[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

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     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




                                 
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