Identifier
Created
Classification
Origin
07PHNOMPENH42
2007-01-11 09:46:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Phnom Penh
Cable title:  

AMBASSADOR AND DPM SOK AN REVIEW BILATERAL RELATIONS

Tags:  PGOV PREL KTEX ETRD EAID CB 
pdf how-to read a cable
VZCZCXYZ0010
OO RUEHWEB

DE RUEHPF #0042/01 0110946
ZNR UUUUU ZZH
O 110946Z JAN 07
FM AMEMBASSY PHNOM PENH
TO SECSTATE WASHDC IMMEDIATE 7810
UNCLAS PHNOM PENH 000042 

SIPDIS

STATE FOR EAP/MLS, EB, H, SWCI
STATE PASS USAID FOR ANE

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL KTEX ETRD EAID CB
SUBJECT: AMBASSADOR AND DPM SOK AN REVIEW BILATERAL RELATIONS

REFTEL: 06 Phnom Penh 2095

UNCLAS PHNOM PENH 000042

SIPDIS

STATE FOR EAP/MLS, EB, H, SWCI
STATE PASS USAID FOR ANE

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL KTEX ETRD EAID CB
SUBJECT: AMBASSADOR AND DPM SOK AN REVIEW BILATERAL RELATIONS

REFTEL: 06 Phnom Penh 2095


1. (SBU) Summary. In a two-hour meeting on December 28, 2006, the
Ambassador called on Deputy Prime Minister Sok An to review the
advances in bilateral relations in 2006 and outline the new USG
Operational Plan Framework for foreign assistance. The Ambassador
stated that the current projections for USG foreign assistance
funding to Cambodia in FY07 will remain approximately the same as
FY06; however, FY08 funding will likely decrease $10 to $15 million.
The Ambassador urged the RGC to pursue the Millennium Challenge
Corporation (MCC) Threshold program in the future. DPM Sok An
outlined a three-point plan to address corruption. The Ambassador
expressed hope that the ongoing Khmer Rouge Tribunal issues could be
worked out. The DPM requested specific assistance and agreed to a
follow-up meeting with USAID. End Summary.

--------------
YEAR OF CONSTRUCTIVE ADVANCES IN RELATIONS
--------------


2. (SBU) Deputy Prime Minister (DPM) Sok An accompanied by 14
senior staff members, met with the Ambassador, USAID Mission
Director, USAID Senior Democracy Officer (notetaker) and Consular
Officer for two hours to review the advances in bilateral relations
in 2006 and outline the new USG Operational Plan Framework for
foreign assistance. The DPM stated that the new OP Framework was
rational and concrete.


3. (SBU) Ambassador opened the meeting by citing the progress in
bilateral relations that had occurred over the course of 2006. He
mentioned the lifting of Tier Three sanctions, beginning of stronger
mil-to-mil assistance, the visit of former President Clinton, and
increasing Congressional willingness to lift the remaining
assistance prohibitions on direct support to the Cambodian
Government. Ambassador invited DPM Sok An to attend the planned
February 2007 Naval ship visit in Sihanoukville.

--------------
CHALLENGES FOR RELATIONS
--------------


4. (SBU) The Ambassador stated that the current projections for USG
foreign assistance funding to Cambodia in FY07 will remain
approximately the same as FY06, however, due to demands on the USG

budget, FY08 funding is likely to decrease $10 to $15 million. The
possible reduction is not directly related to the existing
relationship between the Royal Government of Cambodia (RGC) and USG,
but due to competing USG budget demands. The Ambassador also cited
lack of sufficient progress in combating corruption as another
possible obstacle to more assistance.


5. (SBU) The Ambassador explained that one option for offsetting the
possible reduction in assistance in FY08 is for Cambodia to pursue
MCC Threshold Country status. If achieved, Cambodia could become
eligible to receive additional MCC funding. He reviewed the MCC
criteria with emphasis placed on improved political rights and
significant progress to address corruption. (Note: Embassy provided
MCC criteria to the Ministry of Economics and Finance Secretary
General Hang Navon in December 2006. End Note)


6. (SBU) In the fight against corruption, the Ambassador highlighted
the need for passage of the draft Anti-Corruption Law (ACL) as an
important step. The transparent management of revenues from
extractive industries, particularly oil and gas, was discussed as
another critical area requiring greater RGC focus. Finally, the
Ambassador stressed the importance of a functioning independent
judicial system. The Ambassador stated that all countries face
corruption, including America, however, the true test is if the
legal system can fairly prosecute corrupt officials regardless of
political affiliation. Ambassador proposed that DPM Sok An assign a
chief point-person for USAID to liaise with on the efforts to
address corruption.


7. (SBU) DPM Sok An stated that "corruption and land disputes are
the top two triggers for destabilization within Cambodia." The DPM
explained the current Government Action Plan places judicial reform
as the third priority. DPM Sok An added that the ACL was delayed in
2006 in order for the draft law to be harmonized with the draft
Criminal Procedures Code. He stated that the Criminal Procedures
Code was recently sent to the National Assembly for debate in
January 2007. It was not stated but implied that once the Criminal
Procedures Code is enacted the ACL will move forward. The DPM added
that he has assigned a Secretary of State to study different
countries' (Hong Kong, Singapore) efforts to fight corruption and
referred to advice provided by UNDP Consultant Bertrand de Speville,
Former Commissioner of the Independent Commission Against Corruption
of Hong Kong.


8. (SBU) Sok An outlined a three-point plan to address corruption:
1) Prevent corruption through greater public education; 2) Improve
enforcement of existing laws; and 3) Build mass support for fighting
corruption to protect against reaction of those who are punished.
He provided several examples of RGC efforts to address corruption:
The creation of the Council of Ministers Anti-Corruption Unit led by
PM Advisor Om Yienteng; administrative action (six-month suspension
without pay) of 38 customs officials and one chief of police in
Banteay Meanchey Province for illegal importation of 800 right-hand
drive vehicles (The DPM reported that 38 of the officials were CPP
members and one was FUNCINPEC); administrative action against land
titling officials and court action for land grabbing against two
Department Chiefs in Koh Kong Province; and Court action for land
grabbing against the former Governor of Kampot Province. DPM Sok An
also added that from 2002 to 2006 civil service salaries have
increased 135%, from $20 per month to $45.


9. (SBU) Agreement on the Lon Nol Regime debt repayment was
discussed. It was urged that progress be made on the debt payment
negotiations between Ministry of Finance, Ministry of Foreign
Affairs and USG.


10. (SBU) The Ambassador raised the status of the Khmer Rouge
Tribunal (KRT) and discussions over the internal rules (REFTEL). He
expressed hope that the ongoing issues could be worked out and said
there were good arguments on both sides. The Ambassador stated that
we continue to work to obtain authority to directly support a well
functioning tribunal. Sok An recounted his involvement over a
five-year period to negotiate the final agreement, including active
negotiations with USG senior representatives. The DPM stated that
"it is normal for lawyers to quarrel, so let them, but then provide
a compromise."

-------------- --------------
USG OPERATIONAL PLAN FRAMEWORK RATIONAL AND CONCRETE
-------------- --------------


11. (SBU) DPM Sok An stated that the new USG Operational Plan (OP)
Framework was rational and concrete. He commented that the OP
objectives of Peace and Security, Governing Justly and
Democratically, Economic Growth, and Investing in People are exactly
in line with the RGC's previous Triangular Strategy (1998-2003) and
ongoing Rectangular Strategy (2004-2008). He provided a historic
account of RGC efforts from 1998 to the present to bring improved
peace and security, democratic, economic and financial reform.


12. (SBU) DPM Sok An requested specific USG assistance for the
newly created Chamber of Jobs and Micro-Enterprise; the National
Commission for Translation of Legal Vocabulary; the Greenbelt
Agricultural Project in Siem Reap; and equipment for health
facilities. Sok An stated that the World Tourism Organization
recently reported that 40% of the $1.5 billion in Cambodian tourism
revenue last year was lost to the purchase of imported non-Cambodian
products (e.g., restaurant food, tourism merchandise, etc.). He
stated government support for the "One Village One Product" model
successfully used in Thailand and Japan, rural credit, and support
for small and medium enterprises.


13. (SBU) The USAID Mission Director offered to provide a thorough
briefing to DPM Sok An and his staff about the new Operational Plan,
MCC Threshold Country criteria, and also to discuss possible USAID
support for the DPM's requests. DPM Sok An replied that this would
be helpful and suggested that a joint team be established. It was
agreed that a follow-up meeting will be arranged to discuss the
team.

MUSSOMELI