Cambodia-Japan Relations by Sim Vireak
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CICP E-BOOK No. 2 CAMBODIA-JAPAN RELATIONS Sim Vireak March 2010 Phnom Penh, Cambodia Contents Acknowledgement ...............................................................................................................5 Abstract 6 List of Tables .....................................................................................................................10 Chapter 1: Introduction .................................................................................................... 11 1.1. Introduction.......................................................................................................... 11 1.2. Research Objective and Rationale................................................................... 12 1.3. Literature Review and Conceptual Research Framework.............................. 14 1.3.1. Aid-Realism.................................................................................................... 14 1.3.2. Aid-Liberalism ................................................................................................ 15 1.3.3. Aid-Idealism................................................................................................... 16 1.4. Structure of the Book........................................................................................... 18 Chapter 2: Background of Loan Resumption ................................................................20 2.1. Historical Background until Loan Agreement................................................... 20 2.1.1. Situation before Starting the Project........................................................... 20 2.1.2. Present Situation (2006) ................................................................................ 23 2.2. Why was it a Loan instead of a Grant?............................................................. 24 2.2.1. Definition and Characteristics of Grant and Yen Loan ............................ 24 2.2.2. Distinct Usages of Grant and Yen Loan...................................................... 26 2.3. Criteria for Loan Approval.................................................................................. 27 2.3.1. ”Country Criteria” ......................................................................................... 27 ① Cambodia’s Macro Economic Climate and Finances ....................................... 28 ② Debt Issues ........................................................................................................ 29 ∗ Debt Service Ratio and Debt Write-Off............................................................... 30 ③ Cambodia Position in Japan’s ODA Strategies................................................ 32 2.3.2. ”Project Criteria” ........................................................................................... 34 ① Project’s Relevance ............................................................................................ 35 ∗ Why were there 5 blank years after resumption in 1999?................................. 39 ② Project Effect and Feasibility ........................................................................... 39 ∗ Port Authority of Sihanoukville as Sub-borrower .............................................. 41 2 Chapter 3: Analysis on Political Concession .................................................................44 3.1. Aid-Realism .......................................................................................................... 44 ∗ Ownership and Independence............................................................................. 46 3.2. Aid-Liberalism....................................................................................................... 48 3.3. Aid-Idealism ......................................................................................................... 51 Chapter 4: Aid and Japan-Cambodia Bilateral Relations ............................................54 4.1. The First Period: The Start of Aid and Early Cold War (1959-1975) ..................... 55 4.1.1. Prince Sihanouk’s Administration (1954-1970): Early Aid as Sub-reparation .................................................................................................................................... 55 Aid Relations........................................................................................................... 55 Diplomatic/Political Relations................................................................................ 56 Economic Relations ................................................................................................ 58 4.1.2. Lon Nol’s Administration: Cambodia in the Western Bloc (1970-1975) ... 59 Diplomatic/Political Relations................................................................................ 59 Aid Relations........................................................................................................... 60 Economic Relations ................................................................................................ 63 4.2. The Second Period: Aid Interruption Period (1975―1992)................................ 64 4.2.1. Pol Pot’s Administration (1975-1979)......................................................... 64 Diplomatic/Political Relations................................................................................ 64 Economic and Aid Relations................................................................................... 66 4.2.2. People’s Republic of Kampuchea and State of Cambodia (1979-1992) .................................................................................................................................... 66 Diplomatic/Political Relations................................................................................ 66 Economic and Aid Relations................................................................................... 71 4.3. The Third Period: The Aid Resumption until Present (1992-2006)........................ 72 4.3.1. First Legislature Royal Government (1993-1997) ........................................ 72 Diplomatic/Political Relations................................................................................ 72 Aid Relations........................................................................................................... 73 Economic Relations ................................................................................................ 74 4.3.2. Second Legislature Royal Government (1998-2003) and the Third Legislature Royal Government (2003-Present) ....................................................... 75 Diplomatic/Political Relations................................................................................ 75 Aid Relations........................................................................................................... 77 3 Economic Relations ................................................................................................ 79 Chapter 5: Conclusion and Implications........................................................................82 Reference 88 Annex I: List of Interviewees.........................................................................................95 Annex II: Japan-Cambodia Friendship Agreement (Khmer) ..........................................96 Annex III: Joint Statement on the New Partnership Between Japan and Cambodia.100 Annex IV: Japan’s Official Development Assistance Charter .......................................104 Annex V: Japan's Assistance Policy for Cambodia......................................................... 116 4 Acknowledgement Through this book, the result of my research, I’d firstly like to express my sincere thanks to the Japanese people, who have granted me a scholarship and the chance to embrace this education. Despite the fact that I may have gained more of an audience, including Cambodian, by writing my paper in English, I decided to write it in Japanese as this is the simplest way I could express my thanks. I also want Japanese people to be the first audience for this paper. I also would like to extend my thanks to Professor Akihiko Tanaka, who has provided me with much useful advice as well as an environment with full freedom to pursue my research. Needless to say, this paper owes a lot to all the interviewees, Mr. Koizumi Yukihiro (JICA), Mr. Sugimoto Satoshi (JICA), Mr. Nakashima Keisuke (JICA), Mr. Matsuda Yosuke (JBIC), H.E. Ma Sun Hout (Sihanoukville Autonomous Port), Mr. Por Yutha (Ministry of Economics and Finance), Mr. Im Sour (CDC, CRDB), and Mr. Yamaguchi Hiroyuki (Penta-Ocean Co.). I’d like to especially thank Mr. Koizumi Yukihiro, who allowed me to widen my network of interviewees. Without him, I wouldn’t have had the opportunity to talk to most of the people mentioned here. Lastly, I would like to thank my families (both Cambodian and Japanese; Hirose House, Horii House and Suzuki House), who have provided me with endless moral support. Their laughing voices, including those on the phone, were the source of my motivation. Thanks to these, I’ve never been conscious about time, despite the fact that I have been in Japan for 7 years. March 2010 Sim Vireak 5 Abstract In 1999, Japan had resumed loans to Cambodia to support the execution of the Sihanoukville Port Urgent Rehabilitation Project. The resumption turned a new page for Japan-Cambodia bilateral aid relations since it took place after 30 years of suspension—or in other word, 20 years after Cambodia built herself from scratch out of the destructive Pol Pot regime. Before