Since US President Donald Trump’s inauguration in January, Cambodian Prime Minister Hun Sen has repeatedly called on the new American leader – often personally – to cancel a US$500 million debt owed dating back to the Vietnam War. Hun Sen has made the request to previous US presidents, to no avail. He has referred to the money owed as “blood-stained” and “dirty.”
Between 1972 and 1974, the US Department of Agriculture gave the then ruling pro-US Lon Nol regime US$274 million, officially for food supplies, but most believe it was really used for military purposes. Lon Nol came to power in a US-backed military coup in 1970, only to fall to the Maoist radical Khmer Rouge regime five years later.
The United States has forgiven other past debts when politically expedient. It cancelled almost US$4 billion worth of Iraqi debt incurred during the Saddam Hussein regime, once it was overthrown and replaced by a US invasion. Most debt negotiations are solved by the Paris Club, an informal group of official creditors founded in 1956.
Cambodia serviced debts with France, Germany, Italy and Japan in 1995, the same year Cambodia rejected a US offer made via the Paris Club to waive 58% of the debt in return for payment of the rest. Cambodia’s debt to the US has now doubled due to interest and arrears, representing almost 3% of Cambodia’s current gross domestic product (GDP).
Hun Sen has noted that around the same time the debt was incurred the US dropped more than 2.7 million tons of ordnance on Cambodia, making the country one of the most heavily bombed per capita in the history of warfare. “It is difficult for us to tell Cambodians to accept debt to buy bombs and bullets to kill Cambodian people,” Hun Sen said recently.
US Ambassador to Cambodia William Heidt acknowledges that tragic history, but nonetheless told local media last month that it is “in Cambodia’s interest not to look at the past, but to look at how to solve this because it’s important to Cambodia’s future.” Cambodia is among only four nations, the others being Sudan, Somalia and Zimbabwe, which are in arrears to the US, Heidt noted.
During the 1990s, when Heidt was an economic officer at the US embassy in Phnom Penh, a US offer was tabled for Cambodia to pay back the debt over a 40-year period, he said. At the time, the debt was considerably less than the US$500 million owed today. It is not in “Cambodia’s best interest to keep letting that grow forever,” Heidt said last month, referring to interest accruing on the principal.
The US government has also firmly maintained that if Cambodia wants to be treated by the US and international community like a stable and prosperous country – as Hun Sen has demanded – these are the terms of engagement it should expect.
“The [US] administration is concerned that creating a special debt reduction program for a country that is unwilling, rather than unable, to pay its debts sets a poor precedent for other counties,” Scot Marciel, then deputy assistant secretary for East Asian and Pacific Affairs, told a congressional foreign affairs committee in 2008.
The Cambodian economy has enjoyed rapid economic growth since, fueled by a booming export sector, driven largely by garment exports, and ever rising levels of foreign investment.
“To me, Cambodia does not look like a country that should be in arrears. Buildings coming up all over the city; foreign investment coming in; government revenue is rising rapidly,” Heidt said last month.
Heidt also chided recent bilateral developments, saying he was “disappointed” by Hun Sen’s decision to cancel joint military exercises scheduled for January, in a move widely viewed as a snub to Washington and a nod to Beijing. He said the government’s passage last month of a new political party law that makes it easy to dissolve opposition parties was not “what the Cambodian people want.”
After some bilateral gains, including a 2009 revision that lifted a long-time US ban on Cambodian imports to the US as a Marxist-Leninist country, Washington’s sway over Cambodia has weakened in recent years as China’s has surged through generous aid and large-scale investments.
With democracy and human rights again in retreat in Cambodia, an agreement by the US to renegotiate the debt might provide it with financial leverage to regain some of its lost political influence.
Indeed, the US$500 million repayment issue comes at a trying time for Cambodia’s finances, with national debt standing at around one-third of GDP. The Cambodian economy, which has expanded around 7% per annum over the last decade, could be poised for structurally slower growth due to its fast rising debt obligations, including to China.
Because of Phnom Penh’s persistent refusal to pay, Washington has in kind pressured the International Monetary Fund to restrict its engagement with Cambodia, including the provision of potentially vital loans if new foreign investments start to wane.
“To me, Cambodia does not look like a country that should be in arrears. Buildings coming up all over the city; foreign investment coming in; government revenue is rising rapidly.” – US Ambassador to Cambodia William Heidt
Stratfor, a US-based private intelligence outfit, noted in a report that the debt issue is largely a “symbolic matter”, but that the issue does give the US “more leverage” over Phnom Penh. But if Washington’s aim is to win more influence, including vis-à-vis China, by replacing carrots with sticks, a tough stance on the debt issue could have the opposite effect.
Cambodia plays a pivotal role in Southeast Asia’s politics through what many view as a patron-client relationship with China. In June 2016, Cambodia’s opposition to a strongly-worded statement against China’s ambitions in the South China Sea forced the Association of Southeast Asian Nations to retract the communique, irking regional partners – and no doubt the US – which supported a tough collective stance.
Shortly afterwards, Beijing extended Cambodia more than $600 million in loans and aid.
“Nothing could be better guaranteed to lock Cambodia in behind China on issues like the South China Sea than to destroy any possibility for flexibility towards Cambodia on that issue than this demand for money,” said Tony Kevin, former Australian ambassador to Cambodia, recently told Australian media. “It’s just dumb.”
The US bombed Cambodia, murdered tens of thousands Cambodians and now has the guts to ask money from Cambodia. If anything, the US must compensate Cambodia for the wrongs done to the Cambodians. The US must also compensate the Laotians for the wrongs done to them.
Cambodia’s election is coming up in about 3 months. Hun Sen’s favored candidte just died about a few days ago. Hun Sen may try to hijack this election again by being that candidate’s replacement. If so, Hun Sen may need to know that that U.S loan has not been forgiven. For Kampuchean people: Hun Sen OR Cambodia?
Cambodia should counter-claim for damages due to the illegal and devastating bombing by the USA. That sum would dwarf the Us loan to its puppet Lon Nol.
Cambodia had 150,000 murdered by the US, and still more due to all the bombing. Lao had 580,000 bombing mission against them, the US have spent the same as 3 days bombing missions clearing bombs, and who would not sign up to no more cluster bombs the Fxxxxxg Americans Wxxxxxs
Shameless, disgusting and immoral murderer USA!
As a Cambodian, I can tell you anyone replace Hun Sen will be just as corrupt if not more. This is just fact of life for unde developed countries probably include India and most African countries.
The US secret bombing of Cambodia devastated Cambodia and cause the rise of the Khmer Rouge which killed 2 million Cambodians. US Must share this crime of mass murder with the Khmer Rouge!
The Party of the Royal Lao Government of Vientiane for the Kingdom of Laos, or another word we so-called the (PGVTE) in Exile, the Co-Signatory Party of Vientiabne Agreement on February 21st, 1973; Re-Activated by the 1st. National Convention (Paris Declaration) in Paris, France, on November 7th, 1993; Endorse and Ratiflied by the Second Lao National Convention in Paris, France, on July 16th, 1994, to be completely reformed before we as the Lao-Americans to reconsider this issue. Otherwise, we as the Lao-Americans people will not be allowed our taxpayers to support this issue. Unless the full reformed had been implemented in the past 42 years now. The case of the Lao American people had been filed with the United States Court, Eastern District of Sacramento of CA at this time. The International Lawyers and the Domestic Lawyers had been hired to pursue the case now.
This Proclamation of the Reactivation of the Party of the Government of Vientiane, we so-called the PGVTE, the Co-Signatory Party of Vientiane Peace Agreement dated, 2/21/1973. The Second National Convention, which gatghered together of all the highly responsible persons of the Kingdom of Laos, had taken place on the 16th of July 1994, at the Holiday Inn in Paris-Charles de Gaulle. Were present at this convention: 1) The members of the PGVTE of the Provisional Government of National Union (PGNU), and the Representative Members of the National Assembly and all the Members of the King Advisory Council, the Provincial Governors, the Mayors, the Directors of National Offices, the High Ranking Royal Lao Government Officers, the Generals of National Army and the Polices, the Functionaries, the eminent persons of the Kingdom, who are residing in France and in the other third world countries and every continents around the world. 2) Were also taken part to this National Convention, the Plenipotentiary delegates of the various orgainzations of the Lao Diaspora living in the foreign lands, the Representatives and Members of the Patriotic and political Organizations, i.e., the Movement for Democracy in Laos (MDL in Europe and USA), the Lao American New Leadership Council, USA, and the Representatives of the various National Ethnic Communities around the world, and 3) His Royal Highness the Prince Sauryavong SAVANG, the President of the Lao Royal Family, being allowed all Representatives to visit him at his Palace in Paris, and has assigned Dr. Tiao Jaisvasd Visouthiphong, the Secretary General of the Regency Council, as His Extraordinary and Plenipotentiary Representative to attending this National Convention…
The National Convention has taken the whole day under the Chairmanship of PhaNga Ngon SANANIKONE, Member of both PGNU and other Consecutive National Parliament of the Constitutional Monarchy for the Kingdom of Laos.
Based upon the following critiria, the Participants of the 2nd. National Convention, have unanimously decided as follows: A) Based upon the Agreement on the reestablishment of Peace and realization of the National Concord, signed in Vientiane on the 21st of February 1973 between the "Party of Vientiane of the Kingdom of Laos" which also so-called the "Party of Government of Vientiane (PGVT) and the "Party of Patriotic Forces" or the "Lao Communist Party" in Vientiane today. This Agreement had been concluded in compliance with the stipulation of the Geneva’s International Accord, dated July 23rd, 1962 on the Neutrality for the Kingdom of Laos whose strictly implementation must be jointly execyted by both sides of the isle particularly for the holding of gebneral election which has to be taken in all the territory of Laos and this shall follow by the immediate formation of an authentic and lasting government. B) Based upon the fragrant violation of the Vientiane Agreement as stipulated in point (1) above by the Patriotic Forces, in derogation from stipulation as said, "the internal problems of Laos and must be jointly resolved within the spirit of National Concord based upn the principle of equality of the two parties for mutual respect and non-interference in each other’s internal affairs. C) Based upon the Paris Peace Treaty, dated January 27th, 1973 (signed between USA and North Vietnam) whose stipulations are clearly stated, Cf. Source: Chapter VII, Article 20, which said: "the Parties participating in the Paris Conference on North Vietnam shall strictly respect the 1954 Geneva Agreement on Cambodia and the 1962 Geneva Agreements on Laos, which recognized the Cambodia and Laos fundamental national rights, i.e., the independence, sovereignty, unity and territorial integrity of those two countries. The parties shall respect the Neutrality of Laos and Cambodia. This Accord is being fragrantly violated by the Socialist Republic of North Vietnam. D) In appreciation of the efforts and sacrifices dedicated by the national patriots both from the inside the outside of Laos in a hope that democracy and freedom be re-established in Laos. E) In recognizing the positive results accomplished by the various Patriotic Organization or by the eminent persons with their common approach to solve the Lao National problems based on the mutual respect and cooperation. And F) With reference to the pressing recommendations and stipulations of "Paris Declaration" which has been officially approved on the first Lao National Convention in November 7th, 1993, in Paris, France.
Juridically speaking, it’s fully uncontestable that the leaders of the Lao People’s Democratic Republic, 1) had violated the Accords on the reestablishment of peace and the realization of the national concord of February 21st, 1973; 2) had abilished the Provisional Government of National Union (PGNU), the monarchy and democratic parliamentary regime; and 3) had instituted the communist regime in Laos in violation not only of the 1962’s geneva Accords on the Neutrality of Laos, but also the clauses and stipulations of Internal Accord of the Vientiane Peace Agreement on February 21st, 1973 as well, on the reestablishment of peace and national accord. Therefore, with the reform of the government for the Kingdom of Laos and there will be no plan to support debts free for the country. Thanks for your attentions.
As the Lao Americans, we have lost the country to the Communist Pathet Lao throughout the supporters of Soviet Union, Norther Vietnam and China. Real political opposition has not been tolerated. Many Lao overseas people and many of our brothers and sisters at home have been imprisoned, abduction, and persecuted with the goal of maintaining the communist state in Laos. The Lao PDR had forty-two 42 years failed sufficiently meet the most basic needs of the Lao peoples. The country’s people remain among the poorest on earth today. There is no genuine free market economic system, no real foreign investment policy, no tax base, high unempoyment, unpaid government employees, particularly nurses, teachers, rampant bureaucratic corruption, high inflation, and overdependence on indebted foreign aid. There will be no compensation up until the Kingdom of Laos had been restored and reformed in Laos…
Got the feeling you are a CIA stooge.