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Credit crisis rattles civil society

Credit crisis rattles civil society

Content image - Phnom Penh Post

Many local civil society groups are concerned that their donations will

dry up as the credit crisis takes hold in developed nations, limiting

future generosity

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

funding.

"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.  

But

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.

"Now

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

Others,

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.

"Our

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.

The

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.

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