World Bank ends suspension of development aid to Cambodia

PHNOM PENH, Cambodia – The World Bank has announced it is resuming direct financing for new development projects in Cambodia, after suspending such funding five years ago.

The Washington-based international financial institution said in a statement received Friday in Cambodia that $130 million in financing had been approved for four projects involving roads, water, agriculture and health care. It said there had been a pause in funding new projects since 2011, but did not elaborate. Funding for ongoing projects had not stopped.

The bank had cut off new lending to protest the forced eviction of lakeside landowners in Phnom Penh to make room for a luxury development, even as it was working to combat land grabs and streamline land tenure claims.

No reason was given for the resumption of lending, although the eviction dispute remains unresolved.

The statement said the new projects are part of the bank’s strategy “to support Cambodia’s goal of reducing the incidence of poverty by at least one percentage point per year.”

“The strategy aims to help Cambodia further improve its business climate and make its products more competitive in global markets. It also aims to improve social and infrastructure service delivery, generate opportunities for the poorest people, and reduce their vulnerability through policies, investments and programs to build assets and create more jobs.”

The bank had informally vowed not to resume lending until the government settled claims with the 3,000 families it had evicted from the Boeng Kak neighbourhood. A small hardcore group of evictees has continued protests for a better deal, and are among the country’s most militant anti-government activists. They and their supporters have protested vigorously whenever the bank was rumoured to be resuming aid to the government. Their reaction to the resumption was not immediately available.

Land grabbing, often associated with associates of Prime Minister Hun Sen’s government, became a major problem by 2011, with tensions sometimes turning into violence. Problems still exist, though they have assumed a lower profile.