•    HOME   
•    NEWS   
•    BUSINESS   
•    INTERNATIONAL   
•    TECH   
•    SPORTS   
•    LIFE & TIMES   
•    OPINION   
•    MY JAKARTA   
•    BLOGS   
•    EYEWITNESS   

Phnom Penh. The World Bank will not provide any new loans to Cambodia until it resolves a dispute about a mass eviction in the capital, it said in a statement.

A private company headed by a ruling party politician is filling in a lake in central Phnom Penh for commercial development, a controversial project that will eventually displace some 10,000 people.

“Until an agreement is reached with the residents of Boeung Kak Lake, we do not expect to provide any new lending to Cambodia,” World Bank country director Annette Dixon said on Tuesday.

The World Bank has taken a stand over the Boeung Kak Lake area, where 10,000 people face eviction to make way for a luxury real estate project led by China’s Inner Mongolia Erdos Hongjun Investment Corp., an unlisted firm that has pledged to spend $3 billion on real estate, metal processing and power generation.

The bank has offered financing and advice to the government on land management but has not received a response. It wants the developer to provide on-site housing for the remaining residents of Boeung Kak Lake rather than push them out.

The World Bank previously had an agreement with the authorities to assist with land management and administration, but that fell through in September 2009. It acknowledged it had been slow to respond when about 2,000 Boeung Kak Lake residents were evicted in violation of an agreement it had reached with the government regarding resettlement.

More than 3,000 lakeside families have already left the area, many after their homes were flooded with mud as the lake was filled in. The remaining families are holding out for a plot of land on the same site or for compensation.

The bank had warned that it would reconsider its work in Cambodia if the government failed to stop the forced relocations. It appears to have followed through on the threat, with Dixon saying its most recent loan to Cambodia was in December 2010.

In the past few years, the World Bank has lent Cambodia about $50 million to $70 million annually.

Government spokesman Phay Siphan said the government had already stated late last year that it “no longer appreciated” the loans from the World Bank.

“The bank is not a proper help to Cambodia in the cause of development,” he said.

Forced evictions are a major problem in Cambodia, with an estimated 30,000 people a year driven from farmland or urban areas to make way for real estate developments or mining and agricultural projects.

A sharp increase in the number of evictions has angered human rights groups and donor countries, several of which have threatened to withdraw aid. Such threats may not be effective when Cambodian tycoons and their government friends are profiting by selling farmland and prime real estate to foreign firms, mostly from China, which is offering more development money than the donors with fewer strings attached.

China is Cambodia’s biggest source of foreign direct investment. In the first seven months of this year it pledged $8 billion for 360 projects, the same amount it invested in the whole of Southeast Asia in 2008.

AFP, Reuters