International donor countries who pledged $880 million in aid to Cambodia last year
are to meet soon to discuss the disbursement of the bulk of the assistance funds
following the successful conclusion of U.N.-sponsored elections in May, a senior
UN official said.
"There has been a bit of a pause in the last couple of months as people wait
and see how the elections go but we expect the International Committee for the Reconstruction
of Cambodia to meet some time between now and August and review Cambodia's needs,"
Roger Lawrence, the UN's chief economist in Cambodia said.
Concerns the peace process would collapse led many donor countries to slow the flow
Lawrence said it was unlikely their would be a flood of foreign aid pouring into
the country in the near future but he said he expected the pace of assistance to
begin picking up once the constitutional government takes office.
"There is likely to be a slow but steady acceleration over the first few months
of the new government as the donor community begins to probe the absorptive capacity
of Cambodia," he said.
Two hundred million dollars has already been dispersed, mostly for projects designed
to refurbish or reconstruct the country's war-battered infrastructure.
Lawrence said there was a general misconception that the aid package involved "millions
of dollars that are going to come to Cambodia and will be lying around for people
to help themselves to." Most of the aid that has been pledged is in the form
of project aid and consists of capital goods and technical expertise.
The economist said the most urgent problem facing the new government would be to
close the budget deficit, which is currently running at nearly U.S. $10 million per
month although he noted there was "very little scope for cuts in expenditure."
Foreign diplomats have agreed on the need to find U.S. $30 million to help the fragile
new government through the transition period but have yet to come forth with the
Lawrence said he expected customs revenue would be a key contributor to the state
coffers, especially as business activity accelerates with the return of peace.
"The economy is being completely driven by the political situation. Now that
we have a different political outlook, the performance is very bright, activity has
picked up and prices are going down," he said.
"I think in the next six months we will continue to have a economy that will
be responding mainly to the emergence of political stability and the viability of
the new government."