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### Viewing cable 07PHNOMPENH42, AMBASSADOR AND DPM SOK AN REVIEW BILATERAL RELATIONS

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07PHNOMPENH42 | 2007-01-11 09:46 | 2011-07-11 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Phnom Penh

`

    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

    ¶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

`