Cambodia Approves 2.8 Bln Public Investment Plan

Cambodia's Council of Ministers approved a three-year plan drafted by the Ministry of Planning to spend 2.8 billion U.S. dollars on public investment from 2010 to the end of 2012, national media reported on Monday.

Cambodia's Council of Ministers approved a three-year plan drafted by the Ministry of Planning to spend 2.8 billion U.S. dollars on public investment from 2010 to the end of 2012, national media reported on Monday.

The plan related to 536 projects, 389 of which are direct investment with the remainder technical assistance projects, the Cambodia Daily quoted the council as saying.

Minister of Planning Chhay Than said earlier that the majority of the budget would be spent on infrastructure and irrigation systems to boost agricultural production.

The list of planned projects also includes the construction of major roadways, hospitals and schools, Than said.

The new three-year plan is part of the broader national development planning strategy 2006 to 2010, which was approved by the National Assembly in May 2006.

The entire state budget approved for 2009 totals approximately 1.9 billion U.S. dollars, meaning that each year the proposed infrastructure projects would consume the equivalent of about half of the current national budget.
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Cambodia debates merits of land sales

PHNOM PENH, At first glance, one could hardly ask for better circumstances for bilateral trade agreements: Cambodia is economically poor, but rich in farmland; Gulf states lack land to grow food, but have money to pay for it. So Cambodia has been signing deals with Kuwait and Qatar to help develop its agricultural sector.

Cambodian officials, however, refuse to disclose details of the agreements, which are worth hundreds of millions of dollars. Such secrecy has triggered warnings that foreign investors could find themselves embroiled in violent land disputes, which have plagued Cambodia in recent years.

Those concerns were raised recently by the UN’s committee on economic, social and cultural rights. Committee experts asked Cambodia’s representative, Sun Suon, “whether everything, including companies, land rights, could be bought; whether a rice concession made to Kuwait could have negative effects”, according to a May 12 release.

Mr Suon said Cambodia “wished to develop its rice exports and therefore welcomed not just Kuwait, but all countries who wished to invest in agriculture”.

Although he said Cambodia’s justice system “had room to improve”, he said the country operated within a legal framework to protect its citizens.

The UN was not overly reassured. Its conclusions, released on May 22, noted: “The committee was gravely concerned that since the year 2000, over 100,000 people were evicted in Phnom Penh alone.”

Opposition politicians and non-governmental organisations are concerned that agricultural agreements could follow the same pattern of evictions as deals involving such sectors as property development, forestry and mining.

“Nobody has much information on this deal or many other similar deals that the Cambodian government makes with foreign investors,” said David Pred, Cambodia director of Bridges Across Borders, which is involved in land rights issues. “Very often, affected communities are not made aware that their land has been granted as a concession until the bulldozers turn up.”

Son Chhay, an opposition MP, predicted that the implementation of the agricultural agreements would lead to violence.

“When the time comes, no doubt we will see that the armed forces will be sent to break down houses and shoot people, as they have in the past, to force them off the land,” said Mr Chhay, of the Sam Rainsy Party.

Until September, Mr Chhay chaired the parliamentary commission on foreign affairs and international co-operation, which he said was involved in negotiating deals with Kuwait and Qatar. But even so, he could not obtain copies of documents outlining the agreements. He claimed his deputy chairman, a member of the ruling Cambodian People’s Party (CPP), went over his head, attending meetings from which he was excluded.

Un Ning, the former deputy chairman, denied he had any information about agreements made between Cambodia and Gulf states. “I haven’t dealt with this affair. I was not involved in talking about this.”

Cheang Vun, who replaced Mr Chhay as head of the commission, said: “I cannot help you with that.”

Long Visalo, a secretary of state for the ministry of foreign affairs and international co-operation, also refused to discuss the agreements. “I have no duty to talk to you,” he said when contacted by phone.

Mr Chhang said a culture of silence has infected Cambodian politics since a 1997 coup led by Hun Sen, the prime minister, which consolidated CPP power and marginalised opposition parties.

This lack of transparency allows ruling elites to enrich themselves by selling off the country’s natural resources, he said.

The government has made some information regarding the dollar value of deals with Gulf states public: Qatar intends to invest US$200 million (Dh734m) “in rice farmland” as well as provide a loan for irrigation systems, according to a speech given last year by Mr Sen.

After returning from an official visit to Kuwait on Jan 16, Cambodia’s minister of foreign affairs, Hor Namhong, told reporters the countries signed a memorandum of understanding, with Kuwait agreeing to finance a $350,000 irrigation project that would cover 130,000 hectares of rice fields.

But the government has not divulged what Kuwait or Qatar will receive in return. Critics say the devil is in the details.

Mr Chhay and others suspect Qatari and Kuwaiti companies will receive land concessions of 99 years (it is illegal foreigners to own land), as other companies have.

Many agree that Cambodia’s agricultural sector needs an overhaul; its rice farmers produce lower yields than their counterparts in neighbouring Vietnam and Thailand. But Mr Chhay said it was up to the government to invest in infrastructure and aggressively seek export markets.

“You don’t need Middle-Eastern countries who have no expertise in rice farming to come here and take land from farmers. It’s ridiculous,” he said.

“There’s potential for this to be a win-win situation,” he added. “Farmers should sell rice to the government and the government should sell rice to Kuwait.”

An April report by the Washington-based International Food Policy Research Institute advised developing countries to find investors willing to work with small farmers. In return for such investments as credit and technical assistance, farmers would be contracted to sell their crops to the investor. According to the institute, land agreements similar to those in Cambodia have proliferated globally since the food crises of 2007-2008.

“Details about the status of the deals, the size of land purchased or leased, and the amount invested are still murky,” said the report entitled Land Grabbing by Foreign Investors in Developing Countries.

The institute urged developing countries to encourage foreign investment in agriculture, but to ensure that deals are made transparently and include measures to protect local residents.

The Kuwait Embassy in Bangkok, which covers Cambodia, did not respond to requests for comment.

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