The United States government may soon release $35 million of frozen funds to Cambodia,
Minister of Finance, Sam Rainsy, told a Phnom Penh press conference last week.
The money was removed from the Cambodian Treasury by Lon Nol during the collapse
of his government in early 1975.
Besides the government of Cambodia, there are a small number of private American
claims against the funds for monetary compensation.
The U.S. government is also considering making some claims against the money but
has yet to decide if they will pursue those claims, according to U.S. embassy spokesman
Ownership of the money is also being challenged by members of the Lon Nol family
but Sam Rainsy said he had assurances from senior State Department officials that
the money would be returned to Cambodia. "Even a bad lawyer could defend our
case," he told reporters.
The finance minister said he had begun negotiations with the U.S. State Department
for the return of the $35 million during his recent official trip to the United States
The minister also announced that salaries for all government employees, including
the police and military, would be increased by 20 percent and said the extra cash
would come from increased state revenues. Income to the national treasury has almost
doubled since June. Revenues in September were 23.8 billion riel up from 12.8 billion
riel collected in June.
Most of the increased revenue comes from import and export taxes. A customs official
at the port of Phnom Penh reports that government inspectors are working harder,
processing more goods and pocketing less money in bribes. In June, the government
told all its employees that "we will not move you from your jobs but we expect
a change in attitude."
"This has given them a new spirit, people know what they are working for,"
said the Minister. "We have had a fair and free election, now we must have fair
and free business and competition," he said.
Foreign investment is still slow coming to Cambodia. Sam Rainsy attended a meeting
on October 4 in Paris with the National Council of French Investors.
"They are very eager to invest but they have a wait and see attitude because
of the political uncertainty. We will be pleased to welcome more French investors
because we need a balanced economy with a diversity of investment rather than depending
on a single source," he said.
The Minister also announced that he had discussions with the Multilateral Investment
Guarantee Agency, a branch of the World Bank. Sam Rainsy hopes to reach an agreement
with the agency which would provide financial assurances to companies wishing to
invest in Cambodia.
"Companies must invest at their own risk without knowing the political future
which is not enough to attract investment to Cambodia," he said.
While in New York, Sam Rainsy met with Yasushi Akashi, the recently-departed head
of UNTAC. Mr Akashi had just completed negotiations with senior U.N. officials who
agreed to donate $17.9 million of UNTAC assets in Cambodia, including $15.9m of telecommunications
equipment and $2m of radio and television studios and hardware.
The minister confirmed that all current contracts signed before the election are
under review but said: "It will take some time to go through all the contracts.
We just don't have enough resources in the ministry."