Poor plan, corruption slows effort to rebuild Cambodia

By Chris Fontaine

TANON, Cambodia (AP): In the capital, highly visible yuppies drive late-model Japanese cars, chat on cell phones and spend leisurely Sundays strolling in riverside parks with their well- dressed families.

Just an hour's drive in any direction from Phnom Penh is a very different Cambodia -- impoverished farming villages where life has changed little in the last century for more than 80 percent of the country's population.

Foreign aid, peace and a new market economy have buoyed the fortunes of the urban elite in the seven years since United Nations peacekeepers turned the war-shattered country over to its first freely elected government.

But the US$2 billion peacekeeping effort and nearly $500 million in annual foreign aid have had a marginal effect on rural communities like Tanon, 40 kilometers (25 miles) south of the capital.

Just two rows of stilted huts divided by a bumpy dirt track, the town exemplifies what some say is a major flaw in the international community's attempt to raise Cambodia from the ashes of war and genocide.

"The daily struggle out here is overwhelming. It is truly a hand-to-mouth existence," says Ira Dassa, a former UN worker from Washington. "Development aid, as best as I can tell, is just not getting to the people."

A 1999 report by the Ministry of Planning and the UN Development Program said the richest 20 percent of Cambodians have increased their income 18 percent since 1994, while the income of the poorest 20 percent hasn't changed.

Similar studies show meager improvements in infant mortality rates, life expectancy and access to education, health care and clean water. One notes tellingly that while only 10 percent of Cambodians live in Phnom Penh, the capital receives 86 percent of the national budget.

Critics say reconstruction efforts -- paid for mostly by the United States, Japan and western Europe -- end up endowing rural communities with impressive four-wheel-drive vehicles and concrete buildings for officials, but few usable skills or sustainable public services.

Some veteran aid workers argue that too little time has elapsed since the 1991 UN-brokered peace agreement to expect much improvement.

Development groups, nonetheless, appear dissatisfied with progress and are rethinking their strategies.

A recent report sponsored by the Asian Development Bank identifies good governance as a major missing requirement for sustainable development. The study said Cambodian officials lack accountability and do not encourage citizens to participate in governing and developing their country.

Dassa uses a more blunt term -- corruption.

"I am absolutely livid at the level of corruption I have seen since day one," he says. "I think now it is worse that it has ever been."

Officials at a major UN development effort, the Cambodian Area Rehabilitation and Regeneration Program, acknowledge that aid money tends to get "bottled up" by the national government and too little trickles down to the rural areas that need it most.

The project pioneered a grass-roots development strategy that bypasses the national government and feeds donor money directly to provincial-and community-level programs.

Known as Seila -- a Pali word that translates as "foundation" -- the project sets up local-level committees to manage donor- financed infrastructure programs in individual communities.

Scott Leiper, a program manager from Berkeley, California, says Seila gives donors confidence that their money is reaching the poor and allows Cambodians to decide what is best for their own communities.

The project says its own studies indicate that Seila, working in 15 percent of the country on an annual budget of about $14 million, provides rural areas with six times the resources they receive from the government budget.

Leiper says Seila also inspires accountability and openness among local-level officials who will soon stand for popular election for the first time in Cambodia's history.

The Asian Development Bank's report warns, however, that the same corruption and nepotism that is prevalent in the national government also exists at the provincial and community levels.

Seila's efficiency is also eroded by the poor administrative skills of Cambodian officials, especially those posted to rural areas.

Dassa, who worked in various UN posts the past six years, is now tackling the problem on his own with private enterprise.

Combining his fluency in the Cambodian language with old- fashioned American entrepreneurial skill, he has devised a small- time development program that has made him a local hero in Tanon and five other villages within a half-day's drive of Phnom Penh.

Wild Boar Creek, Dassa's handicraft wholesale business, sells a variety of Cambodian-made goods to American retail stores.

In Tanon, he buys hand-woven silks by the dozen from village women who toil for two weeks to produce three yards (meters) of silk for which they usually get $21. Dassa pays them $27.

He says his familiarity with the countryside allows him to cut out many middlemen, so he can afford to pay the artisans more.

Dassa concedes some of the money goes into his own pockets, but he believes he is doing more for Cambodians now than when he was legal adviser to the Parliament, whose members generally have a reputation as self-serving fat cats.

On the larger front, economist Sok Hach of the Cambodia Development Resource Institute advocates imposing strict foreign aid conditions that essentially would force the national government to reform itself.

Donors, especially the United States and the International Monetary Fund, are steadily moving in this direction.

In 1999, major donors for the first time directly linked an aid pledge of $470 million to significant progress in key reforms, spurring a clampdown on illegal logging, adoption of a banking law and improved tax collection.

An additional $548 million in aid for 2000 was tied in May to fiscal and military reforms.

Foreign donor nations are expressing confidence that Cambodia is finally beginning to improve.

But aid workers warn it will be years before the country can abandon its foreign-aid crutches and stand on its own.

Cambodia remains crippled by the late-1970s rule of the Khmer Rouge, when nearly one in four Cambodians died in radical communist experiments, and by the ensuing civil war.

"The trauma that was experienced by Cambodian society as a whole created deep wounds, and scar tissue grew over the wounds," Leiper says. "We've been removing scar tissue ever since."