Aid donor battles Cambodia over forced evictions

Poor residents fight eviction in Cambodia's capital, and the World Bank fights the government

PHNOM PENH, Cambodia (AP) -- A manmade sand dune looms over Cham Pothisak's tin-roof and plywood shack, left by builders who want to transform the sprawling slum-like neighborhoods on the periphery of Phnom Penh's largest lake into fancy villas and office space.

Cham and his family are among 10,000 people who face eviction because of a questionable deal turning over some of the Cambodian capital's priciest real estate to a company reportedly owned by a close associate of the prime minister.

Their predicament stems in part from a flawed $23.4 million World Bank program that was supposed to prevent such land grabs by strengthening people's title to their land. The problems illustrate how difficult it can be for well-intentioned outsiders to bring about change in developing countries plagued by corruption and entrenched interests.

The dispute over Boeung Kak lake has embarrassed the World Bank and led to an unusually tense standoff with Cambodia's government. The bank issued an ultimatum in March demanding a halt to evictions and higher compensation for landowners. A May 8 deadline has been pushed back to next Monday, though the bank is not likely to act immediately.

The 38-year-old Cham likens the situation to life under the Khmer Rouge, the ultra-Marxist regime that terrorized the country for four years in the late 1970s.

"We're angry but we can't do anything against them," he said. "It's like the Khmer Rouge all over again. We're helpless."

The root of the mess lies with the Khmer Rouge, which outlawed private property in a bid to create an agricultural utopia. An estimated 1.7 million Cambodians were killed or died of starvation or disease under its brutal rule and failed polices.

Since the Khmer Rouge was ousted in 1979, the United Nations and other international groups have tried to help rebuild the country and its government institutions, with mixed results. Democracy has struggled; Prime Minister Hun Sen consolidated power in a 1997 coup and has not relinquished it since. A real estate boom has driven land-grabbing by wealthy or politically connected developers to new heights, activists say.

In 2002, the World Bank, the Washington-based institution focused on development and poverty reduction, helped set up the Land Monitoring and Administration Program to build a system of paper titles and central registries. Germany, Canada and Finland helped finance the effort.

When the lands in question were marginal, the system appeared to work. Government surveyors interviewed owners, reviewed documents and issued more than 1.2 million titles, a sign of the program's success, the bank says.

But when business interests wanted land -- for logging, sugar plantations or real estate, for example -- the process actually left some more vulnerable to eviction.

That's because government officials running the program would simply reject claims from poor landowners or deny them the right to appeal, said David Pred, whose organization Bridges Across Borders Cambodia advocates for landowners.

"Meanwhile, the wealthy and well-connected have little difficulty in acquiring land title in high value areas in which poor communities reside due to their connections or their ability to pay the high 'unofficial fees,'" Pred wrote in an email.

A 2006 report done for the German government's aid agency found that 20 percent of households surveyed were refused the right to prove ownership of their property, according a land-use consultant with firsthand knowledge of the report. The consultant spoke on condition of anonymity because the report is not public.

Many landowners around Boeung Kak -- a 330-acre (133-hectare) bowl of sewage-filled water and trash-littered marshes in the shadow of high-rise banks and government ministries -- expected to have a chance to argue their claims after workers began surveying their properties in May 2006.

But in January 2007, authorities surprised residents, activists and foreign donors by refusing to acknowledge any records of the residents' properties, essentially pre-empting any ownership claims.

The next month, the government announced that a company called Shukaku Inc. had acquired the development rights to the lake under a $79 million, government-backed 99-year lease. The land was worth far more, residents say.

Shukaku's chief is widely reported to be Lao Meng Khin, a ruling party senator, reclusive businessman and close associate of Hun Sen.

By August 2008, workers had started pumping sand into the lake, creating berms like the one menacing Cham's house. Torrents of sand and water flooded some homes almost instantly, sometimes in the dead of night. The World Bank and many foreign embassies complained.

In September 2009, the government abruptly canceled the land title program, citing what Hun Sen called "complicated conditions."

Most of the lake is now filled, the sand all but destroying its ecology. More than 2,000 families have already moved. The remaining landowners complain that the compensation being offered is laughable, particularly given skyrocketing real estate values.

Authorities "aren't stupid, they're just corrupt. They just have no conscience," said Tep Vanny, who faces eviction from her house on the lake's east side. "It's a way to keep the people poor, and for them to stay in power."

Neither Shukaku officials nor Lao Meng Khin responded to written requests for interviews.

Government officials, including the Phnom Penh governor and the national government's chief spokesman, either refused to comment or take a reporter's repeated phone calls.

In an internal report released March 8, World Bank inspectors concluded the land title program was flawed in its design, violated bank social and environmental policies and may have made it easier to evict landowners.

The bank also warned that it would reconsider both current and future projects in Cambodia if the government doesn't help resolve the Boeung Kak controversy. Bank President Robert Zoellick took the unusual step of publicly criticizing the government on the day the inspectors' report was released.

Aid experts say the government does not want to be seen as being pushed around by a foreign institution and may be using the fight as a signal to keep other donors in check. For the World Bank, its credibility is at stake if a strong-arm government can ride roughshod over bank policies to protect the poor.

Sia Phearum, head of a Cambodian housing rights organization, said that people in many countries welcome development projects and the hope they bring for better lives -- but not in Cambodia.

"In Cambodia, people who have no land have no hope," he said.