Expert warns of abuse of CGI loans for poverty program<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
A prominent expert on poverty warned the government of renewed
\ncorruption thriving within its poverty reduction program and
\neating into loans of the Consultative Group on Indonesia (CGI).<\/p>\n
H.S. Dillon said that battling poverty through government
\ndevelopment projects tended to breed corruption.<\/p>\n
\"What I see here is efforts by certain people wanting to have
\na piece of the cake that is the CGI loans,\" Dillon told The
\nJakarta Post on the weekend.<\/p>\n
The CGI, which groups together Indonesia's major bilateral and
\nmultilateral creditors, pledged last week, during its 11th
\nmeeting in Jakarta, loans of US$3.14 billion to help finance the
\n2002 state budget.<\/p>\n
The group, whose meeting had the theme, \"Working together to
\nreduce poverty\", has tied $1.3 billion of its total loans to the
\npolicy performance of the government.<\/p>\n
Among the items to fall under CGI scrutiny will be the poverty
\nreduction and anticorruption programs.<\/p>\n
Failure to obtain the badly needed CGI loans in full would
\nhave serious consequences for the state budget.<\/p>\n
\"I suspect the funds to finance projects for the poor may get
\ncorrupted,\" Dillon went on.<\/p>\n
He said the vulnerability of the CGI loans was apparent, given
\nthe emphasis placed on the office of the Coordinating Minister
\nfor People's Welfare on administering the projects.<\/p>\n
He also suspected the ministry of adopting a centralistic
\napproach to tackling poverty, which was conducive to corruption.<\/p>\n
Coordinating Minister for People's Welfare Yusuf Kalla,
\nhowever, told CGI donors that he would include local communities
\nand the poor themselves in the implementation of poverty
\nreduction programs.<\/p>\n
CGI members made it clear that the loans should be distributed
\nin such a way that corruption would not reduce away their
\neffectiveness.<\/p>\n
Indonesia, a country with around half of its more than 210
\nmillion population have descended into poverty, has had a
\nhistory of massive abuse of loans provided by the World Bank to
\nmitigate the impact of the 1997 economic crisis on the poor.<\/p>\n
Late last year, for instance, the Bank canceled the second
\n$300 million tranche of its $600 million social safety net
\nadjustment loan mainly due to corruption by bureaucrats.<\/p>\n
Subsequently, the World Bank slashed its loan commitment,
\nhoping the country would work harder to stamp out corruption.<\/p>\n
It said Indonesia should focus less on the amount of lending
\nit received and more on how well the loans were being used.<\/p>\n
Last week's CGI meeting discussed corruption issues for the
\nfirst time.<\/p>\n
During the meeting, the government presented participants
\nan outline of its poverty reduction program.<\/p>\n
The program's key feature is a coordinating committee chaired
\nby Coordinating Minister for the Economy Dorodjatun Kuntjoro-
\nJakti, and Yusuf Kalla.<\/p>\n
While Dorodjatun would tackle the macroeconomic issues
\naffecting the country's poor, Yusuf would address mircoeconomic
\nissues such as health, education and housing.<\/p>\n
\"Both of us will work to ensure that economic and social
\npolicies are designed to improved the welfare of the poor,\"
\nDorodjatun said.<\/p>\n
Another feature of the program's participatory nature is that
\nit allows the poor to help shape the policies to be implemented
\nin their respective regions.<\/p>\n
\"Stakeholders will be active participants in the process of
\nunderstanding the nature of poverty, choosing poverty reduction
\nobjectives ..., monitoring outcomes and evaluating their impact,\"
\nDorodjatun said.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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