State Department says Cambodia has ability to pay off US debt

WASHINGTON - The State Department says that cancelling Cambodia's debt would set a bad example because the impoverished country has the ability to pay what it owes the United States.

Joseph Yun, a deputy assistant secretary of state, said Thursday at a congressional hearing that even as Cambodia has accumulated debt with the United States, it has paid off other creditors on time.

Yun says the debt stems from low-interest loans in the 1970s for U.S. agricultural commodities. He says it was about $445 million by the end of 2009.

Eni F.H. Faleomavaega, chairman of the House of Representatives Asia subcommittee, says other countries have cancelled debt for Cambodia, while the United States insists on "squeezing this little, least developed country."