Congressional Hearing in US Pushes Cut to Cambodian Aid

At a congressional hearing in Washington on Tuesday that scathingly rebuked Prime Minister Hun Sen and his ruling CPP, a U.S. lawmaker called for legislation to cut American aid to Cambodia following the national election on July 28. Representative Steve Chabot, who chaired the House Subcom­mittee on Asia and the Pacific hearing on Cambodia’s looming election, said his bill would complement a Senate resolution last month that called for a cut in aid if the vote was deemed “not credible and competitive” and for other donors to follow suit. … Of the roughly $70 million in annual U.S. aid to Cambodia, about $6 million went toward military assistance in 2011. Amid a U.S. military “pivot” to Asia to counter China’s growing influence in the region, the U.S. State Department is asking for even more military aid in 2014. … Amid all the criticism, some rare praise for Mr. Hun Sen came from Daniel Mitchell, the CEO of Phnom Penh-based emerging markets investment firm SRP International Group. With 1 in 3 new loans from leading local bank Acleda now being backed with private land titles, he said, “tangible progress has been made.” He added that all the talk of human rights was also ignoring the country’s real challenge: jobs for a growing but undereducated workforce. “The issue of youth skills and employability is of increasing significance and has greater long-term social crisis potential than the current human rights issues capturing the headlines,” Mr. Mitchell said. With 300,000 people entering the workforce every year, he said the country needed to maintain a gross domestic product growth rate of 7 to 8 percent per year if it hoped to keep living standards on the rise. “That growth requires significant capital investment,” he said, and rather than pulling back, he said the U.S. should be stepping up—responsibly. … Chinese loans and grants to Cambodia came to $2.7 billion over the past two decades compared to the U.S.’ $1.2 billion, and Mr. Hun Sen has proven fond of praising Beijing for “speaking little” and making no conditions on its aid. … He [U.S. Representative Eni Faleomavaega] said the U.S.’ pivot to Asia should be both military and economic, and called for canceling Cambodia’s war-era debt to the U.S., now at $460 million with interest, a longstanding request of Mr. Hun Sen’s. … If the U.S. was serious about improving the country’s rights record, he said, it should be promoting the investment of “responsible capital.” “That is the way forward,” Mr. Faleomavaega said. … Human Rights Watch’s Mr. [John] Sifton said that cutting military ties was just the start. … “The money is not so much the issue…but symbolically it’s quite potent. The real hurt comes from infrastructure lending from financial institutions like the World Bank, the Asian Develop­ment Bank, the [International Monetary Fund] and others,” Mr. Sifton said. “The U.S. can use its voice on the World Bank, the IMF, the Asian Development Bank to vote against large infrastructure lending.” He rejected the idea that the U.S. and China were locked in some sort of zero-sum game over Cambodia—that less U.S. investment would mechanically mean more investment from China. He said China would keep investing in Cambodia whatever the U.S. did. … In Phnom Penh, Cambodian officials were quick to dismiss the hearing. Only hours after the hearing had wrapped up in Washington, Cambodian Foreign Min­ister Hor Namhong was signing off on a new $200 million loan from South Korea for a host of infrastructure projects. …

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