Clinton flags Lon Nol debt negotiations

Photo by: Will Baxter
Hillary Clinton is guided through the Tuol Sleng genocide museum by the director of the Documentation Center of Cambodia, Youk Chang, on Monday.

via CAAI

Monday, 01 November 2010 19:28 Thomas Miller

United States Secretary of State Hillary Clinton has said that Washington would dispatch a “team of experts” to resolve the long-standing issue of the Kingdom’s Lon Nol-era debt to the US as she completed her two-day visit to Cambodia.

Following a meeting with Foreign Minister Hor Namhong, America’s top diplomat said the debt required “immediate attention”, and that she would move the issue “up the ladder of priorities” for Washington.

“There have been no discussions since 2006 at all, and we think it’s time for our experts to meet and explore a broad range of potential areas for settling of this debt,” Clinton said.

“It is a concern that it has not been even addressed, and I would like to see us make it a priority, and [Hor Namhong] has agreed, so we will begin to work on that together.”

Clinton said she had “no preconceived notion” of how the matter would be resolved, but told students at a town hall meeting that repayment could perhaps be redirected to priority sectors in the Kingdom.

“You could have some repayment, you could have debt for nature, you could have debt for education,” she said. “There are things that the government of Cambodia could do that would satisfy the need to demonstrate some level of accountability but, more importantly, to invest those funds in the needs of the people of Cambodia.”

The Kingdom has long called for the US to cancel its Lon Nol-era debt, which now stands at US$445 million with interest.

In a speech in September, Prime Minister Hun Sen called the sum a “dirty debt” that was used to fund bombs “dropped on our heads” in the early 1970s by US forces.

“We requested that this debt be resolved through two agreements. One is an agreement reached through Paris Club principles,” Hor Namhong said, referring to the association of economic officials from developed countries who work to relieve or restructure sovereign debts. “Second is an agreement to resolve the debt by transferring it to development.”

Clinton arrived in the Kingdom as part of a region-wide trip that has also taken her to China and to Vietnam for last week’s ASEAN summit.

She said her visit to Cambodia was the result of a commitment “to restoring America to a high level of engagement in the Asia-Pacific region”.

Asked at the meeting about the rising Chinese influence in Cambodia, Clinton warned the Kingdom not to become too dependent on Beijing and said it was “smart for Cambodia to be friends with many countries”.

“China is a great country and has an exciting future,” she said. “There are certainly many reasons for Cambodia to have a good relationship with China. I think there are also important issues that Cambodia must raise with China.”

Wu Bangguo, chairman of the standing committee of China’s national people’s congress, will arrive in Cambodia for a four-day visit Wednesday, Chinese embassy spokesman Qian Hai said.

The visit follows Hor Namhong’s announcement on Sunday that China had promised to support the construction of a $600 million rail link between Cambodia and Vietnam.

In addition to her meeting with Hor Namhong, Clinton also met Hun Sen, King Norodom Sihamoni and opposition leaders.

ADDITIONAL REPORTING BY THOMAS MILLER