IMF queries Cambodian defence spending, but aid up

IMF queries Cambodian defence spending, but aid up
04 Dec 2008 07:08:56 GMT
Source: Reuters
(Releads with IMF)

PHNOM PENH, Dec 4 (Reuters) - The International Monetary Fund on
Thursday queried a planned increase in Cambodia's military spending
and other donors urged it to pass an anti-corruption law, but they
promised to increase aid to the country next year.

The government has said it would double military spending to $500
million in 2009, announcing the figure in October after a brief clash
between Thai and Cambodian troops over a disputed area on their
border.

"Military spending should concentrate on critical needs to avoid
crowding out other essential spending, unnecessarily widening the
deficit and potentially weakening the external position," John Nelmes,
the IMF's representative in Cambodia, told a donors meeting.

Donors have promised at least $900 million for 2009, a hefty increase
on the $600 million that has been offered in the past, said Hang Chuon
Naron, secretary-general of the Finance Ministry, adding Japan pledged
the biggest amount.

"This is a reward for the government's good performance," he told
Reuters, adding that he expected pledges to reach $1 billion by the
time the meeting wraps up on Friday.

However, the donors called on Cambodia to pass an anti-corruption law
that has been delayed for 10 years.

"Passing the law will be an important signal, providing investors and
development partners with confidence to make more long-term
commitments in Cambodia," Qimiao Fan, newly appointed World Bank
country manager, told the meeting. (Reporting by Ek Madra; Editing by
Alan Raybould)
.

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