Foreign donors pledge record sum for Cambodia

Updated June 4, 2010
Source: Radio Australia

Cambodia's annual donor conference has ended with donors pledging a record 1.1 billion US dollars for the country's development programs. The government is pleased, but there are plenty of warnings that the country needs to step up the fight against social ills including corruption and increasing landlessness.

Presenter:Robert Carmichael
Speaker: Masafumi Kuroki, Japan's ambassador to Cambodia

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CARMICHAEL: These may be tight times internationally, but here in Phnom Penh the Cambodian government is celebrating another year of record funding courtesy of the country's donors.

Last year foreign donors gave Cambodia 950 million dollars, a record at the time. This year they gave even more -- 1.1 billion dollars -- around half the country's annual budget.

The money is to be used to fund development in areas as diverse as health, education, infrastructure, judicial reform, good governance and more. The list of needs is long.

The announcement came at the end of the two-day long donor conference in Phnom Penh, a gathering of senior government officials, ambassadors, UN agencies and other worthies.

Cambodia's Finance Minister Keat Chhon made the announcement at a press conference, where he confirmed that Japan was again the largest contributor.

But the week has heard warnings that the government needs to improve its handling of public finances. Recent media reports have noted that millions of dollars in revenues have not been properly accounted for.

And other critics say Phnom Penh must be more open about how it spends aid.

Japan's ambassador Masafumi Kuroki agreed that aid effectiveness needs to improve. But he feels that mechanisms now in place will ensure that happens.

KUROKI: 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 of aid.

CARMICHAEL: The week of the conference heard plenty of calls for donors to push the government to combat scourges such as graft and a lack of transparency.

On Tuesday, UK-based non-governmental organisation Global Witness said donors must stop turning a blind eye to corruption and the government's shoddy and opaque handling of natural resources.

On Thursday, the World Bank said improving transparency and accountability in the management of public finances and natural resources was a critical issue.

All of which tells you that the subject of graft is hard to avoid. Cambodia is, after all, regarded as one of the most corrupt countries on earth.

Cambodia's Prime Minister Hun Sen told donors that the fight against graft is central to equitable development. And he cited the recent passage of an anti-corruption law and moves to combat illegal logging as evidence of the government's good faith.

Ambassador Kuroki addressed the issue obliquely when he said that Japan was looking at providing 130 million dollars.

KUROKI :That's only an indication, that's not a commitment, but an indication. We want the money will be utilised in an efficient and effective and transparent way, with concrete results on the ground.

CARMICHAEL: He said that while combating graft is important, economic growth counts too.

In the past decade, Cambodia's economy has grown by nine percent a year. But those benefits have not been shared. Around four million Cambodians live under the poverty line, and many others are close to it.

Another key issue is landlessness, which some believe has the potential to spark social unrest.

But Thursday was about the money, and despite tough times globally, Cambodia's donors have shown they are prepared to keep the financial taps turned on.

But that largesse will not last forever.

At some point Cambodia will need to stand on its own two feet. Donor funding is meant to ensure that at some point it can.