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PM flags Covid-default advocates for asset seizures

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Prime Minister Hun Sen meets with graduate students of Vanda Institute on October 3. SPM

PM flags Covid-default advocates for asset seizures

Prime Minister Hun Sen doubled down on his earlier statements encouraging banks and microfinance institutions (MFIs) to seize or repossess the assets of those who told debtors not to repay their loans during the Covid-19 crisis in 2020.

“Some [politicians] made a promise that after they won [the election] and became commune chiefs, their constituents who were in debt wouldn’t have to repay [banks and MFIs]. They should be targets for asset seizure.

“I’m talking about those who took out loans to buy motorcycles or to gamble and, after running out of the borrowed money, tried to promote a political campaign saying that if they won the election, nobody would need to repay the bank," he said at a graduation ceremony for nearly 4,000 Vanda Institute students on October 3.

Hun Sen recalled that when Covid-19 first broke out, he was calling for banks and MFIs to be more understanding with debtors and not seize their assets, and for them to be flexible about the schedule and amounts for loan repayments.

But at the same time, he said a movement by a political party he dubbed “overseas illegal rebels” called on debtors to just default on their loans.

“At the time I [publicly] called on banks and MFIs to remember the names and faces of those who came out and called on debtors to default on their loans. I encouraged them to seize their assets. After [the call], they [politicians] kept silent.

Hun Sen’s first appeal for banks and MFIs to seize their assets back in 2020 were apparently made in response to Sam Rainsy, former president of the now-defunct Cambodia National Rescue Party (CNRP), who took to Facebook that year calling on Cambodians who were in debts to stop repaying banks and MFIs both the principal and interest.

“We need to work together to push for a common solution to the debt crisis that came about in the wake of the global economic crisis due to the Covid-19 pandemic. Please, my compatriots, be ready to react together. If they come to confiscate the land of any debtor, please all of that person’s neighbours and villagers strongly oppose any move by the banks to seize the land of any family,” Rainsy wrote at the time.

About three weeks later in 2020, the self-exiled opposition leader – who once served as finance minister for roughly one year in 1993-1994 – also posted a message claiming that nearly three million small debtors in Cambodia could not pay their debts due to the pandemic-induced economic crisis which he said would last indefinitely.

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