World Bank Confronts Cambodia Corruption

Far from "Smiling Past Corruption" (Review & Outlook, Oct. 11) in Cambodia, the World Bank is confronting corruption head on in that country. In fact, it was bank staff in Cambodia who first raised concerns about corruption in projects there. Following World Bank investigations, in June 2006 the bank suspended the government's right to draw funds for three projects where we had identified problems.

In response, the Cambodian government agreed to new anti-corruption measures for each project, including intensified audits and the hiring of an international procurement agent. In February 2007, after the government completed all the anti-corruption measures and made substantial progress in hiring the agent (who has now been selected), former President Wolfowitz agreed to lift the suspension on the affected projects. The bank cancelled over $2.5 million in project funding, and the government subsequently repaid the World Bank $2.89 million and agreed to incorporate anti-corruption action plans into all existing and future bank legal agreements. The bank's Institutional Integrity office has initiated the process of debarring firms involved in the affected projects, working through the Sanctions Committee.

Cambodia, which suffered a genocide, needs help both to strengthen its capacity for good governance as well as to build the foundations for inclusive growth. Today, our projects are helping build roads, bring water to poor communities and enable poor people to secure ownership of their land and homes for the first time.

While in Cambodia in August, the new World Bank president, Robert Zoellick, coordinated with the donor community to make the case to the prime minister and other senior officials on the need to stay the course on governance, anti-corruption and strengthening the legal system. The Institutional Integrity office will visit Cambodia this month to follow up.