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Japan is Cambodia's largest donor, as it is for other countries of the Mekong Region. From the beginning, however, aid to Cambodia has been almost exclusively in the form of grant aid and technical assistance. In 1968, one loan of 1.517 billion yen was given for the Prek Thnot Dam, but due to deteriorating security in the early 1970's, the project was suspended. In September 1999, a second loan from Japan of 4.142 billion yen was given to the Cambodian government for the renovation of the Sihanouville Port. While this loan is considered a test case, we can expect that yen loans will expand in the near future.

The Prek Thnot Dam was not completed, and the areas where construction had begun are in a state of disrepair. But it is now being examined for renewed support. Studies to rehabilitate the project plans have been done by an Australian company, and Maeda Construction, the company which began the construction in the 1960s, is reportedly interested in completing the project with assistance from the Japanese government. The Prek Thnot Dam is a 10 kilometer long dam primarily for flood control and irrigation. This is a very controversial project not only due to its size and the 15,000 people it is expected to relocate, but also because some of the areas targeted to benefit from this project are already sufficiently irrigated and other areas use farming methods dependent on rainfall. The wisdom of abandoning traditional methods of agriculture to switch to more costly, high maintenance forms of agriculture to justify the dam is highly questionable.

Not only is the Japanese government's role significant in Cambodia as a bilateral donor, but in multilateral aid as well. The Asian Development Bank (ADB) is providing a loan to Cambodia and Vietnam in order to construct Highway #1 between Ho Chi Min City and Phnom Penh. While this road is supposed to drastically cut the time it takes to transport goods between these two cities, there are many unresolved issues concerning resettlement and compensation.

In terms of transboundary issues, Cambodia has also felt the negative impacts of development projects located in Vietnam. The opening and closing of the flood gates of the Yali Falls Dam on the Se San River in Vietnam has caused severe flooding in Ratanakiri Province across the border in Cambodia, threatening the livelihood of some 20,000 people. These issues have not been adequately addressed, however, by either the Cambodian or Vietnamese governments, and villagers continue to face tremendous difficulty.

In spite of the many unresolved issues, in June 2002 the Vietnamese government began the construction of the Se San 3 Dam, also on the Se San River just 18 kilometers from the Yali Falls Dam. Villagers in Cambodia have expressed outrage and great concern about the impacts of a second dam on the Se San River.

Other pressing concerns regarding natural resources and livelihood in Cambodia are the impacts of upstream development of the Mekong River and fisheries on the Tonle Sap Lake. The Tonle Sap Lake has been a rich source of fish and other aquatic resources upon which many have depended for their livelihood. However, laws on fishing rights favor large fishing companies, and have created a system in which those who fish on a smaller scale must pay the larger companies for the right to fish. Because local people's livelihoods have been usurped by larger companies, more people must resort to illegal means of fishing to make a living. The combination of the distribution of fishing rights and increase in illegal fishing methods is leading to the degradation of Tonle Sap Lake.

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