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Cambodia Receives Cash, Criticism from International Donors

International donors have pledged more than $500 million to Cambodia for the next year. This was considerably less than the amount requested by Cambodia's government, and the pledges were accompanied by sharp criticism of the government's failure to curb corruption.

At the end of a two-day meeting in the Cambodian capital Phnom Penh, international donors had pledged $504 million in assistance for 2005.

International aid, which includes funding from the World Bank and countries such as Japan, remains a vital component in Cambodia's still struggling economy, accounting for about half the government's annual budget.

As large as they were, the pledges were far below the government's request of approximately $600 million per year during the next three years. The $504 million was also almost $100 million less than had been granted in 2002.

During the talks, donors expressed sharp disapproval of the government's failure to curb rampant graft.

A recent World Bank study found the level of graft in Cambodia to be one of the worst in the world. A U.S. study estimated that between $300 million and $500 million in funds were siphoned off each year from the national budget.

Foreign investment has fallen sharply in recent years, with investors deterred by excessive red tape and outdated tax systems along with the corruption.

Prime Minister Hun Sen told delegates he would make priorities of the fight against corruption and reform of the tax system and the bureaucracy.

But non-governmental organizations have criticized the international donor's readiness to provide funds despite the massive theft.

Phnom Penh-based environmentalist Mike Davis said it was all well and good to provide aid, but it was useless unless the donor governments made sure the money went to the people it was supposed to help.

"If it continues the pattern of more aid with no real conditions attached, I think that the donor community is being incredibly complacent and not putting the interests of Cambodia's population first, which is what they should be doing," he said.

Cambodia remains one of the world's poorest nations, with more than half of its 13 million residents living on less than $1 per day.