As Foreign Aid Increases, Questions About Conditions

Cambodia has seen huge growth of foreign aid and loans over the past two decades, but experts are beginning to question its worth—and what conditions might be attached. Total aid from 1993 to 2012 amounts to around $10 billion, with the percentage of aid coming as loans steadily increasing. And a larger portion of that money is now coming from China, in a shift from the typical international aid patterns. … Cambodia received a total aid package of $550 million in 2004, according to government figures. By 2012, that number increased to $1.38 billion, an increase of about 14 percent per year. China has been behind much of that increase, but other aid comes from international donors like Australia, Japan and the US, as well as the Asian Development Bank and the UN. … But donor priorities have shifted over the years. The health sector, for example, which was traditionally the most funded, has been surpassed by projects for infrastructure in recent years. Again, Chinese money accounts for the shift. Infrastructure aid has increased from $185 million in 2010 to $376 million in 2012. … Yim Sovann, spokesman for the opposition Cambodia National Rescue Party, said Chinese loans have higher interest rates compared to other donors, and the deals aren’t transparent. “Some aid is useful, but some is not,” he said. Substandard road construction, subject to corruption and non-transparent bidding, for example, is not good for the country, he said. “Only one or two years after construction, the road is damaged again,” he said. There are also those who argue that Cambodia is taking in too much aid. …

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