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Logo of Phnom Penh Post newspaper Phnom Penh Post - Govt seeks return of Lon Nol millions

Govt seeks return of Lon Nol millions

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

David Miller.

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

and Europe.

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."



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