By Brian McCartan
Asia Times Online
Cambodian leaders have shrugged off a World Bank move this month to suspend new lending due to state-sponsored, large-scale evictions to clear land for development projects. While rising access to private Asian capital, particularly from China, has helped Cambodia weather previous Western donor pressure for reform, the socio-economic costs of the latest sanction could be much higher.
The World Bank had come under pressure from local and foreign non-governmental organizations (NGOs) to take a tough stance against Cambodia’s government in response to well-documented forced evictions of communities. The issue centered on a large-scale urban development project planned for central Phnom Penh at Boeung Kak lake where many of the residents are involved in catering to a growing tourist industry.
The pressure increased late last year after an internal investigation found that the World Bank had violated its own social and environmental policies in supporting the project. It is being led by the privately-held Cambodian Shukaku company, which signed a 99-year lease with the government in 2007 to develop Boeung Kak and the surrounding area into a district of luxury apartments and high-end shops.
The company is chaired by Lao Meng Khin, a powerful senator affiliated with the ruling Cambodian People’s Party (CPP) and a close associate of Prime Minister Hun Sen. Shukaku is partnered with the Inner Mongolia Erdos Hongjun Investment Co Ltd of China, which has pledged broadly to spend US$3 billion in Cambodia on property development, metal processing and power generation.
However, the joint venture has raised some eyebrows due to the unlisted Chinese company’s murky background and ownership. Critics say that the company has no proven expertise in any of the areas in which it has pledged to invest, and there is an unusual lack of publicity around a company that has promised to commit such a large amount of capital outside China.
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