With the victory of President-elect Joe Biden from the Democratic Party, the Cambodian government hopes that the country’s United States war-time debt, which has accumulated to more than $600 million, may be cancelled by the new US administration.
“When he won the election, Joe Biden gave hints that he will collect friends and ease the political tension in the world [under President Donald Trump’s administration],” said Sok Eysa, spokesman for the Cambodian People’s Party (CPP).
He added: “Meanwhile, I think Cambodia’s debt [to the US] is very small. Therefore, I think there is a possibility that the US may cancel the debt or use it to help build and develop Cambodia. I think it is a good thing. This is just my view, but I don’t know what will exactly happen.”
Eysan said he was not sure when asked if the new US administration would set any conditions if it does agree to cancel the debt.
It should be recalled that while busy fighting Khmer Rouge guerillas in the 1970s, the US-backed Lon Nol government was given $274 million to buy rice, wheat, oil and cotton. The current debt includes interest accrued on this original loan.
When asked about the loan via email this week, a spokesman for the US Embassy in Phnom Penh declined to comment. However, during a media roundtable held at the US Embassy in Phnom Penh in October, US Ambassador to Cambodia Patrick Murphy said the debt has grown to over $600 million, saying it is a “bilateral debt issue”.
“Any government assumes debt responsibility. That’s the nature of governance and that’s in accordance with international standards,” he said at the time. “It is an issue. I would love to see the result, but in order to resolve a debt issue both sides have to have good faith and have to have a good environment in the relationship to make some progress.”
Murphy said debt is a serious issue in the US Congress and plays a role in policy making. He said Cambodia has more significant debts with other countries than with the US.
Kong Monika, Khmer Will Party president, said he believed the US would maintain its position to keep the debt or it could turn Cambodia’s debt into development aid.
“However, in order for the US to turn [the debt] into development aid, Cambodia needs to appropriately and correctly follow the path of democracy by allowing wider democratic space in Cambodia such as freedom of expression and the right to freedom of assembly and to hold demonstrations,” he said.
He added: “So far, Cambodia seems to have a setback in these basic rights. Therefore, we are worried that Cambodia and the US will not have a good relationship if this situation continues and Cambodia continues to have such a narrow space for democracy.”
Pech Pisey, executive director of Transparency International Cambodia, said he believed it would be difficult for the US to cancel Cambodia’s debt based on complicated procedures.
“Except if there is any political exchange that serves the interest of the US, they may be able to push for this [debt exemption],” he said. “But, Cambodia is a country which does not have a big advantage for the US and Cambodia is an unimportant geopolitical area, so it may be difficult to push for [debt exemption].”
“If we show country-to-country cooperation which benefits both the US and Cambodia, which we call the ‘win-win’ policy, it may be easy to talk to each other,” Pisey said.
However, he said the US administration under Joe Biden may weigh between debt exemption and Cambodia’s records for the respect for human rights and democracy.
“It may not be difficult for Cambodia if it wants the debt to be cancelled in talking to a free country like the US if we have the will to respect some principles such as democracy, the rule of law and social justice,” Pisey said.
Kin Phea, director-general of the International Relations Institute of Cambodia at the Royal Academy of Cambodia, said he saw that the possibility of the new US administration cancelling Cambodia’s debt to the US as still being bleak.
“As far as I can see, there are no signs in the list of the agenda of Joe Biden’s administration,” he said.
Nevertheless, Phea said the best way is for diplomats from Cambodia and the US to talk to each other in order to encourage the new US administration to put the
issue of debt exemption for Cambodia on the table.
“They may not spontaneously put this issue into the agenda,” he said, adding: “Cambodia and the US even have different definitions on what debt is.”
Phea said: “The US said the government of Lon Nol had used the debt for the development of the country’s agricultural sector and so on, while Cambodia sees it as ‘a blood debt’ which was used to buy weapons and ammunition to fight [during the war].”
As under the administrations of previous US presidents, whether they were from
the Republican Party or the Democratic Party, Cambodia may have to wait for more US elections to find the right president who decides that Cambodia’s war-time debt can be cancelled.