Cambodian and US officials held talks on March 17th to explore ways of settling over US$400m of loans given by the US to the government of General Lon Nol, who came to power in a US-backed coup in 1970. Cambodia says the money helped fund a devastating bombing campaign by US forces targeting the Khmer Rouge, the murderous communist movement that ruled the country in 1975-79. Cambodia has called for the debt to be cancelled, but it has softened its stance since the US secretary of state, Hillary Clinton, said in November that the US was willing to discuss alternative ways to repay the sum.

During talks with the US deputy assistant secretary for East Asian and Pacific affairs, Joseph Yun, Hor Nam Hong asked the US to lower the interest rate on the loans from 3% to 1%. The foreign minister also asked that 70% of the debt be converted into development assistance, with the remainder to be paid back. The US embassy in Phnom Penh said that the US hopes that an agreement can be reached that "would enhance Cambodia's creditworthiness and ability to access international capital markets."