Corruption threatens continued aid: WB<\/p>\n
JAKARTA (JP): The World Bank warned on Thursday that aid money
\nfor social safety net programs in Indonesia could be discontinued
\nif its intended purposes are hindered by corrupt practices.<\/p>\n
The government's ability to ensure an unimpeded flow of rice
\nand other forms of assistance to those worst hit by the year-long
\neconomic crisis is a prerequisite for additional international
\nassistance to Indonesia, a senior executive of the Washington-
\nbased bank said.<\/p>\n
Deputy vice president for East Asia and the Pacific Julian
\nSchweitzer told a news conference that credible management of the
\nsocial safety net program for the poor was vital and would
\ncritically affect the World Bank's assistance to the country.<\/p>\n
\"International donors will be watching very carefully to see
\nhow things go in the delivery of food, medicines and other
\nessentials to the needy. It's a major test of sincerity,\" he
\nadded.<\/p>\n
At the meeting, Schweitzer announced the Bank's agreement with
\nIndonesia to help the government design an anti-corruption
\nstrategy.<\/p>\n
The World Bank has of late come under sharp criticisms from
\nanalysts and politicians for its alleged condoning of corruption
\nwithin the implementation of its projects in Indonesia.<\/p>\n
The criticisms have increased especially after a World Bank
\ninternal memorandum, which was leaked to The Wall Street Journal
\nlast month, confirmed that Indonesian officials had siphoned off
\nat least 20 percent of the Bank's money lent to the country.<\/p>\n
The World Bank and other international donor institutions,
\nincluding the IMF are committed to providing Indonesia with US$14
\nbillion in bailout money to finance the country's social safety
\nnet program to help the poor survive the worst economic crisis in
\nthree decades. Forecasts have suggested that at least half of the
\ncountry's 200 million population will be living below the poverty
\nline by the end of this year.<\/p>\n
Priority<\/p>\n
The bank is currently helping President B.J. Habibie's
\nadministration design an anti-corruption strategy with an
\nimmediate focus on protecting funds for the social safety net
\nprogram from being misused.<\/p>\n
\"Our top priority in helping the government with its strategy
\nis to do everything we can to protect the poor from corruption,\"
\nSchweitzer said.<\/p>\n
\"Social safety net programs must be allowed to work swiftly
\nand cleanly. This is the key test of Indonesia's ability to make
\nits overall campaign work,\" he added.<\/p>\n
The bank's country director Dennis de Tray said at the media
\nconference that multilateral institutions would provide funding
\nto support Habibie's anti-corruption measures.<\/p>\n
He said that the size of the funds had yet to be discussed
\nwith the government but it would be part of the bank's additional
\n$2 billion commitment to the country in the current fiscal year.<\/p>\n
The bank's agreement with the government follows last week's
\nWorld Bank-led international mission to Jakarta to seek advice
\nfrom political, business and civil society leaders on measures
\nneeded to combat corruption, collusion, and nepotism.<\/p>\n
\"The World Bank has strongly endorsed the government's
\ncommitment to good governance, calling it essential for continued
\ninternational support and a crucial step towards eventual
\neconomic recovery,\" De Tray said.<\/p>\n
The economic crisis has slashed the government's ability to
\nfinance its budget due to huge subsidy spendings which has been
\nestimated will cause a budget deficit equivalent to 8.5 percent
\nof gross domestic product (GDP) in the current fiscal year.<\/p>\n
Coordinating Minister for Economy, Finance and Industry
\nGinandjar Kartasasmita has said that although the deficit was
\nexpected to decline in the next fiscal year, the country would
\ncontinue to need a significant amount of international support.<\/p>\n
The Paris Club creditor nations agreed on Wednesday to
\nreschedule $4.2 billion of the country's sovereign debt which
\nfalls due in the 1998\/1999 and 1999\/2000 fiscal years over a
\nperiod of between 11 and 20 years. The measure will considerably
\nease the burden on the state budget.<\/p>\n
The government is also seeking international support to ease
\nthe burden of servicing the commercial debt which it owes to
\ninternational banks.<\/p>\n
Analysts here also see the issue of good governance as
\ncritical to the success of the banking reform program, in which
\nthe government sponsored Indonesian Bank Restructuring Agency
\n(IBRA) is expected to manage large assets handed over by the
\ncountry's major business groups in lieu of their banks'
\noutstanding debts to the government. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/corruption-threatens-continued-aid-wb-1447893297",
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"sponsor": "Okusi Associates",
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