Breaking news: World Bank funding to Cambodia frozen over forced evictions in Phnom Penh

by Rhodri C. Williams

Today’s edition of the Cambodia Daily carries the news that the World Bank has confirmed suspending funding for new projects in Cambodia pending the conclusion of an agreement between the Government of Cambodia and remaining residents of the Boeung Kak Lake district of Phnom Penh that would allow for them to be re-housed on site.

This development marks the continued escalation of a longstanding controversy over the Cambodian Government’s legally dubious evictions of the residents of Boeung Kak. As described in previous TN postings, criticism of these and other similar urban forced evictions led the Government of Cambodia to pull the plug on a multi-million dollar World Bank-supported titling program, while simultaneously embroiling the Bank’s own country team in proceedings before the body’s Inspection Panel over charges that the same program had violated longstanding policies on involuntary resettlement.

The Inspection Panel’s November 2010 report found significant shortcomings and the Bank’s management responded in March 2011 with a forthright report that acknowledged past mistakes but recommended continuing to engage with the Cambodian authorities on land issues until it was clear that no progress could be made, at which point:

Management would anticipate reviewing all current and proposed support to the Government in the land sector and carefully take into account the Government’s position in considering the magnitude and focus of future Bank support to Cambodia.

Since then, the Cambodia Daily notes that the Bank has officially kept silent on what measures it has been pursuing to make good on its implicit threat to cut funding to Cambodia, even as forced evictions continued unabated in Boeung Kak. What is now known is that it is no coincidence that the Bank has failed to approve any new projects in Cambodia (including several pending projects worth $128 million) since January 2011. According to the Daily, the European Commission had been informed several months ago that approval of further projects was conditional on progress in the Boeung Kak case, but public confirmation from the Bank only arrived this week.

In principle, scope for a breakthrough would appear to exist. The Bank has not stopped work on projects that were previously approved and implies that it will begin approving new projects again based only on a narrow breakthrough related to the re-housing of some 1,000 residents of Boeung Kak that have managed to remain on site, rather than acquiescence to its broader demands for a moratorium on urban forced evictions. Moreover, the cost of such rehousing would presumably hardly be felt in the $2.17 billion investment plan for the area by ruling party Senator Lao Meng Khin and the Chinese Erdos Hong Jun Investment company.

However, the lack of an official response to the Daily’s revelation by either the Boeung Kak investors or the Government indicate that this may be a political stand. Consider the numbers: $2.17 billion in direct investment, much of it from a Chinese firm versus $128 million in pending World Bank spending. The Daily quotes Cambodian Council of Ministers spokesman Phay Siphan, who claims to know nothing specific about the status of World Bank funding but expresses disdain for the Bank’s ostensible nitpicking:

We are looking for a partner to develop the country. They put pressure on the government to do this, do that.

Any guesses as to which partners Mr. Siphan’s bosses might find less demanding?

7 responses to “Breaking news: World Bank funding to Cambodia frozen over forced evictions in Phnom Penh

  1. They suspended pipeline projects that are not yet approved? Which wouldn’t start disbursing for 3 or 4 years anyway? Wow, they’re really playing hardball…

  2. I think that final approval was a formality in these cases and that they would have gone forward by now all other things being equal. On the other hand, the fact that six months of freeze barely seems to have registered politically may indicate that hardball may not be the Bank’s strong suit.

  3. Further developments in relation to this story in the last 24 hours. The government set aside 12 hectares for residents. Difficult to know why this happened as it did, but difficult to escape the conclusion that the Bank’s stance played a role.

  4. Pingback: Cambodia: Resolution of Boeung Kak Lake dispute in sight | TerraNullius

  5. Pingback: Back to business as usual in Cambodia? | TerraNullius

  6. Pingback: World Bank urged to stand firm on land-related rights violations in Cambodia | TerraNullius

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