Cambodia's Donors Pledge $1.1 Billion For Development

Robert Carmichael | Phnom Penh
03 June 2010

via CAAI News Media

Photo: AP
Cambodian Finance Minister Keat Chhon, smiles at the end of foreign donors meeting in Phnom Penh, Cambodia (File Photo)

Cambodia's donors on Thursday promised $1.1 billion in aid to help the cash-strapped country meet its development goals. But it came amid criticism that Phnom Penh is failing to address key issues such as landlessness, transparency and corruption.

In the global context, $1.1 billion is not a huge sum. But for impoverished Cambodia, whose annual budget is only twice that, a billion goes a long way.

The 15 percent rise in pledges was announced on Thursday by Finance Minister Keat Chhon at the end of a two-day donor conference in Phnom Penh.

Keat Chhon said the government would focus on four priority areas of roads, water, human resources and electricity.

He added that Japan was, again, the largest donor.

But the conference, which allows donors, senior government officials and some non-governmental organizations to discuss issues of importance, was not free from criticism.

The World Bank said it was critical that Phnom Penh improve its handling of public finances and natural resources.

That echoed calls earlier this week by civil society groups that donors cannot turn a blind eye to corruption and mismanagement of the country's natural resources.

Others also charge that donor funds are not spent properly.

Japan's ambassador Masafumi Kuroki, whose nation will provide $130 million, said although aid effectiveness needs to improve, processes in place mean it is heading in the right direction.

"There is very increased monitoring of aid between the government and development partners, so I think we have to further promote this process of monitoring," he said.

Kuroki also said that factors other than good governance are vital.

"I understand the importance of governance, MDGs and poverty reduction, but I also want to emphasize the importance of economic growth," added Kuroki.

In the past decade Cambodia has enjoyed stellar economic growth of around nine percent annually. But the rewards have not been evenly shared.

The World Bank country head Annette Dixon congratulated the government on some progress made, but warned that 4 million people - or one-third of the population - still live in poverty.

In his speech, Prime Minister Hun Sen said the government recognizes that good governance is vital to ensuring equitable development.

And he said combating graft is a top priority. The new anti-corruption law and crackdowns on illegal logging, he said, prove the government's commitment.

On the issue of landlessness and the parallel granting of vast tracts of land to investors, Hun Sen said the government would pay more attention to the land needs of the poor.

But critics say poverty, widespread corruption, increasing landlessness, and opaque deals that allow firms to exploit limited natural resources mean the poor are being ignored.

Finance Minister Keat Chhon said today's pledges are sufficient to meet the needs of the national development strategy. But as World Bank country head Annette Dixon told the conference, the function of the donors is help the poor. How well the government spends this money will be key to meeting that goal.