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US Policy Remains Unforgiving of 1970s Debt

The US expects Cambodia to repay $300 million in loans from the Lon Nol era, despite hopes in Phnom Penh the debt will be canceled, a US State Department official said Tuesday.

“We think Cambodia should begin to make payment on it,” Deputy Assistant Secretary of State Scot Maciel said. “The Cambodian government has not been willing to do so. So this is something we will continue to talk about.”

Maciel, who is also the ambassador to Asean, was addressing reporters in Phnom Penh, following a four-day visit, during which he met with Foreign Minister Hor Namhong and other Cambodian leaders.

Hor Namhong met with US Secretary of State Hillary Clinton last year and asked that the debt, stemming from weapon purchases in the 1970s, be canceled.

“We have made it clear all along that we’re willing to work with Cambodia and with other creditors to schedule the debt payment in such a way that would not be an undue burden on Cambodia,” Marciel said.

Cambodia has also proposed the debt be converted into development assistance for social sectors like health and education, and idea welcomed by several US congressmen who visited late last year but one that is not yet US policy.