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Russia converts debt to investment

Khy Sovuthy / Khmer Times Share:
Prime Minister Hun Sen with his Russian counterpart Dmitry Medvedev. Fresh News

Russia has agreed to recategorise Cambodia’s outstanding $1.5 billion debt as an investment, pledging to provide more aid to the Kingdom next year.

Prime Minister Hun Sen met with Russian Prime Minister Dmitry Medvedev in Brussels on Thursday. Mr Hun Sen had asked Russia to convert the Kingdom’s debt into “investment”.

The debt was accumulated during the 1980s.

“Russia will [recategorise] that debt as an investment in Cambodia,” Mr Medvedev said after the meeting.

He added that Russia will also help to improve the Khmer-Soviet Friendship Hospital and also mend the Kingdom’s ancient temples.

During the meeting, both sides vowed to enhance trade, investment and security cooperation. The Russian news agency TASS will open its Cambodia bureau soon in order to strengthen media ties.

Following the meeting, Mr Hun Sen invited the Russian government to participate in the Asia-Europe Summit in 2020 which Cambodia will host.

Aside from Russia, Cambodia owes about $500 million in debt to the United States.

In February, Lieutenant General Hun Manet, deputy commander of the Royal Cambodian Armed Forces’ army, said the United States lent the money to President Lon Nol to kill Cambodians.

“There was an attempt in the past to persuade the armed forces to join a movement against the government through the promise of high salaries,” he said. “It failed because the army had faith in the government and understood the value of peace and the consequences of war.”

Former US Ambassador to Cambodia William Heidt told Cambodian officials that a deal should be worked out to pay off the Kingdom’s $500 million war debt.

The debt was originally a $274 million loan for food and supplies for the Lon Nol regime in the 1960s and 1970s, but has grown to about $500 million today.

“To me, Cambodia does not look like a country that should be in arrears,” Mr Heidt said. “Buildings are coming up all over cities and foreign investment is coming in.”

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