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Logo of Phnom Penh Post newspaper Phnom Penh Post - Job now to avoid a $501m development traffic jam

Job now to avoid a $501m development traffic jam

TO Cambodia, the spoils: $501 million in development aid for the next year, exactly

what it asked for.

For Finance Minister Keat Chhon in particular - and Cambodia as a whole - the Tokyo

Consultative Group meeting on July 11-12 was a triumph in cash.

For the first time, Cambodia gave donors a list of 219 projects to fund for the next

three years. ADB consultants were instrumental in helping compile the list, biased

toward large infrastucture such as road, bridge, telecommunication and water use


But bilateral donors balked at this, prefering to talk more generally of where they

wished to guide their money. Most saw that to be into human resources, education,

health and rural development, especially agriculture.

Not all specific aid pledges are available. Japan gave $91m; US $40.5m (including

$11m by the Department of Defense); Australia will be "somewhat less" than

the $29.5m it gave in 1995; ADB $107m; UN agencies $54m and the World Bank $75m.

Only around half the donors uttered a firm figure, most just privately jotted them

down on a piece of paper and handed it to their Japanese hosts.

Observers are now reflecting on how the change from emergency aid to development

aid is going to be pursued in the Cambodian context.

One delegate described the new project-by-project development blueprint as "a

hell of a big social experiment. Who's going to sustain this for three years?"

"This is a great opportunity, all the money is on the table," said UNDP/CARERE

consultant MS Shivakumar, "and if it is used usefully development will happen.

If not there will be a huge traffic jam.

"If you talk to donors and Cambodians, they will tell you that everything is

a Number One priority," said Shivakumar, adding that the more objectives one

has, the less important they become. "If everything is a priority, then nothing


It was up to the political leadership, and not donors, to say where development priorities

lay, and to guarantee equity and sustainability, he said.

The Australians, among others, noted that the "balance" of the Cambodian

development plan had increased toward big infrastructure projects, and less toward

social services.

According to one delegate, the only words spoken by the lone South Korean representative

were "if you want economic development, you have to pay attention to education

and health."

"The thing about infrastructure development is that it is attractive to investors,"

noted one delegate.

"The Japanese talked about building a super hospital. That's the problem. You

give the Cambodians something and expect them to run it with no training or resources.

You expect the [benefits to] trickle down, but that's not targeting rural poor."

Most experts interveiwed by the Post said the 1996 aid package would stimulate growth,

even if money was simply thrown at the first project that came to hand. The worry

was whether there would be enough emphasis on local training, and in logically selecting

the most important projects, to ensure that growth was not lost "when the experts


Donors even accepted at Tokyo that they were partly to blame for Cambodia's social

and economic problems.

World Bank co-chairman Javad Khalizadeh-Shirazi closed the meeting saying: "We

were gently prodded by some speakers on the need to recognize our own 'capacity-draining'


The self-criticism touched on the fact that of the $501 million pledged, only a fraction

- maybe 25 per cent or less - will actually be spent in Cambodia. Most will go to

foreign consultants and experts, or spent within the country of origin.

It also touched on other areas: the sheer number of donor missions and projects which

strain the Government's own limited capacity; the fact that donors often send conflicting

messages and are neither unified nor coordinated; that local staff are headhunted

from NGOs and the government for higher, topped-up salaries; and, most importantly,

that participation of local communities in designing and planning development projects

is underestimated or ignored completely.

"Let me urge all of you, as I did at the ICORC meeting in Paris in 1993, to

ensure that when short-term experts visit us and produce reports and recommendations,

they should also point out various options for implementing such recommendations

including the sources to access for financial and technical assistance," Finance

Minister Keat Chhon said.

The UNDP statement said: "To ensure scarce human capacities are used and developed

where most needed, donors - both official and NGOs - should support Cambodia's priority

objectives rather than following their own predilections."

The Cambodian Development Council - the body set up to coordinate aid but which has

been widely criticized, most particularly its investment arm - should be strengthened

and respected, donors including the UNDP and Australia said.

One expert said it was still unclear whether donors wanted to develop the country,

or train Cambodians to do it themselves. "Donors are likely to respond that

they try to do both. But probably Cambodians will [still be in a position of] 'witnessing'

implementation," he said.

Others said Cambodians' actual needs are no longer a condition for donors to give

aid. Previous Cambodian development plans had maintained a balance between the State

and the free-market. The latest Cambodian blueprint "affirmed its faith in the

market alone," said one, "and this was legitimized in Tokyo."

The Cambodian development plan was crafted by outsiders who consider that economic

growth had an automatic link with human development, he said.

Donors, by pledging for only one year to ensure the Royal Government's "discipline",

did not give Cambodia a sense of long-term security - even though donors talked much

about the need for long-term commitment. This was highlighted by NGO co-representative

Eva Mysliwiec, who also coined the term "capacity- draining" later taken

up by the World Bank.



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