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World Bank Loans Prompt Credibility Questions

Private security guards stand at the entrance of the headquarters of the World Bank, in Washington D.C., file photo.

The Bank announced on May 19 it would issue $130 million in new loans to Cambodia to fund poverty reduction projects.

The World Bank’s decision earlier this month to resume lending to Cambodia after a five-year moratorium has drawn criticism from development experts.

The Bank announced on May 19 it would issue $130 million in new loans to Cambodia to fund poverty reduction projects.

It had placed a freeze on new loans in August 2011 after coming under fire for its support for a land titling scheme for victims of forced eviction from Boeung Kak lake.

Phil Robertson, deputy director of Human Rights Watch’s Asia division, said that the Bank’s decision to go ahead with the planned loans would be interpreted as a “green light” by the government to continue its ongoing crackdown on dissent.

“The unfortunate reality is that obviously the World Bank is politically tone deaf when it comes to dealing with human rights,” he said.

“You know that is an unfortunate stance. I mean none of the corruption has been handled in Cambodia; none of the human rights issues have been handled. The problems with land and the seizures of land by cronies connected to the government have not been solved.”

David Pred, managing director of NGO Inclusive Development International, said that the Bank had taken a “rare stand for human rights and accountability when it suspended new loans to Cambodia pending a satisfactory remedy for the Boeung Kak Lake residents.”

“By renewing lending now without first ensuring assistance is provided to the thousands of people who were forcibly evicted and impoverished, the Bank is squandering its credibility,” he added.

The government has often accused those critical of donors who look the other way when right abuses occur as impediments to development, something Pred says is not an accurate characterization.

“I don't know anyone who wants to block the development of Cambodia. Those who are protesting this decision simply want to see a different development model - one which places the rights and well-being of people above the interests of the ruling elite and foreign investors.”

The new loans include funding for a controversial land concession project that could see villagers in Kampong Thom province forcibly relocated.

Chheang Vannnarith, head of the Cambodian Institute for Strategic Studies, said that the Bank was seeking to keep its relevance in the region amid the increasing clout of the China-led Asian Infrastructure Investment Bank.

“I think that the World Bank has bent along with a political and economic strategy in the region. So, I see that it turns and obviously I see that the World Bank does not want to lose its role in South East Asia, especially Cambodia.”