    [House Hearing, 111 Congress]
    [From the U.S. Government Publishing Office]

                            CAMBODIA'S SMALL DEBT:
                          WHEN WILL THE U.S. FORGIVE?

    =======================================================================

                                    HEARING

                                   BEFORE THE

                     SUBCOMMITTEE ON ASIA, THE PACIFIC AND
                             THE GLOBAL ENVIRONMENT

                                     OF THE

                          COMMITTEE ON FOREIGN AFFAIRS
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED ELEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               SEPTEMBER 30, 2010

                                   __________

                               Serial No. 111-128

                                   __________

            Printed for the use of the Committee on Foreign Affairs

     Available via the World Wide Web: http://www.foreignaffairs.house.gov/

                                     ______

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                          COMMITTEE ON FOREIGN AFFAIRS

                     HOWARD L. BERMAN, California, Chairman
    GARY L. ACKERMAN, New York           ILEANA ROS-LEHTINEN, Florida
    ENI F.H. FALEOMAVAEGA, American      CHRISTOPHER H. SMITH, New Jersey
        Samoa                            DAN BURTON, Indiana
    DONALD M. PAYNE, New Jersey          ELTON GALLEGLY, California
    BRAD SHERMAN, California             DANA ROHRABACHER, California
    ELIOT L. ENGEL, New York             DONALD A. MANZULLO, Illinois
    BILL DELAHUNT, Massachusetts         EDWARD R. ROYCE, California
    GREGORY W. MEEKS, New York           RON PAUL, Texas
    DIANE E. WATSON, California          JEFF FLAKE, Arizona
    RUSS CARNAHAN, Missouri              MIKE PENCE, Indiana
    ALBIO SIRES, New Jersey              JOE WILSON, South Carolina
    GERALD E. CONNOLLY, Virginia         JOHN BOOZMAN, Arkansas
    MICHAEL E. McMAHON, New York         J. GRESHAM BARRETT, South Carolina
    THEODORE E. DEUTCH,                  CONNIE MACK, Florida
        FloridaAs of 5/6/       JEFF FORTENBERRY, Nebraska
        10 deg.                          MICHAEL T. McCAUL, Texas
    JOHN S. TANNER, Tennessee            TED POE, Texas
    GENE GREEN, Texas                    BOB INGLIS, South Carolina
    LYNN WOOLSEY, California             GUS BILIRAKIS, Florida
    SHEILA JACKSON LEE, Texas
    BARBARA LEE, California
    SHELLEY BERKLEY, Nevada
    JOSEPH CROWLEY, New York
    MIKE ROSS, Arkansas
    BRAD MILLER, North Carolina
    DAVID SCOTT, Georgia
    JIM COSTA, California
    KEITH ELLISON, Minnesota
    GABRIELLE GIFFORDS, Arizona
    RON KLEIN, Florida
                       Richard J. Kessler, Staff Director
                    Yleem Poblete, Republican Staff Director
                                     ------

          Subcommittee on Asia, the Pacific and the Global Environment

                ENI F.H. FALEOMAVAEGA, American Samoa, Chairman
    GARY L. ACKERMAN, New York           DONALD A. MANZULLO, Illinois
    DIANE E. WATSON, California          BOB INGLIS, South Carolina
    MIKE ROSS, Arkansas                  DANA ROHRABACHER, California
    BRAD SHERMAN, California             EDWARD R. ROYCE, California
    ELIOT L. ENGEL, New York             JEFF FLAKE, Arizona
    GREGORY W. MEEKS, New York

                                C O N T E N T S

                                  ----------
                                                                       Page

                                    WITNESS

    Mr. Joseph Y. Yun, Deputy Assistant Secretary, Bureau of East
      Asian and Pacific Affairs, U.S. Department of State............     9

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    The Honorable Eni F.H. Faleomavaega, a Representative in Congress
      from American Samoa, and Chairman, Subcommittee on Asia, the
      Pacific and the Global Environment: Prepared statement.........     6
    Mr. Joseph Y. Yun: Prepared statement............................    12

                                    APPENDIX

    Hearing notice...................................................    34
    Hearing minutes..................................................    35
    The Honorable Eni F.H. Faleomavaega: Material submitted for the
      record.........................................................    36

               CAMBODIA'S SMALL DEBT: WHEN WILL THE U.S. FORGIVE?

                                  ----------

                          THURSDAY, SEPTEMBER 30, 2010

                  House of Representatives,
                  Subcommittee on Asia, the Pacific
                                and the Global Environment,
                                  Committee on Foreign Affairs,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 2:05 p.m., in
    room 2172, Rayburn House Office Building, Hon. Eni F.H.
    Faleomavaega (chairman of the subcommittee) presiding.
        Mr. Faleomavaega. The subcommittee will come to order.
        This is a hearing of the Foreign Affairs Subcommittee on
    Asia, the Pacific and the Global Environment. The specific
    topic for discussion this afternoon is ``Cambodia's Small Debt:
    When Will the United States Forgive This Debt?''
        I am going to begin the hearing by giving my opening
    statement.
        I do want to say, Mr. Secretary, I deeply appreciate your
    taking the time to come again and make this appearance before
    the subcommittee. I want to say that this town is practically a
    ghost town ever since we took the last vote last night at about
    1 or 2 in the morning, and everybody is out trying to get re-
    elected. I thought we were going to still be in session next
    week, but things change, and this is where we are now.
        Between 1972 and 1975, Cambodia incurred a $276 million
    debt to the United States through the provision of agricultural
    commodities. General Lon Nol incurred this debt to support his
    chaotic and dictatorial regime, which seized power through a
    coup, making his an illegitimate government in the eyes of many
    of today's Cambodians. Lon Nol did nothing to address this
    debt.
        The Khmer Rouge came to power in 1975. This regime also
    failed to service the loan. In addition, it killed or starved
    at least 20 percent of Cambodians, some 7 million people, and
    neglected infrastructure and factories and reverted to ancient
    agricultural techniques, all of which decimated the Cambodian
    economy and any ability to repay the debt. Vietnam occupied
    Cambodia for 10 years after the Khmer Rouge lost control, and
    they also ignored the debt. Consequently, Cambodia now owes the
    United States $444.4 million, including interest, as of
    December of last year.
        I want to give a little sense of perspective concerning the
    history of U.S.-Cambodia relations because I think it is
    important for the record that this be noted. At the height of
    the Vietnam War, Cambodia was very much a part of our overall
    military and strategic interests, and some highly questionable
    decisions were made by officials of the Nixon administration,
    including President Nixon himself.
        Part of the U.S. frustration in dealing with Cambodia was
    due to Prince Sihanouk. As ruler in Cambodia, he maintained a
    position of neutrality on the war in Vietnam, yet, at the same
    time, was unable to prevent North Vietnamese military forces
    from setting up sanctuaries or strongholds along the border
    between Cambodia and Vietnam. Prince Sihanouk's government was
    later overthrown by General Lon Nol, supposedly with the
    assistance of the United States, although this has never been
    proven to be true.
        Against the advice of his Secretary of Defense Laird and
    Secretary of State Rogers, President Nixon accepted the
    recommendations of his military commanders by sending military
    forces into Cambodia to destroy those North Vietnamese
    sanctuaries along the Cambodian-Vietnam borders, raising the
    specter of expanding the war in Vietnam despite an established
    policy of supposedly winding down the overseas U.S. military
    presence in Vietnam.
        It is believed that the U.S. military action going into
    Vietnam contributed to one of the greatest tragedies of recent
    history. The American invasion of North Vietnamese forces
    inside Cambodia unleashed thousands of tons of bombs on
    Cambodia. It also caused North Vietnam to conduct large-scale
    operations in support of the Khmer Rouge, who were fighting
    against Lon Nol's government, which was supposedly supported by
    the United States.
        I quote from George Herring's book, ``America's Longest
    War: The Ultimate Tragedy'':

            ``From beginning to end, the Nixon administration
            viewed its new ally, General Lon Nol, as little more
            than a pawn to be used to help salvage the U.S.
            position in Vietnam, showing little regard for Cambodia
            and its people.''

        It should also be noted that President Nixon's decision to
    invade Cambodia caused serious repercussions even within the
    United States. College student demonstrations erupted all over
    the country, and some might have said this was Nixon's worst
    nightmare. One demonstration in particular resulted in four
    students shot dead by the U.S. National Guard at Kent State
    University in Ohio. Two students were also shot dead at Jackson
    State University in Mississippi.
        Some 100,000 more demonstrators showed up in our Nation's
    capital to demonstrate against the President's decision to
    invade Cambodia. Students at some 350 college and university
    campuses went on strike, and more than 500 colleges and
    universities were closed to prevent more violence. So this
    little insight in terms of the history was not very pleasant in
    terms of U.S. involvement, not only in Vietnam but what we did
    to the people of Cambodia.
        Cambodia has asked the United States to forgive its debt or
    use a portion of the payment toward U.S. assistance programs,
    which include health care, economic competitiveness, civil
    society and land mine removal--especially land mine removal,
    Mr. Secretary. However, the U.S. Treasury and Department of
    State have showed remarkable inflexibility and simply a lack of
    any cooperation on this issue.
        Why does the United States insist on squeezing this little,
    least-developed country out of $444.4 million? Why is debt
    forgiveness not an option? Why do we not consider recycling the
    debt payments for environmental conservation efforts or
    swapping the debt for a much-needed educational exchange fund
    similar to the Vietnam education exchange fund created by
    Congress 10 years ago?
        This is the second in a series of hearings I have held in
    my capacity as chairman of the subcommittee on Cambodia's debt.
    During the last hearing, held in February, 2 years ago, the
    U.S. State Department testified that debt forgiveness or
    recycling for Cambodia would set a pattern of forgiveness for
    other nations indebted to the United States. In my opinion, Mr.
    Secretary, this is absolutely ludicrous and without
    justification.
        We should note that a precedent has already been
    established. Six years ago, the United States forgave $4.1
    billion of Iraqi debt accumulated under Saddam Hussein's
    leadership so as not to cripple the new government. Bosnia-
    Herzegovina's debt of $24 million was forgiven in 1999, and
    Yugoslavia's $538.4 million debt was forgiven in 2002.
        But we must also consider the impact of U.S. activities in
    Cambodia during the Vietnam War era. From 1969 to 1973, the
    U.S. staged large-scale bombing campaigns in parts of Cambodia,
    which still prevent the use of a vast majority of rich
    farmlands in this country, Mr. Secretary. In certain regions it
    has restricted agricultural development because many of these
    bombs that were dropped never detonated and has caused a
    serious hazard, not only to the citizens and to the people of
    Cambodia and just simply because the ordnance is still there
    and it is a real, real serious situation.
        The legacy of losses inflicted by the Khmer Rouge also
    continues today. The average Cambodian earns a mere $5.50 a
    day, an amount comparable to Mauritania, Cameroon and several
    other countries classified by the International Monetary Fund
    as highly-indebted poor countries worthy of debt reduction. But
    far worse living standards face 30 percent of Cambodians, who
    live on less than 60 cents per day, according to the 2009
    United Nations Development Program report.
        Given Cambodia's status as a least-developed country and
    acknowledging that the Khmer Rouge's brutal genocide continues
    to afflict the country today economically, other nations and
    organizations have shown considerably more flexibility in
    addressing Cambodia's debt.
        For example, Hungary forgave Cambodia's debt of $216
    million in 2009. Russia forgave approximately $1 billion of
    Cambodian debt in 2008. In 1995, Japan forgave all claims
    against Cambodia incurred before 1975, which totaled $270
    million. Additionally, the International Monetary Fund granted
    Cambodia $82 million in debt relief 5 years ago, acknowledging
    that Cambodia needed the funding to reach its Millennium
    Development Goals.
        Should the United States fail to forgive or recycle
    Cambodia's debt, Cambodia may turn to other countries for
    financial assistance. Already, China has forgiven at least $60
    million of debt and extended loans to Cambodia for
    infrastructure and historical preservation. Such Chinese
    assistance often comes without conditions for political,
    economic or environmental reform, thereby weakening the
    position of the United States and other democracies to
    influence Cambodia's leaders.
        Greater engagement with Cambodia could help the United
    States achieve our foreign policy goals in the region and
    counter adverse influences. Requiring payment of a debt
    incurred by an illegitimate government more than 30 years ago,
    without consideration of Cambodia's historical trauma, runs
    counter to the need for greater engagement, in my humble
    opinion, Mr. Secretary. This is why I ask the Department of
    State and Treasury to end their opposition to Cambodian debt
    forgiveness and support our efforts to give this country a
    brighter economic future.
        The Department of Treasury could begin by taking this issue
    seriously enough to send a witness to testify before this
    subcommittee. Two years ago, and again for this hearing, the
    U.S. Treasury Department refused to send a witness, which, in
    and of itself, speaks volumes about the lack of commitment for
    advancing American interests in Southeast Asia.
        Finally, for the record, I want to express my opposition to
    a bill that was introduced earlier this year, H.R. 5439, the
    Cambodian Trade Act of 2010, which would prevent any
    forgiveness of Cambodia's debt currently owed to the United
    States and would ensure that no textiles or apparel produced in
    Cambodia would be given duty-free treatment within the United
    States.
        My two colleagues who introduced this piece of legislation
    are very dear to my heart, and we constantly work together on
    many issues. My good friend from California, Congressman
    Rohrabacher, and my good friend from Massachusetts, Congressman
    Delahunt, who is retiring this year, unfortunately, are
    certainly champions and senior members of this committee when
    it comes to human rights.
        While I have the utmost respect for my two colleagues who
    introduced the bill, unfortunately, there was never any
    consultation with me or members of this subcommittee. And I am
    deeply concerned that a trade bill like this was introduced in
    response to Cambodia's deportation of 20 Uighurs who entered
    Cambodia illegally from China. I do want to note for the record
    that I do oppose the provisions this bill.
        Prior to the introduction of this bill, I was in Cambodia
    and met with Prime Minister Hun Sen, Deputy Prime Minister Hor
    Namhong, and the Minister of Finance Cham Prasidh, at which
    time we discussed the deportation of Uighurs who were returned
    to China in December of last year. The Government of Cambodia
    provided me with the following account of events which
    transpired, affecting the status of these Uighurs.
        Three groups, with a total of 22 Uighurs, illegally entered
    Cambodia in June, October, and November of last year. But the
    United Nations High Commissioner for Refugees failed to
    determine their status and failed to provide the Government of
    Cambodia with any information relating to the Uighurs' entry in
    November of last year. Two Uighurs fled the headquarters
    without reporting to the Ministry of Foreign Affairs and
    International Cooperation. Consequently, 20 Uighurs were
    returned in December because they had entered Cambodia
    illegally.
        The Government of Cambodia has firmly stated that it
    adheres to the principles of the rule of law and respects the
    International Convention on Refugees. The Royal Government of
    Cambodia also believes, and correctly so, in my opinion, that
    the United Nations' High Commissioner for Refugees should do
    its part by acting in accordance with its mandate to coordinate
    the protection of refugees in a transparent and expeditious
    manner.
        While I fully support the rights of international refugees
    and the mission of UNHCR, the Uighurs are a minority population
    residing in China, not Cambodia. Therefore, if the intent of
    the bill is to champion the cause of the Uighurs, it should not
    offer up a superficial fix which pits Cambodia against China in
    a match-up that should be, actually, between the United States
    and China. Simply put, the bill should not use trade or debt as
    a means to address the repatriation of Uighurs.
        I remain firm in my position that the United States should
    forgive or recycle Cambodia's debt, given that there is
    historical precedent for both options. And I commend Cambodia's
    ambassador to the United States, his Excellency Hem Hang, for
    tirelessly working on behalf of the Royal Kingdom of Cambodia
    to bring these serious matters to the attention of the U.S.
    Congress.
        The Kingdom of Cambodia's statement regarding the pre-1975
    loans will be made part of the record.
        [The prepared statement of Mr. Faleomavaega follows:]

        Mr. Faleomavaega. At this time, I recognize our leading
    witness and only witness willing to come and testify before
    this subcommittee, the Deputy Assistant Secretary for the
    Bureau of East Asian and Pacific Affairs, Mr. Joseph Yun.
        Mr. Yun is currently the Deputy Assistant Secretary in the
    State Department responsible for relations with Southeast Asia
    and ASEAN affairs. He previously held the position of Director
    of the Office of Maritime Southeast Asia at the Bureau of East
    Asian and Pacific Affairs within the Department of State. He
    served also as a senior counselor in our U.S. Embassy in Korea
    and in other overseas posts, including Thailand, France,
    Indonesia, and Hong Kong.
        He has been a career member of the Foreign Service since
    1985. He holds degrees from the London School of Economics and
    the University of Wales.
        Mr. Secretary, I want to sincerely thank you for taking the
    time from your busy schedule to again appear before the
    subcommittee for your testimony concerning the issue of
    Cambodia's debt forgiveness.
        Without objection, your statement will be made a part of
    the record. If you have any miscellaneous materials or
    documents that you would like to submit to be made part of the
    record, you are welcome to do so.
        So, Mr. Secretary, please, I would like to hear from you.

      STATEMENT OF MR. JOSEPH Y. YUN, DEPUTY ASSISTANT SECRETARY,
     BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF
                                 STATE

        Mr. Yun. Mr. Chairman, thank you for inviting me here today
    to testify about Cambodia's outstanding bilateral debt to the
    United States. With your permission, Mr. Chairman, I would like
    to make a few brief remarks on this topic and submit a more
    detailed written response for the Record.
        Mr. Faleomavaega. Without objection.
        Mr. Yun. U.S.-Cambodia relations have continued to improve
    over the past few years. The tempo of interaction has
    quickened, and there has been both a broadening and a deepening
    of positive engagement in a number of areas. In order for
    Cambodia to realize its full democratic and economic potential,
    we continue to ask Cambodia to make progress on issues related
    to human rights and rule of law.
        A satisfactory resolution of Cambodian debt to the United
    States can help accelerate development of this improving and
    growing bilateral relationship. Such a move would also enhance
    Cambodia's own economic development by improving its
    creditworthiness and better access to international capital
    markets.
        Cambodia's debt to the United States stems from shipment of
    U.S. agricultural commodities to Cambodia in the 1970s during
    the turbulent Lon Nol era financed with low-interest rate loans
    from the U.S. Department of Agriculture. Cambodia fell to the
    Khmer Rouge in 1975, which ceased servicing this debt. By the
    end of 2009, Cambodia's debt to the United States totaled
    approximately $445 million, including arrears and late
    interest. About $405 million of that amount was in arrears, and
    it's due and payable immediately.
        Debt relief can be an important means of achieving U.S.
    goals of promoting economic growth, well-functioning markets,
    and economic reform of our foreign partners. Long-standing U.S.
    policy on debt relief and restructuring is to coordinate
    internationally, primarily through the Paris Club group of
    official creditors. In 1995, the Paris Club and Cambodia
    reached an agreement to restructure Cambodia's debt on the so-
    called Naples terms, at that time the most generous treatment
    in the Paris Club's project.
        Cambodia eventually signed debt agreements with France,
    Germany, Italy, and Japan to implement the 1995 Paris Club
    agreement and began repaying those countries accordingly.
    However, the United States and Cambodia never concluded a
    bilateral implementing agreement, in part because the Cambodian
    Government refused to accept responsibility for debts incurred
    by the Lon Nol regime and in part because of a disagreement at
    the time over the amount of debt actually owed.
        U.S.-Cambodian debt negotiations resumed over the 2001 to
    2005 period. The U.S. ultimately offered concessions of nearly
    $100 million, and the Treasury affirmed that, for legal and
    policy reasons, this was the final best offer the U.S. could
    make.
        In February, 2006, the Cambodian Minister of Finance
    indicated that Cambodia agreed with the United States that the
    amount of principal it owed was $162 million. He also agreed to
    move forward in drafting a bilateral agreement implementing the
    1995 Paris Club agreement. Based on this understanding, the
    United States drafted a bilateral agreement that retroactively
    implemented the 1995 Paris Club agreement, including USDA's
    concessions, and presented it to the Cambodia Government in the
    summer of 2006.
        Nevertheless, to date, the Cambodian Government has been
    unwilling to sign the draft bilateral agreement and now seeks
    additional concessions. Cambodia is seeking a low interest
    rate. However, long-standing U.S. debt policy is to retain the
    same interest rate of the original loans in any rescheduling of
    those loans. Offering a lower interest rate would be an
    unauthorized form of debt reduction.
        Another concession requested by the Cambodian Government in
    the past has been debt for assistance swaps. The only general
    debt swap program that the United States currently offers is
    through the Tropical Forest Conservation Act for which Cambodia
    is not eligible because of its arrears. Cambodia, however, has
    focused on the swap arrangement that the United States
    established with Vietnam in 2000 and is seeking a similar
    program.
        In 1993, Paris Club creditors provided Vietnam debt
    rescheduling terms similar to those of Cambodia's in 1995.
    Vietnam signed a bilateral agreement with the United States in
    1997 and resumed making scheduled payments and was in good
    financial standing when Congress created the Vietnam Education
    Foundation several years later. This program, authorized by
    law, directs about 40 percent of Vietnam's total debt payments
    to the foundation for joint education initiatives. There are no
    special programs authorized for Cambodia, however, and existing
    programs are not available so long as Cambodia is not making
    scheduled payments. An individual debt program, therefore, is
    not a possibility.
        The administration is concerned that creating a special
    statutory debt with option program for a country that is
    accumulating large arrears, despite payment capacity, sets a
    poor precedent for other countries in similar circumstances and
    sends the wrong message about prudent debt management.
        In Cambodia's case, I would note that Cambodia has
    accumulated arrears to the United States while paying other
    creditors on time. The administration has, therefore, urged the
    Cambodian Government to sign the bilateral agreement and
    reestablish a track record of timely repayments under that
    agreement. We have communicated to the Cambodian Government
    that if it makes scheduled payments for at least 1 year the
    U.S. Government would signal to the IMF that efforts are under
    way to resolve the country's official arrears. Should Cambodia
    then obtain an IMF program, end the future Paris Club
    treatment, this action could pave the way for generous
    rescheduling of accumulated arrears on debts owed to the United
    States.
        We have also informed the Cambodians that we would work
    with Congress to explore the possibility of enhancing mutually
    beneficial U.S. development assistance projects Unfortunately,
    the Cambodia Government thus far has not responded to this
    overture and continues to accumulate arrears on debts owed to
    the United States.
        In sum, the administration is very much of the view that
    Cambodia should resolve U.S. debt claims by concluding a
    bilateral agreement implementing the 1995 Paris Club agreement.
    This would eliminate this long-standing issue in the overall
    context of otherwise very much improving bilateral relations.
    We also believe that an agreement to address the U.S. bilateral
    debt issue would also enhance Cambodia's creditworthiness and
    Cambodia's ability to access international capital markets.
        Mr. Chairman, I appreciate this opportunity to appear
    before you today and I welcome any questions you may have.
        [The prepared statement of Mr. Yun follows:]

        Mr. Faleomavaega. Thank you, Mr. Secretary. I appreciate
    your statement and your testimony. I would like to have a
    little dialogue in that respect in terms of some of the issues
    that have been raised on this question.
        Can you explain what exactly the procedure the United
    States currently has for granting debt forgiveness to countries
    that owe money to the United States? Is it in statute, or does
    the administration have discretion, or is it a given policy of
    the Treasury as well as the State Department? I would like to
    know.
        Mr. Yun. Mr. Chairman, as you can appreciate, that issue is
    a very implicated issue, so I will try my best to explain what
    the U.S. policy is, with the provision that you do understand I
    am a diplomat.
        Mr. Faleomavaega. I will note that for the record, sir, you
    are going to give a very diplomatic response to the question. I
    thank you.
        Mr. Yun. First of all, let me say your remarks earlier on
    about the economic position Cambodia finds itself in and the
    historical remarks you made are very persuasive. However, it is
    not U.S. policy at this point to forgive Cambodia's debt, and
    let me explain that point.
        In that situation you do have creditor and a debtor. In our
    case, U.S. is the creditor. U.S. interest is very much in
    protecting the creditor interest, and so in any situation we
    understand why countries get into debt difficulty, and so there
    is a general procedure.
        Once a sovereign country is in a debt difficulty, what do
    we do about it?
        Number one, the first step generally is that sovereign
    country must show that it is in debt difficulty. How do they
    show it? Typically they enter into an IMF program. Essentially,
    what the IMF does is go through the country's books, including
    its ability to finance, including how much money it has in
    reserve. And so they are the bookkeeper, or I guess you could
    say almost like a bankruptcy court internationally.
        So with the IMF help, usually the creditors, there are two
    types of international creditors, sovereign creditor or we call
    it official creditor. They will reschedule their debts in Paris
    Club. Private side, mostly bank side, will reschedule their
    debt at the London Club.
        In Cambodia's case, in 1995, as I mentioned, we had a Paris
    Club arrangement; and by perchance I happened to be there at
    that time. I was working for the U.S. Embassy in Paris, and I
    attended that debt rescheduling. And it is a negotiation
    process with IMF acting as the official data keeper saying how
    much debt relief they would need.
        So at that time all the countries went through their debt
    and reached an agreement, what we characterize as Naples terms.
    And so we reached an agreement and each country from there on
    went back to their countries and negotiate the terms of Paris
    Club agreement and how each country would implement. And, as I
    mentioned to you, Cambodia reached that agreement with many
    countries and thereafter started paying them. With the U.S., we
    never got to that, and that's the bilateral agreement that is
    in question.
        And so our policy is we do have a bilateral agreement that
    is outstanding, that implements the Paris Club. Now, the debtor
    country should sign the bilateral agreement so their debt
    relations with us is normalized. So the U.S. policy very much
    is to reschedule debt, forgive debts, debt reduction or
    anything, do it under the auspices of the Paris Club.
        Mr. Faleomavaega. In terms of the IMF's involvement, as you
    had mentioned, pursuant to the Paris agreement that was made in
    1995, how much influence does the United States have in the
    operations of the IMF? Don't we have about somewhere between
    25-30 percent of the assets, votes, and influence within the
    IMF? Does the United States have that much influence in the
    process?
        Mr. Yun. Again, Mr. Chairman, I regret very much, like you,
    my Treasury colleague not being here. So let me try as best I
    can----
        Mr. Faleomavaega. Well, I just want to say that you are
    more senior than the Treasury Department anyway. I have always
    held the belief that the Secretary of State is the most senior
    member of the President's cabinet. In that sense, as far as I
    am concerned, the Treasury is second to the State Department,
    as far as formulating policies by the President. Now, correct
    me if I am wrong on that.
        Mr. Yun. Thank you for your confidence.
        On the IMF issue, we do, I believe, have about 19-20
    percent of contribution, and that contribution is reflected in
    our voting size. So, of course, when a country goes there for a
    program, the U.S. reveals that program is very much a factor. I
    would agree with you. But I think in these cases what IMF does,
    the IMF program is essentially to put the house in order.
        Mr. Faleomavaega. I understand that, Mr. Secretary. Can you
    tell me how we were able to forgive Iraq's debt for some $4.1
    billion 6 years ago? I assume that they went to the Paris Club,
    they went to the IMF, the same procedures. Somehow we were
    able, through the goodness of our hearts, to say, Iraq, we
    forgive you for $4.1 billion.
        That is not a pittance. That is a lot of money that we
    forgave and apparently Iraq qualified for this debt
    forgiveness?
        Mr. Yun. In Iraq's case, they did go through IMF, and it
    was rescheduled at IMF. What has happened between 1995 and 10
    years down the road is that terms change and the amount of debt
    forgiveness a nation can do change. So after Naples terms that
    Cambodia was beneficiary of, we had other, more generous terms.
    I mean, at that time, in 1995, the Naples terms were the most
    generous.
        And, also, we are going to have, throughout debt history,
    special cases. I believe Iraq was one of them; and there were
    special cases also for Poland, Egypt, countries that underwent
    significant transformation.
        Mr. Faleomavaega. Mr. Secretary, with all due respect, I
    know what you mean. Iraq was a very special case. Given the
    fact that we have spent almost $1 trillion in fighting this war
    in Iraq, not only for the loss of lives and 2 million Iraqi
    people that died as a result or displaced, as you said, there
    are special cases given to each country, I grant that. That is
    an important consideration.
        So it now comes down to our basic foreign policy and
    political consideration. We bombed the hell out of Cambodia
    when we invaded Cambodia. This was one of President Nixon's
    defining moments, a legacy of his administration, when we sent
    military forces into Cambodia, supposedly to go after North
    Vietnamese forces, which was true. They had sanctuaries. The
    North Vietnamese had strongholds along the Vietnam-Cambodian
    borders, and with some justification. I can understand that.
    But what I am really troubled by all of this is that Cambodia
    is considered a least-developed country by the United Nations.
    How many countries are in the LDC classification within the
    United Nations?
        Mr. Yun. I would say quite a few.
        Mr. Faleomavaega. Can you submit that for the record? I
    believe there are about 50 LDCs----
        Mr. Yun. Yes.
        Mr. Faleomavaega [continuing]. Within the United Nations of
    190-some countries that make up the United Nations.
        [The information referred to follows:]
      Written Response Received from Mr. Joseph Y. Yun to Question Asked
           During the Hearing by the Honorable Eni F.H. Faleomavaega
        Currently, the United Nations classifies forty nine countries as
    Least Developed Countries (LDCs). Cambodia is classified as an LDC.

        Mr. Faleomavaega. I just wanted to pry into this issue a
    little more. Some of our policymakers, including me, ask, why
    can't we recycle? What is wrong with recycling the debt
    process? I think there seems to be not so much the money here
    but it is the principle.
        Somehow, somebody seems to be so annoyed by Cambodia.
    Whatever it was historically. I can talk to you about the
    killing fields. I have been there. It is one of the saddest
    legacies of modern history--the genocide that was committed
    against the Cambodians. And by implication we were very much a
    part of what happened in that country. Really, really a sad
    history. I consider our involvement in Cambodia as very special
    in that it cost so many lives. Some 20 percent of the country's
    population was decimated through genocide.
        And this was because we wanted to continue the
    Vietnamization process. President Nixon had tried very hard to
    get us out of Vietnam. And, as you know, instead of getting out
    of Vietnam, we ended up invading Cambodia--Nixon's private war,
    as some have said.
        So I don't see where the comparison could be said that
    Cambodia is not special enough, in the same way that we were
    able to forgive Iraq's debt of some $4.1 billion and
    Yugoslavia's debt incurred under Marshal Tito. He was no
    democratic person.
        I mean, during the time of Yugoslavia's problems, we
    forgave Yugoslavia's debt of $538 million. So I just want to
    say by comparison Yugoslavia and Iraq do not come to the same
    status as Cambodia with the problems and the complications and
    the difficulties that our country faced when dealing with these
    people.
        I don't mean to suggest you are just throwing out numbers
    and figures, but I want to say that these are people. I just
    wonder, is there an existing policy that we have toward
    Cambodia that continues to allow or to say that our standing
    policy is that they must pay their debt because we don't want
    to set a precedent? The problem is that we have already set
    precedents. We have already forgiven debts of several
    countries.
        As you said, it is complicated. There are exceptions. There
    are special cases. I happen to believe that Cambodia is a
    special case, and we ought to give due consideration to them
    for what we did to these people, their lands, and the misery is
    still there.
        We have not even cleaned up the mess that we created in
    Cambodia from the hundreds of thousands of tons of bombs that
    we dropped on its people. A lot of innocent people died as a
    result.
        Mr. Yun. Thank you, Mr. Chairman.
        I would say that the overriding factor on debt issues is
    the capacity to pay. And if you look where Iraq was, where
    countries like Egypt were, where they went when they had a debt
    program, they could not sustain the amount of debt they had,
    which was why debt reduction was possible for those countries.
        In the case of Cambodia, admittedly, they are a least
    developed country among them, but their capacity to pay is
    there in terms of foreign exchange earnings.
        Mr. Faleomavaega. I didn't mean to interrupt you, and I
    appreciate that term, that they have the ``capacity to pay.''
    So then it raises the question of principle. The principle is
    that it was an illegitimate government that caused the debt to
    be incurred during General Nol's military takeover against
    Prince Sihanouk's government.
        Now was that a legitimate government that we supported?
    There are still a lot of questions raised right now whether our
    intelligence agencies had anything to do with overtaking Prince
    Sihanouk's government when General Lon Nol became the new
    dictator, if you will. And, of course, later on, a civil war
    broke out between the Khmer Rouge and Lon Nol, who was kicked
    out.
        So this is another gray area. To say that, on the one hand,
    they might have the capacity to pay, but then, as a matter of
    principle they say, Why should I pay when it wasn't us that
    were there? I mean, why is it that we are being targeted as the
    government to pay for these debts?
        We could have said the same thing about Tito's government
    and his reign in Yugoslavia. The succeeding government of
    Yugoslavia, whatever existed then, should have been
    responsible. In the same way, in Iraq--the government was
    legitimate even though it was controlled by a dictator. How do
    we say that a government's legitimacy comes from the fact of
    whether you are a dictator or whether you are ruled by a
    dictator?
        Mr. Yun. Mr. Chairman, in regard to that issue of what
    happens to the debt as it gets passed from one government to
    another, it is the policy of the U.S. Government and is
    standard international practice that whoever takes over the
    government assumes responsibility for all previous government.
    There is a class of debt called ODS debt, but that is very
    narrowly defined.
        In the case of Cambodia, these were agriculture, PA 480
    debt, mostly for foodstuffs. I think it would be another thing
    if, say, Lon Nol bought tanks with them and started, you know,
    fighting or, you know, forces that were, say, loyal to Prince
    Sihanouk at the time and so on. So it is very hard to classify
    agriculture commodities in that class of ODS debt.
        Secondly, even in countries like Iraq, Afghanistan, they
    have assumed their previous debt. You are right. A lot of them,
    you are right, were forgiven, but there are some debt they have
    assumed. I don't think it was 100 percent forgiveness. I will
    get the data for you----
        Mr. Faleomavaega. Please.
        Mr. Yun [continuing]. How much they were forgiven.
        [The information referred to follows:]
      Written Response Received from Mr. Joseph Y. Yun to Question Asked
           During the Hearing by the Honorable Eni F.H. Faleomavaega
        Afghanistan qualified for treatment as a Heavily Indebted Poor
    Country (HIPC) according to the eligibility requirements established by
    Congress in the Enhanced Heavily Indebted Poor Countries Initiative
    (Title V of Appendix E of H.R. 3425, as enacted into law by Section
    1000(a)(5) of P.L. No. 106-113) and we signed the bilateral agreement
    with Afghanistan authorities in July, 2010. Congress authorized funds
    for the forgiveness of 100 percent of Iraqi debt in section 135 of the
    Continuing Resolution (P.L. 108-309)(CR), enacted into law by Section
    569 of the FY 2005 Foreign Operations Appropriations bill, H.R. 4818,
    as passed by the House of Representatives on July 15, 2004. U.S.
    government forgiveness of both Afghanistan's and Iraq's official debt
    was coordinated through the Paris Club of creditor nations which
    requires, as a condition on such forgiveness, that the debtor nation
    have an IMF program. Cambodia does not have an IMF program.

        Mr. Yun. So that policy is very much based on capacity to
    pay, Mr. Chairman.
        Mr. Faleomavaega. I make an observation that one of the
    things that really riles me up is all the resources and the
    amount of money that we spent in the war in Iraq. And, all of a
    sudden, overnight, after spending almost $1 trillion and
    causing the suffering that we have caused the people of Iraq,
    and then when the new government came up it says they are going
    to have a bidding process for oil companies that could come and
    help extract the oil so that they could start, go back to
    prosperity and all of that.
        So 30 major oil companies conducted their bidding, and
    guess what country won the oil contract? The People's Republic
    of China, which didn't lift a finger, not even an ounce in
    terms of having it any way associated with all the resources
    and the sufferings and the commitments that we made. China
    ended up tapping into the resources of the oil that, I thought,
    as a matter of policy, was why we had to go to Iraq to make
    sure to secure the oil supply, that we don't lose that.
        Well, after the bidding, as we like to do free enterprise
    market system and letting the markets control, China ended up
    getting the oil contracts. So that was a special condition, to
    say the least.
        Here is just a question for you, Mr. Secretary. Is there a
    strategic argument for offering Cambodia debt relief? Many have
    argued that economic dependence has made Cambodia one of
    China's strongest allies in Southeast Asia. Do you agree, and
    would debt relief from the United States change this dynamic?
        Mr. Yun. Mr. Chairman, I believe debt relief should be
    offered in the context of our debt policy. So in that sense we
    did make progress in 2006. We did come to terms on the actual
    amounts owed. So, right now, I think the way forward is for us
    in Cambodia to at least come to terms on the bilateral
    agreement so that Cambodia is current for, say, 1 year or so,
    which we have asked them. After 1 year, we can review the
    situation, but it is very hard to commit to up-front debt
    forgiveness, debt reduction, debt swap.
        I mean, that really isn't the domain of Congress. If you
    allow us--if you allow us to do that, because what it means is
    that our budget, the U.S. Government budget, has to reflect
    that. If you allow us that, sure. I mean, we can do it.
        Mr. Faleomavaega. I remember a couple of years ago there
    was a newspaper article that said we had forgiven Jordan $500
    million in debt, just like that. And Jordan isn't exactly a
    least-developed country, may I add. So, here again, I guess one
    word that comes to mind is contradiction. I am a little puzzled
    when you mention there have to be special circumstances to
    forgive debt.
        I would deeply appreciate if you could submit for the
    record what exactly is both the State Department policy as well
    as that of the Treasury Department, since they are not here, to
    outline exactly what process and what specifics these countries
    have to follow in order to qualify for debt forgiveness.
    Because, as you said, it is complicated.
        [The information referred to follows:]
      Written Response Received from Mr. Joseph Y. Yun to Question Asked
           During the Hearing by the Honorable Eni F.H. Faleomavaega
        The fundamental principle underlying debt forgiveness is that debts
    owed to the United States are assets of the United States and that
    federal officials generally lack authority to dispose of such assets
    without both: (1) statutory authority from Congress; and (2) a
    corresponding appropriation to pay the ``subsidy cost'' of the debt
    forgiveness under the Federal Credit Reform Act of 1990 (2 U.S.C. Sec.
    661, et seq.). Further, any additional conditions on that forgiveness
    included by Congress in the authorizing statute(s) must also be
    satisfied. When debt is forgiven, the Federal Credit Reform Act of
    1990, 2 U.S.C. Sec.  661, et seq., requires that Congress have
    appropriated sufficient funds to the Treasury Department's Debt
    Restructuring Account to pay the ``subsidy cost'' of the forgiveness on
    the government's books. Foreign government debt is maintained on the
    account books of the United States Government as an asset. Changes to
    loan contracts, including debt forgiveness, are considered
    modifications to the original loan agreements under the Federal Credit
    Reform Act and require an appropriation amount to pay the value of that
    modification. Essentially, this is double entry bookkeeping with the
    ``subsidy cost'' of the debt forgiveness offset by an appropriation
    enacted by Congress to pay the cost of the forgiveness. The Office of
    Management and Budget (OMB) has issued detailed rules on how this
    amount is ``scored'' for budgetary purposes.

        Mr. Faleomavaega. Secondly, there are special
    circumstances.
        Thirdly, I am totally puzzled as to what are these
    exceptions or special cases that makes Cambodia different from
    these other countries that I have just shared with you where we
    have forgiven debt.
        [The information referred to follows:]
      Written Response Received from Mr. Joseph Y. Yun to Question Asked
           During the Hearing by the Honorable Eni F.H. Faleomavaega
        Cambodia's situation is different from other countries that have
    been given debt relief in a number of important ways. For example,
    whereas Cambodia has paid other creditors on time or early, it has made
    no attempt to pay the United States despite there being a Paris Club
    agreement. Also, Cambodia is the only country that has refused to pay
    the United States on the grounds that the debt is ``odious.'' We do not
    agree with the Cambodian view that this debt is ``odious'' or that
    Cambodia is relieved of payment obligations. Finally, every country
    that has had debt forgiven by the United States has had an IMF program.
    Cambodia is requesting debt forgiveness even though it does not have an
    IMF program.

        Mr. Faleomavaega. Could I ask if you could do that for the
    record? So at least, assuming I get re-elected in November, you
    will see my ugly face again. And I don't know if we are going
    to take a majority of the House, but I assure you we are going
    to revisit this issue again, maybe by introducing a bill that
    will reflect the concerns of my colleagues here and me.
        I fully understand the standard policy. We don't want to
    set a precedent. But when I look at the number of countries
    that have had their debts forgiven, that is where I raise more
    questions and say, Well, we have a standing policy, but there
    are exceptions to the rule.
        If you could, Mr. Secretary, if you could submit for the
    record all the countries for which we have forgiven their
    debts. It would also be helpful to explain what gave rise to
    our justification in forgiving those countries of their debts.
    I think that would really help the record.
        Mr. Yun. We will do that, sir.
        [The information referred to follows:]
      Written Response Received from Mr. Joseph Y. Yun to Question Asked
           During the Hearing by the Honorable Eni F.H. Faleomavaega
        Attached please find Table A5 from Treasury's Foreign Credit
    Reporting System's Salmon Book, which lists U.S. bilateral debt
    reductions from FY 1990 through FY 2009 and the statutory authorities
    under which those debts were forgiven. Since the table was published,
    Tropical Forest Conservation Act (TFCA) agreements with Peru (2008--
    $25.1 million) and Brazil (2010--$20.8 million) have been finalized.

        Mr. Faleomavaega. All right. I really thank you.
        I think I have already asked a question, and you have
    already raised the conditions that Cambodia has to come up with
    in order for them to properly pay their debts. Whatever
    documentation or things that relate to that, I would appreciate
    if you could submit that for the record, and maybe even the
    terms of the Paris Agreement, do that as well.
        [The information referred to follows:]
      Written Response Received from Mr. Joseph Y. Yun to Question Asked
           During the Hearing by the Honorable Eni F.H. Faleomavaega
        The 1995 Paris Club Agreed Minute is attached along with the draft
    of a proposed bilateral agreement between the U.S. and Cambodia, which
    was never signed. Also attached is a copy of the February 2010 letter
    from Under Secretary of State Hormats to Cambodia's Deputy Prime
    Minister Hor Namhong, which offers a generous rescheduling of arrears,
    provided that certain basic conditions are met. We have not received a
    reply to this letter.

        Mr. Faleomavaega. What about the suggestion by some of our
    policymakers--including myself--about the recycling of this
    debt forgiveness? Is that a poor option? Has it been done in
    other countries about recycling resources?
        Mr. Yun. It has been done quite a bit, sir, I would say.
    There is, as I said, one program in the U.S. Government called
    Tropical Forest Conservation Act. And essentially what that
    program does is payment is made in local currency, and that
    money goes toward protecting forests. And we have done it in
    several countries.
        Mr. Faleomavaega. I didn't mean to interrupt you, but I
    think there is one standing issue that has been brought to my
    attention, that some of the richest cultural, historical
    sites--I don't know if it is an ancient city or ruins--that sit
    right on the border between Thailand and Cambodia. It has been
    suggested by some of the NGOs and other organizations that some
    kind of funding process could be brought about so that these
    countries, rather than fighting over their borders in this very
    historic area between Cambodia and Thailand, that maybe some
    kind of an international cultural heritage, some type of thing
    that would be beneficial to visitors, tourists coming from--
    whether you are from Cambodia or from Thailand, certainly as a
    means of giving a greater economic boost for the tourism
    industry of both of these countries. I have been informed
    that--this was one suggestion that was offered, that maybe the
    recycling of the debt could be done in that format. But what is
    your best sense about recycling as another option to consider
    in dealing with Cambodia's debts?
        Mr. Yun. I think recycling, or debt swaps as we call it, is
    certainly something that could complement our debt program with
    them.
        However, one real difficulty currently doing something like
    recycling is that Cambodia is in arrears in the sense that they
    have stopped paying us. And so, as in any creditor/debtor
    relation, when a debtor stops paying you, the creditor is not
    going to say let's think about these creative options. I mean,
    those options only come as we negotiate and normalize debt
    relations. So I would say, Mr. Chairman, certainly those are
    great ideas and we should and we will explore them, but please
    understand they can only be done as debt relations become
    normal.
        Mr. Faleomavaega. So, in other words, you are making a
    precondition. Before you may consider recycling, you have to
    start paying up your debts to kind of show that in good faith
    you are sincere in your efforts to try and pay your debts. Am I
    sensing this is our policy on recycling?
        Mr. Yun. That is very much it. Our U.S. Government is a
    tough creditor, sir.
        Mr. Faleomavaega. Well, $4.1 billion, that is a pretty
    sizeable debt forgiven for Iraq, which has a huge amount of
    oil. I think number two or three largest oil reserves in the
    world.
        So what does Cambodia have to depend upon? Not very much.
    The textile industry is really the only thing that is really
    putting this poor country on the strings of trying to get
    economic billing. And when you compete against the largest
    textile industry, like China or Bangladesh or India or other
    countries, you are living in a real tough market situation
    there where these 14 million people in Cambodia are struggling
    to make ends meet and survive.
        So basically you are saying that the basic policy on the
    recycle issue is that we do have this precondition that you
    have to start paying your debt before we talk about recycling.
    Is that basically the administration's position on this?
        Mr. Yun. I would say in order for us to discuss issues like
    that, Cambodia really should come to terms--and Cambodia and
    us, it is negotiations--should come to terms on what to do
    about arrears and what to do about payments coming due. Once we
    can come to terms on those, I am pretty sure we can discuss
    some of the options you have outlined.
        Mr. Faleomavaega. So it isn't a question of whether the
    government was illegitimate. It is a question of whether you
    are a dictator or whatever it is, you are responsible for the
    debts that incurred in that given period, obviously. Because
    this is what happened historically with Cambodia and why we are
    slapping this $400 million debt because of something that
    General Lon Nol did in receiving these agricultural
    commodities.
        Is this also one reason why our assistance in ordnance,
    trying to clean up the mess that we created, the bombings in
    Cambodia, is this also one of the reasons why we are not
    forthcoming in helping Cambodia get rid of the mess that we
    created, because they haven't repaid their debt?
        Mr. Yun. We are in a kind of, I would say, contradictory
    situation. We do give assistance. Our USAID programs in
    Cambodia are in the region of $60 million or so. And we do that
    every year. There is a substantial USAID program in terms of
    health, public health programs, HIV/AIDS programs. We also have
    education exchanges and some fellowships there.
        Mr. Faleomavaega. Can you submit for the record total U.S.
    assistance programs----
        Mr. Yun. Yes, happy to do so.
        Mr. Faleomavaega [continuing]. Loans and stuff that are
    currently given to Cambodia every year.
        [The information referred to follows:]
      Written Response Received from Mr. Joseph Y. Yun to Question Asked
           During the Hearing by the Honorable Eni F.H. Faleomavaega
        In Fiscal Year 2010, the United States provided $72.6 million
    dollars in assistance to Cambodia. That amount includes development
    assistance, economic support, military financing, health, education,
    and non-proliferation and anti-terror programs.

        Mr. Yun. So for a lot of people looking at this situation,
    it would seem ironic that we are insisting on debt payments
    while we are giving assistance. But these are two, we believe,
    separate issues. Matters of debt follow their own policy issue.
    Matters of assistance--and I think it is correct that we do
    that. We cannot withhold assistance because of some disputes
    over what is owed and what is not owed. That will take time
    coming to terms, and we are coming to that.
        So in terms of assistance on unexploded ordnance and so on,
    we continue to give them. We have programs both in Cambodia,
    Laos, and Vietnam--we call it UXO programs. And we work with
    NGOs on cluster bombs, especially in Laos and Cambodia. And we
    also work somewhat on education programs so that people are, I
    would say, watchful of these UXOs.
        Mr. Faleomavaega. I appreciate you mentioning the situation
    in Laos. I visited Laos recently. We dropped 2 million pounds
    of bombs, probably the most bombed country per capita in the
    world. What we did in that country, both Laos and Cambodia, as
    a result of that a lot of unexploded ordnance remains in the
    farmlands and all over. Approximately 300 people--mostly
    children and women, because they look for scrap metal--end up
    getting into a lot of these bombs that were unexploded and
    ended up getting blown up themselves. And so for the Unexploded
    Ordnance Program that is currently being carried out right now,
    for example, in Laos, we contribute only $3 million a year to
    do this. And I will say, Mr. Secretary, I sincerely hope the
    administration is going to change the policy of giving a little
    more than the measly $3 million to clean up the mess that we
    created both in Laos as well as Cambodia, especially for all of
    that. It is still there.
        I am not going to get into the cluster bomb situation. I
    don't know if many Americans know what a cluster bomb is.
    Although I have seen a bombie--they are called little bombies--
    these cluster bombs are dropped from planes and in midair would
    explode, putting out 50, 100 bombs like little grenades. I
    mean, it is amazing how man can invent machines and things on
    how to kill in a more perfect way, but probably put it in other
    terms, the worst way in killing other human beings, and we did
    this to the Cambodians. A lot of innocent people died as a
    result of these cluster bombs that we dropped on them. But
    worst is that thousands or millions of these bombies are all
    over the country, and because they haven't exploded, children
    get--I think 300 people get killed a year because of what we
    have left that we never cleaned up, the situation that we did
    there.
        So I hope in some way that, as much as we are giving
    assistance, that we can give a lot more than $3 million a year
    to clean up the unexploded ordnance that we have left both in
    Cambodia as well as in Laos.
        Mr. Secretary, I know I have retained you for quite a long
    time here, and I don't want to hold you any further.
        As I understand it, you mentioned earlier that debt
    forgiveness is an entirely different issue from the current
    U.S. assistance programs for Laos. What is your best estimate
    as to the total amount of money that we provide in assistance
    programs, Mr. Secretary, to Cambodia?
        Mr. Yun. We will get the exact figure for you. By my
    recollection, it is about $60 million a year.
        [The information referred to follows:]
      Written Response Received from Mr. Joseph Y. Yun to Question Asked
           During the Hearing by the Honorable Eni F.H. Faleomavaega
        In Fiscal Year 2010, the United States provided $72.6 million
    dollars in assistance to Cambodia. That includes development
    assistance, economic support, military financing, health, education,
    and non-proliferation and anti-terror programs.

        Mr. Faleomavaega. Could you also provide for the record
    total exports, imports of products?
        [The information referred to follows:]
      Written Response Received from Mr. Joseph Y. Yun to Question Asked
           During the Hearing by the Honorable Eni F.H. Faleomavaega
        In 2009 total trade with Cambodia was approximately $2 billion.
    Total exports to Cambodia amounted to $127 million, and total imports
    from Cambodia equaled $1.9 billion. U.S. exports to Cambodia include
    motor vehicles, textile fibers, waste, professional and scientific
    instruments, and vegetables and fruit. Cambodian imports to the United
    States include apparel, textile yarn and fabric, footwear,
    miscellaneous manufactured goods, and fish.

        Mr. Faleomavaega. Does the United States have any trade,
    any export relations, import/export ties with Cambodia?
        Mr. Yun. We have very good export-import relations. As you
    mentioned, textile trade--of course, textile exports from
    Cambodia is a very big source of U.S. imports of textiles.
    There is substantial U.S. investment there, especially in the
    mineral sector and the oil and gas side. And I would say the
    economic relations is really improving, as is the Cambodian
    economic situation in general. They are very hardworking
    people, and they are doing quite well.
        Mr. Faleomavaega. Mr. Secretary, I want to thank you for
    your participation in this dialogue. I sincerely hope that one
    day both of us will travel to Cambodia and meet with officials
    of that government and find a solution to the current problem
    with this debt issue that we have discussed this afternoon.
        Thank you very much. The hearing is adjourned.
        [Whereupon, at 3:15 p.m., the subcommittee was adjourned.]

                                A P P E N D I X

                                  ----------

         Material Submitted for the Hearing RecordNotice deg.

          Material submitted for the record by the Honorable Eni F.H.
      Faleomavaega, a Representative in Congress from American Samoa, and
     Chairman, Subcommittee on Asia, the Pacific and the Global Environment