World Bank Freezes Loans to Cambodia Over Lakeside Development

Posted August 9th, 2011 at 3:50 am (UTC-5)
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The World Bank said Tuesday it will not issue any new loans to Cambodia before the government resolves a dispute with citizens displaced by a lakeside development in Phnom Penh.

Country director Annette Dixon confirmed to reporters that the lending institution has not made any loans to the country since December and will not do so until an agreement is reached with the residents of Boeung Kak lake.

Thousands of families are being displaced by the 133-hectare development, which involves filling in the lake. The project is being handled by a private company headed by a ruling party politician and a Chinese firm.

Residents are asking to be allowed to settle on a portion of the site rather than be resettled outside Phnom Penh. They have staged several demonstrations in front of City Hall, often clashing with police.

Government spokesman Phay Simphan said officials are not concerned by the announcement. He said the bank is overstepping its authority and, in any case, its loans are “no longer appreciated” by the government.

The bank said the decision will not affect its current projects in Cambodia. According to its website, it has more than 20 active projects involving more than $400 million in funding.

The bank acknowledged in March that it had not properly protected the lake's residents when it participated in a nationwide land titling program a few years ago.