Logo of Phnom Penh Post newspaper Phnom Penh Post - EC's multi-million dollar aid project under fire

EC's multi-million dollar aid project under fire

EC's multi-million dollar aid project under fire


HE European Commission (EC) - at $80 million, one of Cambodia's biggest development

donors - has been savaged in two reports, the latest published today by the NGO Forum

on Cambodia.

The Forum's study said the EC's showcase $44m rural development program, called Prasac,

had: "... serious weaknesses in design and planning...," "unclear

assumptions [and an] overambitious approach" and was "... unduly inward-looking,

with very limited transparency."

NGOs claimed that the EC was trying to do too much too quickly, wasn't accepting

good advice, and that its relations with them were unclear.

All these arguments were found to be valid by the report's authors, the Oxford-based

NGO Research and Training Center (INTRAC).

Further, the report said, the EC was tying aid to a political objective of "[demonstrating]

that the new government could deliver benefits to rural communities better than its


This change in emphasis - from not only supporting the coalition, but to actively

demonstrating it's credibility - came from an "unexpected, high-level intervention

from Brussels" in early 1994, INTRAC said.

Brussels saw it as "particularly appropriate" to "help Funcinpec gain

some control over a government apparatus that, under a single-party system, had effectively

been run by the CPP for fifteen years."

This was in contrast to most aid projects with political objectives, INTRAC said,

which were likely to be "highly visible and prestigious.

"The EC can be credited with some originality in trying to combine a 'community-based'

and a 'rapid impact' approach.

"Unfortunately however this is impossible to achieve in the time frames envisaged,

and this should have been clear from the start."

More, the EC had contracted a company called Hunting Technical Services to manage

its Food for Work program. Huntings sister company, Hunting Engineering, made landmines,

leading to an NGO campaign to force them out.

This contributed "to the climate of relations between NGOs and the EC."

The report was a comparative study on how differently NGOs and the EC worked in Cambodia,

taking as examples local rural credit lending and water schemes. It outlined how

each group could improve its methods of working.

Both could improve coordination, communication and planning as the country's development

needs changed.

However, while the NGO community was given the odd brickbat - for instance, that

many had not yet developed strategies for handing over their programs when they left

- the most withering criticisms were reserved for the European Commission.

Responding to the unprecedented public airing of what till now has been "in-house"

sniping, EC Ambassador Michel Caillouet told the Post that he rejected the NGOs'

critique, deriding it as "some kind of provocation to have a good debate.

"We don't consider these criticisms valid.

"They should look at our results," Caillouet said. "We've had good

results in two years... it's been difficult."

However, The Post has also obtained a July report by the Government's Credit Committee

for Rural Development (CCRD) that suggests the EC should hand over its rural lending

scheme - at $3 million, the country's biggest - to a "professional organization"

that could actually run it properly.

The CCRD could find no strengths worthwhile mentioning about Prasac's lending scheme.

INTRAC was slightly less abrasive in this area, recommending the EC "uregently

review how to make Prasac sustainable," and especially looking at how long it

intended to commit to Cambodia.

Caillouet however said: "They [the NGOs] want a good democratic debate, but

we're ready to answer."

He said the Prasac program, in six provinces, had irrigated more than 10,000 hectares

of land, opened up 400 rural credit banks and helped 556 small industries - all of

which "is a lot within two years."

"There's nothing in this report about these results," he said.

"We're very keen to work with the NGOs, and farmers and villagers, and the Government,"

he said.

"We work with 18 NGOs at the moment... And did you know that the EC is the first

[ranked] donor in the world for NGOs?

"We gave 16 million ECUs last year to NGOs because we share their approach.

We're very useful to their job."

Phnom Penh-based NGOs, who would not be named, said the report was not designed to

criticize, but rather to point out the differences in the EC's approach and to suggest

ways it could improve.

"It doesn't say [the EC] should leave. It doesn't suggest the baby's thrown

out with the bathwater," said one, pointing to the report's recommendations

that the EC should instead review its design, plan its programs better, and communicate

more, especially in national policy debates.

Caillouet however was little mollified, and seemed to take the report as an attack.

He said he had seen an earlier draft but the final version was more critical.

NGOs said that was only because the recommendations had been moved from the back

to nearer the front of the study.

"Of course the [EC's] project was ambitious," he said, "but we have

made a big impact and [had] sustained development...

"Development is a big business."

He rejected the claim the EC was politically driven.

"We changed our policy because it wasn't possible to work with the government

before [the elections] because it didn't exist. There were only NGOs."

When asked whether the EC, in retrospect, would have designed its Cambodian projects

differently, he said: "The first year was surely difficult. There were a lot

of challenges.

"But after two years, thanks to our technical assistance team, thanks to the

Cambodians, things are right. There's no major problems."

Caillouet said that the EC would continue to collaborate with NGOs, "though

I can't say all [of them] are good".

INTRAC noted that despite the EC agreeing to a comparative study being carried out,

"in early 1996 uncertainty remained over the extent to which the EC welcomed

the study and was willing to cooperate with it."

Ultimately the study received good cooperation from almost all EC officials and contractors,

it said, "though one or two influential people remained opposed to extending

any more cooperation than was considered strictly necessary."

The authors said they were grateful to Ambassador Caillouet "for a couple of

decisive interventions in favour of cooperation and transparency."


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