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Viewing cable 07PHNOMPENH62, FINANCE MINISTRY ON CAMBODIA'S BILATERAL DEBT

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Reference ID Created Released Classification Origin
07PHNOMPENH62 2007-01-16 12:07 2011-07-11 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Phnom Penh
VZCZCXYZ0024
OO RUEHWEB

DE RUEHPF #0062 0161207
ZNR UUUUU ZZH
O 161207Z JAN 07
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7827
INFO RUEHMO/AMEMBASSY MOSCOW PRIORITY 0378
RUEHFR/AMEMBASSY PARIS PRIORITY 0553
RUEHGP/AMEMBASSY SINGAPORE PRIORITY 0773
RUEHKO/AMEMBASSY TOKYO PRIORITY 3121
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY 0628
UNCLAS PHNOM PENH 000062 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS AND EB/IFD/OMA 
TREASURY FOR ANDREW JEWELL 
 
E.O. 12958: N/A 
TAGS: EFIN ECON KTIA CB
SUBJECT: FINANCE MINISTRY ON CAMBODIA'S BILATERAL DEBT 
 
REF: A. A) STATE 913 
 
     B. B) PHNOM PENH 42 
 
1.  (SBU)  On January 10, Pol/Econ Chief met with Deputy 
Secretary General Vongsey Vissoth at the Ministry of 
 
SIPDIS 
Economics and Finance (MEF) to relay points outlined in 
reftel A.  Vissoth thanked the Embassy for the assurances 
regarding the USG position vis-a-vis the cut-off date, and 
mentioned that he was aware the Ambassador had raised the 
debt issue with DPM Sok An in late December 2006 (reftel B). 
However, he cautioned that the only person with 
decision-making authority on the debt issue is PM Hun Sen, 
who is thoroughly briefed on the matter.  Vissoth advised 
that the Embassy push the PM's office if there is to be any 
traction.  He added that the PM would like to put the 
bilateral debt issue behind Cambodia, but wants a "fair 
deal."  Pol/Econ Chief stressed that the pending offer, 
coming after years of negotiation and concessions on the USG 
side amounting to nearly $100 million, was the best offer 
that Cambodia could expect. 
 
2.  (SBU)  Pol/Econ Chief also related that the Japanese 
Embassy earlier indicated that the GOJ will not object to the 
RGC signing the debt agreement, assuming the cut-off date 
remains December 31, 1985.  In addition, the USG would 
support Cambodia's returning to the Paris Club to request a 
rescheduling of the its loans.  Pol/Econ Chief noted that 
signing the debt agreement would allow Cambodia to move 
forward on the proposed IMF Poverty Reduction and Growth 
Facility.  Vissoth indicated that the RGC may not be 
interested in the PRGF; the RGC already has a shadow IMF 
program in place. 
 
3.  (SBU)  We also passed reassurances regarding the question 
of the cut-off date to the Japanese Embassy's Economic 
Counselor, Murata Tetsumi, who indicated that he would inform 
Tokyo.  Tetsumi told us on January 16 that he was pleased 
with the information in reftel regarding the cut-off date and 
USG reassurances, and said that there would be "no problem" 
from the GOJ side if Cambodia signed the draft agreement with 
the USG. 
 
4.  (SBU)  John Nelmes from the IMF told us on January 16 
that a IMF mission would be visiting February 14-21 to 
clarify RGC willingness to support an IMF program.  Usually 
the IMF would meet with the PM at the end of the Mission; 
this time, the IMF will meet with the PM at the outset of the 
mission and put the question to him.  The IMF will also 
clarify whether the PM understands how close the RGC and 
Russians are on resolving their bilateral debt.  Nelmes 
pointed out that MEF negotiators have tended to downplay the 
Russian offer, which the IMF does not believe to be that bad 
and close to what the Cambodians wanted in the first place. 
Nelmes indicated that Cambodia needs an IMF program, not just 
intensive surveillance or other measures that the IMF could 
offer as a substitute. 
 
5.  (SBU)  Vissoth recommended that any interventions from 
the USG side at the Paris Club regarding Cambodia's debt be 
done quietly.  He said that the October 2006 meeting had led 
to GOJ misperceptions and questions.  Reassuring the Japanese 
at the upcoming Paris Club would be fine, but perhaps the 
discussions could be done on the margins of meetings, he 
advised. 
MUSSOMELI