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Corruption Main Issue As Cambodia's Donors Meet

Cambodia's foreign aid donors gather next week to assess progress in the country's economic reforms. The World Bank warns that Cambodia risks economic stagnation if the government fails to deal with corruption.

The World Bank says "endemic" corruption is making Cambodia's poor poorer. It says corrupt public officials contribute to the depletion of the country's natural resources and impede investment.

In a report released ahead of the annual aid donors meeting Monday, the international lender called on the government of Prime Minister Hun Sen to implement "urgent efforts" to improve governance - such as improving laws and strengthening the judiciary.

Failure to do so, it says, will be costly for the future of the country.

Sok Hach, director of the Economic Institute of Cambodia, says he expects donors to press harder for results.

"Donors right now highlight the real issues," said Sok Hach. "Before they just complain behind the scene and in front of the government, they just pledge for a lot of money. What is interesting is that the World Bank is now focused more on the issue of governance that it was not before. "

A World Bank survey showed a majority of companies pay bribes to public officials to secure contracts. But the system of accountability is weak, anti-corruption laws lacking and the country's judges and prosecutors poorly paid and trained.

Cambodia is struggling to rebuild its economy after a legacy of war and genocide. Some 40 percent of the country's 13 million people live on less than $1 a day.

With Cambodia's economy expected to grow only two percent next year, economists say it cannot afford to delay reforms.

The government recently drafted a four-year strategy to address these issues. Mr. Sok says it is a good start.

"I think the government more or less recognize that this [reforms] is missing.," he said. "I think the World Bank tried to take this opportunity to tell the government, 'Okay you are right, but you have to implement it right now'."

The donors' conference Monday will be the first such meeting since 2002, when Cambodia received $635 million in aid.

No donors' meeting was held last year as Cambodia struggled for months to form a new government following national elections. The European Union Thursday says it is giving $33 million to fight poverty in northwestern provinces.

On Thursday, Vietnam's major donors held a similar meeting and pledged more than $3 billion in aid, 21 percent more than last year.