The World Bank's Man in Phnom Penh
The World Bank's Bonaventure Mbida-Essama
Bill Bainbridge interviews Bonaventure Mbida-Essama, Chief of the
World Bank's Cambodia Country Office, and Chair of the Consultative Group.
Can you tell me about your background and how you came to be working in Cambodia?
I'm from Cameroon in West Africa and I trained in the late sixties at Princeton University
as an electrical engineer, then went to Harvard where I got an MBA from the business
I worked in the private sector back home for about seven years as managing director
for a company. After that I joined the World Bank in Washington for ten years, then
I went home and started my own fertilizer and consulting business which I was in
for 13 years.
My firm had a diversified portfolio so I had private companies from Europe, the US
and UK. Then I had international institutions like ILO, UNDP, the World Bank. So
in 1999 the World Bank contacted me saying they needed someone who had a development
background but also experience with government officials at the highest level so
after a lot of negotiations I said yes. It was only supposed to be a short term contract
but then the government was satisfied and the donors were very pleased with what
I had done so they asked me to stay....so a year ago I agreed to sign a three-year
Would you agree that Cambodia, even in development terms, is a pretty unique case?
My view is that it is a truly unique situation because of a number of factors. Cambodia
has been at war within itself for the better part of three decades. You usually don't
see that and, because of that, they have ignored their infrastructure and their human
resource development or they have simply destroyed them, through mass killings, through
bombs and mines, so you have a very weak institutional base. You also have a huge
number of donors and NGOs who are very active and therefore need to work together
in a coordinated way.
People who work in development here tend to say that coordination is lacking compared
with other developing countries.
I think I may slightly disagree on that because I've worked in Africa; I worked in
the former Soviet Union and I've never seen such an intensive level of coordination
as I have here.
There is such a massive reform agenda; institutional reform, fiscal reform, expenditure
management reform, demobilization, natural resources, land reform. You name it, anything
that can be called social reform you have it here.
Now that doesn't mean that donors see eye to eye necessarily but believe me there
is a determination by all donors to try to coalesce, to make sure that they don't
shoot at each other and that the international community doesn't give mixed signals
to the government. There is the working group mechanism, the CG process, which is
very active and very cohesive, as well as the governance action plan which all the
donors are rallying around.
So how important is aid?
This is a difficult one because there is a lot of debate in the aid and academic
community about the relevance of aid to developing countries. I have seen many studies
written by prominent economists saying that aid has made no difference to economic
I won't go into that debate, but what I would like to say is that we don't know what
would have happened if the road wasn't built, the hospital wasn't there or the school
program wasn't launched. It's almost certain that without external capital then it's
quite likely that some of these things would never happen.
Now granted the progress from this may be below expectations, but you could turn
around and say that without aid the situation [for developing countries] would be
In the case of Cambodia it's quite clear that Cambodia doesn't have enough capital
to meet its needs. For example, if a farmer can't get his rice from Ratanakiri to
the market then he can't get any marketable surplus, so there's no cash to pay his
health costs. We know of cases where people have to sell their land or sell their
daughters into prostitution to pay health costs.
So for sure we have to address some minimum requirements; access to education, healthcare,
transportation etcetera. If you don't have the domestic capital to acquire those
things then we know that people would not have the chance to develop.
Whenever the World Bank has a major meeting now it attracts protesters criticizing
it for maintaining first world hegemony rather than resolving the poverty problem.
Yes I would like to address this. First of all it's not just the World Bank, the
W.T.O in Seattle, the G8 in Genoa, when the ADB has its meetings now they also have
demonstrations. These are a sign of the times.
The second point is that those who make these demonstrators are unelected, they have
no mandate. Third I'm not sure that most of them know what poverty is. I'm not sure
that they know what development is. I come from Cameroon which is a poor country
with a GDP per-capita of less than $1000 but just to go to these demonstrations you
really need to be quite well off. I don't think these people have a mandate to say
that the World Bank or the ADB shouldn't build a well in a village to provide drinkable
Now there are a lot of mistakes that have been made I agree. There is no known formula
which is foolproof to know that development will give you a one hundred percent return.
So we should be prepared to recognize that we are all groping, trying to find the
best solution to a very, very complex problem. So instead of trying to be destructive
maybe [the demonstrators] should join hands [with us] and together address the situation.
Are the debts that Cambodia is running up now sustainable?
Cambodia is one of the poorest countries and therefore we don't really make loans,
we make credits which are concessional loans with no interest payments over about
40 years. When you take account of the effects of inflation then Cambodia will repay
barely the principle.
These credits are made after a thorough analysis of the need, the costs and the likely
benefits accruing to Cambodia, in terms of added production or savings or profits.
If we find that it won't generate enough economic benefits then we don't make the
I would also mention that our loans are for investment purposes, not consumption
and when you invest you expect a return.
But it's a feature of Cambodian corruption that money is misappropriated and spent
on the consumption of range rovers, villas and the like.
That's a good point, but let's be clear: money may be misappropriated but not World
You're confident of that?
To a reasonable degree. Most of the money of the World Bank comes from either the
rich countries as grants or it's borrowed in financial markets from rich countries.
We float bonds in world financial markets and the people who buy those bonds are
hard core capitalists, institutional investors, retirement funds and insurance companies
who are all answerable to their shareholders.
They ask tough questions. They ask for audited balance sheets, they ask how the money
is going to be used and, with the openness of the press, if you have any scandal
in any of our projects it is proliferated everywhere and the next time you go to
the markets to borrow money our cost of borrowing money would go up. Yet we still
have a "triple A" rating and these aren't people who give gifts.
Why I think there is no World Bank money that is misused is because we have very
clear loan agreements with the government, with well defined procedures on how the
money is going to be used. All our credits have to be audited by independent auditing
firms and they have to certify that the money was used for the purpose intended and,
if there's anything wrong, the government has to reimburse the money, that's in the
legal agreement. If we find that the money has been used for a kickback we stop disbursement
and the money has to be paid back, otherwise we cancel the loan and force them to
We haven't run into that kind of situation in Cambodia yet but in many other countries
loans have been stopped.
Under James Wolfenson the bank has changed direction slightly - how has that effected
The major change that he has brought about is more transparency and inclusiveness,
that's why he brought in the Comprehensive Development Framework.
So he's reached out to NGOs, to civil society, to all the stakeholders and he's reached
out to really hear from the poor in all the countries. One of the first things he
did was take a trip around the world and when he came back he said 'People like us,
people appreciate us but people think that we are insulated and we don't listen'
and he said 'I want that to stop. We have to be close to our customers we are there
for them not for us'.
That applies to Cambodia, if you look at the working group system here, you have
an extraordinary level of involvement from all the stakeholders. When we did our
Country Assistance Strategy in 1999 we had many workshops with the private sector,
the various ministers, the council of ministers, the NGO community just to get their
We had a document in English and Khmer and after the workshops we rewrote it and
we sent it again to seek their views on what they had to tell us. I went from one
organization to another, one ministry to another to literally insist that we would
not adopt the document unless we had in writing their comments and consideration.
Yet the private sector was fairly bitter earlier this year over not being consulted
over the new foreign investment laws.
Well they have some good points but all is not what it appears to be. There were
some mistakes made in the process but it was not because the private sector was not
consulted. The government hired the Foreign Investment Advisory Service, which is
basically a consulting firm within the World Bank.
So the idea was that FIAS would come talk to various people, including the private
sector. Their client was the government and they were to submit their report as a
blueprint to their customer the government which they could then either accept or
The government intended to have consultations with the private sector but for some
reason the process was short circuited so that the initial draft of the FIAS report
was presented to the private sector at the same time as it was presented to the government.
It was perceived as government recommendations, but that was not the case.
So now the government has taken the initiative to consult the private sector and
to seek their views. There have been two or three missions and, through the private
sector forum, there have been extensive exchanges.
So now there is a much more dynamic dialogue going on and in the last two or three
months you haven't heard many recriminations. It was recognized that the process
could have been better explained to the private sector and we've changed the way
this is being managed.
You have a huge number of projects in Cambodia, what are the key ones for the
The motto of the World Bank is very clear - 'Our dream is a World Free of Poverty',
and we mean it. That's why since 1999 the Bank started focusing more specifically
on poverty alleviation strategies.
The priority is therefore on poverty reduction. For the most part, donors and the
NGOs have expressed a lot of enthusiasm for helping the government in trying to come
up with a strategy for poverty reduction. I will urge everyone who is willing to
help in Cambodia, to help the government on this by working at the grassroots level,
the village level, with communities and so on making sure that we know how the poor
feel, what is hurting them, what they need.
We also think that any poverty reduction strategy cannot go without talking about
human resources, and when you talk about human resources you're talking about education.
If you educate a young girl for instance she has a better chance of not dying during
child birth, of not having ten children, she'll have a better nutritional program
for the child. So education is fundamental.
Health, because obviously you cannot go to the field or work if you are not in good
health. I would say these are the two cornerstones.
Then the third priority is that, if you are educated and in good health then, unless
you have a very good environment in which to realize yourself, that is governance,
you can't go anywhere.
If you don't have the proper rule of law, there is no security, there is too much
corruption, when you have a lack of governance it falls disproportionately on the
Then you need of course rural infrastructure, you need clean water, roads to go to
market, good education facilities. So these are our priorities in the Country Assistance
Strategy and this is where we are going to put the focus. This also reflects what
we were told when we went for consultations with NGOs, private sector and so forth.
And when will demobilization get under way?
The World Bank approved a credit of $18.4 million on August 23rd. The total program
will come to $42 million to be funded by Japan with $10 million, the Dutch with $2
million, Sweden at $2.4 million, the World Food Program another $2 million and the
government for $7.2 million.
I've been informed by the government that the first discharge activities will start
on October 15 in Kampong Chhnang with an official launching ceremony a few days after
So my understanding is that the government will have to demobilize within the current
calendar year about half of the 30,000 soldiers and the balance will be demobilized
in the next dry season around February/March next year.
We learnt a lot from the pilot program. Also the key stumbling block was getting
the finance package in place and now we have all the donors. Most of the issues that
we need to focus on the reintegration package to take into account the vulnerable
groups and so on. All these issues have been thrashed out between the government
and the donors. The government has played a key leadership role with strong partnership
from all the donors.
What will the Cambodian economy look like in the future?
I think there is a recognition within the government of the need to look at growth
strategies. The Ministry of Commerce is playing a key role in that. They've already
done a lot of thinking about being less reliant on the textile industry but it's
too early to tell what will come out of that.
There is a recognition that, with Vietnam gaining most favored nation status and
China entering the WTO and China being more of a pull for foreign investment, it's
possible that this will have a negative impact on the textile industry.
So there is a need to develop a framework to promote investment in other industries,
agro-industries for instance, trying to see what comparative advantage Cambodia has
compared to Taiwan or Thailand
A lot of people attack the structural adjustment or the pushing for macro-economic
development but experience from developed countries shows that if you have a lousy
economic framework you don't get re-elected, the economy goes to the dogs and you
have depression, unemployment and bankruptcies.
When will Cambodia stop needing assistance?
It's difficult to tell. A measure of when that might be is that some countries started
getting loans from the World Bank shortly after the Second World War, like India,
and they're still a major customer. As long as you have development programs you
need development assistance.