It was by all accounts a big deal: On November 2, Prime Minister Hun Sen emerged
from a meeting with his Chinese counterpart Zhu Rongji and told reporters of a
gift "beyond our expectations".
The Chinese premier, he said, had
declared that all Cambodia's debts to the Middle Kingdom would be
relieved.
Or has it? The answer is that most people don't know, while
those that do aren't telling. What seems clear, though, is that the offer might
not be as generous as everyone first assumed.
An article posted on
China's Ministry of Foreign Affairs website that same day stated that all debts
had not in fact been written off. The offer instead referred only to those debts
that had fallen due.
"Zhu announced that the Chinese government has
decided to write off all Cambodian debts to China that have matured, which is
part of China's plans to cut or write off debts owed to China by Asian nations,"
it said.
Neither the Chinese nor the Cambodian government would clarify
what the deal was worth or - what could prove equally intriguing - when the
loans were contracted.
The deputy secretary-general at the Ministry of
Economy and Finance, Vong Soy Visoth, is in charge of accounting for the
government's debt, but couldn't help. Also unable to assist was government
spokesman Khieu Khanarith.
The first secretary at the Chinese Embassy in
Phnom Penh, Wang Tian, also did not know. On a request two months ago for the
same information, he had said the figure might be "related to confidential and
undisclosed material".
What is clear is that the Cambodian government has
borrowed at least $210 million from China since 1999. The five-year $10 million
Agreement on Economic and Technical Cooperation kicked off last January, and
back in February 1999 Hun Sen inked a $200 million loan for infrastructure in
Beijing. Both agreements were said to be interest free.
And in April
1999, the then economic and commercial counselor at the Chinese embassy, Chai
Zhizhou, told the Post the $200 million loan was very loosely
defined.
"There hasn't been any discussion of a [loan] repayment
schedule," he said at the time. "There's no time limit [on the loans
repayment]."
However none of that $210 million has matured. So if the
Chinese government's own website is to be believed, it isn't included.
It
is also not clear whether on-lending loan agreements - money lent to one party
who in turn lends it to another at a higher interest rate - that went to private
Cambodian enterprises, were part of that February 1999 pledge.
On
Christmas Day two years ago, the People's Daily in China reported that the
Cambodian government would on-lend a 50 million Yuan ($6 million) Chinese loan
to a private enterprise to construct a textile factory with a repayment period
of 20 years.
Two months earlier the same paper reported a 99.6 million
Yuan ($12 million) loan for a joint venture fiberboard plant in Kampong Cham
with Cambodia's Men Sarun Import-Export Corporation Limited. That loan was due
to mature in 2012, so is likely not part of this deal.
So with only vague
details provided on the nature of the loans, observers were left to speculate
about the actual amount. One report had the figure as high $1 billion. Some
speculated that the debt eradicated was in fact loans to the Khmer
Rouge.
That was certainly the conclusion of opposition leader Sam Rainsy,
a former finance minister. He referred to the debt at a press conference in
which he downplayed the significance of the ASEAN summit to Cambodians.
"Nobody knows what it's about. How much, when from," he said of the
debt. He mused that it may have stemmed from the Pol Pot regime, which meant
Cambodia would never have repaid it anyway.
