Many local civil society groups are concerned that their donations will
dry up as the credit crisis takes hold in developed nations, limiting
Photo by: Heng Chivoan
Major development partners such as the UN may be unlikely to pull out, but local NGOs are concerned about the impact of the global credit crisis on their funding.
CAMBODIA's civil society groups are under threat from the global credit
crisis that looks set to severely limit the amount of available donor
"The government collects tax and has other sources of
income, but NGOs have only one source of funding: donors," said Thun
Saray, president of Cambodian rights group Adhoc.
Adhoc has an
average monthly running cost of between US$100,000 and $200,000, which
all comes from donors. Were donors to reduce funding in 2009, the
organisation would have no option but to cut back on lower-priority
projects, Thun Saray said.
According to Eric Sidgwich, senior
country economist for the Asian Development Bank (ADB), inflows of
foreign aid, or official development assistance, were likely to be
"more resilient" than inflows of foreign direct investment, at least in
the immediate future, due to the fact that aid comes from government
budgets. In the long term, there is a risk that the amount of aid could
decrease, but it would not be until 2009 before the effects would
really be felt, he said.
"It is a hope that countries like
Cambodia, which are still heavily aid dependent, who still have high
instances of poverty, will be somewhat shielded from these events,"
Sidgwich said. "But I think the jury is still out on that," he added.
for many, such as Ou Virak, president of the Cambodian Center for Human
Rights (CCHR), the lack of long-term security is a major concern.
we have to have funds of more than $250,000 to operate our projects for
next year," he said. "But we are still worried about [the credit
crisis] because it will affect our organisation ... if it continues."
He expressed worry over the chance that hundreds of millions of dollars of aid for poverty alleviation projects would be lost.
"If donor countries have a financial crisis, they will think about whether to donate funds to Cambodia," he said.
Not such a problem
such as Youk Chhang, director of the Documentation Center of Cambodia
(DC-Cam), were less concerned. He said DC-Cam's annual running costs
are approximately $500,000, most of which is covered by the
organisation's investment endowment, which is held in New York, and
funds from the sale of books, pictures and DVDs about its work.
investment endowment earns interest of about $200,000 per year," he
said, adding that the sale of books, pictures and films earns DC-Cam
about $100,000 per year. Another $200,000 comes from donors.
government is also concerned that both aid to the government and donor
funding for NGOs could dry up, said Mey Vann, director of finance at
the Ministry of Economy.
He said that the government is currently
devising a strategy to lobby donor countries to keep providing aid to
Cambodia, even in difficult times, saying the Kingdom remains one of
the world's least developed countries, he said.