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World Bank to re-engage after five-year absence

Activists protest at the World Bank’s Phnom Penh headquarters in 2014, calling for the reconsideration of millions in loans for the development of land concessions.
Activists protest at the World Bank’s Phnom Penh headquarters in 2014, calling for the reconsideration of millions in loans for the development of land concessions.

World Bank to re-engage after five-year absence

The World Bank has approved $130 million in developmental aid aimed at reducing poverty in Cambodia, signalling its first direct re-engagement with the Kingdom since it left in protest in 2011 after one of the largest forceful evictions led by the government displaced more than 3,000 families.

The decision came last week when the World Bank’s executive directors voted on a new Country Engagement Note (CEN) that approved financing of four projects including infrastructure development, clean-water projects, agriculture production and access to health care.

The projects will be supported by $130 million in concessional credits from the bank’s International Development Association with repayment schedules stretched over 25 to 45 years.

“Our new engagement with Cambodia starts with projects aimed to bring tangible benefits for Cambodians,” said Ulrich Zachau, country director of the World Bank for Southeast Asia, in a press release.

The vote to restart lending marks a stark departure from its lending freeze in 2011, when more than 3,000 families were evicted from Boeung Kak lake after Cambodian People’s Party Senator Lao Meng Khin began filling in the lake after his company, Shukaku, was awarded a 99-year lease of more than 100 hectares of land in 2007 to develop the Phnom Penh City Centre project.

At the time, the World Bank was involved in a $24.3 million land-titling project, which was accused of denying thousands of Cambodians property rights.

Eang Vuthy, executive director of Equitable Cambodia, said that between 50 to 100 families were still waiting for adequate redress.

“I am disappointed that the World Bank has decided to lend to the government again while there are still families that are landless,” he said. “Unless part of this $130 million involves an action plan to help the evictees, the people will continue to protest.”

He added that while the programs lack detailed information on how they will be implemented, the question remains if adequate safeguards are in place.

Ear Sophal, the author of Aid Dependence in Cambodia: How Foreign Assistance Undermines Democracy, explained that the decision to issue lending could not have been timed any worse.

“The World Bank has managed [to pick] just about the worst moment ever: just when a bunch of human rights activists have been arrested and are essentially being targeted,” he wrote in an email.

“The overall significance is that the authorities can take this to the bank and gloat about how normalcy has returned to Cambodia with the World Bank’s vote of confidence,” he said, adding that the organisation was “politically tone deaf”.

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