World Bank Restarts Cambodia Loans after Five-year Freeze

The World Bank has approved $130 million worth of new loans for Cambodia, ending a five-year freeze in new lending to the country following a spate of controversial forced evictions by the government.

The decision will be welcome news to strongman Prime Minister Hun Sen whose government has clashed with the World Bank over the eviction of thousands of families from the shores of a lake in the capital Phnom Penh.

In a statement published on its website late Thursday, the bank said its board of directors agreed to restart loans for four projects "to provide many communities across Cambodia with better roads, sustainable sources of water, improved livelihoods from agriculture, and increased access to health care".

"Our new engagement with Cambodia starts with projects aimed to bring tangible benefits for Cambodians," Ulrich Zachau, Country Director of the World Bank for Southeast Asia, said in the statement.

The bank froze new lending to the impoverished nation in 2011 over mass evictions at the capital's Boeung Kak lake -- although it continued to administer loans promised before the freeze and also allowed money held in trust by the bank for other countries to be passed on to the nation.

Hun Sen's government leased the lake area to a private company which was headed by a ruling party politician. The company then filled in the lake for commercial development, displacing some 4,000 families along the way.

According to the NGO Inclusive Development, the Boeung Kak evictions are the worst mass expulsions in Cambodia since the evacuation of Phnom Penh by the Khmer Rouge in 1975.

Many activists had urged the World Bank not to renew loans until new and suitable homes had been found for the evicted families.

"I am really disappointed with the World Bank," Tep Vanny, a prominent anti-eviction activist from the lakeside, told AFP.

"Both those who have been evicted and those still living in the Boeung Kak neighbourhood have yet to receive justice in this case."

"The dispute has not ended yet," she added, demanding the World Bank to pressure the government find a speedy resolutions.

Government officials could be immediately reached for comment.

Land conflicts are a major problem in Cambodia and the government has faced mounting criticism in recent years from rights groups and the United Nations over a spate of forced evictions around the country that have displaced tens of thousands of mostly poor people.

Land ownership was abolished during the 1975-1979 rule of the communist Khmer Rouge and many legal documents were lost during that time.