Half of RI's WB projects at risk<\/p>\n
WASHINGTON (Agencies): More than half of the World Bank's
\nongoing portfolio of projects in Indonesia were at risk of
\nfailure, the bank said in a report Thursday.<\/p>\n
"They have not failed; they are at risk, which means we have
\nto concentrate on finding out how to salvage them, restructure
\nthem, cancel them, renew them," Robert Picciotto, director-
\ngeneral of the operations evaluation department, told a news
\nconference at the launching of the report here.<\/p>\n
The report said that financial turmoil in East Asia had
\nsharply increased the number of World Bank projects in the region
\nplagued by problems and has nearly doubled the percentage at risk
\nof failure.<\/p>\n
More than 16 percent of World Bank projects in East Asia faced
\n"serious problems" in 1998, up from 10.5 percent in 1997 and 4.7
\npercent in 1993, according to the World Bank's Operations
\nEvaluation Department.<\/p>\n
It said 27.5 percent of the bank's projects in the region were
\nat risk of not achieving their objectives in 1998, up from 14.6
\npercent in 1997 and 10.5 percent in 1993.<\/p>\n
"What we have, following the East Asia crisis, is a major job
\nof reevaluating our ongoing portfolio."<\/p>\n
He conceded that too much focus has been placed on
\nmacroeconomic figures and too little on the structures in the
\neconomies trying to cope with economic crisis.<\/p>\n
These institutions include the governments themselves, the
\njudicial and financial systems and corporate laws, he added.<\/p>\n
Picciotto said the Asian crisis has trigged a "total debacle
\nin the transition economies," with the number of people in
\npoverty set to leap to 168 million from 14 million.<\/p>\n
"We have lost at least a decade of development in Indonesia,"
\nhe lamented.<\/p>\n
The World Bank did not spell out the problems facing specific
\nprojects in specific countries.<\/p>\n
But as a rule, when the World Bank lends money to a government
\nto fund a project, it spells out targets. It may set a timetable
\nfor construction of roads and schools or ask the government to
\nchange certain economic policies before more money is paid out.<\/p>\n
The International Monetary Fund, the World Bank and other
\nlenders have responded to the turmoil by rushing billions of
\ndollars in aid to the hardest-hit states -- Indonesia, South
\nKorea and Thailand.<\/p>\n
The World Bank said the number of problem-plagued projects in
\nAsia could increase in the months ahead if growth does not pick
\nup. "We have not yet probed the downside," Picciotto said. "The
\nrisks are higher."<\/p>\n
He added that if the approach taken by the development
\ncommunity isn't changed, it will only be "treating the symptoms,
\nnot the fundamental disease" behind the crisis plaguing many
\ndeveloping countries.<\/p>\n
One solution being used more widely within the World Bank is
\nto provide money for projects in installments, rather than in a
\nsingle disbursement, to give it a lever to argue for wider
\nreforms, Picciotto said.<\/p>",
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