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Logo of Phnom Penh Post newspaper Phnom Penh Post - Refugee deal has hidden bonuses: policy analyst

Scott Morrison, the then Australian immigration minister, toasts Interior Minister Sar Kheng after signing the refugee deal in September, 2014. Afp
Scott Morrison, the then Australian immigration minister, toasts Interior Minister Sar Kheng after signing the refugee deal in September, 2014. Afp

Refugee deal has hidden bonuses: policy analyst

While the modest stream of refugees from Nauru to Cambodia expected under the controversial deal with Australia has all but dried up, the aid money has continued to flow.

Only four refugees have taken up the offer of resettlement from the Pacific island to Cambodia – one of whom recently decided to go back home to Myanmar – and just two more have signalled a willingness to join them.

Nonetheless, the Australian government is coming through with its promised cash.

In May 2014 the Australian Government budgeted $A52.4 million to the Cambodia bilateral aid program for the 2014-15 financial year. The budget outcome for the full financial year was $A59.2 million. In 2015-16, Canberra has increased the Cambodia bilateral aid program to $A62.4 million.

The Australians promised the Cambodian government $A40 million in aid over four years as part of the deal but Development Policy Centre associate director Robin Davies, a former AusAid senior executive, believes it has turned out to be worth a lot more than that.

The Australian government slashed its overseas aid allocations in May’s budget with most Southeast Asian countries taking a 40 per cent hit. But Cambodia’s base aid allocation remained untouched.

“Without the resettlement agreement, Cambodia would have lost 40% of its base allocation this year — that’s the percentage cut that was applied in almost all other cases — and would have received the lower base amount in each year for at least the next several years, and of course it would not have the $10m,” Davies said in an email.

Effectively, Australia is locked into giving Cambodia at least $A209.6 million over the four years.

An Australian embassy spokesman said the additional aid money would go towards “demining, agriculture and electoral reform”.

“The Australian Government does not channel this or other development assistance through Cambodian government financial systems – we deliver our aid in partnership with a range of organisations including the United Nations, the World Bank, the Asian Development Bank, Australian non-government organisations, and through managing contractors.”

The spokesman also noted that the Australian Government “has a zero tolerance approach to fraud in the aid program, and the Cambodia aid program has a very low instance of fraud”.

Davies said he had no doubt that the money would be used for standard development purposes.

“I don’t believe there is any risk that it will be provided in a way that creates any additional risk of diversion,” he said. “Clearly it had the character of an inducement when promised but that does not mean that it will be used for other than normal development programs.”

However, he said the deal had a less direct benefit to the Cambodian government, by effectively denying the Australians political leverage.

Australia can now no longer threaten to reduce aid funding in order to pressure Phnom Penh into, for example, improving its performance in regards to human rights.

“With a fixed aid commitment to Cambodia, Australia cannot credibly criticise the very real shortcomings of the Hun Sen government,” Davies noted in a blog on the issue.

“The latter can now be confident of Australia’s silence or even support in the face of the occasional scathing attack on its legitimacy and conduct.

“In other words, the loss of Australian leverage mentioned above might well be a factor in Cambodia’s enthusiasm for the deal.”

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