Logo of Phnom Penh Post newspaper Phnom Penh Post - Donors set to cough up the cash

Donors set to cough up the cash

Donors set to cough up the cash

AS donors and the government gear up for the February 25-26 Consultative Group meeting,

analysts say that despite continuing donor concerns over accountability, transparency

and constitutional reforms, Hun Sen's government is likely to walk away from the

Tokyo showdown with yet another ample fistful of dollars and few if any concrete

benchmarks to meet.

"In the last few weeks I've sensed that the donor community feels the initiative

and actions from the government in recent months are encouraging," said one

senior economic analyst.

Since the last meeting in July 1997, just days before the coup, donors have taken

a cautious line in disbursing new aid, with many adopting a 'wait and see' attitude

towards the government.

But with the Tokyo talks just days away, diplomats and economic analysts describe

the mood of the donor countries and agencies as 'positive' - and most believe that

the government's request of $1.35 billion over the next three years will be met.

Certainly the government has been polishing up its image in the last few months,

with visible moves towards alleviating some of the concerns raised by donors at the

last CG meeting.

Illegal logging and forestry mismanagement, frequent donor bugbears, have been addressed

by the government's recent announcement of cutbacks on logging concessions, bringing

the total number of concession areas almost within World Bank recommended levels.

Current land under concession now stands at around 4.7 million hectares, while the

World Bank recommends a level of 4 million hectares for sustainable development.

Reunification and unity are also recently recurring government themes, paving the

way for the much-demanded demobilization of the army, which on paper receives some

40% of the national budget - but in practice may receive much more - while only 1%

goes into rural development. But are these efforts any more than token gestures to

seduce the donors into parting with more cash?

"I don't think it's all a show for the Consultative Group," said Australian

Ambassador Malcolm Leader. "It's true that the government is putting a lot of

effort into the CG preparations, but it's not simply for placating donors, it's part

of a long term series of reforms."

The senior economic analyst agreed: "One can easily accuse the government of

making [these reforms] just to please at this key moment - but the very fact that

they're doing anything is encouraging."

Donors say they are determined that key issues such as civil service reform, forestry

management, and demobilization will be followed through by the government.

"I think the goodwill honeymoon period from the 1993 era is over," said

the economic analyst, "and the government is realizing that with the strident

chorus of donors continually pointing out their deficiencies they can't afford to

be complacent."

Ambassador Leader echoed the sentiments of many, saying: "Donors are looking

to the government for evidence that they are implementing the reforms. We will send

signs to the government that if their reforms are not serious then aid will not continue


But while the words may seem strong, in practice donors are reluctant to discuss

the possibility of stronger conditions to ensure governmental action.

Many diplomats mentioned that donors would be looking for new "benchmarks"

and markers to monitor the government's progress. Leader noted that the forestry

law was such an example, but few diplomats were forthcoming about what specific mechanisms

could be used to monitor outcomes. Donors face a dilemma: the will to give aid to

a poor country is there, but problems of transparency and corruption constantly threaten

to upset the aid wagon.

Yet with the notable exceptions of the International Monetary Fund, which suspended

assistance in 1997, and USAID, most NGOs and donor countries have continued with

ongoing projects as planned.

Human Rights Watch Aisa will call today (Friday) for human rights conditions to be

attached to any non-humanitarian aid pledged at the meet, citing years of impunity

and rights violations as a major obstacle to Cambodian development.

The rights watchdog is urging the Government to cooperate with Special Representative

of the UN Secretary General for Human Rights Thomas Hammarberg in establishing an

international tribunal for the Khmer Rouge, as well as demanding that they address

ongoing rights abuses and unresolved cases of impunity.

"This is a key moment to press for an end to impunity in Cambodia," said

Mike Jendrzejczyk, Washingotn Director of the Asia Division of Human Rights Watch.

"It is pointless to talk about the rule of law as long as impunity is not seriously


It's a subject which is close to the heart of the opposition Sam Rainsy Party.

Party president Rainsy is currently on a tour of the United States trying to drum

up support for strict conditions on any United States aid pledged to Cambodia in

Tokyo, and has said Cambodia will remain a "sinkhole for foreign aid" unless

fundamental reforms are pushed through by a responsible government.

The US response to his request has been lukewarm: after a meeting with US Assistant

Secretary of State for East Asia Stanley Roth, Rainsy claimed that the language Roth

used was more typical of Hun Sen or the Khmer Rouge - let bygones be bygones.

In fact, US policy makers seem sharply divided on the aid issue, with Roth's reported

attitude differing from that of the Congress. Despite Congressional qualms about

democracy in Cambodia, the administration is reportedly pushing for an aggressive

aid package.

Congress, which controls Washington's purse strings, put strict democracy-related

conditions on aid in the yearly Foreign Appropriations Act, passed late last year.

The Act, which applies to US funding from Oct 98-Oct 99, prohibits aid to Cambodia

unless the Secretary of State reports to the Committee on Appropriations that the

RCG has: "thoroughly and credibly resolved all election-related disputes and

complaints"; "discontinued all political violence and intimidation";

and "been formed through credible, democratic elections".

However, the Congressional conditions exclude humanitarian NGO projects, which have

continued to be funded even after the 1997 coup; Washington insiders predict that

the Administration will resort to a "gymnastic" interpretation of the exclusions

to allow considerable aid inflow through Congress's loophole.

While the RCG would certainly welcome a renewed surge of aid from the US, they will

also be looking with interest at the International Monetary Fund, who suspended their

loans to Cambodia in 1997 after the government failed to meet required standards

in forestry management.

Analysts say the IMF are keen to discuss returning to Cambodia. If this happens,

it will be the strongest indicator yet that confidence in the seriousness of government

reforms is real.

"The donors will be tougher, but at the same time all the parties want to have

a positive dialogue at the CG," said Jonas Lövkrona, Programme Officer

at UNDP.

The CG itself, while obviously the keystone for aid pledges, is not a make-or-break

meeting in terms of total money pledged. Not all countries will be able to pledge

finalized amounts at the meet due to varying aid cycles, finances and money already

pledged, and pledges are not binding - they can be lowered or raised as the donor

sees fit.

Pledges made may also initially be misleading, as many are spread over three or four

year cycles, and actual disbursements are always lower than money pledged. Much of

this is due to the backlog of aid projects waiting for approval since the unrest

in 1997 and to some extent, last year.

But whatever the actual figures to come out of the meet, one thing is clear. The

donors are ready to give - and Hun Sen is likely to come away smiling.

Japan, the biggest bilateral donor to Cambodia, is "scale wise and content wise,

ready to pledge as much as we are able to," according to Kazuhiro Nakai, First

Secretary at the Japanese Embassy. Japan never stopped funding to Cambodia, even

after the 97 coup, and was the first to kick in new aid after the formation of the

government last year.

Other analysts have admitted they would be surprised if Hun Sen came away with much

less than the $1.35 billion the government wants over three years. If all the other

donors follow suit, the RCG can look forward to a healthy foreign aid bank balance

for the next few years.


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