COMMITTEE ON FOREIGN AFFAIRS

SUBCOMMITTEE ON ASIA, THE PACIFIC, AND THE GLOBAL ENVIRONMENT

U.S. HOUSE OF REPRESENTATIVES

WASHINGTON, D.C. 20515

Donald A. Manzullo (IL-16), Ranking Member

Opening Statement

February 14, 2007

Mr. Chairman, thank you for holding this hearing on Cambodia and the need for debt relief. I commend your tireless efforts and hard work in bringing to our attention important issues such as the one we are discussing today.

The Kingdom of Cambodia and her beautiful people have endured the unimaginable pain of genocide and failed governance for far too long. For decades this country in the heart of Southeast Asia has seen its neighbors develop and succeed while it remained chained in poverty. So, I fully support the Administration’s efforts to provide development assistance and support to Cambodia so that its future can be brighter than the past.

Recent improvements in Cambodia hold a glimmer of hope that the domestic situation may finally be turning for the better. I note that a number of senior Administration officials have visited Phnom Penh to further our engagement. However, despite these improvements, some serious structural deficiencies still exist. Rampant corruption in the public sector is one of the most serious threats to Cambodia’s development. In fact, an eye opening report published by Global Witness, which is a highly respected organization, estimates public sector corruption in the timber trade at $100 million. If left unchallenged the possibility of even worse corruption in the future is very real. According to a Radio Free Asia article from March 2007, Cambodia stands to reap billions of dollars in new revenue from future oil and gas deals. If corruption takes hold in the extractive industries it will ensure that Cambodia remains locked in poverty for the foreseeable future. I submit for the Record both documents from Global Witness and Radio Free Asia.

As a result of these very real problems, I do not believe that granting debt relief to Cambodia will lift that country out of poverty. First, Cambodia does not even qualify for debt relief because its debt load remains serviceable. In order to qualify for debt relief a country’s debt must meet or surpass a ratio of 150 percent debt-to-export and 250 percent of debt-to-revenue. According to the International Monetary Fund, Cambodia’s debt-to-export ratio is only 32 percent and its debt-to-revenue ratio is 188 percent.

Second, Cambodia is already awash with significant levels of development assistance from a number of countries, and it is the third-largest recipient of American foreign assistance in Asia, receiving $62 million in U.S. dollars in 2007. In fact, overseas development aid totals approximately half of Cambodia’s annual gross domestic product. But decades of poor governance has resulted in Cambodia’s inability to use foreign assistance in a productive way to build a better future. America’s goal should be to help Cambodia break free from the chains of poverty and onto a path of self sustainability. Assistance in public sector reform, skills training, and market development is the way to help Cambodia stand on its own.

Despite concerns regarding corruption, America remains a committed friend of Cambodia and her people. We are working with the Cambodians on a number of important issues, such as prevention of HIV/AIDS, maternal health, demining, and good governance. Since Fiscal Year 2001, the United States Department of Agriculture has provided more than 66,000 tons of agricultural commodities to assist the people of Cambodia. However, we must ensure that our foreign aid dollars are being used in a proper manner, and not to exploit human and natural resources for the personal gain of a few. Cambodia must prove that they are committed to reforms in these areas before we commit to help them further.

Mr. Chairman, thank you for calling this hearing. I look forward to the testimonies.