Tue, Dec 07, 2004 - Page 5 News List

Donors slam Phnom Penh government for squandering aid

DEMANDS FOR REFORM Foreign donors -- who provide Cambodia with half its annual budget -- criticized the government for squandering their funds

AP , Phnom Penh, Cambodia

Cambodia's foreign aid donors lashed the government yesterday for failing to curb corruption, saying the problem was ruining the nation and suggesting they might have to reconsider future funding plans.

Cambodia loses an estimated US$300 to US$500 million annually to corruption, according to a study prepared for the US Agency for International Development (USAID).

"It is no exaggeration to view corruption as a cancer that threatens this country's economic, political and social development," said US Ambassador Charles Ray, speaking at the opening of a two-day conference at which the donors -- known collectively as the Consultative Group -- will determine what aid to give Cambodia next year.

Cambodia is asking donors -- who have been holding such meetings for about a decade -- for US$1.8 billion in development aid for next year to 2007, Cambodia's Finance Minister Keat Chhon has said.

The assistance from Western countries, Japan and international institutions such as the World Bank provides about half the government's budget.

The squandered funds include foreign aid, and "Without doubt the misuse of donor resources undermines the effectiveness of assistance and puts the prospects for future contributions in jeopardy," Ray said.

"Donors want to see accountability, especially when resources they have provided appear to be diverted for personal gain. There is widespread consensus that defeating corruption is the key challenge facing Cambodia."

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