World Bank says corruption hits the poorest the hardest
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The World Bank has asked Cambodia to repay $7.6 million (£4 million) in aid, saying it was wasted on development programs due to a crackdown on corruption.
The World Bank said contracts worth $64 million for spending on sanitation, land management, and transportation infrastructure were improperly handled.
We froze funding for three important projects after finding evidence of ongoing corruption.
The government has not yet responded to the World Bank’s decision.
“Enough evidence”
Cambodia has long argued that permanent funding cuts would damage its reform efforts.
After a year-long investigation, the World Bank said it had found “sufficient evidence” to substantiate allegations of fraud and corruption in the projects it funds.
“It is vital that the government tackles corruption head-on.”
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The World Bank, which spent $244 million on Cambodia last year, identified corruption as the main obstacle to economic development in 2003.
Since then, it has worked with governments to root out abuses and improve governance.
“Difficult decision”
Three projects have been suspended until the World Bank is satisfied that the government has taken steps to correct past wrongdoing and minimize the risk of future fraud.
Affected projects include building roads in rural areas, providing access to safe drinking water and securing greater land ownership for poor farmers.
“Suspending spending on these three projects was a difficult but important decision,” the World Bank said in a statement.
“The World Bank has concluded that critical work on these projects cannot continue until the identified fraud and corruption issues are resolved.”
It promised to work with authorities to strengthen regulations and improve disclosure, but also called for stricter enforcement of penalties to deter fraud.
“It is vital that the government tackles corruption head-on.”
Relations between the World Bank and Cambodia, one of Southeast Asia’s poorest countries after decades of civil war, have been strained in recent years.
Cambodia was forced to repay $2.8 million in 2003 after the World Bank threatened to withdraw funds, and has so far resisted calls to introduce anti-corruption laws.