The World Bank said Tuesday it will no longer provide new loans to Cambodia until the government resolves a land dispute surrounding a controversial development project in Phnom Penh.
The action drew a sharp rebuke from Prime Minister Hun Sen’s government, which called it an “abuse of Cambodia’s integrity and its independence.”
Annette Dixon, country director for the World Bank, said in the statement that the loan freeze will not be lifted “until an agreement is reached with the residents” facing eviction from land around a lake in the country's capital.
"We are continuing to encourage the Government of Cambodia to reach an agreement to provide on-site housing for the remaining residents of Boeung Kak Lake," she said, adding that discussions between the government and residents are ongoing.
In March, an independent inspection panel found that the World Bank had mishandled a land titling program in Cambodia that led to the eviction of thousands of residents from the lake district in central Phnom Penh over the past two years.
Following the panel’s findings, the bank offered to help the government find a solution for the residents, but it also warned that it would reconsider its work in the country if the forced relocations were not halted.
Tuesday’s statement showed that the World Bank means business in Cambodia, where its last loan was provided in December last year. In the meantime, Dixon said, the bank will continue to honor its existing commitments to the country.
“The government is continuing to implement existing programs and we are working with the government to ensure that all its legal obligations under those projects will be met," she said.
‘Working for the public’
Responding to the statement, Cambodian Council of Ministers spokesman Phay Siphan told RFA that the government would not fold to pressure from the bank.
“The World Bank’s decision to halt the loans is contrary to the agreement between the government and the bank. The decision was made solely by the bank,” he said.
He added that government is continuing to work to resolve the dispute at Boeung Kak Lake, but not because of the bank’s decision. Phay Siphan called the bank’s statement an “abuse of Cambodia’s integrity and its independence.”
“We are working for the public benefit, not for the bank loan interests,” he said.
The bank currently has some U.S. $400 million committed to more than 20 active projects in Cambodia, according to its website.
More than three-fourths of nearly 4,000 families have been forced from their homes as construction crews fill in Boeung Kak Lake, and many had to accept what they consider inadequate compensation from the government.
The remaining families, who have held frequent protests in recent months, say they are holding out for property on the same site after the construction is complete or greater compensation, and are currently in talks with city officials and the developer.
A company owned by a politician from the ruling Cambodian People’s Party plans to redevelop the 330-acre (133-hectare) lake district into a luxury residential area, office complex, and shopping center.
Many residents say they are entitled to the property under Cambodia’s Land Law, though few of them possess titles, because they have squatted there for decades.
Police and company workers have threatened and harassed the residents in attempts to prevent them from holding meetings and from peacefully protesting against the forced eviction.
Police have also used excessive force against some residents when they gathered to bring the issue to the attention of visiting dignitaries and Cambodian politicians, rights groups said.
Phnom Penh Mayor Kep Chuktema particularly was blamed for not meeting the residents over their complaints, according to a representative of the Boeung Kak residents.
Cambodia’s land issue dates from the 1975-79 Khmer Rouge regime, which forced large-scale evacuations and relocations throughout the country. This was followed by mass confusion over land rights and the formation of squatter communities when the refugees returned in the 1990s after a decade of civil war.
Housing Cambodia’s large, young, and overwhelmingly poor population has posed a major problem ever since.
An estimated 30,000 people a year in Cambodia are driven from farmland or urban areas to make way for real estate developments or mining and agricultural projects.
The World Bank established the Cambodian Land Management and Administration Project (LMAP) in 2002 to support the formulation of policies for land administration, management, and distribution in the country, but the government canceled the project in 2009 after the bank requested a suspension to look into complaints by residents over evictions and other issues.
During his visit to the country in February, the U.N. Special Rapporteur to Cambodia Surya Prasad Subedi discussed land rights issues with ADHOC director Thun Saray, calling for “a swift and satisfactory solution for those who have been affected by the land conflict.”
Reported and translated by Samean Yun for RFA’s Khmer service. Written in English by Joshua Lipes.