Thursday, 4 December 2008

IMF queries Cambodian defence spending, but aid up

04 Dec 2008
Source: Reuters
(Releads with IMF)

PHNOM PENH, Dec 4 (Reuters) - The International Monetary Fund on Thursday queried a planned increase in Cambodia's military spending and other donors urged it to pass an anti-corruption law, but they promised to increase aid to the country next year.

The government has said it would double military spending to $500 million in 2009, announcing the figure in October after a brief clash between Thai and Cambodian troops over a disputed area on their border.

"Military spending should concentrate on critical needs to avoid crowding out other essential spending, unnecessarily widening the deficit and potentially weakening the external position," John Nelmes, the IMF's representative in Cambodia, told a donors meeting.

Donors have promised at least $900 million for 2009, a hefty increase on the $600 million that has been offered in the past, said Hang Chuon Naron, secretary-general of the Finance Ministry, adding Japan pledged the biggest amount.

"This is a reward for the government's good performance," he told Reuters, adding that he expected pledges to reach $1 billion by the time the meeting wraps up on Friday.

However, the donors called on Cambodia to pass an anti-corruption law that has been delayed for 10 years.

"Passing the law will be an important signal, providing investors and development partners with confidence to make more long-term commitments in Cambodia," Qimiao Fan, newly appointed World Bank country manager, told the meeting. (Reporting by Ek Madra; Editing by Alan Raybould)

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