run by a kelptocracy and its government is run by a serial human rights

abuser, but few want to admit or deal with this."