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Cambodia, appealing war-era debt, tells US: you owe us

Marshal Lon Nol’s soldiers lay down their weapons after surrendering to the Khmer Rouge in Phnom Penh on April 17, 1975. AFP
Marshal Lon Nol’s soldiers lay down their weapons after surrendering to the Khmer Rouge in Phnom Penh on April 17, 1975. AFP

Cambodia, appealing war-era debt, tells US: you owe us

During the Vietnam War, even as US B-52s were carpet-bombing the Cambodian countryside, the United States lent hundreds of millions of dollars to Cambodia’s flailing government to feed and clothe refugees fleeing the chaos.

Now the United States wants that money back — with interest.

For decades, Cambodia has refused to repay the debt, which has grown to more than half a billion dollars. It says the United States, if anything, owes Cambodia a moral debt for the devastation it caused.

Washington says a loan is a loan.

But recently Prime Minister Hun Sen, an admirer of President Donald Trump, has appealed to him to forgive the debt.

“Oh, America and U.S. President Donald Trump, how can this be?” Hun Sen said in February, according to The Cambodia Daily. “You attacked us and demand that we give money.”

Between 1965 and 1973, as it fought what would prove to be a losing war in neighbouring Vietnam, the United States dropped an estimated 500,000 tonnes of explosives on eastern Cambodia. The bombardment started covertly as part of an effort to cut off supply routes used by the Viet Cong.

In 1969, under President Richard M. Nixon, it expanded into full-fledged carpet-bombing, meant to buy time for US troops to pull out of South Vietnam, while halting the advance of the ultra-Communist Khmer Rouge rebels fighting the Cambodian government.

Rice farmers fled the fighting and the bombs in large numbers, abandoning their fields for Phnom Penh, the capital. As a food shortage ensued, the United States — which was backing the anti-Communist government led by Lon Nol — lent the country $274 million to buy U.S. rice, wheat, oil and cotton.

“Many, many people came to Phnom Penh from the countryside, so there was nobody to produce food,” Chhang Song, who was information minister under Lon Nol, said by telephone from Long Beach, California, where he lives. “There were two million, many, many, and we had to provide food for these people.”

The loan, made under a program called Food for Peace, was an afterthought for both countries, which were far more focused on the deteriorating security situation. In April 1975, the Americans pulled out of Cambodia just before the Khmer Rouge seized power, ushering in a brutal period of starvation, forced labour and mass murder during which up to 2.2 million citizens died.

But in the 1990s, as Cambodia began to emerge from decades of war, the United States said the money was still owed, with interest and late fees, though it offered rescheduling on favourable terms. Since then the debt has swelled to $506 million.

“We lack the legal authority to write off debts for countries that are able but unwilling to pay,” Jay Raman, a spokesman for the US Embassy in Phnom Penh, said in an email last month. “These legal authorities do not change from one administration to the next, absent an action from Congress.”

Cambodia argues that the loan is invalid because the government of Lon Nol, who seized power in a 1970 coup that deposed Prince Norodom Sihanouk, was illegitimate. But the State Department says the international financial system will fall apart if governments cannot be held responsible for their predecessors’ debts.

The United States has also disputed arguments by Cambodia that it cannot afford to repay the debt. Once one of the world’s very poorest countries, Cambodia graduated to lower-middle income status last year, with a gross domestic product of about $19 billion, according to the International Monetary Fund. Refusing to service the US loan has impeded its ability to borrow internationally.

“I look around me, and to me Cambodia does not look like a country that should be in arrears,” the US ambassador, William Heidt, told local journalists in February. He said that the United States wanted to “work out a deal that works for both sides” but that completely cancelling the debt was not an option.

“From time to time, for reasons I don’t think that we really fully understand, the Cambodian government feels the need to publicly criticise the United States,” Heidt said. “I think that reflects some kind of political dynamic inside of Cambodia.”

Hun Sen, who has been in power since the 1980s, has long resented the US for the bombing and for its support of the Khmer Rouge at the United Nations after a Vietnamese invasion ousted it in 1979, said Sebastian Strangio, author of Hun Sen’s Cambodia. Strangio said it was “clear that he’s testing the mettle of the Trump administration”.

Just days after Trump’s inauguration, Hun Sen’s government made international headlines by announcing it would evacuate a village to remove two unexploded US barrel bombs, containing tear gas, that had been discovered behind a pagoda. It later emerged that the bombs had long been known about, and evacuation plans were quietly dropped.

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Hun Sen speaks about the Kingdom’s outstanding debt to the US at an event in Phnom Penh’s Chbar Ampov district. Photo supplied

A month later, two other bombs were removed from a pond where they had been known to be lying for decades, accompanied by a flurry of commentary in pro-government news outlets that accused the United States of hypocrisy over the debt.

The legacy of the bombing still lingers in such unexploded ordnance, although US and other foreign aid pays for most efforts to remove it. No one knows how many people were killed in the bombing, but there is no question that it was devastating.

“I did interview refugees from bombed areas, and most had no idea what had happened to them,” Donald Jameson, who was a political officer at the US Embassy in Phnom Penh in the early 1970s, wrote in an email. “The sky turned red and the earth shook, so they ran for their lives. As far as they were concerned it could have been a natural disaster of some sort. Some of them came by bullock cart and brought their dismantled houses with them.”

Some historians and journalists have argued that the bombing paved the way for the Khmer Rouge’s murderous rule by destabilising the country. Senior Khmer Rouge leaders have embraced that argument. But most Cambodia historians say other factors, including Sihanouk’s alliance with the rebels and the decadence and corruption under the Lon Nol regime, were more significant.

David Chandler, a professor emeritus at Monash University in Melbourne, Australia, who has written several books about Cambodian history, said that the bombings were a “deeply sordid” chapter in US history but that they did not do much to advance the Khmer Rouge’s cause. Chandler also said he doubted Cambodia would pay the debt.

“In fact, in international law they probably should pay it, because it’s a debt incurred by a previous regime, but the point is the way these regimes changed hands and what they stood for makes it impossible,” he said.

Some believe Hun Sen is raising the issue to distract attention from his government’s clampdown on opposition voices. Sophal Ear, an associate professor at Occidental College who studies Cambodian governance, said the issue “deflects attention from what’s happening now in Cambodia and puts the limelight on Cambodia the victim”.

Others see Hun Sen as trying to play the US off China, which has been pouring aid and investment into Cambodia. Even as the United States insists on repayment, Beijing wrote off $89 million in debt last year, while offering Cambodia hundreds of millions of dollars in soft loans. China years ago cancelled debt incurred by the Khmer Rouge regime, which it had supported.

Sophal Ear said he considered pleas of poverty by officials in Cambodia as hypocritical, noting that corruption accounts for an estimated 10 percent of the country’s gross domestic product.

“These same authorities cry poor while riding around in Bentleys and Mercedes S600s,” he wrote in an email.

But in Chhang Song’s view, whatever the motivation of the Cambodian government, the moral imperative for the United States is clear. “Forgive the loan,” he said, pointing out that bombing helped protect US troops as they withdrew from South Vietnam.

“It’s the other way around,” he said. “It’s the Americans who owe the Cambodians money.”

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