Pledges reopen development debate

Written by Kay Kimsong

Monday, 08 December 2008 Phnom Penh Post

Civil society groups, concerned that the emergence of China as a major aid player will not benefit the country, urge Western governments to be less complacent about corruption Photo by: Heng Chivoan Deputy Prime Ministers Men Sam An, Nhek Bun Chhay and Keat Chhon (left to right) at the donor-government meeting on Wednesday. VYING FOR POSITION China led the pack in international aid donations to Cambodia, pledging $257 million for 2009. It was followed by the European Union, which promised $214 million, and Japan with $113 million. The rest of the breakdown was not disclosed by the government. LAST week's nearly US$1 billion international aid pledge - the largest ever granted under the auspices of the annual Cambodia Development Cooperation Forum - has reopened the debate over the Kingdom's development trajectory, amid concerns over the effect of a fresh influx in foreign aid. Despite worries about the Kingdom's endemic corruption, government officials have interpreted the unsolicited donations as a unanimous vote of confidence for the government and its ability to effectively manage future development. "We [are] a train running on the right tracks," Minister of Finance Keat Chhon said Friday, on the last day of the annual donor meeting. "We have put on a good performance. If we had not, [donors] would have cancelled their aid." However, opposition leaders have lashed out at the pledges, questioning both the philanthropic intentions behind the aid and how far the Kingdom is set to benefit from such a vast injection of cash - which this year came from both traditional Western sources and nations such as China, participating in the donor meeting for only the second time. "Loans and grants from China are just debt that the Cambodian people will have to pay back in the future," said Sam Rainsy Party lawmaker Son Chhay. He added that donors have consistently pledged more aid every year since the meetings began in 1992, reaching a total of $690 million last year. In 2009, that amount could rise to more than $1 billion once the United States makes its aid pledges. Aid can do more harm than good, depending on how it is given. Chinese strings According to Son Chhay, donors - especially those such as China - have their own reasons for coughing up cash for Cambodia, which are neither philanthropic nor an indication of support for the government's development work. Most of the soft loans and grants given by China are contingent on the government's using Chinese contractors to complete earmarked projects. "Cambodia only really benefits from about three percent of the total loans that China gives," he said. "If China gives a $250 million loan, I think, in real terms, that Cambodia gets about $5 million in benefits." Ou Virak, president of the Cambodian Center for Human Rights, said the government was labouring under the illusion that the Chinese government was proffering aid without strings attached. "The [government] says China is the nicest donor, since they give without any human rights or anti-corruption agenda," he said. "Even though Western donors don't hold the government to their demands, at least the West makes demands. China is playing politics in Cambodia. It is very scary." Western complacency Others said that Western donors needed to reconsider their complacency in the face of government inaction. "Aid can do more harm than good depending how it is given," said Sin Somuny, director of Medicam, an umbrella organization for health-related NGOs that attended the donor conference. Sin Somuny said that donors - particularly traditional Western donor nations - should give civil society organisations more chances to participate in the drafting of the national strategic development plan, and to use them as the primary channel for aid. "The role of NGOs and civil society groups in providing complementary services, particularly in areas where state services do not reach, is crucial and should be recognised by donors," he said. Qimiao Fan, country manager for the World Bank, said that the amount pledged was irrelevant next to the way the funds were used. "I think it is not important how much we have provided. It is important that what we provide is used efficiently and effectively in priority areas," he said, adding that he was not able to disclose the figure the World Bank has pledged. But improving the regulatory framework and passing the long-awaited anti-corruption law was essential to the proper use of the aid money, he said. "Adopting the anti-corruption law is not going to be a ‘magic bullet', but we feel it is very important because it does provide an essential legal framework," Qimiao Fan said. "We believe our support will help protect the poor. We are not here to put pressure on any government." He added that the government needs to take ownership of reforms and that it was not up to development partners to push the government over the content of domestic reforms. EU Representative Kerstin Henke, from the German Federal Ministry of Education Cooperation and Development, said the adoption of the anti-corruption law would be an important step. "I think we have promises on the adoption of the anti-corruption law, which will be a step forward because for all development partners ... good governance is a key issue," she said. "We have called on the leadership of the government to take more steps to implement the policies which were announced," Henke said, adding that the European Commission has pledged an aid package worth around $634 million over the next three years. Related article: Cambodia: The economy of aid ADDITIONAL REPORTING BY CAT BARTON