Economic and Social Development: Framework for a Comprehensive Political Settlement of the Cambodia Conflict
Implementations
Economic and Social Development – 1991
Post-war reconstruction of Cambodia began immediately after the signing of the Paris Accord. The initiatives, however, were largely led by the international community. It was reported that the Foreign Ministry of Japan was sending a team to Cambodia to study the reconstruction of the war-torn country.1
- “Foreign Ministry to send reconstruction team to Cambodia, Report from Japan,” United Nations, December 11, 1991.
Economic and Social Development – 1992
In a donor conference in Tokyo, Cambodian leader Prince Norodom Sihanouk emphasized the need to assist the agricultural sector and rural peasants. Besides clearing mines, he highlighted the urgency of coming up with an expedient way of providing water to rural peasants, utilizing hand drills to dig wells in sufficient quantities, utilizing bulldozers and other machines to dig water reservoirs in large numbers, and building as many dams as possible. He prioritized the need to rehabilitate agriculture. He asked that diversified aid be given to the majority of the population in order that they would be able to deal with different reconstruction and rehabilitation issues.1
Cambodia received tremendous international support in its various initiatives, including the reconstruction of infrastructure and rehabilitation of those displaced during the war. At the Tokyo donor conference held on June 21-22, 1992, the donor community pledged $880 million in aid. The conference concluded with the Tokyo Declaration.2
- “Sihanouk’s Speech Emphasizes Assisting the Poor and Agriculture,” BBC Summary of World Broadcasts, June 23, 1992.
- “Tokyo Declaration on the Reconstruction and Rehabilitation of Cambodia,” BBC Summary of World Broadcasts, June 24, 1992.
Economic and Social Development – 1993
On July 20, 1993, the Cambodian and Japanese governments agreed to cooperate on the construction and restoration of 37 km of roads and 14 bridges.1
On August 19, 1993, the Japan International Cooperation Agency (JICA) said it would strengthen its cooperation on Cambodia’s postwar reconstruction ahead of the establishment of a JICA office in Cambodia in September.2 The United Nations Transitional Authority in Cambodia (UNTAC) had been the life-support system for the Cambodian economy, which was in critical condition. As the removal of UNTAC drew near, Sam Rainsy, Finance Minister of UNTAC, issued calls for continued international aid to assist in repairing and building up Cambodia’s infrastructure. Cambodia had prioritized agriculture as the centerpiece of its economic reconstruction. More than 80% of the population was engaged in farming and agriculture contributed to about 45% of the nation’s GDP. Cambodia exported rice in the 1960s, but in 1993 was unable even to meet the annual demand for domestic consumption (2.5 million tons) and had to rely on foreign donations of about 200,000 tons. Inadequate irrigation facilities and insufficient use of agrochemicals had caused the per-hectare harvest to fall to 1.2-1.4 tons, a quarter of the Japanese standard. Cambodia aimed to become a rice exporter by the end of 1995 by increasing the amount of land cultivated.3
- “CAMBODIA; Road and bridge construction and reconstruction agreement signed with Japan,” BBC Summary of World Broadcasts, July 23, 1993.
- “CAMBODIA; Japanese aid agency to open Phnom Penh office,” BBC Summary of World Broadcasts, August 21, 1993.
- “Cambodia braces for U.N. pullout: SHOCK TO ECONOMY THREATENS STABILITY,” The Nikkei Weekly (Japan), October 4, 1993.
Economic and Social Development – 1994
At a donor’s conference in Tokyo in March 1993, Cambodia secured 773 million US dollars for reconstruction projects. But reconstruction remained a daunting project due to the elusive political stability in post-UNTAC Cambodia. To reform and restructure the economy, on December 16, 1994, Cambodia signed loan agreements worth 44 million dollars with the World Bank and the Asian Development Bank.1
Economic and Social Development – 1995
It was reported that the first prime minister of the Royal Cambodian Government suggested that Japan choose their own projects and pay for them themselves without giving financial aid to the Cambodian government. There was growing concern regarding the corruption in the government agency.1
After nearly 25 years of war, the path of Cambodia’s reconstruction and economic development was long and difficult. The real problem facing Cambodia was poverty. The people in the countryside lacked food and water. According to the Christian Science Monitor report, the Cambodian economy as a whole was expanding – investment was up and inflation was down – but major foreign-backed projects were under scrutiny and ordinary people were complaining more loudly than ever about their prospects.2 During the donor’s conference, Cambodia received $1.35 billion in commitments from the international community.3 “Japan, ASEAN countries, and Cambodia had initiated their tripartite cooperation to help the reconstruction of Cambodia with the emphasis on communities. The tripartite cooperation programme is regarded as a model for Cambodia’s rural development centre to be set up” (BBC, 1995).4
- “Foreign relations: Ranariddh tells Japan to manage aid itself as “Cambodians might embezzle it,” BBC Summary of World Broadcasts, February 21, 1995.
- “Cambodia: A United Nations Success Story Going Awry?” Christian Science Monitor (Boston, MA), March 8, 1995, 8.
- “Cambodia to receive 1.35 billion dollars in 1995 and 1996,” Deutsche Presse-Agentur, March 16, 1995.
- “Participation in reconstruction of Cambodia renewed,” BBC Summary of World Broadcasts, April 4, 1995.
Economic and Social Development – 1996
According to an E.U. statement, between 1992 and August 1996 the European community had committed over 200 million dollars to Cambodia in the fields of demining, rural development, human resources development, health, and environment.1 Special attention was given to rural development in Cambodia’s post-war reconstruction and development process. Hun Sen, the second prime minister of Cambodia, said that socio-economic development in rural areas was a powerful way to improve the livelihood of the people and thwart the influence of the Khmer Rouge.2
- “E.U. officials inspect demining in Cambodia,” Deutsche Presse-Agentur, August 5, 1996.
- “Working together to re-construct war-torn Cambodia,” New Straits Times (Malaysia), October 28, 1996.
Economic and Social Development – 1997
Another conference of donor countries met in Paris on July 1-2, 1997. In the multilateral donor meeting, Cambodia was expected to win international aid commitments of about 449 million dollars. In the conference, Cambodia was told to put its house in order or face dwindling support. Donor countries also criticized Cambodia for spending too much money on its security forces.1 On July 7, 1997, Hun Sen, the leader of the Cambodian People’s Party (CPP), overthrew Prime Minister Norodom Ranariddh in a brutal, bloody coup, which created resentment in the donor community. This impacted economic and infrastructure reconstruction efforts.
Economic and Social Development – 1998
Notwithstanding the political instability or uncertainty after the coup, Cambodia’s strongman vowed to continue with economic and infrastructure development efforts. He proposed measures to bring back foreign investors, including eliminating illegal tax collections, cracking down on kidnappings of businessmen, and the implementation of new infrastructure projects and judicial reform.1
- “Cambodian strongman vows to push reforms despite political deadlock,” Deutsche Presse-Agentur, October 22, 1998.
Economic and Social Development – 1999
In a donor conference held on Feb 25-27, 1999, Cambodia received pledge support of $470 million from the international community.
The Malaysian Prime Minister and Cambodian Prime Minister held a talk on the possibility of Cambodia’s entry into ASEAN. In the meeting, the Malaysian Prime Minister pledged that Malaysia would look into Cambodia’s request for training in industry, foreign policy, oil, and gas, as well as agriculture. This training included establishing water resources and building dams and water catchment areas. The Cambodian Prime Minister also asked for credit to finance such endeavors. Despite the economic downturn in the region, Malaysia continued to invest in the Cambodian project, with 31% of its total foreign direct investment going to Cambodia.1
- “Premier Mahathir discusses ASEAN entry, investment with Cambodian counterpart,” BBC Summary of World Broadcasts, February 6, 1999.
Economic and Social Development – 2000
After attaining political stability, Cambodia continued to receive external support of its efforts to rebuild its economy and infrastructure. Ariston Sdn Bhd, a Malaysian-based multi-national corporation, has revived its massive 1.3 billion US dollar (S$ 2.2 billion) infrastructure project in Cambodia, the biggest source of foreign investment in the country.1 In September 2000, the Asian Development Bank had approved a 16 million dollar loan for a package of infrastructure and training programs to help farmers in the Cambodian province of Kompong Thom increase their incomes by 40 percent.2 Cambodia received support from the United States to rebuild its health infrastructure.3
Note: The information above gives the amount of money pledged at the donor conferences, but not the amounts that were actually spent. On the topic of socio-economic development, the boom of the garment and tourism industries that had been taking place in Cambodia since 1993 is also worth mentioning.