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Logo of Phnom Penh Post newspaper Phnom Penh Post - Budapest halves Soviet-era debt in bilateral agreement

Budapest halves Soviet-era debt in bilateral agreement

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090203_05.jpg

Half of Cambodian debt to former-Soviet bloc country to be cancelled, half to be directed into local development projects.

Photo by:
HENG CHIVOAN

CPP lawmaker Cheam Yeap at the National Assembly on Monday.

THE Hungarian government has agreed to write off half of Cambodia's Soviet-era debt to the country, with the remaining half to be diverted to local development, officials in Phnom Penh said.

"Hungary will cancel 50 percent of the debts that Cambodia incurred under previous regimes, while the other 50 percent will be diverted to help develop Cambodia," Nguon Nhel, first deputy president of the National Assembly, confirmed Sunday.  

He said that the debt relief package was announced last week during a Cambodian parliamentary delegation visit to Budapest.

"There will be an upcoming meeting with Cambodia's government to consider which sectors are priorities for the diversion of the rest of the debt," he told the Post, but added that he "could not confirm" the exact amount owed.

You Phirom, deputy director of the Ministry of Finance's Department of Investment and Cooperation, said Sunday that he was unaware of Hungary's decision, but added that the amount was likely small.

"I do not remember specific figures, but it is not much - just around $1 million or $2 million," he said.

Cheam Yeap, chairman of the National Assembly's Special Commission on Economy, Finance, Banking and Audits, said he was also unsure of the exact amount, adding that it was likely a small fraction of the US$3 billion debt the royal government owes abroad. He nevertheless welcomed the move: "We applaud the debt relief that Hungary has offered us, just as the IMF [International Monetary Fund] and China have done," he said.

In September, Russia also agreed to cancel around 70 percent of the $1.5 billion debt Cambodia has owed Moscow since the 1980s.

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