Book Review: The Dark Side of Foreign Aid

U.S. President Barack Obama toasts with Cambodia’s Prime Minister Hun Sen at the East Asia Summit dinner in Phnom Penh, November 19, 2012. REUTERS / Jason Reed


Aid Dependence in Cambodia: How Foreign Assistance Undermines Democracy
By Sophal Ear
October, 2012
Cloth, 208 pages, B&W Photos: 1, , Graphs: 4, , Figures: 3,
ISBN: 978-0-231-16112-1
$50.00 / £34.50

As United States President Barack Obama made history in Phnom Penh today, becoming the first sitting American president to visit Cambodia, his motorcade was escorted by Cambodian police–a force trained by the U.S.–whose violence has made the capital a place where public demonstrations are seldom if ever tolerated.

After two decades of U.S. aid, he will enter a city where the illegal evictions of about 20,000 people from prime real estate has nearly been completed by a close friend of Prime Minister Hun Sen — who held direct bi-lateral talks with the president. Obama shook hands and touched glasses with Hun Sen, despite a reportedly “tense” hallway discussion of human rights.

The State Department has promised that U.S. officials will use Obama’s attendance at a summit of East Asian leaders in Phnom Penh as the occasion to scold the Cambodian government for human rights violations.

But it remains to be seen whether American officials will confine their displeasure to unofficial press briefings, or if they will dare express their concerns within earshot of the Cambodian public.   Presumably at U.S. urging, Phnom Penh may have delayed plans ahead of the meeting to evict almost 400 more families for an airport expansion. Eight residents were held by police for 12 hours for writing ‘SOS’ on their roofs and displaying Obama’s image to draw the president’s attention.

 This embarrassment came just six months after security forces shot dead a 14-year-old girl during the forced eviction of a rural community in Kampong Thom province (soldiers at the scene were photographed donning U.S.-donated gear). The death was the latest outrage in a land crisis that has victimized 400,000 of Cambodia’s poor in the last nine years, according to one human rights group.

After the arrest of the independent radio journalist Mam Sonando, who is again in jail for at least the third time in a decade, and this year’s murders of the forestry activist Chut Wutty and the reporter Hang Serei Oudom, U.S. Ambassador William E. Todd and other foreign aid donors received letters in September from eight human rights organizations urging them “not to endorse and reward” the government’s actions with “a large-scale injection of new funds.”

And yet it won’t be surprising if they do. Since a U.N. peacekeeping operation in the early ‘90s attempted to establish pluralist democracy, wealthier nations including the U.S. have together poured billions of dollars into Cambodia’s development, each year demanding reform and each year continuing to pledge hundreds of millions more, even though it hasn’t happened.

Over the first decade of this century, net inward flows of official development assistance and aid totaled $6.24 billion, representing a yearly average equivalent of 94.3 percent of government expenditures. In 2002 alone, foreign donors paid between $50 million and $70 million for 740 foreign consultants, roughly equal to the entire payroll for 160,000 Cambodian civil servants, according to ActionAid.

Has depending on all this money in fact encouraged corruption and prevented Cambodia from consolidating its democracy?

In a new study of aid to Cambodia, Sophal Ear, a refugee who lost his father and eldest brother to the Pol Pot regime of the 1970s and now teaches development studies at the Naval Postgraduate School in California, argues that, yes, to an important extent, living off the fat of foreign money has helped allow the Cambodian government to abdicate its responsibilities and has encouraged the famous venality of its ruling class.

Situating his findings within a large body of literature on aid effectiveness in other countries, Sophal says the high level of aid has relieved Cambodian authorities of the need to collect taxes, making ordinary members of the public less inclined to hold them to account.

This has also stymied improvements in the quality of governance, as Cambodia’s government ministries fought each other over “turf “in donor funding, drained talent from the government to higher-paying donor projects and encouraged officials’ “rent-seeking,” or efforts to cash in on their positions.

“Certainly, with respect to control of corruption and the rule of law, Cambodia may be further now from progress than it was a decade ago,” Sophal writes. “It is also apparent that official development assistance has made it more feasible, through fungibility, to divert resources and enable corruption.”

Sophal has avoided simplistic conclusions or easy condemnations of Cambodia’s donors. But the focus of his examinations is narrow, to the point that Sophal does little to consider the role of the political environment in shaping aid decisions.

In advance of Obama’s visit, land protesters had already appeared at the U.S. Embassy, pleading for the U.S. President’s intervention, according to The Cambodia Daily. But Obama’s very presence in tiny, poor, Cambodia speaks to Washington’s eagerness to curry favor in Southeast Asia and its inability to curb government violence. Phnom Penh is already sufficiently irritated by Western support for human rights monitoring and credit from China, now Cambodia’s largest foreign benefactor, will easily make up for whatever Washington threatens to withhold.

Sophal acknowledges this, yet his prescriptions for improving aid (“stronger consequences for corruption;” “improved domestic tax revenue performance”) appear unlikely to meet with success in the current political climate. Likewise, while large, his e-mail and Internet surveys of anonymous officials, as well as a cast of 113 anonymous informants throughout government, diplomacy and aid organizations, appears scattershot and unrepresentative–a fact which speaks to the difficulty of the work that he has set out to do.

In Cambodia’s post-war era, foreign powers have been instrumental in creating what little political space currently exists for democracy. But, as Sophal has convincingly shown, genuine progress in the next 20 years will depend less on visiting American presidents than on Cambodians themselves.


Douglas Gillison, a member of 100Reporters, worked as a reporter at The Cambodia Daily for six years, where he served as Executive Editor from 2009 to 2011. He was a consultant to Human Rights Watch in 2012. The views expressed here are his own.




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