Prime Minister Hun Sen said on Friday that Cambodia would not fall into a so-called debt trap as it embraces China’s Belt and Road Initiative (BRI) as the Kingdom only accepted projects beneficial to the country.
Hun Sen was speaking in China on the first day of the second “Belt and Road Forum for International Cooperation” in Beijing. The prime minister is expected to return home on Monday.
“That an economic superpower has the ideals and conscience to build a community of common destiny with other countries, both big and small, is heroic wisdom and a tender and respectful gesture from a civilised country, one that should be regarded as a role model,” he said in his speech to the forum on Friday.
The prime minister said he expected countries with advanced economies to follow the model and live up to the philosophy of “‘a strong country helps a weak country; a rich country helps a poor country’ as we join hands towards one goal for a prosperous future”.
For Cambodia, Hun Sen said BRI had provided many benefits in economic and cultural development.
He said the success of the Sihanoukville Special Economic Zone (SSEZ), the largest Chinese investment in the Kingdom, was clear proof of the project’s positive impact in Cambodia.
He said that currently 181 companies – of which 148 are Chinese – were based in the SSEZ and 20,000 workers were employed there. He added that the SSEZ would create an additional 80,000 jobs in the second phase.
Another BRI achievement was the construction of an expressway from Phnom Penh to Sihanoukville, Hun Sen said.
“It’s not like the view of those who believe BRI will make some countries fall into a debt trap. Cambodia will negotiate and prepare projects in the interests of the nation and its people, and not increase financial burden and public debt."
“As a sovereign country, we have the right to make whatever choices we want and receive the loans necessary. We will implement these projects for national development based on self-reliance,” Hun Sen said.
The Ministry of Economy and Finance earlier this month revealed that Cambodia has an outstanding external public debt of around $7 billion.
However, Hun Sen said the debt situation was favourable because Cambodia’s policies managed macroeconomic and public financing clearly and with strict discipline. The government also had further national development strategies, he added.
The BRI is a transcontinental infrastructure project that was unveiled by the Chinese government in 2013. It has seen the Chinese government invest in the construction of roads, railways, ports and other infrastructure linking Asia, Europe, Africa and Latin America.
It has proved controversial due to its perceived issues in tying poorer nations into unsustainable loan repayment schemes, the most prominent example of which being Sri Lanka who last year had to sign over Hambantota Port to the Chinese government on a 99-year lease after it couldn’t meet its debt commitments.
Political analyst Lao Mong Hay said that, to the best of his knowledge, Belt and Road Initiative projects in the Kingdom were “build-operate-transfer” (BOT) projects under Cambodian government BOT concession contracts.
“These concessions guarantee the financing, design, construction and operating of these projects [by China], so Cambodia should incur no debt at all,” he said.
Kin Phea, director-general of the International Relations Institute at the Royal Academy of Cambodia, said there were two factors proving provocative regarding BRI debt to China.
“Opposition politicians, not only in Cambodia but also in other BRI participatory countries, have cited Chinese influence as a tool to attack the ruling parties with the intention to sow confusion as to BRI.
“This is also true for Cambodia. There are people who fear that Cambodia could fall into a debt trap or are wary of high-cost projects that go without bidding. Normally we see this from opposition politicians trying to discredit the government by saying it is under China’s influence” he said.
Phea said that there were also criticisms that BRI could conversely weaken China’s influence internationally.
“We have the right to negotiate on projects as to whether they are suitable before accepting them. Each country has to take care regarding their debt management,” he said.
Hun Sen also met with Wang Huning, a member of the Communist Party of China’s Politburo Standing Committee and the secretary of its Secretariat.
Wang said China was committed to helping solve the problems facing Cambodia, including those related to the EU’s “Everything But Arms” scheme.
The Prime Minister also oversaw a signing ceremony for six agreements between China and Cambodia. In one such agreement he called on Chinese telecommunications giant Huawei to bring its 5G technology to the Kingdom.
He also urged Chinese companies to invest in the Kingdom’s electricity infrastructure, as well as railway projects in a joint venture with Royal Railways.