ADB claims most local projects successful<\/p>\n
The Asian Development Bank (ADB), a major lender to Indonesia,
\nhas provided a total of US$19.35 billion loans to finance 269
\nprojects since 1968. However, last week, several local non-
\ngovernmental organizations (NGO) released a report that said 70
\npercent of the projects funded by the Bank were \"unsuccessful\".
\nThe Bank's country director in Indonesia David Green responded on
\nMonday to the criticism in an interview with selected journalists
\nincluding The Jakarta Post's reporter Tony Hotland.<\/p>\n
Question: What are your comments over the NGOs' statement that 70
\npercent of your projects in Indonesia were \"unsuccessful\"?
\nAnswer: The evaluation of the activities we finance does not show
\nthat the projects are unsuccessful. The work suggests that there
\nare problems. Our evaluation done by an independent office within
\nthe ADB, which is what the NGO was using, say there are problems
\nand some projects are not successful, but the majority of the
\nprojects are successful. The NGO says that 70 percent of our
\nprojects are not effective, not sustainable. We don't feel that
\nit's true. They have not given a good balance.
\nWhy?<\/p>\n
The NGOs say that the sustainability is very important. It is
\ntrue, it is one of our five criteria. But sustainability must
\nalso be weighed against the other things. Even in projects where
\nwe have concerns about sustainability, most of these projects are
\nrated successful because the benefits are large enough.<\/p>\n
Even if they are not being sustained as well as we hoped,
\ntheir benefits are large enough to far outweigh the cost. It is
\nclear that sustainability is important, it is only one of a
\nnumber of equally important aspects that must be considered when
\nyou consider a project.
\nWhat are all the criteria?<\/p>\n
We take five different criteria. First, relevance. Does the
\nproject really aim for goals that meet the government's
\npriorities for development? Second is efficacy. It relates to
\nwhether or not you met your objectives. Third, efficiency. How
\nwell you met the goal with your resources. Did we pay too much?
\nWe look at the cost of the projects related especially to the
\nbenefits that we get out of it.<\/p>\n
Fourth, sustainability. You are looking at a project at one
\npoint in time, but any project has benefits that come over time
\nand costs that come over time.<\/p>\n
Fifth, are we transferring knowledge? ADB does not want to be
\nforever providing assistance to its partner countries. We want to
\nprovide capacity building so at some point everything is done by
\nthe country.<\/p>\n
At the end of the project, we do a project completion report.
\nIt tries to look at how the project looks at the very end of the
\ndisbursement of our funds. But then we wait three years, and then
\nwe come back and do an evaluation. It is conducted by an
\nindependent office. These people don't report to us, the
\nmanagement -- only to the board of directors. Indonesia sits on
\nthe board.
\nWhy has sustainability become an issue now?<\/p>\n
The reason that the NGO reports talk about sustainability a
\nlot is because in the period of time of these projects, Indonesia
\nhas had a very difficult set of problems. In the mid 1980s, there
\nwas the oil price collapse. In the late 1990s, there was the
\neconomic crisis. In both periods of time, the government budget
\nshrank much more than anyone thought.<\/p>\n
It is, unfortunately, extremely normal that the government
\noften cuts back on maintenance and operation expenses. This
\nworries us because this reduces the benefits for development
\ninvestment.
\nSo, you admit there is a sustainability problem in ADB projects
\nin Indonesia?<\/p>\n
Yes, it seems that maintenance and operation expenditures are
\nnot being met by the government. For instance, road or irrigation
\nfacility rehabilitation and school (maintenance). There is an
\nimmediate return if you make some changes, some investment, (if
\nyou) rebuild the schools, keep them from leaking, get new books,
\nput some computers in the classrooms.<\/p>\n
But if you don't repair the school building, at some point, in
\na few years, those benefits disappear. The project may still be
\nworthwhile, it still may provide more benefits than cost. But a
\nlittle money each year to maintain it might make the benefits
\neven greater and more worthwhile.
\nWhat do you expect the government to do?<\/p>\n
Over the last four years since the financial crisis, it's been
\ndifficult for the government to maintain the kind of expenditures
\nthat it would want to for the investment that has been made. We
\nexpect that it will improve. We're walking away from the crisis.
\nYou are stronger and you should increasingly be able to do the
\nkinds of things that provide sustainability.<\/p>",
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"sponsor": "Okusi Associates",
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