From 1993 to 2018, the government repaid $1.3 billion of its debt to development partners, roughly 8 percent of the country’s external debt, according to an official report on the country’s public debt.
In the same 25-year period, the government has signed concessional loan agreements to the tune of $11.3 billion, the report, issued by the Ministry of Economy and Finance, says.
The government disbursed $7.2 billion, around 64 percent of total money borrowed. Just over 87 percent was used to finance infrastructure projects, while approximately 13 percent was used for projects in other priority sectors.
Cambodia borrows to finance public investment projects in priority sectors that support long-term sustainable economic growth and increase economic productivity, the report notes.
Transparency International (Cambodia) executive director Preap Kol told Khmer Times yesterday that debt must be managed with transparency and accountability.
“In developing countries borrowing is inevitable. What concerns me the most is whether this debt is being managed with accountability and transparency,” Mr Kol said.
“Without accountability or transparency, much of the money borrowed is wasted, going to the pockets or corrupt officials. This severely hinders our ability to make the most out of the money we borrow.”
Cheam Yeap, chairman of the Commission on Economy, Finance, Banking and Audit, said late last year that as the country’s economy develops, the national budget grows larger every year. This, in turn, requires that the government increases foreign borrowing.
“We could survive without foreign loans, but it would be difficult,” Mr Yeap said. “We must take any loan that we are offered in order to further the country’s development.”
Concessional loans amount to less than 32 percent of gross domestic product (GDP), Mr Yeap said, adding that this level of borrowing poses no risk to the economy.
“So, I would like to tell the people not to worry too much because thanks to the four principles that we follow, the risk to our economy is very small.”
In bilateral terms, as of the end of 2018, Cambodia had borrowed $4.6 billion from China, $1.6 billion from France, and $1.3 million from Japan, while just over $4 billion were borrowed from international institutions like the Asian Development Bank and the World Bank.