Monday, May 16, 2011
Associated Press


PHNOM PENH, Cambodia — The World Bank is pushing Cambodia to resolve a standoff involving thousands of poor landowners facing eviction from their homes but stopped short of punishing the country Monday after it missed a deadline set by the bank to end the dispute.

A bank statement said landowners are still trying to negotiate a deal with the government over valuable land around Phnom Penh’s Boeung Kak Lake. But the bank did not follow through on an ultimatum it had issued to the government.

A seven-year, $24 million bank program designed to strengthen property rights backfired for landowners at the lake, where it facilitated evictions without adequate compensation.

The fate of the estimated 2,000 families at the lake, many living in slum-like conditions, has pitted the Washington-based development giant against Cambodia’s aid-dependent, but increasingly authoritarian and corrupt government.

In March, bank inspectors acknowledged that the land program was flawed, had violated bank policies and may have contributed to or ignored the likelihood of evictions. It issued an ultimatum to the Cambodian government demanding it halt evictions and agree to fair compensation for landowners, or face unspecified consequences.

Many housing activists and bank observers had hoped that if the government failed to act by the bank’s unilaterally imposed deadline, it would send a strong signal of disapproval, possibly by announcing it would suspend all new funding assistance or cut off funding altogether.

The bank has around 16 ongoing projects in Cambodia with about $343 million in funding, mainly for health, and education. The Cambodian government has received billions of dollars in foreign aid in recent years, but has come under growing pressure from foreign donors and the United Nations who have complaints about corruption and undemocratic policies.

Jelson Garcia, who works for a watchdog group that monitors the World Bank and other institutions, said the Boeung Kak situation has put the bank in a bind, since its policies are being violated in what amounts to violation of a contract.

“What’s the point of striking new lending deals if the other party is unwilling to abide by its obligations and refuses to correct its past wrongdoing?” Garcia wrote in an e-mail.

Monday’s statement just noted that it is “encouraging the parties to reach a resolution and in the interim will be closely monitoring the progress of negotiations.”

It was unclear how long the bank would give the negotiations, and what the consequences, if any, would be if the government does not agree. A spokesman said there would be no further comment beyond the statement.

The bank’s statement was released after the end of the workday, and comment was not available from a spokesman for the Cambodian government who did not answer his cell phone.

The bank said the government had told it that it “is taking a number of steps to improve resettlement processes more generally in Cambodia.”

Landowners at the lake had expected that their claims — many of them long-standing — would be respected when government workers began surveying the area in 2006. But the government abruptly shut them out of the process in early 2007, and then surprised many by announcing a $79 million, 99-year lease to a developer with close ties to Prime Minister Hun Sen.

In 2008, developers began pumping sand into the lake, flooding out homes and all but destroying the lake’s ecology.

Boeung Kak landowners have decried as laughable current offers of compensation, which include around $9,000 and an apartment far outside of the city, given what they say the land is now worth. The government, however, has refused to consider the main proposal for a 35-acre (15-hectare) plot at Boeung Kak to be set aside for housing.

Tep Vanny, an activist who faces eviction from her house on the lake’s east side, said she welcomed the bank’s statement, but had little hope the government would agree to anything, since it had repeatedly delayed meetings and negotiations and broken its promises.

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