RI may register slight growth in two years: WB<\/p>\n
WELLINGTON (AP): Indonesia may begin to move out of its
\nprofound economic crisis and see slight growth within two years,
\na senior World Bank official said Monday.<\/p>\n
Benjamin Fisher, the bank's country program coordinator for
\nIndonesia, told a seminar that Indonesia could see the beginnings
\nof growth of between zero and 2 percent in the financial year
\nending on April, 2000.<\/p>\n
By then investment may have recovered to about 4 percent and
\nimports may be growing, although not strongly, Fisher said. By
\nthe following year there should be a return to even stronger
\ngrowth and better demand for products, he said.<\/p>\n
\"The Indonesian recovery is going to surprise a lot of
\npundits,\" Fisher told the trade organization Asia 2000 seminar.<\/p>\n
But the news in the short term was not good, with the economic
\ncontraction continuing this financial year, Fisher predicted.<\/p>\n
Since July last year confidence in the Indonesian economy has
\ncollapsed and domestic demand has plummeted. Unemployment and
\ninflation have soared.<\/p>\n
The Indonesian rupiah has dropped more than 80 percent against
\nthe U.S. dollar and high foreign debt levels have left most
\nIndonesian companies technically insolvent.<\/p>\n
Fisher said the prospects for Indonesia look good if stability
\nand reform can be maintained under the new leadership of
\nPresident B.J. Habibie.<\/p>\n
The country's natural resources were very strong and the
\nIndonesian economy at the time of the crisis had not been nearly
\nas inefficient as people believed, he said.<\/p>\n
However, corruption remains a serious problem, as does the
\nflight of foreign capital.<\/p>\n
The Indonesian government could not afford to be complacent
\nabout implementing reforms, Fisher said.<\/p>\n
Corruption<\/p>\n
Meanwhile in an opinion piece published in several Indonesian
\nnewspapers, bank officials skirted a charge that some 20 percent
\nof money meant for projects in Indonesia had been siphoned off by
\ncorrupt Indonesian officials.<\/p>\n
However, they said the bank had to \"honestly evaluate history,
\nincluding our own successes and failings.\"<\/p>\n
\"The central issue is not whether 20 percent of development
\nfunds were or were not misappropriated; figures such as these are
\nthe roughest of rough estimates,\" the officials said.<\/p>\n
\"What really matters is that corruption is widespread in
\nIndonesia and it poses a major obstacle to economic growth and
\nfairness. Wherever it is found, it must be stamped out,\" they
\nsaid.<\/p>\n
The article said the Washington-based bank was considering
\nstepping up independent audits of aid projects and establishing a
\nproject watchdog committee.<\/p>\n
The officials, the bank's Vice President Jean-Michel Severino
\nand its Indonesia director Dennis De Tray said the watchdog
\ncommittee, if established, would take in non-governmental
\norganizations, \"other members of civil society and increased use
\nof independent audits and international public sector reform
\nspecialists.\"<\/p>\n
De Tray and Severino said the bank had begun discussing this
\nplan with the Indonesian government.<\/p>\n
They said the fight against corruption would \"continue to be a
\nmajor priority in our dialogue with the government and will have
\na significant influence on future lending.\"<\/p>\n
The Wall Street Journal reported last month that Indonesian
\nofficials were believed to have taken more than 20 percent of
\nbank project money allocated to the sprawling Southeast Asian
\nnation.<\/p>\n
The newspaper cited a World Bank internal memorandum detailing
\nlarge-scale corruption.<\/p>\n
Long present in Indonesia, the World Bank has been sharply
\ncriticized for not blowing the whistle on the country's economic
\nmismanagement and frail banking system before Asia's financial
\nmeltdown erupted last year.<\/p>\n
The World Bank's soul-searching comes as the Indonesian
\ngovernment also moves to show its commitment to cracking down on
\nthe corruption, collusion and nepotism that characterized much of
\nthe rule of former president Soeharto.<\/p>\n
Last week, the government canceled some contracts linked to
\nthe family of the former president and said it may review others.<\/p>\n
Soeharto stepped down in May after riots and protests rocked
\nIndonesia.<\/p>",
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